Sramana Mitra: What have you concluded, through your various assignments, in terms of process? What processes have worked for you? What are examples of best practices?
Anita Sands: Let me share two. They’re related. As I look back on all of the various processes that we put in place to try and work through innovation, from ideation right through to end-to-end execution, was that innovation really works for large companies at the perfect intersection of three things. I used to describe it as a three-legged stool. If one of the legs is shorter, then things would topple over.
First of all, there needs to be a market need. There needs to be a customer need for the problem. The second is there has to be a business model. There has to be a way to make a buck or save a buck. The third is, there has to be a technology that is robust, mature, and scalable enough to support your idea and develop your solution at a scale that a large enterprise needs. If one of those three isn’t right at the right moment in time and they don’t come together perfectly, then it won’t work.
A great example for us was probably the early days of mobile payments back in the 2006 era. I was working in Canada. We knew mobile payments were coming. We absolutely knew that it was going to be something that the bank would end up doing and doing a lot of. We were starting to explore the territory and how we might engage. What was very clear at that time though was that the market need wasn’t fully there yet.
At that time when we started going to market with it, it was clear in Canada that only certain segments of the population actually wanted to adopt mobile payments. They were mostly immigrants or younger people. It wasn’t the mass market adoption that you see today. The second thing that we ran into was from a business model perspective. It wasn’t clear between the banks and the telcos who would actually own the relationship with the customer and how the economics would work.
The third thing was, from the technology standpoint, the only way to deliver online payments was through SMS messaging. That was a very limited technology architecture for us to work with. Looking back, it was a really valuable lesson. All you needed to do was roll the clock on a couple of years with the introduction of the iPhone. You could see how the market was going to move quickly. You have to get your timing right. That was one very valuable lesson that I learned.
The second is that when I talk to a lot of companies, they talk about having a funnel. They might start with a hundred ideas. Their batting average may be four out of a hundred that gets executed. When I look back, funnel is the wrong concept. A better concept is a conveyor belt. The pace of change is so fast now that some of the reasons why you decided not to pursue a certain idea at a point in time may have shifted.
You need to be willing to revisit ideas and accept that your assumptions may have changed. The conclusions you reached may no longer be valid. I’ve seen a lot of teams where when one person comes into the company and says, “How about XYZ?” The tenured employee would say, “We tried that two years ago. It didn’t work.” That may have been the right answer at the right time but that’s not to say that the condition and the underlying circumstances haven’t changed.
Sramana Mitra: That’s a very good point. In our process, the few things that we have learned that speaks to some of your points is, we do contests. Twice a year, we do contests where we invite employees to present applications and apply to be part of a structured innovation program. Then the corporation gets to choose which projects are going to be actually supported whether it’s process innovation or product innovation.
So far, we only work with technology product companies. The methodology is very much technology product company oriented. Your point about timing is very interesting. In some cases, somebody within the organization will come up with an idea as they’re going through the program with us.
They will come up with an idea. That idea may have competitors in the startup market. That’s validation in itself. That company has to make a choice whether it’s a build or a buy decision. Is it worthwhile buying this company for a very huge amount of money or is it something that you just build?
You have the channel already Oracle or ServiceNow would have the channel. If it’s a development project that can directly go into the channel to the existing customer base, you can leapfrog the startup’s entire cycle of development doing that. That is a timing question.
Anita Sands: That’s exactly right. That’s another challenge that organizations fail to understand. You have to create capacity for change. You have to create the capacity and the capability. A method like yours that gives everybody transparency into how innovation is going to work. That’s another issue. You see companies put an ideation platform. Then they fail to execute on any of them. That creates a huge sense of disillusionment. It’s one thing to know that your idea was looked and not pursued for all the right reasons. It’s another thing just to feel like it’s vanished into a blackhole.