How to innovate in a large enterprise
I recently gave a talk on Innovation at the Digital DNA conference in Ireland (remotely!) and this post is more or less the written version of it, except for the bit where my dog interrupted!
What is Innovation?
Innovation is a much used word in enterprises, and can mean lots of different things to different people.
Is this innovation:
Ok, that’s a bit of a joke — but is virtual reality innovation anymore? Was it ever?
How about blockchain & cryptocurrency, is that innovation?
What about serverless tech, is that innovation?
Or what about quantum computing?
These are the type of technologies that get mentioned a lot in innovation discussion, but to me, regardless of the tech or whichever hype curve they’re on, innovation is simply delivering new value:
Delivering
Delivering new value means actually doing it — creating it, building it, making it real. Ideation is not innovation, it’s just coming up with ideas — innovation is about execution, as it’s the only way to find out is there real value in the ideas.
New
Delivering new value means that it’s something new for your company. If your competitors already have chatbots in their call centres but yours doesn’t, is making a chatbot innovation? Yes — for you.
What if you already have some chatbots, should you build another one? If it makes business sense, absolutely — but not with your innovation capacity. It’s critically important to protect and reserve your innovation capacity & resources for new products and services, as this is how you keep up with your competitors, and/or gain competitive advantage.
Value
Delivering new value means making money or saving money. Large amounts of money. In a large enterprise with billions of dollars of revenue, innovation efforts should be focused on moving the needle enough to make or save millions of dollars.
Don’t invest your time or money if:
- The main value is “Brand” value — which is a mistake a lot of innovation efforts make. Making a VR app may look and sound cool, but is unlikely to make millions of dollars.
- The value is currently too far away e.g. Quantum computing. I’m actually looking at quantum computing right now, but will be spending a very short amount of time on it, to prepare an objective position on it for colleagues and partners.
- You don’t have the resources e.g. space travel! I’m not joking, I’d love to be working on a new type of rocket to bring people to Mars, but my 2021 budget won’t allow for it! It may not cover the iPhone 12 Pro I want!
- It’s anything to do with blockchain — still not joking, and after I tweeted this the other day, a few people instantly contacted me to point out use-cases “of value”, and I’m sure there are some nuggets out there; but in general, unless you’ve a killer idea that is guaranteed to make you money, and can only be done with blockchain, stay away.
How to innovate when we don’t know what will work?
So how do we try to focus on new technologies and concepts, in an effort to find value, when we’re not sure where the value is? This is the classic innovation problem — trying not to waste time and money on the wrong solution. My answer is: short research projects and test in the real world as soon as possible.
Short research projects
A common cliché in innovation is “fail fast” and in my experience, most people mean it when they say that failure is acceptable, but in practice they are absolutely terrified of anyone knowing that they’ve failed.
The key is, and again it’s a cliché but is 100% true — learn from your failures and most importantly: use them to succeed. Repeated failing with nothing learned and applied, no matter how fast, is a sure way to lose all your funding.
A few years ago I built a prototype augmented reality app for customers to take floor measurements in their homes — when we tested with real people in their real homes, they struggled with it, unable to accomplish a task that they’d never done before.
We stopped the project, so it could be regarded as failure — but we didn’t spend too much time on it, we got quality testing results as evidence, including the sense of empowerment that the testers felt using the tool; they loved having greater control of the information they sent us.
We took that knowledge and we pivoted to make a similar web-app for our customers to take photos of their damaged cars — this tool was a success and is in every day use now.
How short is short? Measure in weeks, not months. If your “proof of concept” will take 6 months, there’s something wrong. Figure out a way of building it in less time and …
Testing in the real world as soon as possible
This may not be fully possible for all projects, especially during Covid-19, but it should be just common sense at this stage that you need to get your innovation solutions into the hands of test users (who aren’t on your team) as quickly as technically possible.
You never really know if something is good until it’s being used, and you can’t just ask people if they like it, because they’ll just say yes. You need to observe people, see if they struggle with it, or use it easily — and if possible, see if they actually use it when they’re on their own.
If testing results are bad, you’ll have time to make changes and iterate, or just cancel the project and move on.
What do companies need to do quick innovation like this?
Innovation done correctly isn’t easy, and requires several things that may take time to accomplish / grow:
- Technical excellence — innovation execution isn’t for junior engineers, it’s for seasoned professionals who can build things really quickly and be comfortable operating in the unknown. This also most likely means having a serverless first approach, which will allow you to operate at speed. Technologies such as CDK will allow you to get solutions into production extremely quickly, giving you more time for the …
- Design led approach — again, hopefully this is common sense now, but before building anything you need to understand the real problems, talk to the real users, and come up with potential solutions. Design workshops, sitting with users, observing them — and iterating this approach throughout the project is key. I recently built a new website to give users access to high-res aerial imagery — instead of “demo meetings” we had a Teams channel with our users & business partners and were in daily contact; if they found a problem we’d fix immediately and update the prototype, likewise if they had a new feature idea. Constant communication and re-designing based on almost real-time feedback.
- Actual acceptance of failure — I mentioned this already but it’s worth saying again. You and people you report to have to be comfortable saying “we spent X amount of time on this, it didn’t work, this is why, this is what we learned, and this is how we’re using that knowledge on Y”.
- Risk appetite for the unknown — this is probably the most difficult one; you & your company must be comfortable trying new things that really aren’t intuitive, or that seem too far-fetched or too risky. Remember innovation is new — this requires risk taking. If you hear “we can’t work on X, there’s no money in that” or “we can’t work on that, it’ll look like we’re playing with toys” too often, you may have a risk appetite problem. The solution — short research projects and test as soon as possible! Evidence proves or disproves value, nothing else will.
Final thoughts
So, to finish off with some closing thoughts, to innovate: find potential new value, build it quickly and test in the real world.
Any thoughts or comments, let me know below, or feel free to reach out on LinkedIn or Twitter. You can learn more about my company, Liberty IT here and yes, we’re hiring!
