Six principles to drive corporate innovation.
2019
Why you should consider isolating and protecting teams to unlock business value.
Discovering and unlocking new value requires contrarian thinking and an ability to see and do what others before you haven’t. Genuine unbounded thinking that leads to commercial value is difficult to sustain inside organisations. From my own experience, most embedded business practices, policies and organisational divisions are designed to reduce the Cost-to-Serve instead of creating new commercial opportunities.
How can you overcome this organisational inertia to implement a targeted and focused innovation capacity, even if only temporarily?
One solution is to purposefully isolate an innovation team from the core organisation. Essentially, these teams should be mandated to start up in opposition to the core business. Isolation allows teams to temporarily escape the company norms and beliefs that subconsciously restrict imagination and dampen curiosity.
Here are six operating principles that you should apply to drive successful corporate innovation:
When you strip things back, what’s powering innovation and design inside your organisation?1. Customer centricity
Ensure you see the opportunity through a beginner’s eyes. Deeply understanding the experience of the first-time user will highlight exciting development opportunities. Their unmet needs are more explicit and observable than those of a seasoned user of your products and services. Our own familiarity with a product experience tends to mask service pitfalls and breakdowns, blind spotting our ability to improve upon what exists today. Emphasis should be focused on asking innovation teams to routinely iterate concepts with their market. Doing so keeps work focused and prevents solutioneering (designing solutions before understanding the real problem to solve) from emerging.
2. Define success, not the product
Employ OKR’s (Objectives and Key Results) that keep the team pegged to your innovation goals, but don’t prescribe ‘how’ and ‘what’ these teams should pursue.
Avoid unhealthily constraining a new venture team with existing process, governance cycles and well-trodden thought patterns. Rules and policies designed for collective harmony will slow a small innovation team from making impact and progress.
3. Measurable experiments
Design and create user experience test scenarios that either prove or fail an idea. Design these experiments to generate data that can drive decision making. These experiences may look like a fusion of subjective experimentation (gutfeel and intuition) with metric quantification and analysis mapped to defined OKR’s.
If data produced doesn’t show what you expected, examine ‘why’? It might be you have failed quickly and it’s time to move to another opportunity.
4. Apply constraints
It feels counter-intuitive; however, applying the right type of constraints will fuel creativity and accelerate innovation. Constrain teams with currently accessible technologies and viable budgets that lead to the creation of feasible and implementable concepts.
Your organisational purpose is an ideal constraint with teams hunting for value. The team may see opportunity, however can your organisation pursue it within the boundaries of set purpose? Purpose is often the best and most difficult constraint to apply to innovation initiatives.
5. Create (and fail)
Employ a create-it/fail-it mindset. Teams should be passionately driven to create the next valuable opportunity and as equally dispassionate about eliminating it quickly. Innovation teams need to find every reason why a concept won’t succeed in market before pursuing further development.
Generally, if something fails in a lab environment, it was never going to succeed in the real-world. This is where data-driven decisions become important. Data provides an objective means to dispassionately eliminate ideas without demotivating teams.
Ideally your innovation teams should operate with enough detachment from their concept that they are objective enough to see and understand when it is failing.
6. Routinely Integrate
Routinely integrate innovation outputs back into the core business. Even if pursuit of a specific opportunity may have failed, what new elements can be deployed back into business-as-usual to lift current performance? In these instances, innovation can be a gambit for other teams and departments to benefit from. Consider routinely showcasing project outputs to multiple business units to transfer lessons learned.
With a small team stood up and operating in short iterative cycles, how long should your start-up innovation activity run for? This will be dependent on your appetite for innovation and what can be financially absorbed by the business. Aim to be fixed around the commercial value expected and flexible around ‘what’ and ‘how’ it is delivered to you.
Experiment with these operating principles and see what works best for your specific challenge.