The Innovation Experiment: Year 4.
It’s year four of my experiment to figure out how to apply startup and scale-up techniques, tools, and tactics to corporate innovation.
After selling GetViable in 2013, a platform to help founders get from idea to MVP, I wanted to solve a bigger, seemingly obvious problem. How do you connect start-ups to corporate innovators to drive value for both?
Since July 2014 I’ve been running a multi-year experiment, to understand how to plug start-ups into corporates. Start-ups have ideas, entrepreneurial people and freedom of thought and corporates have money, scale, resources, mature processes, and customers.
My thesis is that you can use well-proven techniques, tactics, and tools used by start-ups and scale-ups in a corporate innovation environment to drive real innovation that delivers results.
What are great innovation results anyway?
- An employee engagement program to help staff think about problems in a new way, amplifying the work of the frustrated innovators in the business.
- A training program to teach these techniques to staff, like Lean Startup, Design Thinking, Pretotyping and Pirate Metrics so they have the tools to stop and assess ideas before wasting precious resources on the wrong ideas.
- An experimentation program to rapidly test, learn and prepare for new technologies, services or business models.
- An evangelist to help the organization to understand that the sky is falling right now and we better get off our asses and innovate.
Or the holy grail.
- Creating disruptive, non-organic growth by finding that 10x breakthrough product that customers love and will part with cash to have.
All I needed was a company willing to let me figure it out.
Three years later I’ve worked for two of these companies.
Experiment 1: Outside-in. Consulting with ThoughtWorks
ThoughtWorks is on the edge of self-managed, empowered people/culture. They have a reputation for excellent, smart technical people, are niche and expensive and attract clients that want this. Perfect.
ThoughtWorks attracted this client-base and sent me in whenever someone said ‘disruption’, ‘innovation’, ‘startup’, ‘accelerator’, ‘fail-fast’, ‘lean startup’, etc.
This allowed me to engage with forward-thinking members of large corporates who wanted to learn more and experiment.
Finding the brave soul driving innovation at these companies is key.
This gave me a good level of insight of what Tier 1 companies in Australia and New Zealand think innovation is, how they approach innovation and the challenges and opportunities executing innovation projects.
What I learned here is:
- Innovation creates strategic advantage. Most clients are happy for short-term engagements but realise very quickly that they need to execute their innovation initiatives themselves for exactly this reason. The challenge is they don’t have the right people, mindset or tools and techniques to do so in most cases.
- There is an abundance of smart people and great ideas inside each business. They just need to be unleashed and appropriately guided and managed. Finding ideas is not the problem — figuring out which ideas to pursue or discard is the challenge. Pretotyping is ideal for this.
The opposite, however, is true.
- Sticking ideas onto a wall, chatting about them, Lean Startup, Lean Canvas, Pretotyping, etc. seem simple on the surface. Few people put in the effort to understand and execute these correctly or to learn the right way to approach early stage innovation, resulting in poor outcomes, money and time wasted on the wrong ideas and as a result, surprise — poor or no outcomes.
Experiment 1 Complete. It was time to move on.
Experiment 2: Inside-out. Heading Innovation at Sportsbet
I was looking for a high growth, digital e-commerce company that genuinely wanted to experiment and innovate. The company also had to be relatively autonomous with decision making — hard to find in Australia as most larger corporates are sales offices of larger conglomerates, regardless of what they tell you. I wanted to have a platform to figure out what worked, test these techniques at scale and plug early stage start-ups into the process to innovate at pace.
Sportsbet fit the bill perfectly for this phase of the experiment. Sportsbet gave me a decent budget and leeway to mold the team in the best way we could. We settled on three startup techniques to filter out the good ideas from the not-yet-ready ideas:
- Pretotyping by Alberto Savoia from Google / Stanford
- Lean Canvas by Ash Maurya
- 500 Startups Pirate Metrics
We tested hundreds of ideas by combining these three approaches, saving millions of dollars by not building the wrong stuff. Quickly validating ideas to productise them and creating an environment where everyone could participate in innovation.
What I learned here
One the biggest learnings is that innovation is a new discipline for most and tough to execute.
As an Innovation Leader:
- You’re a change agent. And everybody hates change.
- You’re an evangelist.
- You’re a salesperson.
- You’re a technologist.
- You’re a VC.
- You’re a cynical optimist.
- You’re a storyteller.
- You’re a mentor.
- You’re a relentless communicator.
At the end of July 2017, I left the Head of Innovation role at Sportsbet.
Every few years I like to step out, assess the landscape and deliberately choose where I focus my energy next. This is that time.
I think of employers as systems I pass through where we exchange value — I bring knowledge, capability, and outcomes and they bring knowledge, resources, customers, and cash. This relationship needs to be in balance, and when it’s not one of us should leave.
In both cases, I decided to leave while we still valued and liked each other. The business is in a good state to continue on the innovation path it has chosen, hopefully enhanced in some small way by me being there. My relationship with the people and business remain in place for future engagement.
After three years, I’ve learned that Innovation Leadership needs:
- Unwavering executive support. Test this with Question 1 from McKinsey’s ‘The eight essentials of innovation’,
Do you accept innovation-led growth as absolutely critical, and do you have cascaded targets that reflect this?
which concludes with
‘In our experience, though, CEOs are likely just going through the motions if they don’t use evaluations and remuneration to assess and recognise the contribution that all top managers make to innovation.’
- a three-year horizon at most. Why? This is the tenure of many CEO’s and they’re working for their near-term bonus unless…
- there is an environment of genuine constraint to get traction. Think energy retailers, general retailers under threat from Amazon, the music industry, etc
- an unwavering belief and trust that the ‘process’ will deliver tangible and intangible benefits to the business,
- strategic clarity and alignment,
- the right people. People that don’t fit properly, challenge the norm, have startup or innovation experience and Get Shit Done.
- space and time to experiment,
- a global network of relationships,
- being a strong and active node in the local innovation network (see Brad Feld’s thinking).
Experiment 3: Outside-in?
I know it’s time to move on and find the next thing. Right now this looks like working with scale-ups, accelerators, engaging with corporate innovators, venture partnering or innovation consulting.
I want a broader perspective and success looks like this:
When I look back in a few years time I’ve helped to impact entrepreneurs, corporate innovators, and the innovation ecosystem positively, at scale.
As the next step I’ve just returned from spending time with some of the biggest thinkers I know — the Singularity University Global Summit in San Francisco. This conference made a tremendous impact on my thinking last year and this year didn’t disappoint.
More on that to come.