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5 Innovation Metrics You Need to Know

When it comes to early stage innovation, we can’t rely on metrics such as ROI or NPV to determine success, particularly given that such metrics favour short term returns whereas disruptive innovation can take years to deliver the kind of returns that large companies are seeking. If you’re evaluating disruptive innovation through a short term lens then disruptive concepts will either not get funded or the plug will be pulled prematurely in the event that they receive some initial funding.

What we want to measure early on in the innovation lifecycle is learnings.

In order to validate that the assumptions underpinning an idea or business model are flawed or valid, we must experiment, learn and iterate relentlessly in order to move closer to product market fit.

With that, I bring you 5 innovation metrics you need to know which leverages Dave McClure’s Startup Metrics for Pirates.

1. Rate of Acquisition - validating the problem

The first indication that people actually care about an idea is whether or not they actually click through to a website via say, an advertisement.

2. Rate of Activation - validating the solution and features

Upon people finding out a little bit more about the solution, do they leave their email address, contact the company or sign up to a mailing list?

3. Rate of Conversion - validating the revenue and pricing model

Do people ultimately pay for a product or service?

4. Rate of Return - validating stickiness and engagement

Do people come back?

5. Viral coefficient - validating viral qualities

Do people refer friends and family?

Case Study

At Collective Campus, we’ve been working with a global life insurer in this space.

The insurer is interested in building an online

Rather than overcommit and invest millions in design, development, marketing, accounting and legal support before finding out whether people will actually engage, we’re helping them generate the

Based on an evaluation of the portal’s business model we were able to define:

  • Target customer segments
  • The problem being addressed
  • The solution to the problem
  • Key features
  • The revenue and pricing model

We then performed the following activities to generate the metrics that matter across the different tiers of the funnel.

Acquisition: Ran an assortment of customer segment targeted Facebook ads and Google display ads with ad copy addressing the problem we defined and to a lesser degree, the solution.

Desired

Activation: Developed a large number of landing pages with different copy to reflect the solutions and features being proposed.

Google Analytics was

Desired

Conversion: Once people click Find Out More, they are asked to enter their details and click submit. Once they do this a pop-up box appears inviting them to sign up to the portal for one month at a special early bird rate of $10 per month. Note: the portal doesn’t exist at this point and upon clicking ‘sign up’ users are told that “we’re not ready yet and you will be notified as soon as we are”. It’s important to use a mock brand to avoid reputational damage here.

Desired action: Click 'Sign Up' button

Return: We send marketing emails to emails we’ve collected and see if they will open the emails and click back into the site.

Desired

Refer: We send marketing emails to users asking them to share the product with friends in order to receive a month’s free subscription. A simple calculation you can run to test how viral your platform is the viral coefficientInvitebox is a great tool to help you embed a referral function into your emails.  

Desired action: Shares product with friends

Ultimately, you want to determine what your metrics look like today, where you want to be tomorrow and what you need to do to start tweaking these metrics towards where you want to be tomorrow.

However, if after numerous tweaks the numbers still aren’t moving, then it might speak volumes about the commercial viability of the problem, solution or business model you’ve identified.

Don't want to take this approach? The alternative is simply taking big bets on unvalidated ideas and pay up to 1,000x more for an exponentially riskier approach. This alternative approach, which ultimately shuns the customer in favour in inside the building

11 Questions to Ask Before Starting an Innovation Project

Ask good questions and you get good answers. Ask the wrong questions, or worse still, don't ask questions at all, and you're essentially driving blind with no sense of direction.

When it comes to innovation in a large company, it is an end-to-end commitment and each stage of the innovation lifecycle must perfectly integrate into the stage before and after it.

If the foundations aren't stable, then chances are that all of the subsequent steps will be flawed, ultimately resulting in questionable outcomes and little benefits realisation, if any.

When starting an innovation project, particularly one that focuses on Horizon 2 adjacent innovation or Horizon 3 disruptive innovation, we need to ask the following elevent questions:

1. What customer job are we addressing?

Is the job of a lawnmower to cut grass or is it actually to keep the lawn tidy and amongst other things, spare us the judging eyes of neighbours? Understanding the customer job helps us identify pain points and gains sought. 

2. Are we actually solving a problem or creating a gain?

Once we understand the customer jobs we can define pain points and gains sought, This puts us in a position to design solutions and ultimately define the value proposition. 

If we defined the customer job of a lawnmower as 'cut grass' then we will only come up with solutions that have blades. However, if we defined the job as 'keep the lawn tidy' then it lends itself to a whole range of solutions. 

3. Is the customer over-served or under-served by existing solutions?

 

Understanding whether a customer is over-served or under-served by existing solutions allows us to determine the size of the opportunity and prioritise between competing ideas.

4. Can we build it?

This is pretty straightforward. Can we build it? If not, can we find somebody else to build it at a reasonable price? Early on all we want to do is build a prototype to help us test assumptions underlying our value proposition and business model. If we can validate these core assumptions then we can justify spending a little bit more building out the next phase of the product. 

5. Are we entering a treacherous red sea or a clear blue sea?

Entering an already polluted red sea where competition is rife is no way to innovate. Innovation is about capturing new markets - if you can be first to market with a disruptive innovation you are six times more likely to succeeed and the revenue generating potential is 20 times greater. If you enter a red sea, margins are slim, cost to market is high and growth opportunities are small. 

6. Has it been done before? 

It's important to look at analogs (other products that validate market appetite) and antilogs (products that invalidate market appetite) in the market. For example, analogs for the iPod were the Sony walkman (validate mobile music consumption) and mp3 players (validate that people would download mp3s to external devices). Likewise you want to identify failures and understand why they failed and whether or not this learning presents an opportunity. 

7. Can we test it relatively quickly, economically and effectively using our existing networks and ability to prototype?

If we can't then we won't be able to move quickly enough and may over-commit time and money to something that that there may be little appetite for. However, today all it takes is a little imagination to build prototypes for even the most ambitious technical endeavours. The first prototype for Google Glass was built in just one day

8. Will people pay for it?

Quite self explanatory but the amount of products that large organisations build for which there is little eventual market appetite is not to be snickered at. We want to build prototypes to not only validate the product/solution fit but also the revenue/pricing model. 

9. Furthermore, will it cost less to deliver than people are willing to pay for it?

What's the cost of delivery per customer and customer acquisition cost? We need to understand this and compare it to the lifetime value generated per customer. If each customer is worth approximately one million dollars but it costs us $1.1m to deliver said product then we're operating at a loss and need to rethink our business model. 

10. Is the market large enough OR have we got a strategy in place to grow a new market? 

While the market size question can be the death of disruptive innovation is most large companies - because the market is initially insignificant by large company standards - understanding how we might grow and capture a new market is another question. Have you identified some early adopters, initial marketing and channel partners?

11. Is this scalable?

If we are successful in finding product market fit and validating our business model, what will it take to 100X, 1,000X or 10,000x the business? Can we scale or do we need funding and partners? How would we go about that? Would scale affect our business model and what makes us tick as a startup? What would be the cost per unit if we scale? Will our business model still make sense? 

If you're embarking upon what is dubbed a disruptive innovation project but most of the above questions remain unanswered, you might want to spend a little bit of time understand them otherwise you might be confusing action with effectiveness and prioritising the urgent over the important. 

The Hierarchy of Needs for Corporate Innovation

Most of us are familiar with Maslow’s Hierarchy of Needs. The theory on psychological health is now almost 70 years purpose rather than just profit, in stark contrast to prior generations, a testament to having already met their other needs.

Maslow's Hierarchy of Needs

One could draw parallels between this hierarchy and the hierarchy of needs when it comes to innovation within a large company.

Let’s dig a little deeper into what I’ll dub the Hierarchy of Needs for Corporate Innovation.

Appearance:

Typically,

Examples:

  • Senior executives visit Silicon Valley
  • The word “innovation” litters annual reports and corporate publications but isn’t
  • Keynotes are delivered on innovation by external speakers
  • Senior executives call for the workforce to “be bold and innovate” without creating an environment to support these behaviours

Awareness:

This step is all about improving executive and employee awareness and planting seeds for a mindset and cultural shift across the organisation. Helping people understand why the organisation needs to innovate and what innovation is.

Examples:

  • Idea contests and hackathons that tend to focus membeddedengaging employees and showing them a different approach to business and product development (as opposed to tangible revenue generating outcomes)

Capability:

This is when organisations actually

Examples:

  • Training employees in innovation theory and methodologies such as GE has trained over 5,000 employees in the lean startup)
  • Systems, resources, values and processes are created or re-designed to support innovation behaviours and the culture that underpins it
  • Idea contest and hackathons with a focus on outcomes (such as problem, solution and business model validation), not just inputs, are performed
  • Innovation outposts and incubators are established

Defend:

The organisation focuses on defending its existing turf through a mix of incremental Horizon 1 innovation and to a lesser extent, adjacent Horizon 2 innovation (the latter teeters between defensive and  growth attributes). Stretch the existing S-curve as far as it’ll go.

This might also involve investment in and acquisitions of startups and emerging technologies.

Examples:

  • Improving the performance of existing products and services 
  • Netflix protecting its turf by creating its own TV shows and feature films
  • UberEATS applying its technology to the delivery of food

Grow:

The elusive pinnacle. The organisation successfully discovers and commercialises disruptive Horizon 3 innovation and builds entirely new markets or replaces existing ones, fostering the development of a defensible next 

Organisations that get this right can re-invent their entire business models.

Examples:

  • Amazon reinventing itself from just an online bookstore to digital media consumption and being the number one cloud infrastructure provider.
  • Apple developing the iPad and creating an entirely new market

Each stage serves a purpose of some sort - what's important is that we don't confuse level 1 inputs with the ability to create level 5 outputs.

In many ways, given that cultural transformation is no easy feat, progressing through the different stages from acceptance onwards makes a lot of sense, so long as that progression is done with senior executive buy-in, budget and a genuine commitment to embrace ambiguity and learn along the way.

Where is your organisation in the hierarchy? Is it in appearance pretending to be in growth or is it genuinely making an effort to build a culture, environment and capability to explore and deliver adjacent and disruptive innovation?

Lucky You're With... a Case Study in Terrible Insurance Customer Experience

I was unfortunate enough to be on the receiving end of some storm damage a couple of months ago, during which time I had to engage my home insurer to help me undergo the necessary repairs.

Water had seeped into my entire townhouse resulting in damage to carpet, floorboards, a mattress, several electrical devices and walls and parquetry, all of which would have to be replaced or repaired.

What followed was an inside look into what was perhaps a case study in what not to do when it comes to customer experience and why the door is wide open for insurance startups looking to disrupt the space by offering significantly better customer service.

So without further adieu I bring to you all of the pain points on my journey from free customer experience consulting for insurers reading this).

I was very tempted to include the insurer’s name in this article but I’m sure they (and my very smart audience) can work it out.

1 - No Update on Wait Time / Place in Queue / Call Back Service

The first few times I called it was on the back of a recent storm so understandably wait times were long. However, I was given no indication as to just how long or how far I had progressed in the queue. Unlike other companies with more progressed customer service, there was no offer of a call back either.

I had to hear the same "thank you for waiting, your call has progressed in the queue and we'll be with you as soon as possible" in between ads every 30 seconds.

FYI, the longest I waited was 1 hour and 40 minutes.

Recommendations:

  • Let people know what the approximate wait time is
  • Let people know what position they’re
  • Offer a ‘wait in silence’ service
  • Offer a

2 - No “Sorry For The Wait”

While a long wait time can be excused, given increased demands on staff post a natural disaster, insult was added to injury on several occasions when not as much as a simple “sorry for the wait” was offered. Often I was greeted by an assistant asking for my claim number in a cold, robotic voice.

On one occasion, I mentioned that I thought it was pretty poor that even the long wait time when I finally got through was not even acknowledged and still got nothing but silence in response.

Recommendations:

  • Add some humanity to calls
  • Acknowledge the other person’s time has been wasted and extend a simple apology on behalf of the company. People will understand as long as it’s coming from a genuine place.
  • Say "sorry for the wait"!

3 - Trying to Upsell Customers While Having a Bad Experience

To further add insult to injury while waiting for more than one hour on several occasions to speak to a consultant, the entire time ads are spun trying to upsell customers different types of insurance. The last thing I was thinking about whilst trying to get through to a human being was buying more insurance services.

Recommendations:

  • Provide the option to

4 - Poor Social Media Engagement

Initially

Recommendations:

  • Don’t have a social presence if you’re not going to use it
  • Don’t respond with generic answers that don’t acknowledge the human being behind the Twitter handle or address the person’s questions or concerns

5 - Expectations Set But Not Met

When I first called my insurer I was told that somebody would be at the property within hours to check and seal the roof to prevent additional damage and to salvage the carpet from ruin by removing the water it had absorbed.

I was assured that “we want to prevent further damage”.

Nobody visited for three days by which point  the carpet was absolutely ruined and required replacement.

On one other occasion, I was told that I would receive a call back within two days but had to follow up several days later due to a lack of said call back.

Recommendations:

  • Don’t set expectations that can’t be met
  • Set realistic expectations and add a contingency buffer to that

6 - Untargeted Communication

In between ads and being told that I’m an important customer during my existing claims queue.

Recommendations:

  • Align communication with the queue the caller is in
  • How about an online app to check on the status of your existing claim and leave comments/questions for review?

7 - Excess

After sleeping on my couch for five weeks due to a ruined, wet

This was after I had been told that an invoice would be sent to be so that I could pay the excess within a given timeframe.

Of course

Recommendations:

  • Don’t just remove an excess from an insurance payment without previously advising the customer
  • Don’t blindly point to the insurance policy as a form of defense for this path of action
  • Invoice customers for the excess instead of
  • If you advise the customer beforehand so that they can better plan and manage their cashflow

8 - Contractors too busy to engage during busy periods

Customers have paid premiums to their insurance company in order to get support in times of need. Post a storm or disaster of some kind it’s to be expected that an insurance company's preferred vendors and sub-contractors will be busy. But customers have paid premiums to get repairs carried out.

Recommendations:

  • In the event that preferred vendors are not available, customers should be permitted to engage their own independent contractors or buy replacement goods up to a certain pre-defined value, especially where time is of the essence and goods stand to perish if not tended to immediately, as was the case with the degeneration of my carpeting.

9 - Communication poor between my insurer and their subcontractor resulting in numerous call backs and follow-ups

  1. The insurer’s sub-contractor had advised me to call the insurer on a Saturday to speak to a client manager. I then waited 30 minutes to get through to the insurer on this occasion and was informed that client managers don’t work on weekends.
  2. I was told to call the insurer by a representative to speak to a client manager at 8am on a weekday. Upon calling, I was informed that client managers don’t start their day until 8:30am upon calling.
  3. On one occasion I was told by an insurance advisor that “we were under the impression that it had all been fixed” despite no work having been performed.

Recommendations:

  • Improve communication between the insurer and sub-contractors (a shared dashboard perhaps?)
  • Ensure all employees of both parties understand when people are available in order to avoid unnecessary customer wait time and

10 - No Accountability, Ownership or Monitoring

Rather than have one point of contact, I found myself being told by insurance advisors to call a client manager or the sub-contractor and by the sub-contractor to call the insurer, oftentimes getting through to the person I was told to speak to only to be told that I should speak to somebody else. At one stage I felt like a pinball being ricocheted between parts of this minefield that is the progression

Furthermore, there appeared to be no monitoring or

Recommendations:

  • One point of contact
  • Monitoring in place (single dashboard between the insurer and its subcontractors perhaps?)
  • Clear communication lines. If being transferred or told to spend time calling other parties, ensure I am being referred to the right people.

We’re living in an age where experiences like this simply aren’t sustainable.

Customers are in charge, they expect more and they will vote with their feet and they'll tell the world about it via social media.

Optimising customer experience can be the difference between success (eg. UBER) and failure (eg. taxis).

How many of these customer experience mistakes is your company making?

How to Optimise your Return on Failure (RoF)

If you’re not failing, you’re not innovating.

Elon Musk’s words are echoed by most successful entrepreneurs and corporate innovators.

If you’re not willing to fail, then you will only ever embark upon safe, incremental improvements, where you have all the answers and therefore can’t fail.

However, in today’s rapidly moving environment yesterday’s answers are fast becoming redundant and tomorrow’s are mostly unknown. The only way to unlock the answers is by doing, failing and learning from your mistakes.

But failure, done incorrectly, can cost companies millions.

This is why it’s important to optimise the Return on Failure (RoF) in order to support management buy-in, optimise learnings and increase an organisation’s likelihood of success when it comes to innovation.

The Equation

Screen Shot 2016-05-06 at 11.59.45 am.png

If we want to optimise our RoF and therefore our learnings, we need to increase assets whilst decreasing resources.

How?

Increase assets:

  • Capture all potential learnings at the culmination of a project or innovation sprint
  • Store learnings centrally and distribute them throughout the organisation so that the entire company can learn, avoid costly duplication of errors and get to product market fit quicker
  • Leverage learnings in existing projects or business units
  • Celebrate learnings publicly in order to foster the development of an intrapreneurial culture, one that is critical for organisation’s serious about staying in business

Decrease resources:

  • Fail quickly, cheaply and effectively
  • Use prototypes to test project assumptions
  • If outsourcing innovation, use small lean startups and boutique firms who can deliver cheaply and quickly, not bloated global consultancies
  • Use smarter processes (eg. speed up decision making by giving innovation projects set budget and authority so that they don’t need to outsource decision making to slow moving steering committees and the like)
  • Decrease system cost (use OTS platforms like Instapage to build faster, analytics tools like Kissmetrics and Google Analytics and customer interviews to learn faster (see below for more like this)
  • Use the cloud where building a more functional version of a product. Do not work within the costly and slow-moving confines of legacy infrastructure)

How to Build, Measure and Learn Faster (theleanstartup.com)

By optimising RoF, we give ourselves the opportunity to place many more bets than we would otherwise and when it comes to innovation, experimentation and a relentless focus on the customer underpins everything.

Venture capitalists get it right once out of every ten times, and their entire job is to invest in early stage innovation so large traditionally conservative company has very little chance of staying alive beyond today’s 12 year average company lifespan (down from 60 only 50 years ago) if all they’re ever placing is few large bets.

15 Personality Traits of the Corporate Intrapreneur

When it comes to identifying, recruiting and nurturing intrapreneurs (corporate innovators and entrepreneurs), there are a number of characteristics and traits you should look for.

While many employees may get temporarily excited by the prospect of working on a ‘corporate startup’ or taking part in a hackathon, the number of employees who embody the mindset and approach required to successfully innovate within a large organisation is much lower.

What to look for, in no particular order:

1: Resilience and Tenacity

Building a new venture requires facing numerous roadblocks and setbacks, not only from customers, partners, regulators and so on but also internally, as intrapreneurs navigate the minefield that is corporate innovation, the processes, values and systems they need to work around and the politics that comes with it.

2: Influencing Skills

Large organisations are built to execute, not to discover. As such, most people in the organisation will not think like innovators and instead will think like risk managers and by extension of their trying to do what’s in the interest of execution, will hinder innovation.

Being able to effectively influence decision makers will play a significant role.

3: Connecting the Dots between Broad Interests and Experiences

This is two-fold.

To innovate effectively, associational thinking - or connecting the dots - is critical.

Steve Jobs connected the dots between calligraphy, zen buddhism, a visit to Xerox’s research centre to come up with the minimalist and clean graphical user interface of the first Macintosh.

But one can first not connect the dots without having broad experiences and interests in the first place which brings us to...

4: Curiosity

Broad experiences come with curiosity. Not simply accepting what is served up by mainstream media but diving deeper. Look for intrapreneurs to consume or have an interest in different types of people, music, art, film, literature, travel spots, sport, activities, news sources and so on that fall far from the definition of mainstream. Innovators are a little ‘whacky’ by societal norms.

5: Challenges the Status Quo

Innovators won’t just accept “the way things have always been done around here”.

They will question why things are done a certain way. They might propose alternative ways doing things. They will be the bane of the existence of change averse managers.

Innovators challenge authority and would rather ask for forgiveness than permission.

6: Well Networked

Corporate innovators tend to have a network outside the organisation, which in turn helps them build broad experiences, demonstrates curiosity and also helps them accelerate their internal ventures through collaborations with the outside. Look for them to attend meetups, conferences, have a large number of connections on LinkedIn and so on.

7: Shameless Self-Promoter

Entrepreneurs and innovators are shameless self promoters - they don’t care for tall poppy syndrome. If they can do a good job promoting themselves, they serve to build brand awareness, authority and their network which in turn suggests that they have the skills required to successfully promoting new ventures. They might blog, host podcasts, give talks, have a large following on Linkedin, be active on the Twitterverse and so on.

8: Passionate

Innovation isn’t a part time or casual gig. Corporate innovators must be passionate about their projects if they’re to carry them through all the various roadblocks, ask critical questions and apply critical thinking required to take ideas from zero to one.

9: Socratic Thinker

“All i know is that I know nothing” - while entrepreneurs may have vision, they are happy to concede that they don’t have all the answers, are relentless learners and realise that orapid experimentation will deliver better answers than their own internal dialog. Innovators are self aware and introspective and are able to take emotion out of the equation when evaluating progress.

10: Tolerant of Ambiguity

As with 9, rather than call for an elaborate plan up front, where the answers are prescribed, innovators realise that when it comes to Horizon 3, disruptive innovation, the answers are unknown. While people who exist to help an organisation execute will be scared off by this reality, innovators embrace it and do what they need to do to discover the answers that other people put in the ‘too hard’ or ‘too risky’ bucket. It’s the discovery of these answers that fosters disruption.

11: Vision

Innovators and entrepreneurs see things most people don’t. This is due to the coalescence of a number of different traits - passion, broad interests, curiosity and associational thinking to name just a few.

12: Self­-Belief

Entrepreneurs will be told they’re wrong or that what they’re working on is impossible by people who see the world differently. They will face many setbacks. They need to have self belief and strength to keep going when people say stop and to be able to filter good feedback from bad feedback along the way.

13: Flexible and Adaptable

They are also open to constructive criticism, customer feedback that invalidates their own ideas and changing the direction of an idea, despite having spent X amount of time on it.

14: Healthy

Successfully commercialising a new disruptive venture is a marathon, not a sprint, littered with many hills, peaks, valleys and troughs. Mental and physical health is required to build something from the ground up. Being on your game not just today, but over a prolonged period of time, where oftentimes long days may be the order of the day, is critical.

15: Productive

Curious and passionate entrepreneurs don’t want to waste time - so they find ways to manage their time effectively. Look for to-do lists, prioritisation of tasks, automation of mundane and repeatable tasks, the use of productivity apps, understanding when they’re most effective at certain tasks and executing accordingly and limiting their time spent in email. These types of people will get a lot more done in a 7.5 hour workday than peers who just roll with the punches.

What else do you think makes a corporate innovator? Let me know in the comments below!

5 Ways to Identify Intrapreneurs in Your Organisation

Large organisations are beginning to invest in innovation - usually this takes the form of idea contests, hackathons, incubation programs and intrapreneur programs. 

However, identifying the right fit employees can be a challenge.

While the idea of being part of an innovation program might sound sexy to almost everybody initially, it requires a particular type of person to generate the most value out of such a program and stay the course. I'm talking about the intrapreneur - an entrepreneurial thinker and doer, within a large organsiation.

So how does one go about finding such talent? I've identified five ways that I've seen work successfully below.

1 - Intrapreneur Hunt

If you’re on the lookout for entrepreneurs within your organisation, you need to identify people who not only find the idea of entrepreneurship compelling, but also characterise entrepreneurial behaviours and spirit. For more on what these behaviours are click here.  

A funnel approach, often used by marketing and sales, can be applied to finding suitable entrepreneurial talent by evaluating their engagement in an innovating vetting campaign.

The funnel might look something like the following.

Step 1 - Place posters around the office promoting a new mysterious program with limited but innovation suggesting copy - think “Gamechangers Wanted” or something to that effect. “Email 

This will pique the interest of a pool of people interested in both doing things above and beyond the realm of their existing role and people who seek change rather than run from it.

Step 2 - Send employees who expressed interest a short activity to complete This could take the form of a survey, an open-ended questionnaire and so on. The activity should take long enough (say 15-30 minutes) to complete in order to foster engagement by those not only expressing interest to go above and beyond, but those that actually spend some time demonstrating this behaviour.

Step 3 - Interview people who completed the survey and assess them against criteria, found here, in order to bring the number down to your desired number of participants.

2 - Psychometric Testing

Psychometric testing can help to identify personality traits that are synonymous with entrepreneurship. The Psychometric Project, a UK-based open source psychometric resource, evaluates people based on the following attributes:

  1. Achievement Striving, which refers to an individual’s intrinsic motivation and efficiency of work completion.
  2. Industriousness is considered to be an indicator of levels of persistence and hardiness, the ability to overcome difficulties and to remain functional in stressful situations.
  3. Passion refers to one’s enthusiasm, personal commitment to achieving goals and extent to which they will go in order to get ahead.
  4. Taking Control is linked to how far the individual believes themselves to have control over a situation and its outcomes, thus affecting their perception of positive and negative events.
  5. Creativity is indicative of how effectively one might generate new ideas, which is vital to an entrepreneur wishing to establish themselves within a niche market.

Check out this 50 item test to test your own entrepreneurial nous.

3 - Social Media Stalking

Entrepreneurs are a curious, inquisitive bunch and subconsciously connect the dots between broad and unrelated interests - this is often referred to as ‘associational thinking’. As such, most entrepreneurs aren’t content with the status quo when it comes to news sources, books, music, television, film, art and so on.

It only takes a few seconds to identify candidates online, privacy settings permitting, and ‘stalk’ their interests.

Do they seem to have a penchant for top 40 music only and whatever is trending on free to air reality television or have they demonstrated an interest in not so easily accessible media and opinions? Do they follow influencers of note on LinkedIn or is their profile blank and does their Twitter account suggest they spend more time following the Kardashians than they do the Elon Musks of the world? If so, they are more likely to not take things on face value, challenge the status quo and go hunting in search of answers to problems that most people don’t acknowledge.

If I was evaluating somebody’s fit for an innovation project purely based on musical taste, I’d take an Iron Maiden fan over a Taylor Swift fan any day...no offence to the Taylor Swift fans reading this!

4 - Startup Experience

This is particularly true of Gen Y employees. As the name suggests, identify existing employees who have embarked upon or are currently working on a startup outside of business hours. This is perhaps one of the most demonstrable and valuable indicators you can find of entrepreneurial thinking and doing.

5 - Routinely Challenges the Status Quo

I know these guys well...I used to be one.

At a number of previous employers, I often put decks together outlining problems with existing processes or systems and what opportunities existed for improvement. Unfortunately, these flawed processes weren’t limited to the way that decision makers got incentivised so the buck often stopped there.

However, truly entrepreneurial people will find it difficult to hold back and accept things as they are - they will either grow disgruntled and unproductive, leave to join more progressive companies or start their own.

It should be easy to identify these people if you’re a middle manager or decision maker in a company - they tend to be the most vocal about not adhering to “the way things have always been done around here” mantra and tend not to shy away from change management efforts.

To find out how I can help you identify intrapreneurs and run innovation programs at your company, get in touch below.

Success Cannot Exist Without Passion

Those who know me personally know that I am a supporter of the Western Sydney Wanderers in the A-League, Australia's top tier football competition.

I was inspired to write this thought piece by a tifo, or banner to the football layman, which put forward the idea that 'success cannot exist without passion', something which is just as relevant for the team's coach Tony Popovic, who was immortalised on the banner, as it is for innovation and entrepreneurship. 

But first, some context. The banner was unfurled on a day in which the Wanderers faced the Brisbane Roar in the semi-finals for a ticket  to the grand final. The Wanderers were twice previously vanquished at the final hurdle by the Roar and so no doubt faced significant mental adversity. 

This adversity was made all the more difficult when the Wanderers, playing on home soil, found themselves 3-0  down within 23 minutes of kick-off. 

However, in a dramatic turn of events, the Wanderers soon found themselves on equal footing less than 30 minutes later, eventually winning the game in extra time 5-4. Sounds crazy right? You can watch the video recap here

So what does this have to do with innovation?

Successfully developing truly disruptive innovation is akin to being 3-0 down against your old enemy, with no visible way back, but like the Wanderers...successful corporate intrapreneurs and startup entrepreneurs must embody the following personal attributes:

Passion - if you aren't passionate about what you're working on then chances are you'll leave many stones unturned.

Resilience - success with disruptive innovation is anything but linear. Resilience is critical to endure countless set-backs.

Self Belief - when you're building something that there may be no existing market for, when you're being rejected by clients, partners and investors, you need more self-belief than almost anything else. 

Fitness - building disruptive innovation requires intense focus and time commitment. A healthy body, mind and spirit provide the foundations to be able to perform at the level required for a sustained period of time. 

Vision - fast paced iterative development is great,

As for the Wanderers, they'll be playing the minor premiers (the team that finished on top at the season end) in the grand final and will need all of the above in droves to bring home their first ever A-League trophy in what will be their third grand final appearance. The third time's a charm, right?! 

50 Common Mistakes Corporate Innovation Teams Should Avoid

In my ongoing dealings with various organisations and innovation thought leaders, all too common mistakes have emerged when it comes to corporate innovation programs - especially when it comes to exploring what McKinsey calls Horizon 2 (adjacent innovation) and Horizon 3 (disruptive innovation).

These themes became so apparent in fact that I decided to capture these in a blog post for your reference.

Consider the following a checklist if you will - how many of these mistakes do you think your organisation or innovation program might currently be making?

When it comes to corporate innovation - each organisation is different and there is no silver bullet - but still, we can stand on the shoulders of giants and learn not to make these mistakes which can, with a little TLC, be easily avoided in order to not only cut the cost of making these mistakes, but increase our chances of success in delivering new commercially successful innovations to market.

  1. Trying to tackle innovation through isolated initiatives instead holistically - Read More
  2. Applying Horizon 1 policies, systems and values to Horizon 3 innovation
  3. No funding is made available to pursue ideas post a hackathon or idea contest - Read More
  4. People are not given time off to participate in hackathons and other innovation initiatives
  5. Using traditional metrics based on dollars such as ROI, IRR and NPV are used to measure success, despite the fact that Horizon 3 and disruptive innovation requires innovation metrics based on learnings - Read More
  6. Separating innovation initiatives from the mainstream - no integration with core business units - Read More
  7. Selected ideas are not given time to incubate learnings and are withdrawn early based on ROI not being sufficient, instead of looking at innovation metrics such as learnings - Read More
  8. Not determining a theme and criteria for idea contests, subsequently receiving hundreds of disjointed ideas of varying quality  - the majority of which receive can not be evaluated effectively
  9. Hackathons focus purely on building things, not on validating make or break assumptions underlying a business mode - Read More
  10. Ideas for progression are selected by senior executives only and based on flawed criteria such as short term ROI potential - Read More
  11. Beginning with a  ‘what is’ constraint based mindset instead of ‘what if’ resulting in narrowly defined, unadventurous and easily replicated incremental improvements
  12. Acquiring startups with and integrating them into the bureaucracy and systems of the mothership, ultimately killing them - Read More
  13. Pulling human resources from projects when competing interests arise
  14. Feedback is not given to people who submit ideas to an idea contest, subsequently resulting in disgruntled employees brandishing innovation initiatives nothing more than ‘theatre’
  15. There is no mechanism in place to build upon ideas in an idea contest
  16. Not effectively defining the objectives of an innovation program and the type of innovation that is sought (i.e. incremental, adjacent or disruptive - H1, H2 or H3)
  17. Not effectively defining what the organisation’s definition of innovation is
  18. Not updating performance reviews and KPIs to align with innovation objectives
  19. Not tieing innovation strategy with corporate strategy
  20. Selection criteria used to recruit people to innovation programs is often flawed and favours Horizon 1 ‘avoid failure at all cost’ personalities, but not Horizon 3 ‘embrace ambiguity and experiment rapidly’ personalities
  21. Middle management are not trained in nor incentivised to take part in innovation programs
  22. Engaging startups to speed up innovation but not aligning internal processes to support this speed (eg. long, drawn out procurement processes when engaging startups, steering committee meetings to communicate with startups, not making key people available to support startup testing and cadence)
  23. Engaging only large incumbent consultants with a large, slow moving cost base to support innovation efforts inhibiting the ability to move quickly and take lots of small bets - critical to the exploration of Horizon 3 or disruptive innovation
  24. Running hackathons without a strong mix of people with diverse skills and experiences - limiting breadth and depth of outcomes
  25. Senior executives dictate what the answers are and what products need to be built - without input from employees, partners, customers or members of the general public
  26. Confusing the adoption of technology with being innovative
  27. Thinking that disruptive innovation is simply filling existing and visible customer needs
  28. Not having a direct reporting line from innovation teams to the C-Suite or senior management
  29. Having an innovation team which is not integrated with other business units and/or the wider organisation
  30. Teaching people methodologies such as lean startup but not addressing the underlying culture, systems and processes that inhibit the application of lean startup principles - Read More
  31. Running focus groups to support brainstorming and market research with people who are paid to participate
  32. Asking focus group participants whether they would pay for something without actually having to demonstrate this behaviour
  33. Asking focus group participants leading yes/no questions which results in false validation of hypotheses
  34. People who vote on ideas as part of an idea contest do so without any knowledge of innovation theory - often resulting in contests amounting to popularity contests and one’s abilities to market the idea internally
  35. Creating innovation roles that are purely ‘part time’, signaling that innovation is not a serious priority
  36. Staff are not trained in innovation theory, design thinking or lean startup principles, yet are expected to act and move like startups
  37. Hiring new employees based on traditional Horizon 1 competencies and skill-sets
  38. Not investing in new technologies or innovations because initial revenue projections won’t support the achievement of short term growth metrics
  39. Not having a process in place to capture knowledge from innovation programs centrally and leverage it effectively across the organisation
  40. Insufficient guidance is provided to staff around ideation of initial ideas
  41. Not getting out of the building - internal brainstorming and a lack of customer focus
  42. Thinking that a startup is just a small version of a big company
  43. Thinking that a large company is just a big version of a startup
  44. Thinking that digitising broken offline processes is innovation
  45. Investing in technology without addressing the underlying business model
  46. Ignoring technologies that aren’t good enough for existing customers
  47. Trying to sell and experiment with existing customers
  48. Not investing because the market for a new innovation or technology isn’t large enough
  49. Silos - business units not effectively sharing knowledge or talking to each for the purposes of innovation, especially marketing and different product divisions - competition across business units can also inhibit innovation
  50. Misaligned communication and incentives across an organisation

If you're interested in finding out how to circumvent the significant time and cost involved in making and learning from these mistakes and navigating the corporate minefield, then reach out below.

How to Increase Productivity by 500% and Boost Innovation

Flow has been defined as a mental state of operation in which a person performing an activity is fully immersed in a feeling of energized focus. The term was first coined by Hungarian psychologist Mihaly Csikszentmihalyi in 1975 and is often referred to as as ‘the zone’, however few people truly appreciate that ‘the zone’ is actually a physiological state.

Why did I choose to write about a topic that may at first glance seem to have more to do with psychology and physiological science than business innovation?

The answer is simple.

A 10-year McKinsey and Co. study on flow and productivity found top executives 500% more productive when in flow. Interested in finding out more?

So I thought...

The Flow State

Before I go on, it’s worth knowing what the flow state looks like from a physiological perspective. The human brain possesses five different types of electric patterns, also called “brain waves” across the cortex.

According to C Wilson Meloncelli, the five brain waves can best be summarised as:

  • #1 Delta - experienced in deep, dreamless sleep
  • #2 Alpha - dominant during quiet thought, while daydreaming or light meditation
  • #3 Beta - associated with normal waking consciousness
  • #4 Theta -  intuition and processing information above and beyond normal consciousness
  • #5 Gamma - higher processing tasks and cognitive functioning

The flow state is activated when the alpha and theta brain waves coalesce - this is essentially the border between the conscious and subconscious mind.

Picture for a second a lone surfer about to hurl himself onto a 20 foot wave on a treacherous, shallow coral reef - in that moment, the mind is processing information above and beyond normal consciousness and intuition takes the driver’s seat (theta) whilst rest of the world simply slips away (alpha) to allow the lone surfer to focus only on one thing - riding that wave (well, maybe two things...staying alive).

According to Steven Kotler, best selling author of The Rise of Superman and founder of the Flow Genome Project, “if we are hunting the highest version of ourselves, then we need to turn work into play and not the other way round. Unless we invert this equation, much of our capacity for intrinsic motivation starts to shut down. We lose touch with our passion and become less than what we could be and that feeling never really goes away.”  

How I interpret this is that in order to be our best at anything, we need to be pursuing our passions which activates a sense of play otherwise we will only ever perceive work as just that and will struggle to tap into the flow state that sees free solo rock climbers (that’s climbing on your own without a rope) scale and survive 600 metre high walls. When it comes to pushing human limits, it’s a case of flow or die.

So you’ve never caught a wave, climbed a wall or jumped out of a plane? Have you ever been so immersed in an activity that time just seemed to slow down, you effortlessly and blissfully put in hours of work and the rest of the world seemed to just slip away?

That’s flow.

Did you find that state productive? Do you want to find that state more often?

Sure you do...

Triggering the Flow State

According to Kotler, there are a number of ways to activate flow states across psychological, environmental and social lines. Yes, you can engineer tapping into your flow state. How?

Psychological triggers:

  • Intense focus - no distractions, no multi-tasking, singular tasks, solitude
  • Clear goals - with calm, the mind doesn’t wander and can stay focused on the present moment and present action. Presence also underpins mindfulness and meditation which is essential to calm, clarity and better decision making.
  • Immediate feedback - knowing how to improve performance in real time means that the mind stays present, this is akin to the surfer changing tact while riding a wave based on the immediate feedback they’re getting from the very wave they’re catching
  • Challenge/skills ratio - Research shows that tasks which are 4% more challenging than our skills are capable of meeting strike a chord at the midline between boredom and anxiety - this is the sweet spot to maximise attention and flow.

Environmental triggers:

  • High consequences - elevated risk levels keep us focused. There’s no trying to get in the zone when it’s life or death / success or failure.
  • Rich environment - an environment with lots of novelty, unpredictability and complexity can focus our attention - not knowing what is coming next can activate flow.

Social and group flow triggers:

  • Serious concentration - think a basketball team all focused on the common goal of sinking the game winning shot with 5 seconds left on the clock
  • Shared, clear, goals
  • Effective communication
  • Familiarity - common language, shared knowledge base - everybody on the same page
  • Equal participation and skill level - professional athletes will be bored playing with amateurs who themselves will be frustrated with the experience
  • Risk - failure underpins innovation and creativity. WIthout skin in the game, be it monetary, mental, physical, creative, social and so on, then there’s no risk. Ever played poker without money on the table? No doubt you were “all in” on many an occasion when you normally wouldn’t be with real money down.

Some other triggers to explore:

  • Meditation and Mindfulness - calm the mind, think clearly, stay present on the task at hand. The Headspace and Calm mobile apps are great places to start.
  • Binaural beats - first discovered in 1839 by phsyicist Heinrich Wilhelm Dove, it refers to the coalescence of different audio frequencies, one in each ear, to help trigger brain activity in the flow state. You can listen to some beats at MyNoise.net and Brain.Fm the next time you’re doing something that requires your full concentration.
  • According to Matt Mullenweg, founder of Wordpress, listening to the same song on repeat gets him into the flow state, while Arkansas psychologist Elizabeth Hellmuth Margulis  echoed these thoughts in her bookOn Repeat: How Music Plays the Mind
  • Smart drugs, better known by those in SIlicon Valley as ‘nootropics’, are cognitive enhancers that support focus, memory, creativity and motivation. UFC commentator, stand up comedian and Brasilian Jiu Jitsu brown belt, Joe Rogan, says he won’t do anything that requires focus without nootropics. Popular brands include Alpha Brain, Nootrobox and Australia's Noots(disclaimer: I'm an advisor at Noots).
  • Batch processing - lifestyle entrepreneur and all round motivational guru, Tim Ferriss, popularised this in his New York Times bestseller The Four Hour Work Week. The idea is that you select times of day to batch certain processes, such as checking email, which he claims to do once or twice a day. This way, you’re limiting distraction and you stop chasing supposedly shiny objects down a rabbit hole.

Flow State Busters

So I’ve given you more than enough flow state inducers to work with, but what about flow state busters. Well, apart from the inverse of the triggers above, there’s no shortage of things that get in the way of flow each and every day.

Some of the more common busters might include:

  • No passion
  • No purpose
  • No tangible, measurable, visible outcomes
  • Email
  • Notifications
  • Phone calls
  • Texts
  • Open plan offices / unscheduled interruptions by colleagues

It’s worth mentioning the cognitive switching penalty here - the time it takes to get back into flow after being interrupted might be as short as a few minutes, but can often be more than 30 minutes. If your day is littered with the above interruptions then do the math and the numbers look pretty ugly, pretty quickly.

Business Model Innovation and Flow States

So you’ve heard of business model innovation.

McKinsey’s award winning article Reinventing Your Business Model suggests that a business model has four key elements - value proposition, key resources, processes and profit formula. Key resources refers to people, technology, products, information, partnerships, facilities, equipment and brand of an organisation. Classic cases of business model innovation leveraging the ‘people’ component of business models might include automating procedures usually performed by humans such as helpdesk functions or mundane transactional tasks.

But we rarely, if ever, look at radically improving the productivity of existing employees by triggering flow states. What if organisations invested some budget into improving the physiological state of human beings?

Measuring Flow

Forbes included ‘flow state percentage’, the amount of time an employee spends in flow state, as one of the five new management metrics that today’s managers and leaders need to know.

As Peter Drucker famously said, “if you can measure it, you can manage it” - and today, with EEG, we can measure flow state percentage.

An EEG (or electroencephalography for those of you that want to be technical) records brain waves and today there are multiple variations of this on the consumer market such as Muse and Melon. Now, we’re not advocating that employees stroll around with headbands on at all times but understanding what kind of work gets employees into a flow state, even if they self monitor at their own leisure, will provide valuable insights to help engineer the more frequent achievement of flow states.

The best selling author of the mindfulness bestseller The Power of Now, Eckhart Tolle, says of modern art that “because we live in such a mind-dominated culture, most modern art, architecture, music, and literature are devoid of beauty, of inner essence, with very few exceptions. The mind left to itself creates monstrosities, and not only in art galleries.  Look at our urban landscapes and industrial wastelands.  No civilization has ever produced so much ugliness."

What he is referring to is the fact that the modern mind is often a messy mind, clouded with work, social, monetary, emotional, psychological and physical pressures, and rarely focused on one task at a time. As such, most people spend little time in flow, resulting in sub-par performance and creative endeavours.

When it comes to innovation, we can run all the hackathons, idea contests and corporate incubators we want, but unless people’s contributions are coming from a place of unperturbed flow, then chances are that those contributions may be average at best.

Most people say that they have their best ideas while in the shower, after a gym workout, whilst going for a run - this is because these activities tend to calm the mind and free it from the noise of the world, allowing us to see things clearer. It is also the very reason why time-boxed brainstorming, while generating ideas, may not serve to generate very good ones.

Clearly, getting employees into a flow state is a powerful way to not only increase productivity, but also increase creativity and innovation in an organisation and just might be the secret weapon for organisations looking to differentiate themselves from competitors.

Hacking a Corporate Culture to Support Innovation

In my most recent podcast interview with Steve Blank, credited with developing the customer development methodology which birthed the lean startup, we touched on the topic of how the corporate culture inhibits innovation.

Culture is to innovation what soil is to a corn field, it’s critical to get it just right if it is to foster growth.

When Eric Ries taught 5,000 middle managers from GE the lean startup way, the company quickly discovered that actors without a supporting cast don’t make movies on their own.

With a history steeped in six sigma and a mentality of ‘get it perfect’, ‘avoid risk and failure of all costs’ and ‘we know what our customers want’, a radical culture shift was required before lean startup could be effectively implemented at GE.

So how do you go about changing the culture, particularly when people are resistant to change, have been taught to practice and preach a conflicting philosophy and are no strangers to “the way things have always been done around here” attitude.

In order to support innovation, it’s critical that we get people on the bus.

Hacking the Culture

Blank gave a great example of a Japanese company whose name he told us begins with ‘S’...let’s just call them, Sony, who had issues getting their middle managers to buy into a new company innovation program. The program required middle managers to give up some of their brightest staff for a period of time.

Naturally, middle managers were reluctant to let their best performers go because participation was not tied to their incentives and they didn’t see the value of the program.

What it took to change the culture

After twisting the arm of one middle manager to go first and reluctantly give up one of his better performers for a defined period of time, he was promptly presented with a letter of thanks from the President of the organisation, which in Japan, is a BIG DEAL.

Word spread, and soon everybody wanted a letter from the President, and they all got on board.

Questions to Ask

  • What or who is blocking innovation in your culture?
  • What cultural nuances exist in your organisation?
  • What do your people value?
  • How can we use these levers to ‘hack’ the culture?

We can look at this from both an intrinsic and extrinsic view.

Scientists who study human motivation have found that after our basic needs have been met, our next level of intrinsic motivators are mastery, autonomy and purpose.

Outside of intrinsic motivators, there are of course some external motivators that, while they can serve to get people on the bus, may not serve to keep people on the bus in the long-term.

Nonetheless, find below some key external motivators to get people on your innovation bus.

It’s critical to remember that no amount of isolated initiatives such as hackathons, idea contests and corporate accelerator programs is going to achieve much unless the culture of an organisation truly supports innovation and that the operating units of an organisation are aligned with its innovation objectives.

The above serves as a starting point to help hack a corporate culture for innovation.

Got any culture hacks you’d like to share? Leave your comments below!

Why Teaching Entrepreneurship is Critical

Half of the S&P500 will be replaced over the next 10 years at current rates of churn.

187 companies in the list today first entered it in the past 10 years alone.

Long standing incumbents are being replaced by companies such as Facebook, Amazon, Google, PayPal, eBay, EMC, Netflix, and Salesforce, among many others. Driving this disruption is faster, cheaper and ubiquitous internet access, Moore’s law, advances in data science, the cloud and rock bottom business startup costs.

There’s also a new breed of companies who haven’t yet hit the S&P500 that are having a huge impact on technological progress and human evolution. Companies such as Elon Musk’s Tesla and SpaceX are reinventing the way we consume energy, travel and explore the cosmos. Not only that but the impact that electric cars and innovations such as the Powerwall can have on our environment can not be understated. The Airbnbs and UBERs of the world are democratizing the way we access almost anything.

In healthtech, companies like Surgical Theatre are bringing flight simulation to the operating room to improve surgery success rates, ReWalk is helping people with spinal cord injuries to walk again while uMoove’s face and eye tracking capabilities help people with disabilities control technology and empower themselves to embrace technology and ultimately get more out of life.

Agriculture employs 40% of the world’s population and generated $120.6 billion for American farmers in 2013 - as such, improvements in farming methods can have a dramatic effect on both western and in particular, developing economies. Companies such as The Climate Corporation,

Granular and Tule are changing the way farmers work for the better, materially increasing and optimising crop yields while materially decreasing manual labour and resource waste.

Microfinancing companies like Oradian are vastly improving the opportunities and lives of people in developing countries by empowering them to build their own businesses and radically improve their earning power and lifestyles. Mobile payment vendor MFS Africa make it easy for workers in Africa to move and access their cash quickly and easily whereas they previously had to trek for hours through barren and dangerous lands to get to city centres - not only presenting a massive waste of time and opportunity cost but often resulting in physical degradation and harm on the perilous trek to and from the city.

People who run these companies see the world differently. They challenge “the way things have always been done around here”, they move quickly, they experiment and take risks, they measure relentlessly, they scan the landscape for opportunities both near and far, they connect these opportunities, they’re astute networkers, their curiosity doesn’t subside, and above all, they have a complete disregard for the common man’s definition of what’s possible.

They make sure that the companies they build and the people that work for them also embody these values.

The world is moving too quickly to stand still. According to Peter Diamandis of Singularity University, in 2001 it cost $5 million to start a company, in 2011 it was just $5,000. The microprocessor transistor count in 2015 was over 5.5 billion, it was less than 1 billion in 2011.

All of this means that a startup with a small team, a relentless focus on the customer and a problem, a fail fast approach to product development, with access to better technology than multinational corporations had several years ago, can play and disrupt companies with 1,000 times the resources who insist on operating under yesterday’s model.

Yesterday’s model of course refers to looking at things through a lens of absolute certainty. What’s the business case, how long will it take to build, who’s the market, what are the features, how much will it cost...what’s the ROI?

But in a world that moves as quickly as it does today, this model doesn’t work, and only ever lends itself to safe decisions that result in minor, incremental innovation - because truly disruptive innovation can not answer these questions, there are simply too many unknowns.

And the only way to uncover these unknowns is to move quickly, take risks, experiment, measure relentlessly and embrace the impossible. Sound familiar?

While there’s no shortage of startups and emerging high growth companies tackling challenges related to healthcare, education, environmental sustainability, agriculture and economic development in the third world and so on, they are in the minority.

The majority of resources are still locked up by organisations who refuse to take bold bets.

In the US, Government expenditure alone accounts for 41.6% of GDP while S&P500 companies account for about 13% of GDP - the majority of this spend is framed by old world thinking.

Take large bets, slowly.

Avoid failure at all costs.

Avoid risk.

This is testament to an education system that rewards the ability to recall facts, punishes failure and doesn’t focus anywhere nearly enough on critical thinking and problem solving. And in the corporate world we’re no better. Shareholder concerns, short term reporting, cookie cutter performance reviews and metrics like NPV ensure we only ever focus on sure things - which is never disruptive.

Can we afford future leaders to think like yesterday’s?

Can we afford another generation of risk averse leaders, taking safe bets while sitting on massive budgets with which they could achieve so much more, not only for themselves, not only for their company but for the wider good.

Imagine a world where leaders thought a little bit more like Elon Musk and did just a little bit more with their budget? We’re not proposing throwing out the old business model which is after all where companies make money today, rather we’re proposing the carving out a bigger piece of the pie for the exploration of disruptive, game changing innovation.

After all, billions are wasted on failed IT projects that go nowhere, due to the very fact that they embrace the old model of certainty based decision making - as such, they are complex, deliver little value to customers and often result in overblown budgets. Gartner found that these were some of the key reasons why Government IT projects so often fail.

Teaching children entrepreneurship is not only critical in a world where 60% of today’s jobs will be replaced in 10 years time, it’s also critical to pushing the human race forward tomorrow and moving us towards economic and environmental sustainability and prosperity for all.

Our Podcast is Number One on iTunes...and our Special Guests Coming Soon!

Having launched our podcast at the start of the year, we've had an array of insightful and distinguished guests on the program, including David Binetti, Niel Robertson, Fabio Oliveira and Humphrey Laubscher. We expected it to be fun, and it has been, but what we didn't expect was that we'd hit Number 1 in the iTunes Business News, ahead of the likes of McKinsey and Bloomberg, and have peaked at Number 11 in the overall Business category. 

 

So for this, we say...THANK YOU! We hope you've enjoyed the content we continue to put out by way of blogs, podcasts, infographics and tools, and if you haven't already - it would totally make our day if you'd show some appreciation by taking a minute to give our podcast a glowing rating on iTunes. 

What's next for the podcast???

Whitney Johnson - author of Disrupt Yourself

"I have used the word ‘disruption’ to understand how some companies blossom while others wither. Whitney has applied the word in a different context – to understand why some individuals succeed in remarkable ways. I enjoyed reading her book!" - Clayton M. ChristensenHarvard Business School, New York Times Bestselling Author, The Innovator’s Dilemma

Don Tapscott - Author of Wikinomics

Don is the CEO of the Tapscott Group and one of the most influential living theorists about business and society. In November 2013, Thinkers 50 named him the 4th most important business thinker in the world. A June 2013 Forbes.com analysis of social media identified him as the most influential management thinker in the world. He is the author or co-author of 15 widely read books about new technologies and new media, including Wikinomics and The Digital Economy.

David Burkus - author of Under New Management

David writes regularly for Harvard Business ReviewForbesPsychologyTodayand 99U. He has written articles in the past for Fast CompanyBloomberg BusinessWeek, and an assortment of other publications and is also the founder and host of Radio Free Leader, a podcast that shares insights on leadership, innovation, and strategy.

Soren Kaplan - Author of Leapfrogging and founder of Innovation Point

Soren is a globally recognized keynote speaker, the author of the bestselling and award winning book, Leapfrogging, a writer for FastCompany, an Affiliated Professor at the Center for Effective Organizations at USC’s Marshall School of Business, and the Founder of InnovationPoint.

Ben Yoskovitz - author of Lean Analytics

Ben is the co-author of Lean Analytics, 15 times angel investor and founding partner at Year One Labs. Lean Analytics is fundamental to helping large organisations identify and measure the correct metrics in order to support moving, learning and succeeding.

Braden Kelly - Founder of Innovation Excellence

Braden Kelley is a dynamic, engaging innovation speaker and recognized thought leader with experience training and consulting with some of the world’s leading organizations. He speaks at conferences and corporate events around the globe about innovation, organizational change, digital transformation, and leadsCharting Change facilitated change planning sessions. He is the author of Charting Change and Stoking Your Innovation Bonfire. 

 

5 Reasons Why Companies Should Outsource Prototyping

We know that getting out of the building (both literally and metaphorically) is the best thing for a company's innovation program. We also know that employing the lean startup methodology can rapidly accelerate even the largest company’s growth - after all, GE was able to reduce time to market validation by 80% in its industrial business unit by teaching its staff the lean startup philosophy and creating the Fastworks Program. But could a company outsource prototyping for a new idea completely and let a third-party organisation do all the testing and market validation?

Prototyping is all about running small experiments to validate ideas, test assumptions and recreate certain experiences about an idea, even if in a non-scalable way. For a large, traditional company, there are many significant advantages of outsourcing prototyping.


It's Cost Efficient

It's very common for enterprise and startups alike to spend tens-of-thousands to build one iteration of an idea, only to have to scrap the project because all the resource have been burnt out or there’s not enough market appetite (or both!). Outsourcing to a company that understands and employs the lean methodology can be incredibly cost effective. By using alternative prototyping methods to test assumptions, outsourced teams can design and run hundreds of tests for multiple hypotheses. As a result, these teams can complete multiple build-measure-learn cycles at a fraction of the cost, allowing for a far more refined and thoroughly tested idea when it comes to actual development.

Companies who develop prototypes in-house also run the risk of either overloading their current development team with the extra work, or find themselves being unable to provide steady development work should they source a new in-house development team while they test their current iteration. This leads to burnout and low staff morale, which is costly in the long-run. On the flip-side, you can employ an outsourced team on a project-by-project basis, meaning you only pay for outcomes, and not thumb-twiddling time.

Click here for 5 Ways to Avoid the Most Common Prototyping Mistakes


Faster Time to Market

Lack of speed kills innovation, and bureaucracy, overarching values and instilled processes kill speed. An outsourced team are unencumbered by these constraints, and as a result, move much faster through the design, building and testing phases.

According to a 2015 BCG Report - The Most Innovative Companies 2015: Four Factors That Differentiate Leaders, long development times were the most-cited obstacle in generating returns on innovation and product development, with the second obstacle selecting the right ideas to commercialise.

Using a fast-moving outsourced teams goes a long way to mitigating both issues. Alternative prototyping methods mean teams can gather data and validate ideas in a matter of days and weeks, as opposed to months. For example, one of the prototyping methods we employ is building simple website landing pages to test market appetite for a particular solution to a problem. This landing page takes a few hours at most to build, meaning we can get a test developed and designed in the morning, launched by lunch-time, and initial data to use by breakfast the next day.


Fresh Pair of Eyes

One of the first things to do with a new business the idea is to flesh it out with a business model canvas. Initially, this new business model canvas will be propped up by assumptions - who the target market is, whether the solution is solving the problem, whether the problem exists for this particular segment, etc.

It's natural at this point to get groupthink and tunnel-vision, often leading to business-breaking assumptions getting glazed over and other opportunities missed. Grace Ng, founder of Javelin and Lean Startup Machine, states that it’s very often for teams to end up testing the wrong things, building bloated MVPs and asking the wrong questions, leading to invalid experiments and long development times.

An outsourced team can get vital new eyes on a project, bringing fresh ideas, testing methods and networks to the table.


Savings Reinvested into Ideas

The savings from outsourcing allow for companies to reinvest in more ideas and incubate the ideas that gather traction. Adopting a portfolio mindset, as venture capitalists do, is critical for the overall success of an innovation program.

One of the best things to do for corporate innovation is to create an innovation outpost and startup accelerator to support any ideas that show promise and give them the best chance at survival. This might include giving these fledgling startups a small amount of seed funding and access to company resources and networks in return for some equity. Cost efficiency in the idea-validation part of the process would mean more resources to spread across the entire program, resulting in a higher chance of success.


Supports Taking Many Small Bets

The lean methodology is all about taking many small bets, rather than a few make-it-or-break-it type bets. By moving fast and being cost-efficient, outsourced teams can validate (or invalidate) ideas and experiments very quickly, before moving onto more ideas.

Peter Sims, author of Little Bets, spoke about the importance of taking small-bets to push innovation, stating companies should focus on what they can afford to lose, and by taking little bets by testing quickly and cheaply, they can avoid losing too much. Taking small bets also allow for diversity, not only in the ideas a company pursues and incubates, but also in expanding the corporate value network.

Issues such as cost, long-development times and only heavily investing in big bets have killed many an organisation. Outsourcing your prototyping is a great way to move faster and cheaper, while creating the much needed distance to really allow the idea to grow.

Want to find out more? Talk to us today about how we can help you prototype your company’s next idea!

How Bluedot Cut Costs and Moved Faster After Learning Agile

Bluedot Innovation is fast becoming a darling of the Melbourne tech startup ecosystem, having recently been featured in a Google case study on delivering 20 times the precision of traditional mobile location services using Google Maps API. The company has also raised over US$4.5m funding and expanded the business to the US by setting up offices in San Francisco.

Like any company experiencing rapid growth, it experienced some growing pains of its own, such as:

  • running effective planning meetings
  • scoping and iterations management
  • estimating task effort and executing accordingly
  • managing developer time efficiently

Bluedot engaged Collective Campus to give its team a better understanding of Agile software development and project management, in particular with respect to the SCRUM framework.

SCRUM is underpinned by the following principles:

  • individuals and interactions over processes and tools
  • working software over comprehensive documentation
  • customer collaboration over contract negotiation
  • responding to change over following a plan

We walked the team through an intensive 2-day SCRUM bootcamp in which they learned agile principles in addition to techniques related to as Scrum practices, requirements, project initiation, estimation and prioritisation, sprint planning, executing sprints, re-planning, closing a scrum sprint and closing a project.   

The result?

The bootcamp had an almost immediate impact on team performance, generating the following feedback from its CTO, Balendran Thavarajah little more than a month after the bootcamp.

“After sending our developers to Collective Campus's Scrum Bootcamp, we've noticed a remarkable difference in the team's application of Scrum. We're also getting more accurate estimations and have successfully completed two sprints since the training and as a result, are now doing a much better job of delivering value on time and on budget. This enables us to build and deliver product and features rapidly. I particularly liked Collective Campus' hands on approach to training, and the customisation they were willing to build into the learning materials for us was very valuable”.

Bluedot’s engineering team is world class and they needed the Agile Scrum training from Collective Campus to reinforce the key themes of Agile product development.

Rick Rubin on Creativity and Innovation Blockers

So many things get in the way of the artistic process, whether writing music, painting or creating new products and business models.

Amazing things happen when you connect unique perspectives and ideas from seemingly unrelated areas in order to see the world through a different lens and solve problems people didn’t even know they had.

I decided to bring the unique perspectives and ideas of one of the world’s most accomplished music producers, Rick Rubin, to this post on creativity and innovation in the enterprise.

Rick has worked with perhaps the most eclectic roster of artists, spanning hip hop, heavy metal, punk, country and pop. His production discography includes names like Jay-Z, Public Enemy, the Beastie Boys, Slayer, Metallica, Run-DMC, Red Hot Chili Peppers, AC/DC, Nine Inch Nails, Tom Petty, Johnny Cash, Macy Gray, Aerosmith, Kanye West, Ed Sheeran, U2, Black Sabbath, Eminem and more...so yes, accomplished.

On a recent appearance on The Tim Ferriss Show podcast, Rick was asked what usually gets in the way of the artistic process which is not at all dissimilar to the inhibitors at large organisations. His answers are something that corporate executives, innovation managers and intrapreneurs should take note of.

Rick Rubin on Creativity and Innovation Blockers

1 - Commercial Considerations

In music:

Most contemporary artists write to get onto the charts, sell countless albums, tour the world and so on which usually results in safe, formulaic music. While some of it might find its way to the charts, the success is far too often a reflection of political power plays, smart product positioning, flashy marketing campaigns and poor consumer choice than it is quality of music. Often, such music fails to stand the test of time, just like poor quality products backed by flashy  marketing campaigns.

In the enterprise:

Shareholder concerns, short term growth targets and KPIs such as NPV and IRR as well as individual performance bonuses all result in investing in formulaic, incremental and safe innovation, no different to the investment in safe, formulaic music by many contemporary artists.

However, when we think about the history of music we think about the gamechangers - Elvis Presley, Little RIchard, Johnny Cash, The Beatles, David Bowie, Led Zeppelin, Michael Jackson, Madonna, Nirvana, Eminem, Lady Gaga and so on. We remember the iPhone and iPad, we don’t remember the countless knock-offs which often fade into obscurity quick, just like the companies that produced them.

2 - Caring About What People Think

In music:

Successful artists are often indebted to a legion of loyal fans who expect a certain calibre or style of music from them. As such, it’s difficult for artists to simply change their direction completely without suffering the wrath of their fans who pay their wages - this is especially true of harder edge music with loyal followings (in the business world this is Apple). On the flipside, if they fail to change direction or experiment they’re often brandished as ‘stale’ by critics - so bands find themselves between a rock and a hard place.

In the enterprise:

Large organisations fans’ are essentially their existing customers and revenue generators - basically their business models. Changing tact at the mercy of existing business models, could be suicide, given that this is where money is made today. However, not keeping an eye on the future and investing in it is a recipe for disruption. The greatest risk is in standing still.

Beyond this, there’s reputational risk on an organisational front (not wanting to release half baked prototypes under the company’s brand) and on a personal front (not wanting to invest in risky projects due to fear of failure and damage to one’s personal brand, position, earning power and status).

3 - Competition

In music:

If rival artists are getting success doing one thing, we feel a need to keep up by doing that same thing. Whatever band has trailed a blaze, there’s been countless others that followed that looked, sounded and acted the same. In the 80s Motley Crue was followed by hundreds of hair bands, in the 90s Nirvana gave birth to an era of flannel shirt wearing grunge bands before Limp Bizkit closed the decade out with a new generation of crossover rap-rockers in baggy jeans and baseball caps.

If the tide of music is changing, bands feel pressure both from within and from their record labels to keep up. As a lifelong rock and metal fan, I took offence, like most Metallica fans did, when the band transitioned from being thrash metal titans to a more accessible alternative rock sound and image in the late 90s due to a change in the music climate (for backlash from fans, see #2 caring what people think). To their credit, at least the albums were commercially successful (see #1).

Metallica - 1988 v 1996

In the enterprise:

If our competitors are gaining traction with particular products, services or business model shifts then there is a sense that we need to do the same and offer competing products. Tense competition also means that we need to cut costs, focus on quick wins and never dare invest in the long term. This limits our thinking in terms of the types of problems we should be addressing and solutions we should be developing. It’s akin to the taxi industry now standing up and saying “we need an app”. True innovation is more than just copying what works elsewhere and relies on an entire supporting business model to work effectively, not just a standalone product, which can often be copied.

4 - Ego

In music:

Rubin says that “if you think everything you do is great you might not edit yourself out enough or you won’t work hard enough”. He goes on to say that some artists feel they are so good that they can produce ten songs in a couple of hours-  however great music evolves over a much longer period of time.

In the enterprise:

When it comes to the creative process, I subscribe to Socrates’ “all I know is that I know nothing”. This is in fact how I approach life - you can learn something from everybody you meet, no matter what their perceived position in society.

The problem with ego is that you think you have all the answers or at least, you want to be perceived to have all the answers. As such, you are likely to shy away from showing signs of weakness. If we begin with a very certain mindset or idea of what we want and this vision, often set from the top, is unmoveable - we are likely to end up with simple, incremental ideas that don’t shake any industry foundations and definitely don’t serve to create new markets or help an organisation catch the next S-curve.

True innovation is evolutionary and requires countless iterations based on unique perspectives coming to the table from employees, customers, suppliers, partners, independent consultants, schools, members of the general public and so on.

In order to innovate, we must leave our egos at the door, ignore our short term commercial pressures and create a culture that celebrates calculated risk taking and valuable failures that teach us the lessons we need to learn in order to move forward.

Free Download: The Innovation Manager's Handbook

For the past three years I have dedicated my life towards the exploration of innovation in the enterprise.

Having come from a background in consulting and banking, I know very well how the nature of large organisations, be it politics, processes and policies, values and culture, infrastructure or all of the above can not just inhibit but suffocate a company and its people’s ability to move, tap into their creative right brains and successfully innovate - that is, to not only extend a company’s existing S-curve but more importantly, to capture the next S-curve, in order to stay competitive and relevant in an era of rapid change and disruption to industry incumbents.

While I worked in risk management for a large investment bank, I took it upon myself to make a number of suggestions to the Director of my division, who although took the time to hear me out, had no appetite in doing anything that didn’t align with his core competencies and anything that messed with the status quo. Basically, I suggested in mid-2013 that we, as an investment bank, could be better making use of data analytics platforms and tools such as Hadoop and R programming language in order to uncover hidden insights that can help us not only better perform our forensic-esque jobs in risk management but also extend to better marketing decisions in the actual business.

The response? “Oh, we’ve got Mark. He’s really good with Excel.” This is a company that registered over one billion dollars profit in 2015 and has more than 10,000 employees worldwide.

Shortly thereafter I was fortunate enough to begin my life in entrepreneurship, having successful raised in the low six figures to build my first web startup, Hotdesk, an office sharing platform targeting startups, which evolved into Collective Campus, an innovation hub, school and consultancy based in Melbourne, Australia that works with both large organisations and startups to help them adopt the mindset, methodologies and tools to successfully explore new business models and disruptive innovation in an era of rapid change (“nailed it!”).

I’ve been lucky enough to have worked with, worked for, given keynote talks at and helped companies such as Ernst & Young, KPMG Innovate, Macquarie Bank, Westpac, Dun & Bradstreet, King & Wood Mallesons, Sportsbet, NAB, Telstra, the Department of Defence, Microsoft and CapGemini at the top end of town and been involved in varying capacities with startups such as Noots, Coinjar, Drawboard, Rotorgeek, Parent Paperwork and Jobbop in the world of tech startups. Most recently, I was invited to be an advisory board member at the Australian Government backed AgInnovation initiative - developed to help accelerate Australian agtech which has long been touted as the ‘food bowl of Asia’.

Today, when ‘innovation managers’ and lead positions are popping up on an increasing basis, it is becoming evident that many, while they have their hearts in the right place, have come from remotely different roles where the mindset of delivery of what is was what was needed. However, innovation requires the mindset of a discovery of what if. It requires us to step away from taking few large, safe bets, towards taking many perceivably unsafe, small bets that of adopting a portfolio mindset and one that mitigates risk by doing, as opposed to mitigation (and paralysis!) by analysis.

This ebook represents a collection of posts that I have made over the past two years related to different mindsets, methodologies and tools that companies can not only adopt but optimise the use of in order to derive maximum value, benefit and achieve objectives.

What I often see is that we confuse movement with productivity and that executives often call upon their workforce to “be bold and innovate” without addressing the underlying environment that prevents the behaviours critical to innovation.

You might notice that this book numbers little more than 100 pages. That’s intentional. There are far too many business books out there that while they number several hundred pages, could essentially get their message across in a quarter of the time...your time. This book is not meant to be a form of intellectual masturbation - far from it, it is a simple guide for innovation managers to give them a clearer pathway.

As human beings, we have a tendency to overcomplicate and overtheorise in order to give our work apparent validity (ultimately by confusing and putting off the majority), however if Steve Jobs and Apple taught us anything, it’s that simplicity, accessibility and ease of use wins.

My personal philosophy on innovation and life in general is to just do it, which might be construed as cliche given its close association with Nike, but it is no less true. By doing and putting ourselves in uncomfortable situations we learn, we grow and we get better. The same holds true for organisations who are looking to become more innovative. With one third of listed companies at risk of delisting in the next five years and 75% of the S&P500 facing replacement by 2027, standing still is not an option.

When it comes to innovation in the enterprise there is no silver bullet that will work for all organisations. It is up to the innovation manager to take the concepts in this book and apply them in order to learn what works best for them.

This book will give the innovation manager what I think is best practice when it comes to innovation culture, ideation and idea contests, hackathons and innovation bootcamps, open innovation and crowdsourcing, prototyping and customer testing, business model development, disruptive, adjacent and incremental innovation, innovation teams, training staff, getting executive buy in, identifying and measuring innovation metrics, corporate incubation, startup investment and partnership and more.

However, results will vary across organisations. After all, organisations are made up of people and people are all unique and result in unique political structures and cultures. In addition, companies form part of a larger ecosystem, an industry, regulations and so on. Executives looking for a silver bullet may find just as much joy looking for the meaning of life.

So if you’re thinking about running an idea contest, flick through to page 63 to figure out what not to do and some tips on what best practice looks like. If you’re thinking about running a hackathon flick to page 49 and so on... 

This is not meant to be a literary masterpiece. It is meant to give innovation managers the most value and guidance in as little time as possible on key mindsets, methods and tools that they should be exploring to help move their companies along the innovation capability curve.

To get your free copy, click the button below! Happy Innovating!

How to Develop a Culture of Innovation Without Compromising The Status Quo

Established companies have been built to deliver, not to discover - as such, large organisations tend to embody behaviours such as like avoid failure at all costs, following set procedure, take few large bets...slowly...maximising certainty, minimising risk through analysis and focusing on reaching short term performance metrics.

As such, innovation suffers. Why? Because innovation relies on the exact opposite of this. Embracing failure as a means to learn, questioning the status quo, taking lots of small bets….quickly….embracing the uncertain, minimising risk by doing and focusing on the long game.

First, a caveat - not everyone in an organisation needs to be an innovator or intrapreneur.

Organisations need to focus on maintaining the core business, which is - after all - where they make most of their money today, but should keep one eye on the future. Essentially keeping the ship afloat while being flexible enough to change direction. While there are no hard and fast numbers on this, organisations should look to invest 5-20% of R&D into disruptive, out of the box innovation and save the remainder for adjacent and incremental innovation.

This split should also be reflected in the organisation’s makeup - we need people to deliver on the existing business model, but we also need people to help discover new business models and innovations and a way to bridge the observations, opportunities, problems and ideas that the wider organisations see every day with action that discoverers can take.

So how do we build a culture that supports ideation and experimentation?

Hackathons

Hackathons (or innovation bootcamps) are a great way to bring together teams with the common goal of quickly solving problems, building prototypes and validating market appetite. This not only helps teams test many ideas quickly to find out what works but also saves money them by avoiding the trap of committing millions to building the wrong thing.

Hackathons, done right, open people’s eyes to a different way of thinking and plant the seeds for a fail fast, “move quickly and break things” mentality, made famous by Facebook, that underpins innovation and the discovery of new business models and innovations.

Idea Contests

Whether a company has a hundred, a thousand or one hundred thousand employees, it has access to an untapped resource of unique, diverse and broad perspectives and insights that employees of these companies don’t share effectively.

Any company with client facing staff has employees who each and every day make hundreds of observations and generate new learnings, either consciously or subconsciously. These insights often aren’t being captured anywhere that's visible to or useable by the rest of the organisation and as such, aren't being capitalised on.

Idea management platforms such as Spigit and Crowdicity have emerged as a much more effective way to capture knowledge centrally so that visibility is ensured, dots can be connected and new opportunities for growth can be capitalised on.

Idea platforms also circumvent middle management who are notorious for shutting down ideas because the ideas often have nothing to do with their KPIs or “the way things have always been done around here” - and are perceived as threatening to their status quo. Many a frustrated intrapreneur has pointed towards middle management as the source of these frustrations and the reason they’ve left said company to join either a more progressive organisation or start their own company.

Incubators and Innovation Outposts

Unless an organisation’s landscape effectively supports the behaviours required to innovate - think risk taking, taking long-term views, lots of small bets, challenging the status quo, sharing ideas, and so on - then it will all be in vain and amount to little more than innovation theatre.

More and more companies are waking up to this fact and as a result of that they are beginning to follow in the footsteps of companies such as Telstra, Barclays, BMW, Samsung, Verizon, Nike, P&G, GE and Disney, who have all set up innovation outposts, or corporate incubators away from the mothership, usually in the middle of innovative startup hubs and ecosystems.

Creating a separate set of policies and procedures for innovation

Steve Blank is an advocate of creating a separate set of procedures to help innovators get to yes. “We agreed that the goal was not to change any of the existing execution processes, procedures, incentives, metrics but rather to write new ones for innovation projects. And these innovation policies would grow one at a time as needed from the bottom of the organization, not top down by some executive mandate. If we were successful, innovation and execution policies, processes, procedures, incentives, metrics would then co-exist side-by-side. In their day-to-day activities, the support organizations would simply ask, “Are we supporting an execution process (hopefully 90% of the time) or are we supporting an innovation process?” and apply the appropriate policy.”

Tone from the top - it’s okay to fail

Terry Jones, founder of American Airlines spin-off success story Travelocity and later Kayak, stresses that “in order to change the culture, senior management needs to make it clear that it’s okay to fail.” He adds that “innovation is not possible without failure.”

These sentiments are echoed by the likes of Elon Musk - “if you’re not failing, you’re not innovating” and Amazon head Jeff Bezos told Business Insider last year that “What really matters is, companies that don’t continue to experiment, companies that don’t embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence”.

Venture capitalists, whose job it is to invest in early stage companies, only strike gold on average once in ten times and that’s their full-time job. Why should it be any different for established organisations whose core job has nothing to do with early stage innovation?

Performance Incentives

Are performance incentives all geared towards quarterly billables and short term KPIs? Is there a focus on innovation? If not, people will not be incentivised to contribute to innovation campaigns. Of course, ‘deliverers’ and ‘discoverers’ will be assessed based on different metrics but innovation should be everyone’s job - therefore, everybody should have at least some metrics that relate to ideation, participation in hackathons and so on…

If company metrics are all based on net present value (NPV) and internal rate of return (IRR) then bonuses are purely contingent on reaching these short term goals and people are unlikely to invest or explore riskier prospects that may or may not generate a return after 3, 4 or 5 years. With NPV we will always be tempted to chase short term quick wins.

Innovation Metrics

Large organisations exist to execute on a repeatable business model, and as such processes, policies and frameworks have been implemented to ensure this execution goes off without a hitch. Decision makers, as such, tend to place only safe bets that promise low to moderate rewards, based on a criteria of evaluating investments on some or all of the following variables:

  • market size
  • gross margins
  • revenue potential
  • time to breakeven
  • performance demands
  • existing customer requirements
  • return on investment
  • risk profile
  • short term KPIs

But the nature of disruptive innovation is such that:

  • the market is small or insignificant, initially
  • they promise low margins, initially
  • they deliver small revenues, initially
  • they can take years to deliver a sufficient return on investment
  • they are often not good enough for existing customers, initially

As such, we need a new set of metrics - innovation metrics - to support the nurturing of innovation culture and not preach it but kill it at the first sign of no ROI within 6 months

  • apply the disruptive innovation litmus test (does this idea have the potential to disrupt or is it a low risk, low reward incremental improvement?)
  • what customer job are we addressing and are customers over-served or under-served by existing solutions?
  • value proposition (are we actually solving a problem?)
  • ability to deliver technology (can we build it?)
  • existing competition (are we entering a treacherous red sea or a clear blue sea?)
  • analogs and antilogs (has it been done before? are there stories of success and failure?)
  • testability (can we test it relatively quickly, economically and effectively using our existing networks and ability to prototype?)

Ultimately, when it comes to innovation in the enterprise there is never a silver bullet. However, the above strategies all help to transform the organisation’s processes, systems and values to support and encourage the behaviours that are critical to innovation.

Why Engaging Startups can Drive Corporate Innovation Initiatives

I recently caught up with Kmart Australia’s innovation program manager, Fabio Oliveira, on my podcast for a discussion on innovation in retail and what the ‘store of the future’ might look like.

One of the key talking points was around how Kmart is engaging startups to accelerate corporate innovation initiatives.

Engaging Large Incumbents = Engaging a Large Cost Base

While it may often be prudent to engage traditional vendors who may occupy the position of incumbent in their industry, this usually equates to not only driving up cost, but also slowing down innovation and even limiting exposure to new, disruptive innovation.

Large incumbent vendors are themselves tackling a misalignment of resources, processes and values with those required to successfully innovate. They are usually chasing large growth targets and short term performance metrics and KPIs that inhibit their ability to move with the cadence required of early stage innovation projects.

We’ve seen Government spending in many jurisdictions double due to an over-reliance on incumbents, a mentality of “just throw more money at it” and an under-investment in new disruptive innovations that usually serve to achieve more with less (think Uber and Airbnb who deliver superior experiences without any assets on their balance sheet).

You Can Only Move as Fast as Who’s In Front Of You

If you’re waiting on enablers who themselves are tackling the dilemma of corporate innovation, you might be waiting a while. And when it comes to innovation, in experimentation, learning and iterating is fundamental to success.

These are precisely some of the reasons why Kmart Australia is engaging startups to help it deliver on new innovation initiatives.

Startups are Adaptable and Flexible

“We need to engage with companies that are flexible and not tied to big budgets, big project management tools and KPIs”, said Oliveira. “It’s not easy to find companies that are adaptable and not resistant to change.”

Kmart not only benefits by tapping into the adaptable, fast paced and often affordable talent of startups, but offers the startups with access to its own operations and technology departments. In addition, partnering with startups by way of assuming the role of customer, is ultimately the best way to support their development as they not only benefit from the monetary value of said engagements but from the experience gained working with a large organisation and the access to its domain expertise and networks.

Startups Make Sense Early in the Innovation Lifecycle

“It doesn’t make much sense for us to engage large companies early on (in an innovation initiative) but when it comes to doing things like integrating legacy systems, we can engage traditional vendors. It depends on which stage of the innovation lifecycle you are in.”

Kmart has decided to work with startups because their mindset aligns with that used in innovation, they advocate fail fast thinking and take a human centric approach from day one. Ultimately, startups come from the Socrates school of thinking - “all I know is that I know nothing” and as a result of this experiment, measure and iterate relentlessly, whereas leaders in large organisations often only make decisions that are shrouded in certainty. Unfortunately for them, today’s technological and commercial landscape is anything but certain.

Kmart seems to have realised this fact and sees startup engagement as key and central to its mission to optimise its customer experience and create its store of the future.

How we helped Sportsbet employees learn Lean Startup

Sportsbet, Australia's biggest corporate bookmaker, has been recording high double digit EBIT growth for the past several years. However, despite this, the company realises that neither the past nor the present are any indication of the future, and as such is making moves to shield itself from disruption and from competitors from Australia and abroad.The company has invested in idea contests to solicit ideas from across its workforce and now runs innovation programs, where cross-functional members from across the organisation come together for three months to explore new business models and foster employee driven innovation.

Sportsbet realised that it wasn't enough to simply throw people together without giving them any direction as the normal "avoid failure at all costs" corporate way of thinking differs from the "fail fast, learn fast" mentality that startups possess. We worked with the team to help them adopt the mindset, methodologies and tools required to successfully explore new business models and disruptive innovation, using elements of both design thinking and lean startup to enable the quick, effective and economical testing of market appetite for new concepts. Check out the video below to hear how it went and what Sportsbet's Innovation Manager had to say.

"I would definitely recommend the lean startup bootcamp to other companies. It's a great way for employees to learn the fundamentals of entrepreneurship and being in a startup and it really encourages them to push the boundaries and diverge from their normal way of thinking." - Oliver Hoy, Innovation Manager at Sportsbet

How GE Saved 80% in Development Costs

Think your organisation is too big, bureaucratic and over-regulated to apply lean startup?

Think again.

General Electric, with its $493B in assets and 200,000 employees worldwide, is doing exactly that. And it’s exactly this kind of progressive thinking, entrenched in GE’s DNA, that sees the company enter its 125th year in a commanding position, ranking eighth in the 2015 Fortune 500 list.

With one third of listed companies facing de-listing in the next five years, it’s no wonder that GE is looking to change the way it thinks, makes decisions and delivers outcomes, in order to keep up with the rapid pace of change disrupting every industry.

GE is fast becoming a model of how to implement lean startup in a large organisation.

Eric Ries, author of the Lean Startup, a new solution development methodology that has radically transformed the way startups get products to market, approached GE with a simple question, after introducing a group of stakeholders to the philosophy that was rooted in software development.

“Is this something you can use to make things like turbines and jet engines, as well?”

Rather than simply shoot down Eric’s question, GE got testing. They put together several new product introduction (NPI) teams at Crotonville, the company’s leadership institute. Eric was brought in and taught the teams how to apply the methodology.

When asked whether this was something that was applicable to their respective businesses, the resounding response was “yes”.

But How?

As soon as team members returned to their respective business units, their ideas and new ways of working were quickly squashed. They realised that applying lean startup would not only require training but a cultural shift in the organisation.

GE promptly created its Fastworks program - geared towards the successful adoption and use of lean startup philosophy across GE.

Step one? Get senior leaders, “the top 5,000”, trained and educated in lean startup. This formed part of a roadshow that Fastworks’ co-founders and partners Viv Goldstein (Business Innovation) and Janice Semper (Human Resources) embarked upon, together with Eric Ries and David Kidder (author of The Startup Playbook). You’ll note that the partners together represent methodology and culture, not just one or the other.

The Fastworks team spent 2 days with senior leaders teaching them all about lean startup and this was not without its challenges. Many senior leaders have spent years at GE and most grew up with Six Sigma and as such were process driven, perfectionist and anti-variation. The lean startup sessions were as much as about challenging them to think in a different way as much as they were about lean startup methodology.

Getting Buy-In from Senior Management

Because of the structural hierarchy of GE, getting senior stakeholder buy in was critical to the success of the program. Getting support at purely a grassroots level wouldn’t be enough to get traction.

However, recognising the benefits that grassroots employees could bring by way of testing projects and gathering proof points, they could take these validated learnings as ‘money in the bank’, so to speak, and say “here is the impact, here is the evidence” to obtain real and ongoing support from senior stakeholders.

They quickly realised that Eric Ries is just one person and that they needed to bring the expertise in-house. As such, GE created a community of coaches and trained them to build the expertise internally.

Was there a specific plan to train ‘X’ amount of teams and coaches? No, GE essentially applied the lean startup principles to its rollout of this program.

“Let’s start small, learn and build it up from there” says Semper.

GE’s different businesses own Fastworks, as opposed to it being a top down corporate initiative, which supports buy in. They are given a framework but are allowed to determine how many coaches, who becomes a coach, whether it’s a part time or full-time role and so on.

“Here’s the framework - it’s up to you how you want to own it.”

While this was initially uncomfortable for a lot of people because it requires judgment, it also gives them ownership, critical to buy-in.

They’ve found that both part time and full time coaches can work in varying degrees.

What about non-tech companies?

“This absolutely works outside of technology and software and GE is a great proof point for that”, having applied the philosophy in areas such as transportation, energy and finance.

It’s not just about training people“What we learned at Crotonville early on is that as soon as people went back to their business they struggled to use the methodology”, says Semper. “You need to think more broadly about your organisation and the ability to make sure that behaviours and culture can support the application of a lean startup approach.”

Questions to ask:

  • will lean startup behaviours be permissible and rewarded?
  • does performance management support lean startup?
  • what are your expectations of your leaders in supporting lean startup?
  • what competencies do you need to develop?
  • like health and fitness, a holistic approach is required to successfully implement lean startup - a personal trainer is pointless if your house is full of high carb, sugary temptations

Everything must be aligned with this way of working

At GE, limiting characteristics that embody the values of its people are failure not being an option, an addiction to being right and a lack of customer-centricity and empathy when developing new products. Why engage customers when you have all the answers right?

Semper zeroed in on these cultural challenges and started to attack them by creating a new belief system that aligned with the Fastworks and lean startup principles.

This belief system was summarised by the following:

  • empower and inspire each other
  • customers determine our success
  • stay lean to go fast
  • learn and adapt to win
  • deliver results in an uncertain world

This was supported by senior management projecting to their people that “this is what we believe”.

New beliefs underpin new behaviours and these new behaviours are critical to the success of lean startup in a large organisation.

Performance management system was out of synch

GE’s performance management system was representative of your standard run of the mill linear system. The type where goals are set and reviewed once a year. In order to support the very experimentation and adaptability that lean startup advocates, the performance system had to also embody these values. GE is currently moving towards a more adaptable system where ongoing management is stressed over once a year check-ins.

Still, there are challenges as one would expect of a company the size and scale of GE - 200,000 diverse employees across 175 countries.

But the results speak for themselves...

Results

Transport: Using lean startup, GE developed and commercialised a new engine based on regulatory changes brought on by the EPA. It got to market 2 years before its competition not only resulting in significant cost savings, but bettering the EPA’s requirements. This positioned them extremely well with customers, gave them first mover advantage.

Energy: GE developed a gas turbine which enabled it to deliver the most efficient, low cost energy solution it could to customers and it decreased development costs by 60% by doing so!

In its Industrial business GE:

  • reduced time of NPI by two thirds
  • reduced time to customer validation by 80%

The latter not only represents a significant cost saving but also frees up NPI funds to reinvest into new ventures, rather than over-invest building the wrong thing and scrambling to find budget for new projects. This snowball effect enables GE to explore a much higher number of new innovations and products in a much shorter time-frame with much lower expense.

Positive Impact on Employee Morale

In a time when customer churn can cost organisations more than $50,000 per person, improving employee engagement and therefore retention is also top of the agenda for most HR managers. Implementing lean startup means that employees are engaged on projects that are delivered quicker and actually realise benefits. This is light years away from traditional, waterfall based ‘transformational’ projects.

Funding Process

The Fastworks process has been embedded into operations.

If an employee has an idea they add it to a growth board and seek seed funding to validate their idea. If validated, then the employee qualifies for additional funding. If invalidated, then things simply stop (stopping anything at GE is also something that was counter-cultural before lean startup reared its head). Now, if a customer says that a new product or feature wouldn’t create value for them, the project isn’t pursued. Makes sense, in retrospect.

On Regulation

I often hear leaders from regulated organisations say that “it’s impossible for us to implement lean startup - it’s too risky, we’re so regulated.”

The fact is that lean startup is a de-risker.

The cost to go to market with a regulated product is higher than normal, given the compliance requirements and checks that need to take place.

“Using lean startup allows us to mitigate risk before putting things to market - it is a risk mitigant that applies across our healthcare, transportation, finance businesses (and so on)”.

By testing quickly, we are taking lots of small bets rather than few large ones and only going to the regulator with products that we know our customers have an appetite for.

Australian health insurer Medibank tested appetite for its Gym Better product by sending employees out to a busy shopping strip in plain clothes with iPads trying to sell a fictional product under the guise of a fictional company to passerbyers and gym goers, purely to gauge customer interest. If somebody wanted to buy on the spot they were simply reminded that “sorry, this doesn’t actually exist but thanks for your cooperation - here’s two movie tickets!”

This approach cost much less than jumping through regulatory hoops and putting a product to market that there is not enough appetite for.

On Why

“Look at the level of disruption that’s happening in our industry. It’s unprecedented and it’s happening today. If we don’t change we run the risk of becoming obsolete in less than a decade.” This is the reality that’s communicated to influencers at GE to inspire their jumping on board the good ship lean startup.

We make it clear that “this is not an initiative, this is a fundamental way we are changing how we make decisions, how we work together, how we align with customers, how we hold eachother accountable”, says Semper.

On Collaboration

Remote teams are a nature of the beast that is GE.

The company created a Fastworks site within GE where methodology, proof points, stories, tools and coaching resources are available. Digital training is also being rolled out to move this way of thinking beyond just project team.s.

On Startups

On startup culture, Semper says that GE has learned two fundamental things:

  1. Startups are extremely purpose driven and have a strong connection to the company
  2. Dedicated co-located teams achieve amazing things

She has been exploring ways to replicate these startup traits within GE.

The underlying message is clear - if an organisation the size of GE can implement lean startup, then chances that your organisation can too.

The Most Common Prototyping Mistake (and 5 Ways to Prototype Better)

The perfect prototype is the one that’s imperfect. Time and time again, new founders will make excuses like, it's not ready yet”, or “I just want to add a few more things to it” to explain why they haven’t launched their prototype yet. This mentality has slowly suffocated many a startup.

The most frequent mistake people make when producing prototypes is over engineering it. Whether it's a SAAS product, a piece of software or a physical object, people tend to spend a lot of time and resources building and perfecting their first prototypes, despite knowing these prototypes are meant to be less than perfect. As a result, prototypes are sat on for months, often accruing upwards of tens of thousands of dollars in development costs. Oftentimes, project teams run out of resources or motivation before even releasing their first iteration.

I get it though. It's a natural instinct to avoid the potential embarrassment that comes from presenting someone with an ugly, unfinished or half-baked product. Many also wish to test as many different features as possible to give people a more 'complete' experience.

However, over-engineering, over-thinking and hesitation kill an early prototype's effectiveness to fill its primary function - get market validation and validated customer learnings as quickly as possible. Prototypes are built 'for learning, not scaling', David J Bland writes, so it's important to get out of the mentality of 'building to build'. As Tim Brown says in Change By Design, "prototypes should command only as much time, effort, and investment as is necessary to generate useful feedback and drive an idea forward”. The more a founder or project lead has invested into it, the less likely they are to listen to and benefit from constructive feedback.

Prototypes are meant to be cheap, dirty and quick

Google is not a company lacking resources. When we ask people how long they think it took Google to prototype their (admittedly now shelved) Google Glass, the most common answer is a couple of months. But Tom Chi, head of Google X, revealed the team built a Google Glass prototype in only one day, using a coat hanger, a piece of plexiglass, and a pico projector connected to a laptop. The purpose of the prototype was to simply test what the experience of having digital information overlaid on the physical world, a la ‘minority report’ style. It wasn't particularly ergonomic, nor was it good looking, but it did the one job quickly and cheaply with bits and pieces lying around.

Here's a few ways you can build quick and dirty prototypes on the cheap.

1. Landing Pages

Landing pages are simple, usually one-page websites where visitors can find out more about your product or service, and leave their email as an expression of interest. They serve as great prototypes as it allows you to test whether people would be interested in your product, as well as onboarding them as your first potential customers.

There are a bunch of drag-and-drop landing page builders which take all the coding out of the website building, meaning it's easy to whip up a simple, good-looking and functional page in less than an hour. The fact a lot of these services don't cost money unless you want all the bells-and-whistles means these landing pages might only cost you some time.

One of the best examples of a landing page being used as a prototype is with social media scheduling tool, Buffer. Before a working version of Buffer was built, founder Joel Gascoigne built a landing page explaining in three lines what Buffer did, what the pricing would be, and an option to sign-up on the spot as if Buffer was live. In this instance, he was trying to test whether people would pay money for an automation software like his, and it was only after positive results, did he start building the product.

Look for Instapage, Unbounce and Launchrock!

2. Paper Prototypes

Paper prototypes are a great way to test apps and usability. Take a few sheets of paper, and draw how you imagine the app (or program) might look (think different screens, buttons and even some text). You can then take these pieces of paper and show people what the app might look like, ask them to interact with the 'screens' and show them what might happen when they 'press' on a button.

This is a great way for you to explain what your idea does, how it might work, and elicit feedback not only on the idea, but on the user experience as well.

Want to take that to the next level? Apps like Pop App allow you to take photos of your sketches and hotlink the buttons to relevant screens, allowing your testers to interact with your idea within a phone, giving an even more immersive experience. If you're looking for something even more realistic, you can use programs like Sketch to digitally design what the app looks like

3. 3D Printing

3D Printing is an absolute boon for people looking to build a physical product. While it's not a medium for mass manufacturing or producing polished products (yet), it's perfect for rapid-prototyping and getting a first product into your customer's hands. Prints can give you customers a way to see what the product will look and feel like in their hands.

"But", I hear you say, "3D printing requires 3D CAD design, which I don't know how to do! And I don't have a 3D printer lying around at home!" That's ok too. Services like Tinkercad allow you to do simple 3D CAD renderings using an easy-to-use drag-and-drop interface. In terms of printing, there'll be often local services that can print 3D files off for you for cheap.

4. Lego Prototyping

Everyone’s favorite plastic toys also make great prototyping tools. Like 3D Printing, it allows you to get something very simple together to replicate the look, feel and experience of a physical product. Mostly used to prototype buildings and urban spaces (maybe you’re looking to build a pop-up store?), lego prototyping really comes into its own when paired with 3D Printing and robotics. By using Lego to fill in any physical gaps left behind in 3D Printed iterations, or using platforms like Brickify to translate 3D design files into Lego blocks so you can build models if you don’t have access to a 3D Printer.

5. Get Creative!

Often, the first port of call is to go to 'experts' - app design studios, prototypers and manufacturers, who you assume can produce something close to complete for you to experiment with. But if you get creative, there are many ways to replicate the main experience of what you're trying to build - the prototype might look nothing like what you have in mind for the finished product, but the goal is to get validation, not wow people.

An example of being creative is Dropbox, who, in a bid to attract investors, used a video as their first minimum viable product. The video purportedly showed a walkthrough of Dropbox in action, with the narrator dragging and dropping files between his computer and the cloud. However, the video was all staged - Dropbox hadn't been built at the time, and all the elements in the video came about through editing effects and video trickery.

Another example is IBM using the 'Wizard of Oz' experimentation method to test whether people would be interested in a program that could transcribe what people were saying. They invited participants into a room with a projector and interviewed them, under the pretense of testing this transcribing program. Whatever the participant was saying would be then projected on the screen. Unbeknownst to the participant, however, the transcribing was not the work of a machine, but a human, typing furiously away, hidden behind a curtain the next room over. IBM just needed to replicate the experience to get fast, relevant feedback.

So before you decide drop several thousand dollars at an app design studio for an initial 'prototype', or hold-off from release to add more features to your product, really think about what you want to test, and whether there's a cheaper, leaner way in doing it. You might not feel ready, but don't forget, if you feel ready to release it, chances are you're already too late.

I want to leave you with a quote we hold very dear in the startup world: "F*ck it, just ship it".

How to Use Design Thinking in Schools

IDEO defines design thinking as the belief that all problems, even the intractable ones such as poverty, disease and inequality, are solvable. It hinges on the belief we can make a difference, and gives us an intentional process to search for and design relevant solutions to make in impact.

It's a mindset and process that empowers children with the ability to think critically and creatively.

In many respects, schools have been helping students in elements of design thinking for decades. At the heart of design thinking sits the need for developing strong curiosities, and fostering the desire to understand and solve complex problems. It encourages empathy and optimism and embracing ambiguity. As such, design thinking has come in many forms, from project-based learning, challenge-based learning, to inquiry-based learning. They all have elements of encouraging good research, developing and testing approaches, and presenting findings.


Creative and critical thinking have always been crucial skills in learning how to unpack issues and problems. They are certainly even more important now as we deal with the challenges of rapid change in work, life, and the environment that require different approaches and a re-thinking in how to tackle them - statistics show millennials will go through as many as 15 jobs different jobs before they’re forty, stay at jobs for only 2 years, and have up to 5 or more career changes, showing necessity of adaptability. Schools, like businesses and industries, are also keen on developing innovation, creativity, and entrepreneurship. Without a proper understanding of the mindsets, the skillsets and tools that can be used, innovation and entrepreneurship very quickly become token buzzwords. When students experience the process of design thinking effectively, they learn how to ask better questions, see past perceived constraints, generate and filter ideas, and have multiple attempts at prototyping their solutions to discover what works and what wows. Consider the depth and breadth of learning that comes from years of working this way and you’ll begin to see how adaptable, creative, and knowledgeable students can become.

Once the methodology of design thinking becomes more familiar, it can be applied to almost any challenging task. Many schools see it as the domain of the humanities or sciences, but it works equally well in any field, even mathematics, languages, or physical education. At its core, design thinking needs learners to make connections, so it is when learning is well-integrated that real innovation starts.    

An example of integrating design thinking into everyday subjects include encouraging students to redesign the classroom and classroom flooring as a way of teaching the concepts of perimeter and area. By getting the students to interact with the space, seeing how these mathematical concepts work in real life and how they can apply these concepts in their own redesigns, students not only can grasp these ideas easier, but also remain more engaged throughout the process.

What’s often missed when schools use design thinking approaches, however, is that it becomes another program done to students rather than with them. It's important to nurture learning environments in which students think for themselves and also have a sense of agency, so when teachers look at curriculum they need to ask themselves: could I also undertake this? It makes a significant difference to the depth and impact of design thinking when the school community knows how it feels and what it takes to tackle complex problems. By using design thinking processes to plan and design learning, teachers become better at facilitating and networking this knowledge with their students.

To work well, design thinking needs the support and understanding from school leadership. It may start with a team of teachers using the processes within the curriculum, but it can also be a very effective way to bring the school community together. Instead of design thinking just being an effective way to address curriculum outcomes, it can also be an ideal way to tackle real problems and challenges in the school. This could be about new school buildings, classrooms changes, strategic planning, or enabling a new initiative with others outside the school.

In this regard, design thinking is not a subject. It is certainly not wise to teach it in isolation (much like people realise about technology), and it is not a form of pedagogy. It’s important to understand that when used well, design thinking will help reveal the learning culture. It will often bring to the surface the blockers and challenges that stand in the way of things being done differently. If we want our young people to begin to appreciate how hard and how intelligent we need to be to navigate this, then to work on real-world problems is also important. Often, the curriculum offers up all kinds of large-scale, complex issues, like natural disasters, wars, and immigration. Instead, schools would be best served initially using the processes of design thinking for the very problems that are core to their own community.       

An example of students using design thinking to tackle community issues was when Brisbane primary school teacher, Elisabeth Hales, used design thinking in exploring the impact of climate change and the 2011 floods on their local communities. They created the topic ‘Burning plains and flooding rains’ to frame their thinking and research. Students explored the news, looked at and compared maps, studied data, watched TED Talks, interviewed people affected by floods, and asked lots of tough questions. Students then addressed their core challenge of ‘How might we help our local community to be flood ready?’. Students generated into lots of ideas and quickly began forming sketched prototypes. One group of girls designed a concept for a Flood Evacuation Kit, received early feedback, made a mock-prototype, then ended up pitching it to community members some of whom had been affected by the floods. This made for very memorable learning for everyone.    

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‍First version of the flood evacuation kit

On an even more individual scale, during our Lemonade Stand Program, we ran a simple 1-hour design thinking exercise with our students, asking them to redesign each other's' gift giving experiences and routines. The students were instructed to interview each other and pose probing questions provoking thoughtful and emotional responses, before designing 'magic-wand' solutions and whittling these down and prototyping the most feasible idea.

In the limited time we had, students only had time to draw their solutions, but ideas ranged from apps that automatically pulled data from a user’s Facebook activities to suggest gifts that a person liked, to automated personal shopping services.

Our partners, NoTosh, have also been working with networks of schools. Some of the local projects have included convincing Taronga Zoo to improve one of their animal habitats, changing the school bell, helping parents to be more involved in the life of the school, or educating their peers about local wetlands. These schools have created learning environments where everyone speaks the same language of learning, and everyone grows the ambition to make things better.  

Students’ descriptions of their learning from these types of projects is very articulate. Lauren, a Year 6 student who has been using design thinking for about 3 years, reflected that “my favourite thing about design thinking is that we can be as creative as possible and be free to let our imaginations go wild, while learning and answering the question.” This captures some very powerful insights about how important the process has been to her learning. Likewise Michelle, age 11, said “I think that Design Thinking is fun and educational, and also lets children use their curiosity, creativity, and gives us freedom of choice at the same time. Although a few troubles may happen.”

Design Thinking might at first seem like a nebulous area. However, with the growing success with its application in the K-12 curriculum and the increasing importance for students to be adaptable and have the capacity to think innovatively, design thinking is rapidly playing a more important role in engaging and teaching students.

Through design thinking schools are creating learning communities where everyone speaks the same language of learning, and everyone grows the ambition to make things better.

Our highly popular Lemonade Stand Program is coming online. Our Lemonade Stand Program empowers kids by teaching them entrepreneurial basics, with lessons on business model planning, design thinking and prototyping. To express your interest in beta-testing our new online platform, click here.

How to Innovate in Government

Victorian Public Sector (VPS) spending has doubled in the past 10 years, according to the ABS.

This comes at a time when other industries are learning how to do more, not by allocating additional resources, but by embracing emerging technologies and business models to do more with less.

‍ABS: VPS Spending, 2004-2014

Education

World class education can now be accessed in remote areas all over the globe, often for free, using massive open online courses, or MOOCs, such as Khan Academy and Coursera. The cost to serve of these organisations is significantly lower than that of say, a University.

Communications

We are now paying less than ever to communicate with people in not only the next postcode, but the next country code too. We are capable of having free real-time video calls with people on the other side of the world using platforms such as Skype.

Travel

The real cost per mile for air travel has halved in the past quarter century and business model innovation means has made international air travel more affordable than ever. My last return trip to Singapore from Melbourne cost me under $400, whereas a similar trip 20 years ago would have cost me well over $1,500. It’s not always about technology but about how a business model shift such as no frills airlines, can support additional aircraft turnover and subsequently lower cost per seat.

Transport and Accommodation

Companies like Uber are not only offering a cheaper and more enjoyable experience than cabs, but their cost to serve is significantly lower than that of a traditional taxi network, given that they don’t own any of the Ubers on the road. The same can be said of Airbnb whose market capitalisation of US$25B is larger than that of the Starwood, the Marriott and the Hilton, despite not actually owning a single property.

While new, emerging technologies and business models are enabling many enterprise companies to deliver more with less, the same can’t be said of our public sector.

Government, like enterprise, can essentially innovate on three fronts.

  • Improve what is
  • Take what is working elsewhere and apply it locally
  • Create radical, breakthrough innovation

However, like enterprise, it faces numerous barriers to innovation.

Government has been built to deliver a reliable and repeatable operating model.

It has not been built to search for new operating models, which requires a different approach and is normally the domain of newly formed ventures and startups.

What prevents Government’s ability to search for new operating models?

A combination of values, processes, systems and resource allocation procedures prevent Government from adopting the behaviours and mindsets required to effectively support innovation.

Most of these are in place to mitigate risk more than anything.

Just some of these include:

  • Procurement processes
  • Oversight committees  
  • Auditor scrutiny
  • Media scrutiny
  • Reputational Risk
  • Politics
  • Departmental Changes
  • Poor Cross-Functional and Cross-Departmental Communication
  • Lack of Procedures to Support Ideation
  • Lack of Resources to Support Ideas
  • Regulation
  • Legacy Infrastructure
  • Approval Processes

Of course, Government can’t just “move fast and break things”, as was the Facebook mantra in their early days, so it must take a different approach if it is to become more efficient at spending taxpayer money to ultimately derive maximum benefit for all. This is essentially what emerging customer-centric tools and methodologies such as design thinking, lean startup and agile support.

So, what can Government do to overcome these barriers?

Open Innovation & Crowdsourcing

Government can implement idea platforms such as Crowdicity or Spigit to solicit opportunities, challenges and ideas from not only their employees but also their partners, suppliers and perhaps most importantly, constituents or members of the general public.

Just some tools that Government can use:

Idea Contests - run challenges to solicit ideas from your workforce and the public

Open Data - make sanitised records and data available to developers and the public to support new product development (the NSW Government launched its Open Data initiative last year)

Open Innovation - work with the public to solve problems and build solutions (the Queensland Government recently piloted such an initiative with PwC)

The United States has been running its Open Data initiative for under three years and in that time has co-developed almost 100 applications to help achieve its mission which includes cost savings, efficiency, improved public services, fuel for business and transparency.

On Procurement

When looking to work with SMEs, startups and members of the general public, it’s critical that procurement processes align with the reality of these businesses. Most small organisations don’t have the time or resources to invest in the often painstaking process of winning a Government contract. They are cash flow driven and simply can’t afford to over-invest limited resources where the payoff is unlikely to come through.

Existing procurement processes have been implemented to ensure probity and minimise risk. However, when we’re looking to do discover new operating models then limiting ourselves to these standards usually results in not only cutting out most of the emerging and disruptive players, their talent and technologies. but engaging large incumbents who are likely to pass on large fees in order to keep hitting their growth targets.

Hackathons & Innovation Bootcamps

Traditional product development processes such as waterfall and stagegate, like procurement processes, are geared towards mitigating risk and maximising certainty.

However, when looking to discover new operating models, lower the cost to serve and transform the way Government fulfills its mission, there are too many unknowns and methods that rely on variables being known simply don’t work. In such instances we need to be embracing iterative, discovery driven development in order to maximise benefits realisation and spend of taxpayer funds.

How does one do this in a Government that is fraught with red tape, requires multiple sign-offs and simply can’t move quick enough to reap the rewards of a fast-paced, iterative product development process that builds on the build-measure-learn feedback loop set out by Eric Ries in the lean startup?

Hackathons and innovation bootcamps help provide some relief. They bring together cross-functional and cross-hierarchical teams for anywhere between one day and one week to apply design thinking and lean startup methods to gather insights, define problems, ideate solutions, develop prototypes and test their prototypes with constituents.

Essentially many ideas can be tested in a short frame of time which means that in a short space of time, with minimal outlay, we can help to determine where capital should be allocated.

It’s important to engage outsiders during these hackathons who will bring unique perspectives to the process and therefore help craft more novel solutions. Think partners, suppliers, constituents, designers, developers, marketers, technologists, innovators and strategists.

Government Incubators

Business incubators have birthed some of the world’s most notable modern companies - think Airbnb, Reddit, Dropbox, Uber and Spotify. Y Combinator, 500 Startups and Techstars are just three of thousands of incubators developing tomorrow’s Fortune 500.

The latter has also worked extensively with enterprise organisations such as Barclays, Disney, Nike and numerous others to help incubate new business ideas and technologies in a safe to fail, fast moving environment away from the bureaucracy of the mothership.

18F is essentially the United States’ incubator. It is a team of people working on all sorts of new, disruptive ideas geared towards their mission of ‘building the 21st century digital government’.

Reconfigure Processes and Systems

When it comes to innovation in Government, as in large enterprise, there is no silver bullet, and only by doing can we identify all of the major roadblocks, be they people, process or technology, that inhibit innovation. With a clear picture of what these roadblocks are we are better placed to break them down and find ways to support the behaviours required to innovate, without compromising the existing delivery of services.

If our answer to every problem is simply to throw more money at it, we will find that our cost to serve continues to skyrocket, without having a noticeable benefit on the quality of service.

Final Toughts
By embracing emerging technologies and exploring operational model innovation, Government can do more with less. This will help to bolster Government, increase the pool of funding available for economic development and make room to decrease the pinch that taxpayers feel each year.

Stop Breaking Awkward Silences

Google “awkward silence” and you will find 443,000 results, mostly focused on how to fill awkward silences and how to avoid awkward silences.

Human beings have an innate desire to fill in the blanks. Failure to do so makes us feel uncomfortable, activates insecurities, questions our cognitive abilities and forces us to disengage entirely.

However, rushing to fill awkward silences is a recipe for disaster when it comes to our brainstorming and innovation efforts.

Why?

People will say the first thing that comes to mind because we don’t want to seem like we’re not contributing or a little bit ‘slow to the party’. Consequently, we don’t allow our thought process to evolve naturally and spew up half baked ideas and thoughts.

This is particularly true of leaders who feel the need to justify their positions (and salaries) by purportedly having all of the answers and therefore being quick to respond. Oftentimes, admitting that we don’t have all of the answers, especially in a turbulent, fast moving commercial and technological landscape, is far more effective in helping us come up with better answers than simply filling the silence with the first thing that comes to mind.

Otherwise, we will waste precious time, money and other resources by pursuing the wrong thing.

The same applies not just for innovation but every day operations. Think about the meetings you attend. How much of what people say do you think is due to a pressure to contribute?

Let awkward silences be. Embrace them as a critical tool in supporting better decision making across your organisation.

Rise of the Corporate Innovation Outpost

We’ve come a long way from the humble suggestion box and top down decision making long synonymous with corporate innovation. Today, more and more companies are sourcing ideas from not only the entire workforce but also getting outside their building and engaging partners, customers and members of the general public.

While ideas are plentiful thanks to idea platforms and open innovation, what often hinders a company’s ability to innovate is its internal policies, values, regulations, infrastructure and political structure.

You can run all the hackathons you want and preach lean startup and design thinking 'til you've run out of st, but unless an organisation’s landscape effectively supports the behaviours required to innovate - think risk taking, taking long-term views, lots of small bets, challenging the status quo, sharing ideas, and so on - then it will all be in vain and amount to little more than innovation theatre.

More and more companies are waking up to this fact and as a result of that they are beginning to follow in the footsteps of companies such as Telstra, Barclays, BMW, Samsung, Verizon, Nike, P&G, GE and Disney, who have all set up innovation outposts, or corporate incubators away from the mothership, usually in the middle of innovative startup hubs and ecosystems.

Typically, organisations who create outposts do so for one of the following reasons:

  • to partner with startups;
  • to invest in and acquire startups;
  • to incubate their own project teams; or
  • a hybrid of the above

Partnering with Startups

This form of the model typically involves synergy and alignment between the strategies of both parties - think target market, infrastructure, data and so on. For example, a peer to peer lending startup might partner with a large commercial bank who would give it access to domain expertise, operating licenses, networks, brand and customers in order to develop better solutions, gain exposure, build trust and perform customer testing to help find that elusive product market fit. Ultimately, everything a startup desperately needs but often finds in short supply.

Equity is not typically not exchanged however the supporting organisation may have an option to invest, have access to the startup’s technology and/or data and/or be otherwise rewarded for its support of the startup.

Diageo Technology Ventures partners with startups to solve specific business problems. "We want to explore opportunities beyond Diageo’s current business model and ways of operating, that we think could result in growth for Diageo in the future” says Helen Michels, Global Innovation Director at Diageo which is home to popular alcohol brands such as Bailey's and Guinness.

Diageo initially invests $100,000 seed funding to support project teams as well as a Diageo team. Successful teams work collaboratively withw orld-class marketers, brand leaders and mentors.

Investing in Startups

As the name suggests, many large organisations are diversifying by investing in not only startups whose strategy aligns with their own, but all manner of startups tackling all manner of industries.

Telstra’s muru-D accelerator has invested in startups from fields as far from its core business of technology and telecommunications such as surfboards, agriculture tech and children’s education. The accelerator invests $40,000 seed funding into startups in exchange for 6% equity.

muru-D is held at a co-location or coworking space away from Telstra’s mothership offices where startups come together under one roof, receive training, mentorship, and access to corporate infrastructure, and are encouraged to share ideas, network, challenges, solutions and so on.

More recently, Westpac and National Australia Bank have both announced AU$50M corporate venture funds to invest directly in startups. 

Incubating Project Teams

As indicated, processes, values, infrastructure and corporate systems of a large organisation tend to inhibit the very behaviours that are necessary to support innovation. This is why there’s a growing trend towards setting up corporate innovation teams in coworking spaces away from the mothership where they are not bound by the same rigid structure that serves only to support the delivery of what is, not the discovery of what if.

Often, post an initial incubation period, should there be sufficient evidence by way of innovation metrics and learnings, to suggest that a concept is worth exploring further, companies are setting up independent organisations in which they take some equity to pursue the idea. The organisation may be made up entirely of external people, internal employees or a hybrid of the two.

AT&T Foundry innovation centres, which collectively represent a US$100m investment from AT&T, Ericsson, Alcatel-Lucent, Amdocs, Cisco, Intel and Microsoft have started more than 200 projects and deployed dozens of new products and services.

It's becoming clear that in order to stay relevant in an era where one in three listed companies faces delisting in the next five years alone, companies are now doing what Steve Blank, father of the lean startup movement, has been telling startups to do for many years now....."get out of the building".

How to Innovate in a Regulated Industry (Pt. 2)

(Part 2 of 'How to Innovate in a Regulated Industry. Check out Part 1 here)

Take a Portfolio Approach

Eggs in one basket

The risk of taking few large safe bets in today’s environment far outweighs that of taking many small risky bets. The fact is though, we need to maintain a balance. We should never compromise the core business at the expense of the new and reconfigure all of our processes, policies, values and infrastructure to support “move fast and break things” unless we want to bring on the death of the company.

Taking many small bets helps to mimic the venture capital approach which is that for every ten investments, expect maybe one or two to deliver the desired returns and the majority to completely fail. Thus, taking small bets gives us more room to fail small but also increases the likelihood that we can win big with the few. If venture capitalists, whose job it is to invest in early stage companies, concede that they don’t get it right all the time (only 10% of the time in fact), then why should it be different for corporate executives whose job it has not traditionally been to develop new ventures and innovative business models? It’s not.

If we want to succeed every time, we can do that, but we do so while conceding that we will never deliver anything great. We will only succeed in stretching our existing S-curve as far as it will go, as did Kodak, Nokia and Borders before us. Perhaps John F Kennedy said it best when he lamented that “there are risks and costs to action, but they are far less than the long range risks of comfortable inaction”.

An environment needs to be created under which delivery of the existing and discovery of the new can co-exist. This should extend to the processes, values and infrastructure that support each approach.

While it’s difficult to experiment and move quickly in a large, often bureaucratic organisation that has implemented processes to protect and execute on a winning business model, there are many things that successful Fortune 500 companies are doing to counteract this.

Open innovation campaigns, idea contests, hackathons and innovation outposts (or corporate incubators), corporate startup partnerships and venture funds, or a combination thereof, are just some of the different methods that companies can use to successfully explore potentially disruptive business models in a fast, safe to fail environment.

A growing number of companies are looking outside the building and looking to pair their significant networks and experience with that of the structure, values, processes and talents of startups to help deliver mutually beneficial outcomes. Open innovation and the corporate startup partnership helps large organisations leverage their strengths without the burdensome bureaucracy they may operate in, without an impact on reputation, without a need to host on expensive internal systems and without regulatory pressures to worry about.

What about our brand?!

It is perfectly responsible to ask about the damaging effects of testing half baked ideas and products with the market, which is why we need to be careful about how we go about it. Remember, it’s not about finished products, it’s about validated assumptions.

How to get around it?

Test on small isolated groups that match the target market assumptionsTest with a new brandTest with full transparency the product is in beta mode and offer it for free purely for the purposes of soliciting early customer feedback (Intuit Labs do this with their “roughcuts” program)

Infrastructure Concerns

Infrastructure concerns

Finally, what we’re often seeing in the market is infrastructure demands and legacy systems slowing down innovation which we can break down into internal and external demands.

Internal demands:

IT departments often demand that all software be hosted on their big, costly, in-house systems, which compared to hosting on the cloud, drives development and hosting costs way up, while bringing speed of innovation teams way down. There is a valid reason why this is done for core systems, pertaining to integration, security and privacy.

Oftentimes however, an innovation team will be permitted to test new ideas in the cloud on a platform like Amazon Web Services (AWS) but as soon as additional investment is made to commercialise the product, company policies and the IT department dictate that it be hosted on the core technology and as such, budget to take the idea forward evaporates.

In the odd case that budget exists, the increase in cost means that X times more revenue is required in order to hit those efficiency targets we spoke of earlier and given that truly disruptive innovation can take several years to deliver returns, the plug is often pulled on promising innovation projects before they get near the hump.

As a lifelong Manchester United fan (please don’t hold that against me!), I can draw parallels between this plug pulling and the career of former manager Sir Alex Ferguson. Sir Alex joined the club as manager back in 1986 and was given seven years to build a team (unheard of in a time when managers come and go like seasons and loyalty is pledged only to one’s personal bank account). However, after several seasons of poor performances Ferguson was on the cusp of losing his job in 1992 if not for the unwavering support of the board.

The end result? 13 Premier League titles, 5 FA Cup titles and 2 European Cups in the 20 year period from 1993 through to his retirement in 2013.

Image result for manchester united champions league winners

Of course, football and large organisations are not exactly the same. In the aforementioned case the bet was taken on the core business of its top tier professional team, instead of as an isolated side project. However there is a lesson in here on patience.

We need to support innovation projects by either configuring our internal policies to support hosting on fast moving platforms or create new companies with their own policies and values.

External demands:

In the case of regulation demanding that we host particular records in house, then creating new independent companies may help to get around these problems. Companies that don’t fall under the banner of the regulator.

A Final Thought on Regulators

Ultimately though, regulation should exist to protect the consumer, not the incumbent. And unless we want to revert to a time when the first cars weren’t allowed to drive faster than horse drawn carriages to protect the then powerful horse and carriage lobby, regulators need to do a better job at exercising professional judgment when evaluating the steps that companies are taking to innovate and add value to the economy.

A job without purpose is a waste of time and regulators need to hone in on their ultimate purpose of delivering value to consumers and growing the economy instead of the archaic, process oriented ticking and crossing of boxes.

How to Innovate in a Regulated Industry (Pt. 1)

Regulation is often used as a scapegoat for a company’s decision not to truly embrace an innovation agenda and the practices that support it.

“We can’t experiment with new products because we have our operating licenses to maintain, a reputation to protect and shareholders to serve” is what many a corporate executive will tell you.

However, in an era where listed companies have a one in three chance of being delisted in the next five years (six times the delisting rate of companies 40 years ago!), large organisations simply can’t afford not to experiment given that it is critical to the development of disruptive innovation and new business models, what organisations need most right now.

But how does one experiment when a corporate watchdog is breathing down your neck and watching your every move?

Experimentation Is About Testing Assumptions, Not Finished Products

Experimentation is about assumptions, not finished products.

First, we need to be clear about why and how we experiment.

If you’re a large insurance company then it’s not a matter of simply releasing a new policy via your website to the public and testing whether or not anybody bites.

As an insurer, any new insurance policy would no doubt require regulator approval before release to the public, which would add significant time and cost to the entire process. This goes against the nature of experimentation which is all about moving quickly and taking lots of small bets to determine what customers like and what they don’t like in order to support strategy and find opportunities for product market fit.

So how do you move quickly then?

Trying to innovate quickly

Experimentation is about validating key assumptions that underpin a business model.

For example, if you’re thinking about launching a new online peer to peer lending service targeting young adults you’ve got a few key assumptions to test which might include:

  1. There is a percentage of young adults that aren’t satisfied with existing lending channels
  2. These young adults are not credit risks
  3. Young adults would use an online platform to borrow and lend money
  4. Interest rates charged are sufficient for both borrower and lender

These are but a few key assumptions that may apply. Others might extend to different aspects of the business model such as distribution channel, payback periods, customer profiles, customer acquisition strategies, fees and so on.

Taking the above example though, do we really need to go through the motions of building, releasing and promoting a full blown peer-to-peer lending solution to simply test whether these assumptions hold true? Of course not. That would be fiscally irresponsible, a case of “me too” and putting the cart before the horse.

These assumptions can be tested using a combination of tools such as design thinking exercises, online and offline surveying, consumer credit reports and hitting the streets.

A Case Study in Getting Out Of The Building

Get out of the building and innovate

Medibank, a listed Australian private health insurer with a market capitalisation of AU$6.9B, hit the streets to test some key assumptions underlying its Gym Better product, a policy that targets gym goers or ‘would-be’ gym goers with casual access to a number of partner gyms across Australia. I personally find this particularly appealing as a health conscious professional who often travels around the country but is not a member of a large franchise gym. Paying $25 to $30 for a casual gym visit is hardly ideal!

Medibank didn’t simply release the product because this would have required regulatory approval, thus requiring a massive time commitment and financial outlay. Not only that, but spending all that money to release a product to market without sufficient customer validation up front is a recipe for disaster and the number one reason why most new ventures fail.

To that end, a new corporate venture is no different to a startup in the sense that they are both new temporary institutions looking for product market fit and a scalable, repeatable business model.

Instead, the insurer dispatched a number of staff in plain clothes with iPads in hand to the busy Bourke Street Mall, in the heart of Melbourne’s CBD. They were able to validate and more importantly perhaps, invalidate some of the key assumptions underlying their business model by simply speaking with gym goers and the like.

This was their way of refining their product before over-investing in a flawed one. In some cases where willing participants expressed their interest in buying the product, they were simply told that the product doesn’t actually exist and were offered some Gold Class movie tickets for their time. Everybody wins!

In addition, health insurance agencies in Australia can only change their price point once a year on April 1. Getting a better idea of price point directly from target customers before going to market is obviously important, less you want to release a product that’s priced poorly and have to stick by it for up to a year.

Gym Better has gone on to be a much talked about addition to the suite of products that Medibank offers, giving members access to over 600 gyms.

Experimentation Leads to Efficiency

office-space.jpg

So much of what companies do is based on efficiency, so much so that we’ve created ratios and metrics to measure effiency such as Return on Investment (ROI), Net Return on Assets and Internal Rate of Return (IRR). As a result, managers often focus only on the D in R&D in order to bring down the denominator and increase the chance of healthy short term returns.

This generally supports only replicable, safe, incremental innovations that serve only existing customers and don’t help companies carve out new markets or catch new S-curves which is critical at a time when, need I remind you again, one in three public companies are at risk of being delisted in the next five years alone.

However, what if experimentation actually supported efficiency? Well, it does.

Products developed using traditional methods such as ‘waterfall’ are said to fail 75% of the time.  

While waterfall might make sense when developing what is known. It simply doesn’t lend itself to experimenting with potentially disruptive innovations when there are so many unknowns to contend with. When waterfall projects fail, a big part of the reason goes back to market failure and not having a strong enough understanding of the customer, the problems they are facing and gains they are trying to create.

Experimentation helps us identify those flawed assumptions before investing in building finished products. It supports releasing products to market only once comfort has been gained around the proposed business model and its revenue generating potential.

As such, if identifying and tracking assumptions and metrics correctly, you can pull the plug on doomed projects much earlier in the piece because of a more intimate understanding of customer needs and re-allocate to more promising endeavours, thus improving efficiencies over time. Methodologies like the lean startup help to keep risk to a minimum and align with company risk profiles, a key aspect to getting buy in from senior executives as well.

(Check back next week for Part 2 of this blog, where Steve talks more about innovating in a regulated industry, including the importance of taking a portfolio approach, and dealing with infrastructure concerns)

The Future Of K-12 Education in Australia

Collective Campus had the pleasure of hosting a panel talk recently with Stile Education on the future of K-12 education entitled ‘Getting Students Future Ready’.

I was fortunate enough to be on a panel next to a line-up of progressive pedagogists such as Hamish Curry from global design consultancy NoTosh, Bec Spink from Code The Future, Richard Olsen from Monash University and Steve Brophy, Director of eLearning at Ivanhoe Grammar.


Discussions touched on what the future ready student looks like, what changes need to happen to the current model of education, the importance of teaching coding, design and entrepreneurship in our schools and the role that technology can play in our schools.

As is always the case with panels, many topics were touched on, but with social conventions playing their part and a finite amount of time available for discussion, a lot of discussions were cut short and some important ones didn’t see light of day. As such, I decided to spend the best part of my Saturday writing an opinion piece that I hope will generate some new conversations.

I am not a K-12 teacher nor have I ever been, however as somebody who runs entrepreneurship programs for children and a corporate innovation consultancy, as someone from the outside looking in, I feel that I can provide a fresh perspective which may be unclear from the inside. As is the case with innovation, and as I tell my clients, you need to get outside the building and look at things from a different lens in order to gather unique insights if you are to truly innovate. In fact, there are many parallels between the challenges facing enterprises and the school system when it comes to innovation, some of which I will touch on a bit later.

So, here we go…

What Does The Future Ready Student Look Like?

‘The times they are a changin…’

According to CEDA, 40-60% of today’s Australian jobs are likely to be replaced in 10-15 years. This is on the back of the rise of automation and offshoring. Jobs once seen as safe, such as accounting and legal, may be few and far between.

Deloitte also reported that 65% of the Australian economy faces significant disruption in the next two years alone (note: this report was released in Dec 2014!). Innovation consultancy Innosight, founded by Clay Christensen - father of the theory of disruption - finds that at current rates of churn, 75% of the companies on the S&P500 today will be replaced by 2025.

As such, the future ready student needs to be more adaptable and resilient in the face of rapid change and disruption - a thought shared by my fellow panelist Steve Brophy

Traditionally, we have taught children to become a master of their field as opposed to a jack of all trades, which made sense. However, with industries and occupations once seen as safe being disrupted, we need them to have both. It would be foolish to guide students towards particular goal posts that may no longer be there when they arrive.

People tend to be resistant to change. The future ready student needs to step out of this mould, embrace change and ultimately be able to reinvent themselves.


This means a focus on T-shaped skillsets. According to Brian Shackel, the number one attribute  distinguishing students who went on to do remarkable things compared with the rest is the possession of great abstract thinking skills with strong foundations in their core knowledge areas. Bill Moggridge, co-founder of globally influential change-maker and design firm IDEO, described the T-shaped person as someone who has basic literacy in a relatively broad domain of relevant knowledge, along with real depth of competence in a much narrower domain.

Curiosity killed the cat (and invented the lightbulb)...

In Clayton Christensen’s The Innovator’s DNA, traits associated with innovation and entrepreneurship all boiled down to curiosity. Questioning, observing, networking and experimenting are considered key characteristics in addition to the ability to connect the dots between broad subject matter and unwavering temperament to challenge the status quo. Think about it: if nobody challenged the status quo, we would fail to evolve and progress would falter. If nobody challenged ‘the way things are around here’, we’d still be running around in loincloths, clubbing each other over the head, or so the story goes.

By encouraging children to ask questions at a young age, as opposed to simply ‘listen, remember and regurgitate’ and take what teachers say on face value, we can encourage the very curiosity most first graders usually have beat out of them by the time they reach sixth grade.

We need a healthy mix of left brain and right brain thinkers and can’t afford to have our future boardrooms populated purely by linear, risk averse leaders. We need to avoid the Kodak dilemma and to do that we need to breed more creative, right brain thinkers and empower them to influence strategic direction at all levels of Australian society. It’s time we start valuing discovery and not just delivery.


Does the current model of education support the future ready student?

As somebody with limited exposure to the inside workings of the K-12 education system in Australia (and having last walked the halls of my high school in 2001), I should stress that my opinion here is based purely as an outsider - it is based on what I’m seeing in the press, in the market and through my conversations with teachers, parents and children.

What is clear to me is that there is an appetite for change amongst our schools and other stakeholders. However, as is the case with any large organisation, entrenched values, policies and processes inhibit change. Whether it be the way grants and funding is allocated, the short term nature of incentives, the metrics we use to measure school and student performance, what the end-game is (University admission and employment), or whether the system is at the mercy to an influential regressive few, values and processes which underpin an education system that numbers 3.6 million students, 373,000 staff and countless affiliations and relationships with Government, Universities and employer affiliations is no easy thing to change in a hurry, especially without a common consensus on what we should be changing to.

Getting buy in from the top is often sighted as a common grievance and roadblock to change. As is the case with corporate innovation, there are a number of ways to drive getting buy in from the top for change. While it may take time, Rome wasn't built in a day, and with a concerted effort of a large number of people each playing their small part, change can happen, albeit slowly.

Just some ways people can go about getting buy-in include:

  • Presenting relevant case studies of what’s working to decision makers
  • Conduct a premortem to gauge risk profiles of decision makers (i.e. “What’s the worst that can happen if we launch this initiative or make this change? Are you okay with that level of risk? Okay, let’s do it”)
  • Blackops (ask for forgiveness, not permission) and show decision makers the results
  • Use the cost of quality teacher attrition as a reason to support change (half a billion dollars in training is potentially lost every five years at current rates of attrition)

On blackops, I’ve met many teachers who are taking matters into their own hands and in some extreme cases investing their own money into providing their students with the best possible learning experience. Teaching five year olds how to not only develop video games but sell them on the open market is one such example of this.


The need to teach our children entrepreneurial skills is becoming increasingly important as we find ourselves living in an increasingly volatile and uncertain commercial and economic landscape. While this may be part of the existing curriculum in Victoria under Design, Creativity and Technology, it does not appear apparent to me that this is actually happening or happening a t a sufficient level.

If it were, then the Federal Government’s Policy Hack initiative, which was used to identify ways to make Australia more innovative, would not have found running a national Lemonade Stand Day in schools, to help embed entrepreneurial skills, as a key recommendation of the initiative.  

In addition to this, having successfully run our first Lemonade Stand program earlier this January, we are now receiving enquiries from schools and parents all over the country who are interested in their children taking part in the program. If it were already happening then this would not be the case. We’ve even got somebody from Sydney flying their child down to take part in our April classes - clearly if enlightened parents are taking such extreme measures, something must be amiss with the current system.

‍Lemonade Stand - “Ask children what they want to create, now that they want to be”

In order to build a more creative and innovative Australia, we need to encourage traits that are simply not in our DNA as a country. Risk taking and embracing small failures as a means to learn and improve are not natural tendencies for most Australians, and speak volumes about why a vast majority of Australia’s most successful entrepreneurs are in fact immigrants or the sons and daughters thereof. In fact, one third of the company founders that featured on the BRW’s 2013 Fast Starter list were born overseas. The impact of teaching entrepreneurship may not be felt until years into the future and while we may have a preference for short term gains (because our performance tends to be measured based on them - that’s another story altogether), we should not neglect to plant seeds for the future.

One of the most rewarding aspects of our Lemonade Stand program was asking each and every student at the culmination of the program what they learned about failure. “It’s okay to fail, as  long as you fail small, learn from it and have enough money left over to keep trying” was the common response. This is in stark contrast to the “avoid failure at all costs” mentality which is especially pervasive across Government and corporate boardrooms in Australia which only ever lends itself to taking safe bets and ultimately avoiding innovation at all costs.

Screen Shot 2016-01-23 at 9.36.47 pm.png
“What did you learn about failure?”


Educate the Parents

I work and meet with a lot of large organisations to talk innovation and it is clear that in the top Australian boardrooms, an understanding of disruptive innovation theory is lacking, and that many leaders don’t quite yet appreciate how under threat their companies and their positions actually are. If people who are entrenched in enterprise can’t see the storm coming, then parents who are far removed from this world are quite unlikely to even check the weather.

What this means is that they would likely feed their children the same narrative they received growing up - “study hard, get a degree and become an accountant” or something to that effect with little consideration for the changing tide or other skills that are becoming increasingly important to survival and success.

Parents are in a position to influence their children and as such need to be armed with the facts, otherwise there will be little emphasis on building skills outside of the norm. Parents are also in a position to join forces and influence educators to adapt and become more responsive to changes in the landscape.

We need to break this narrative...


Quality of Teachers

I am generally not a fan of metrics, particularly school system metrics that tend to reward the ability to ‘remember and regurgitate’ over the application of learning to solve problems.

As such, I don’t believe that the Australian Tertiary Admission Rank (ATAR) is a reflection of somebody’s intellect, emotional intelligence or ability to make a valuable contribution to society.

Having said that, less than half of Year 12 students who received offers for places in undergraduate teaching degrees were in the top 50% of their age cohort. Furthermore, teacher education degrees also had the highest percentage of students entering with low ATAR scores.

Now this by no means suggests that students who are in the bottom 50% of their age cohort can not make absolutely amazing teachers, nor does it suggest that those in the top 50% wouldn’t make appalling teachers. However, one might argue that the typical bottom 50% student is less likely than the top 50% to have sufficient literacy, numeracy, critical thinking or reasoning skills.

It must also be said that while many teachers are drawn to the profession for the right reason, many more are drawn to it for the wrong ones - 10 weeks of leave, comparatively shorter work days than your standard corporate gig (I fully acknowledge that the more invested teacher works incredibly long days but this is the exception not the norm), ATAR scores that prevent them from admission to other courses and so on.

So ultimately, you end up with many below average teachers throughout our school syste, who ultimately see their occupation as a job and not a calling or a purpose.


We need to encourage, develop, acquire and retain quality teachers otherwise a negative flow on effect to our children is imminent. Easier said than done sure but by making positive changes to the school system and essentially making teaching say, sexier, we might just be able to attract and retain a higher calibre or teacher. Whether that be via funding, partnership with enterprise, a better use of technology or any combination of other factors, the current system simply does not appeal to high performing students.

Is Technology the Answer?

Perhaps this is where technology fits into the equation. It’s not just about teaching our children how to use technology or how to code - they’re quite bright, so if they’re genuinely interested they’ll figure this out on their own providing we make it visible and accessible to them (sprinkled with some ‘cool’ of course).

But the role technology can play for teachers, and in particular with respect to helping optimise and align the performance of teachers with varying capabilities, can arguably be in the space of facilitating guided education through analytics that monitor and report on student progress, identify student strengths and weaknesses, identify patterns in learning to determine preferred learning styles and develop personalised, interactive and gamified curriculum based on these factors. Play to their habits - the ever successful Mathletics e-learning application by 3PLearning is a fantastic example of what happens when you embed ‘game theory’, or gamification, into the learning experience to increase student engagement.

Source: Mathletics


A teacher with a class of 20 to 25 students, no matter what calibre of teacher, can hardly be expected to perfectly monitor each student and tailor customised material and learning plans to each. Faced with this problem, we use streamlined content and the same set of metrics to measure each child’s performance in unison. However, the interests of teacher and class time are hardly in the interests of the developing student.

What this also results in is the strong getting stronger and the weak getting weaker. Because we measure each student using the same set of metrics and the exact same curriculum, we don’t allow them to learn at a pace and through a method that suits them and the gap between the higher performing student and the lesser performing students gets larger and larger, This is particularly true as the latter starts to face growing confidence issues and self doubt, which can often and usually results in them withdrawing their focus altogether and instead looking for validation in other, less productive ways, such as acting out and bullying.  

Malcolm Gladwell wrote about this very effect in his New York Times bestseller Outliers. He tells the story of how ice hockey players in Canada and the USA are first selected for youth teams based on a January to December calendar year, which means the vast majority of players, selected predominantly based on size at that age, are born in the first half of the year. Subsequently they get into the A-teams, get more experience and by the subsequent year the gap between them and the supposed B-players gets bigger. The end result?


E-learning technology has the ability to personalise education, harness strengths, help students work on weaknesses and ultimately provide a tailored learning experience. This can help give ‘December students’ as much chance as their January counterparts if we take the above example and apply it to the effect of blanket education on children and an absence of truly tailored learning.

Perhaps the role of technology is away from the classroom with class time used simply to take those learnings and apply them through hands on activities and exercises where students learn by doing. This is essentially what the concept of the ‘reverse classroom’ is all about, a blended learning method under which the teacher becomes a facilitator of outcomes rather than the regurgitator of content.

Benjamin Franklin is famously quoted as saying “tell me and I forget, teach me and I may remember, involve me and I learn”.

Tall Poppy Syndrome


Australia is one of several countries that suffers from tall poppy syndrome, whereby people of genuine merit are resented, attacked, cut down, or criticised because their talents or achievements elevate them above or distinguish them from their peers.

While this theory might be on the contrary of the earlier discussed hockey reference, it is worthy of mention because it disadvantages both those we classify as high performers and those that are in reality, falling behind. Why?

High performers need encouragement and their efforts and achievements should be rewarded accordingly in order to promote further exploits, this is positive reinforcement 101.

On the flipside, if we persist with the “everybody gets a ribbon” mentality, then we are rewarding sub-par performance and planting seeds of false hope and validation in the mind of students who need to be acknowledging failure in certain areas in order to identify a need to improve - which is where some of the approaches mentioned earlier such as personalisation come into play.

How we define success and failure however, particularly when it comes to less tangible skill sets than say, mathematics, is another matter.

What changes are happening?

Independent Programs

Some of the changes I’m privy to are incredibly positive. Some of my fellow panelists are doing great things in the space of teaching kids design thinking, as is the case with NoTosh, and teaching them how to code, as is the case with Code The Future. These are ultimately independent organisations, the latter a not-for-profit, that are addressing gaps in the school system.

Code the Future

Independent Schools

I recently had the pleasure of meeting Sophie Fenton, co-founder of Sandridge School in the seaside Melbourne suburb of Williamstown, which claims to be ‘the entrepreneurial school that inspired constructive intellect, social prosperity and nourishes people’s lives’. Marketing aside, the school was founded by teachers in early 2015 and now boasts over 100 enrolments (500 on waiting list) as it braces itself for its first school year in 2016 with an emphasis on partnering with ‘activators’, NGOs and enterprise in the space of entrepreneurship, work experience, ethics and community service.

Sandridge School

Collective Campus is one such activator looking forward to working with Sandridge to run a year long pilot of our Lemonade Stand program which we are delivering on a pro-bono basis because we feel it provides for a unique and rewarding learning opportunity and experience.

Employer Changes - Degrees of Secondary Importance

Schools are simply one part of a much bigger system of Government, Universities, Colleges and ultimately employers. We go to school, we get good grades, we get into a degree and then suit up for a secure job right? Or so the narrative goes…

But what happens when degrees are no longer prerequisites to getting a job? The UK office of Ernst & Young, one of the big four global accounting firms, last year removed the degree classification from the entry criteria for its hiring programmes, having found “no evidence” that success at university was correlated with achievement in professional qualifications.

EY is dropping degree prerequisites


EY’s managing partner for talent said the changes would “open up opportunities for talented individuals regardless of their background and provide greater access to the profession” and added that “academic qualifications will still be taken into account and remain an important consideration but will no longer act as a barrier to entry.”

The implications of this happening here in Australia can not be understated, particularly if a broad cross-section of large and influential employers take the same stance. No longer will one need a top ATAR to get into ‘top’ degrees to get the ‘top’ job. What this lends itself to is the mass adoption of modular education, choice and a tendency to favour broad experiences, vocational background (internships and such), proactivity, communication and relational skills and the ability to learn and solve problems over one size fits all metrics such as an ATAR or University scores, which as eluded to earlier, often reward memory, not problem solving and the application of knowledge.

Suddenly, children would be encouraged to play to their strengths and their passions.

Independent programs such as those mentioned earlier and MOOCs (massive open online course providers such as Coursera, Udacity and Khan Academy) would gain more relevance, and like music, television and car ownership before it, education too could become modular and less cookie cutter.

Coursera is one of many MOOCs democratising education


If we give students more freedom to identify and play to their strengths and their passions, it might just give them the opportunity to excel at certain areas and would be particularly useful for students that the current system leaves behind as they would no doubt build confidence in areas that they enjoy and further assert themselves accordingly.

Another interesting trend is to leverage off pop culture and the existing interests of children to increase student engagement. For example, the plethora of Minecraft related ‘learn to code’ applications available such as the Microsoft collaboration Hour of Code are great ways to attract and engage students much more than traditional methods are usually capable of.

Like adults, children need compelling stories to capture their attention - if that story can be delivered through a video game, even better.

Minecraft: making learning cool and fun

Investment in early childhood education

Australia’s investment in early childhood education ranks 34 out of 36 OECD countries and 22 out of 37 for the percentage of GDP that reflects investment in education. Nobel prize winner James Heckmann also found that investment in early childhood education produces the greatest returns to society such as better citizenship, larger tax base and lower crime rates which goes far beyond the welfare of the individual child.

The mindful student

Today’s students are being born, virtually with iPads in their hands (now that I think of it, I’m somewhat surprised Apple hasn’t followed the successful eatery, Zouki, and set up Apple kiosks inside hospitals to capitalise on the wave of outsourcing parenting) and technology is ultimately a logical extension of their very being.

However, as enabling as technology can be, it can have some nasty side effects. The rise of photo sharing apps such as Instagram and social media mainstays such as Facebook have been absolutely amazing platforms for socialising, building relationships with influencers and developing business. However, used incorrectly, they can quickly become a vehicle for students to perceive vanity metrics such as likes and follows as surrogates for self-worth.

Follow me back! Social media can be seen as a dangerous surrogate for self worth.


The danger with this is externalising self worth and becoming ‘social media centric’ people whose happiness and drive is dependent upon external factors such as social media engagement. What happens if those followers aren’t there? What if your peers have more followers? What if every time we sign on to Facebook we see how our ‘friends’, who always put their best foot forward online mind you, have ‘much better’ lives than us? Ultimately, that serves to put today’s youth in a very unhealthy mindspace, one where they don’t have the calm of mind and clarity to make good decisions, don’t funnel energy towards proactive pursuits and worse still, could see them spiralling into depression. Oh, and the same applies for us adults too.

It’s important we address this because unclear minds ultimately result in poor performance and unrealised potential. Mindfulness training is one way that we can tackle this epidemic by helping students develop intrinsic self worth and a calm and clear state of mind. The Mindfulness in Schools Project, based in the UK, is one of many initiatives bringing meditation into classrooms around the world. This may serve not only to dull the harmful effects of social media, but also to improve concentration, life decision making and overall wellbeing.

Mindfulness training can give students clear heads so that they can be their best.


The easiest way to get started? The Headspace mobile app has been heralded as bringing meditation to the masses and is something that anybody with a smartphone and ten minutes a day can do. In addition, books that I was exposed to in my mid to late 20s such as How To Win Friends and Influence People by Dale Carnegie and the Seven Habits of Highly Effective People by Steven Covey completely changed my life and the lives of millions across the world.

Thought leadership such as this is a big part of the reason why I managed to raise $156,000 to fund my first start-up while still working for Macquarie Bank on a full-time basis before embarking upon life as an entrepreneur.

Books such as these which go light years beyond simply developing literacy and comprehension skills and should be considered for inclusion in mandatory reading lists. The same should extend to teachers and parents.

In addition, podcasts such as The Tim Ferriss Show, hosted by the author of the Four Hour Work Week, and Lewis Howes’ The School of Greatness are powerful sources of knowledge, wisdom and inspiration that require little more than an internet connection and a pair of headphones for students to start tapping into. These resources would be particularly useful for Secondary school students and teens looking for a little more guidance and direction in life.

To this end, I do note the encouraging move that the Victorian Government recently made to introduce relationship building into the school curriculum.


Closing Remarks

As indicated earlier, this is an opinion piece based on my visibility of schooling in Australia and while it’s easy to identify what’s wrong, what we can all do is collectively push to play our part and as cheesy as it sounds, be the change we want to see in the world.

My team at Collective Campus are doing our part with our Lemonade Stand programs and we’re now exploring ways to roll this out across Australian schools, conscientious of budget restrains with our Lemonade Stand Online offering and are exploring ways we can train teachers to teach entrepreneurship as scale across all schools, regardless of socioeconomic or geographic alignment is critical, otherwise we are simply paving the way for greater societal divides.

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In addition to this, while there is much talk about innovation and changing education in Australia, we need to move quickly in order to learn what works, learn what doesn’t work and iterate towards a system that better serves all students. As with corporate innovation, there is no silver bullet or sure thing and the moment you make a safe bet, you have resigned yourself to limited reward.

My team came up with the concept, developed the curriculum, performed marketing for and delivered a successful Lemonade Stand program in four months from wo to go, despite the fact that our core business is in innovation consulting for corporates and running workshops for adults. Despite limited time and resources, and a two week Christmas break to boot, we committed to doing something, we moved quickly, we delivered, we learned and we can now make improvements.

We need more doers collectively directing the narrative of K-12 education in Australia.

5 Things University Courses Do Not Teach About Marketing

A few years ago, feeling the tug of the startup world, I enrolled myself into a Masters of Marketing & Management at a very reputable university. I’d thought it’d be the best, most comprehensive way to acquire at least a solid fundamental set of skills that would hold me in good stead in whatever I would decide to do. At the least, I thought, I’d finish with an impressive looking piece of paper that would have employers lining up to hire me.

As the story goes, about halfway through my course, I got a junior-level role at a digital marketing agency. I’d just finished a unit called ‘Digital Marketing/Online Marketing’ at university, so I thought be well equipped for the job.

Boy was I wrong.

It did not take me very long to realise that digital marketing was almost completely different to what I had learnt at university. I had very superficial knowledge of some concepts, and there were others that I had never even heard about. Sure, I wasn’t exactly a stellar student, but my Masters was sorely lacking.

Now a year after completely immersing myself in the digital world, here are five things your university doesn’t teach you about (digital) marketing.

1. ANALYTICS

Digital Marketing is primarily data driven. Marketers approach decisions with an almost scientific mindset - they look at the available data, break it down to understand why something is what it is, make a hypothesis about how things could be improved, run an experiment, assess the results and iterate. One of the primary tools used in this process is Google Analytics, but there are other analytics software in general, all which serve different purposes - for example, Facebook has two different analytics tools - Insights and Ads Manager. Understanding how to use these analytics software, for example, how to implement the software, how to make the most out of your data, how to make sense of the data and how to make decisions based on what’s available, is key to becoming a good marketer.

2. CONVERSION RATE OPTIMISATION

Conversion Optimisation is the practise of optimising a digital product, whether it’s a website, a SAAS (software as a service), or an app, so that it’s converting as many users or visitors as possible into becoming purchasing users. Conversion Rate Optimisation requires a broad set of skills - good conversion optimisers will have solid analytics, UI/UX design, user research and testing, design and even coding skills. Because CRO is all about increasing a company’s ROI, a good conversion rate optimiser is a powerful weapon in any business’s arsenal, and is a definite must-have skill.

3. ONBOARDING CUSTOMERS FOR A MODERN BUSINESS

The way businesses get new customers has completely changed over the last few years. The rise of social networks and SAAS’s have opened up completely new methods, theories and practises. Sales funnels have changed, and thus the process and mindset behind customer acquisition have shifted dramatically. Landing pages, drip feed campaigns & growth hacking are just some examples of relatively new practices that universities courses don’t teach. These aren’t just new-fangled fads I’ve just made up either - these are industry accepted practises that all digital marketers should know.

4. MARKETING ON AND FOR MOBILE PHONES

Everyone knows that everyone is glued to their smartphones. However, how you make a company’s marketing mobile optimised is a little more complicated. There’s a technical side to it - i.e. understanding website mobile optimisation, the psychology behind it - i.e., changing your copy so that it suits the mindset of a mobile user, and overall strategy - i.e. inbound vs outbound marketing. To a user, these are often subtle and arbitrary differences, but it’s understanding these nuances that define a good marketer.

5. PROPER PERFORMANCE BASED, EFFICIENT  SOCIAL MEDIA MANAGEMENT

Everyone thinks they understand social media - it’s just about making pretty pictures and posting witty things, right? However, just like every other facet of digital marketing, social media is heavily data and analytics driven. In an average day at a social media agency, I spend far more time looking at numbers and graphs rather that looking for nice pictures. Content marketing is also all but glossed over in courses, each network’s very in-depth advertising platforms aren’t touched on, and automation and organised management aren’t explored.

It’s true the digital landscape is one that’s always changing, so it’s hard for large universities keep up constantly. However, the practises and concepts mentioned in this above article are definitely here to stay, and having at least a good understanding of these concepts (even if it’s not practical experience) will ensure you are far better equipped in the digital marketing world. Digital Marketers though, are constantly learning - it always has been, and will be up to your personal drive and hustle.

 

So outside of doing a formal course, what are the best resources for you to follow to learn about digital marketing?Bonus: Here are 5 top resources to get skilled up practically in digital marketing!

  1. Kissmetrics
    Founded by one of the most influential modern marketers and entrepreneurs, Neil Patel, the 
    Kissmetrics blog is a great resource for insights from some of the most notable in the industry
  2. Growth Hackers 
    Growth Hackers is a forum where founders and marketers write about their successful marketing campaigns and launches, and dispense huge amounts of marketing tips, secrets and general growth hacking practises. Reading through case studies to find out what has worked for others, and engaging with the wider Growth Hacking forum, is a great way to learning and keeping ahead of the marketing curve.
  3. Gleam.io
    Gleam.io is a great SAAS, but Stuart Mckeown, co-founder, also runs an awesome blog. Full of long, detailed articles about digital marketing, entrepreneurship and business in general, it’s an indispensable resource for the modern digital marketer and entrepreneur.
  4. Google Academy
    Who knew Google ran its own school? OK, it’s not really a school as it’s a bunch of free video courses for all its products, such as Analytics and Adwords. It covers everything from the basics to pretty advanced stuff, so it’s a must-have for digital marketers at any level.
  5. MOZ
    MOZ are industry leaders when it comes to SEO. Their blog is full of detailed articles and information about good SEO and Digital Marketing practices, and is definitely a resource all companies and resources should refer to.
  6. Buffer
    Buffer is also a great SAAS (and a personal social media management favorite), but their blog is an awesome resource for social media & digital marketers. They always feature detailed social media breakdowns and analysis, and feature news about the newest features to help you stay ahead of the curve.
  7. Social Media Examiner
    Social Media blogs are a dime a dozen, so you have to make sure you’re following the good ones. Social Media Examiner is definitely one of the industry leading social media resources, and something that all digital marketers should tune into.  
  8. We Are Social Digital Marketing and social media are changing all the time, so you need something that keeps track of all the changes. Whilst We Are Social is a digital agency, they run a fantastic blog, especially their weekly Tune-up, act as a great news sources for all the different happenings and changes. They also have great articles about digital marketing in general.
  9. Practical Education

With the rapidly changing pace of the digital marketing world, and disruptive technology paving the way for new jobs and roles (and making others obsolete). Universities are unable to keep up with the pace of change - after all, university courses are often 2 years, in which time, much would have changed. As a result, short courses are far more practical in getting skilled fast. These short-courses are often hosted by more innovative organisations, and are taught by industry thought-leaders and current practitioners, making the knowledge dispensed much more practical, relevant and useful.

Want to learn more about Digital Marketing? Check out our Digital Marketing Masterclass series.

Startup Acquisition 101 for Large Organisations

In order to stay relevant in an era of rapid change and disruption, companies can do a number of things. Further penetrate existing markets, enter new industry and geographic markets, explore new customer segments and make changes to pricing and packaging are a few of the more traditional options, which will only ever serve to stretch the existing S-curve.

Successfully exploring new disruptive innovations is an alternative approach that is designed to catch the next S-curve, but for most established companies, this is fraught with complications because their businesses are designed to execute upon a repeatable business model, not to look for a new one.

So in order to catch the next S-curve, most large and established companies seek to acquire fast moving and disruptive startups. The challenges and questions posed however are plentiful.

  • Who to acquire?
  • When to acquire?
  • How much to pay?
  • Integration or Independence? 

Far too often, large companies spend millions acquiring smaller startups and end up ruing their decision because they essentially acquired the startup once it had delivered most of its organic growth or paid too much for it relative to growth prospects.

However, one of the most devastating plays is made when the acquired startup is integrated into the new mothership, inheriting the parent company's processes and values. Very quickly, everything that made the acquiree great is destroyed as a result of this. The startup can no longer move quickly. The startup can no longer innovate. The startup's employees no longer enjoy going to work. 

I have heard many horror stories in this space. Most recently, I heard of a financial services institution that paid $5m for a startup, only to spend $4m on integrating that startup into the parent's IT infrastructure. Several months after acquisition, the founders and chief dreampushers at said startup left because they could no longer tolerate being constrained by the corporate bureaucracy. Value of this startup today? Zero.

Sound familiar?

What's broken with startup acquisition and how do we fix it? 

1 - Acquiring at the Wrong Time

Companies are acquired once they’ve already blown up and incumbents end up paying a premium for companies who haven’t got much growing to do, taking a hit to their share price in the process for acquiring at a premium.

Yahoo! paid  $3.7 billion to acquire Geocities in 1999 and eventually shut down the service as its users defected to blogs, Twitter and Tumbler. 

Newscorp paid $580m to acquire Myspace in 2005 and sold it just six years later for $35m, less than 1/10th it paid for it.

How To Fix This: Adopt a portfolio approach and look to invest in multiple, diversified companies at an earlier stage. Venture capitalists invest in 10 companies expecting that maybe 1 or 2 will go 'bang'. Why should it be any different for large companies, particularly given that investing in startups is not their bread and butter, unlike many VC firms. 

2 - Integrating the acquired company

Companies get acquired because they’re awesome. Too often large incumbents attempt to integrate these startups into the mothership’s way of life - infrastructure, process, values and so on. What happens is that the cost of running the acquired company goes through the roof, often pegged to legacy infrastructure which represents a massive cost premium over cloud services such as AWS, and the values and processes that made them great are replaced with bureaucracy. Long story short, the founders and many employees end up leaving and the incumbent has paid a premium for a potential unicorn that quickly turns into a lemon.

How To Fix This: Know why you’re acquiring Company X. If it’s because their processes and values make them an awesome company, let them run an autonomous show and avoid integration at all costs. The benefits of complementing big company networks with the speed and culture of a smaller company are plentiful - keep it that way.

There are no hard and fast rules when it comes to knowing who, when or how to acquire as the relationship between any two companies is completely unique. However, we should consider shying away from an inherent fear of failure that permeates throughout large companies and instead mitigate the risk of paying too much too late, by identifying startups for investment much earlier in their maturity curve which not only allows us to pay less for them but distribute our startup investment across a diverse portfolio of companies.

Failing Fast (and Other Things Kids Should Learn)

Early this week, Collective Campus hosted our pilot Lemonade Stand - Business School for Kids program. We hosted over a dozen children and taught them business-building basics, running them through the lean startup methodology, building business model canvas, prototyping - they even got to play with a 3D Printer and print their first designs.

While most parents we spoke to in the lead-up to our program were very positive, some parents disagreed, arguing 'kids should be allowed to be kids', and business was not something kids needed to learn, especially during the holidays.

The unfortunate and uncomfortable truth is schools are not adequately preparing students for the future. At the current rates, 65% of Australia's economy faces significant disruption - every one-to-two weeks, an S&P 500 company is replaced, and automation and robotics are predicted to take over 30% of existing jobs by 2025. Disruption is moving faster than ever, so kids need to become adaptable and empowered to take control, rather than stand still.

So how do schools prepare students for the age of digital disruption? Here are three things schools should be teaching children to make them future proof.

1. Fail Fast, Learn Fast mentality

Gone are the days of 'avoid failure at all costs'. While school tests and exams may not necessarily reflect this, students need to understand that failing is ok, as long as they aim to fail small, and treat each failure as a learning exercise.

When Chrys Bader- Wechseler, co-founder of Secret app spoke to us, he told us he learned to code in his youth by modifying computer games, and that he biggest learnings came from fixing something he had accidentally broken.

By only choosing the safe path, and spending heaps of time and resources planning for every possible outcome and variable has resulted in the dearth of innovation and growth in many a company. By avoiding failure at all costs, companies (and students) alike miss out on valuable learnings, meaning when they eventually do make a mistake (and it's usually a big one), it's usually one that has much more significant consequences. A student's learning should always reflect this - to grow quickly and differentiate themselves, students need to learn it's ok to fail, to break things, and never to make that same mistake again.

2. Coding and Programming

With old, manual jobs becoming replaced with disruptive technology and virtually no industries left untouched or unchanged by digital technology, digital literacy has become almost essential in all jobs. New industries created or enabled by new technologies, such as Internet of Things, Machine Learning, and AI will also spring up; in fact, by 2020, it's estimated there will be one million unfilled programmer jobs in the US. This represents more opportunity than ever for those who understand code.

However, just as all students who learn to write won't become writers or all students who learn math will become mathematicians, coding too has become one of the fundamental skills all children should learn.

Learning how to code isn't just going to be important in employability. Coding teaches children new ways of understanding a problem and creating solutions, helping them adopt a procedural, step-by-step method of tackling tasks at hand. It develops a powerful hybrid of analytical and creative thinking, allowing people to problem solve in a procedural method while also allowing for self-expression and creativity.

3. Design Thinking

Design thinking is a process designed to create solutions to come up with ideas and fix complex problems. It's a human-centric process, integrating the possibilities of technology and requirements of the problem at hand into a framework of thinking that fuels innovation and creative thinking.

Although starting off as a method designers use, design thinking can be applied by anyone to any problem. Children can be taught design thinking in its most basic form so they can learn how to ask the right questions when addressing a problem, how to mine the information for the insights, and to create solutions from an inside-out perspective.

As an example of teaching design thinking to children, one of the exercises we used during our Lemonade Stand program was pairing the kids up and getting them to ask each other about their morning routines, with the aim of finding out how to optimise each others' mornings to get a better start in the day. The kids were encouraged to ask probing questions to get deep insights into their partner's routine, habits, and emotions, before drawing solutions. While children often have the propensity to come up with out-worldly, technologically unfeasible solutions, the overall goal of thinking outside the box can easily be achieved through simple exercises like these.

The most powerful thing about Design thinking is that it allows children to see problems as a whole, rather than to come up with fragmented solutions that form a stack. It also gives them a chance to embrace ambiguity that often comes with ingenuity, allowing them become creative with their solutions and look for opportunities that might otherwise be overlooked. The design thinking process also encourages the 'fail fast, learn fast' philosophy, encouraging children to learn and iteratively improve on their solutions. It's an adaptable way of thinking that children will be able to take with them long after their education has finished.

Want to learn more about how to prepare students for the future? Collective Campus is running a free panel talk called "Getting Students Ready," featuring a packed panel of industry experts in education, including thought leaders in the ed-tech, STEM, design thinking and startup space. Click here to register your spot!

A Success Story in Teaching Children Entrepreneurship

Ask students what they want to create when they grow up, not what they want to be. This was the mantra of  Lemonade Stand,  the two-day business building program for kids run by Collective Campus.

Lemonade Stand brought together 13 ten-year-olds from different backgrounds and parts of Melbourne to develop their entrepreneurial mindset and capabilities. 

CEDA recently released a report which found that 40-60% of Australian jobs will be replaced in the next 10 to 15 years with technology and offshoring driving these changes. As such, the need for today’s children to be adaptable and develop the ability to reinvent themselves has never been greater. There’s no longer such thing as a “sure bet” when it comes to occupations. Accounting and law graduates are now finding scoring a gig after University increasingly difficult. 


Our Lemonade Stand program

Our program combined a healthy dose of theory with practical hands-on application and fun in order to support engagement for what were nine hour days (50% more than what they're used to at school - it's okay, we survived!)

We first got the kids to draw the future which delivered some very interesting insights into the way children that have grown up with technology think. Robots (and robot police!), teleportation systems, drones and hover bikes were some of the features of tomorrow’s landscape with some of the darker drawings encompassing robots taking over (either these kids genuinely fear artificial intelligence and machine learning taking over or they’ve been watching too much Terminator 2).

The future according to ten year olds

We then delved into business fundamentals 101 and got the class to develop their understanding of different concepts such as products & services, business names and branding, customers, location, competition, packaging, supplies, costs, pricing, marketing, sales, financing and budgeting. We used a lemonade stand as a case study to help hone the children's understanding of these different concepts.

The children were lucky enough to be surprised by a guest speaker, straight from Silicon Valley, on day one of the program. Secret app’s Chrys Bader gave a five minute talk and answered a number of questions from the class on how he went about building an app that scored more than 15 million users and over US$25 million in funding.

Chrys Bader from Silicon Valley's Secret App giving an inspirational talk

One of the key messages that Chrys delivered was that he learned how to code by breaking things and that each time he broke something he’d learn what not to do and be one step closer to the right answer.

This was the perfect segway into day two as we dived into Lean Startup for Kids. The whole point of this exercise was to make them comfortable with concepts such as embracing small failures as a means of learning in order to make critical changes to their business models.

We used examples of businesses that children could relate to like an ice cream parlor to help bring home this message. We were quite encouraged when one of the parents dropped off their child for day two and said “the first thing he said when he got home was that it’s okay to fail as long as you fail small and learn and have enough money leftover to make changes.”

This mindset is a far cry from the ‘avoid failure at all costs’ mantra that is the social norm throughout schooling and the workplace. However, if we only ever take safe bets and avoid the path less traveled, we are unlikely to differentiate ourselves and almost sure not to innovate.

We gave the example of how Kutol, once a wall cleaner, ‘pivoted’ and became Play-Doh, a brand all of the students know well and love.

Design thinking concepts featured on day two as we introduced the children to customer jobs, journey and ethnographic mapping by asking lots of why questions.

Once children had honed in on a number of problems, they were introduced to ideation tools such as analogs and antilogs, the strategy canvas (using Nintendo’s Wii as an example) and the innovation card game, GEElab’s Futuredeck.

Ideas included a video game sharing platform, an all access pass for sports and recreation facilities and a gamified event and social network for fitness buffs. 

Ideating with FutureDeck

Having decided on a solution, we guided the class through the completion of a business model canvas and subsequently, prototypes! Prototypes developed included mobile apps (using POP), web prototypes (using Instapage and Launchrock), lego prototypes, play-doh prototypes and perhaps, the most exciting for the class, 3D printed prototypes.

One of the many landing pages the kids created to test market appetite

We were joined by our guest facilitators from 3D printing company Protoworks who taught the kids the basics of CAD design and had them print their designs on an Ultimaker 3D printer.

An introduction to the world of Computer Aided Design
3D Printing in action

Finally, after all of the hard work of identifying problems, creating solutions, defining business models and developing prototypes, we asked the kids to develop pitch decks to present their ideas to the teachers, parents and resident startups at Collective Campus, which were an overwhelming success, scoring rave reviews from all in attendance.

One of our presentations - Sports Courts for All

It’s obvious to us that kids really enjoy learning about business if it is pitched at the right level and with the right tools. The concept of empowering themselves to build whatever they want is a compelling one for all concerned.

It’s encouraging that the Federal Government’s Policy Hack initiative singled out running a national Lemonade Day in schools to teach children business and embed entrepreneurship in the broader education curriculum.

We are happy to be playing our part in this initiative by taking charge and delivering a program that both children and parents thought was a success. Practicing what we preach at Collective Campus, we learned a lot from the experience - what went really well, what could be improved, what didn't work so well - and will take these learnings into subsequent iterations of the program.

It took us four months to go from idea to delivery, notwithstanding the fact that our primary focus and majority of our time is spent on innovation consulting for large organisations and educational workshops and events for adults, leaving little time for anything else. This is a testament to the startup and entrepreneurial mindset which is all about “getting **it done” and learning by doing, as opposed to paralysis by analysis and delayed, outsourced decision making which is prevalent across many sectors of our economy.

In an age when lost productivity costs the Australian economy more than $305 billion each year, teaching our next generation how to move with the speed of a startup and empower themselves to take control and make decisions can not come soon enough, particularly in an age where the rate of technological disruption and change means that standing still is not an option (65% of the Australian economy faces significant disruption).

We need to encourage discovery, not just delivery, amongst today's youth and we welcome other organisations to join the movement and foster a change in mindset amongst tomorrow’s leaders. 

But don’t take our word for it on the success of the program, hear from one of our students (who turned up to class in a Facebook tee on day one and a Google tee the next!) talking about his Lemonade Stand experience below! 

We'll be running the Lemonade Stand program again during the Easter school holidays. Details can be found here!

How to Run an Effective Hackathon for Corporate Innovation

Hackathons (or innovation bootcamps) are a great way to bring together teams with the common goal of quickly solving problems, building prototypes and validating market appetite. This not only helps teams test many ideas quickly to find out what works but also saves them by avoiding the trap of committing millions to building the wrong thing.

Hackathons, done right, open people’s eyes to a different way of thinking and plant the seeds for a fail fast, “move quickly and break things” mentality, made famous by Facebook, that underpins innovation and the discovery of new business models.

What hackathons help facilitate:

  • Moving quickly
  • Validating market appetite 
  • Saving on unnecessary costs
  • Shifting cultural mindsets and behaviours
  • Engaging and retaining high performers and intrapreneurs
  • Engage senior staff who are short on time
  • Bring together cross-functional teams and external participants
  • Building new revenue generating businesses (!)

Sadly, far too many hackathons throw people together in the pursuit of creativity and they are successful at getting the creative juices flowing but fall short of delivering any tangible value beyond that by way of prototypes or products that may actually generate new revenues for the participating company.

Firstly, we need to answer the following questions to the affirmative in order to develop an optimal hackathon environment, under which tangible outcomes are given the best chance of success.

  • Can the right mix of staff get 2-3 days away from their day jobs?
  • Are there problems that can’t be solved through existing channels?
  • Does the organisation have the ability to move quickly?
  • Is there budget available to explore ideas post the program?
  • Will staff be given adequate time to participate and explore their ideas post the hackathon?

If you can't answer yes to the above questions, there is a significant risk that your hackathon team will lack necessary skills and any prototypes developed will simply fizzle out post the hackathon. As a result, cynicism about the company's innovation efforts will creep in and the company will ultimately end up losing intrapreneurs to other more progressive companies or new startup ventures, at a time when they need these people more than ever. 

Where else do hackathons regularly fall short?

1 - No focus on market validation

Hackathons often stress building prototypes quickly around a central theme but don’t focus enough on understanding the customer job to be done, the problem being solved and value proposition, the development of business models and validation of underlying assumptions to best gauge market appetite for a product.

A friend of mine recently attended a corporate hackathon where one of the teams worked on an app to “help you find a warm place in the city”. How about getting out of the shade?

Recommendation: Use lean startup methodology to frame ideas around an actual problem and clearly defined value proposition. Use the business model canvas to determine key assumptions and build prototypes accordingly. A prototype should only be built to validate these key assumptions, otherwise it serves very little purpose.

2 - Teams lack cohesion

Oftentimes people turn up to hackathons and are thrown into groups of people that either don’t work well together, don’t bring enough unique and different cross-functional perspectives to the table and lack a broad skill set to make the most out of the hackathon.

Recommendation: Ensure that teams contain a good mix of skills such as designer, developer, marketer, business mind as well as people with industry experience. Including customers in the process can also be very value adding.

3 - Participants pitch their ideas to non-innovators

It’s no secret that large organisations usually require a business case when allocating resources to new projects. This business case includes metrics such as minimum gross margin and market size. But what happens when the market size is small or unknown, as is initially the case with most disruptive innovations?

Judges end up selecting safe bets, where the market is known. The problem with this is that we only choose innovations that are incredibly replicable, generate only some small short term value, serve only our existing customers and are ultimately incremental, not breakthrough or disruptive innovations.

Airbnb made US$200 a week in its first year - it’s now worth more than US$25B. Think about that next time assessing products based on market size.

Airbnb investment rejection letter

Recommendation: Use  innovation metrics when selecting winners. Selection criteria such as scalability, business model and market validation should be stressed above market size, gross margins and other predictable indicators.

4 - No resources or plan to explore successful ideas post-hackathon

In the event of having built prototypes that show some early market validation, we should have a budget allocated to further explore the ideas, preferably in an incubated environment away from bureaucracy of the mothership.

Giving people movie vouchers for participating is great and all (I hear there’s a new Rocky movie out!), but it won’t stop your organisation being disrupted by the next Airbnb or Uber.

Recommendation: Ensure there are sufficient resources to explore promising concepts post the hackathon. Consider turning partering with or investing in external startup teams with the right mix of talent and ability to move quickly in order to accelerate ideas. 

The next time you or your company are considering running a hackathon, ask yourself why. If it's simply for the purposes of bringing people together, getting creative and exploring the fail fast philosophy of startups, then great, but if you are serious about transforming your company's potential to innovate then hackathons are one of many tools that can, if effectively applied, deliver tangible outcomes by way of products or services that you can take to market. 

https://steveglaveski.youcanbook.me/

The Problem with Corporate Innovation Programs

Corporate innovation programs are growing in popularity as more and more industry incumbents come face to face with the realities posed by disruptive innovators.

We’ve seen the proliferation of chief innovation officers, hackathons and idea contests, all signalling an appetite of varying degrees for a departure from the traditional way of thinking, geared towards the delivery of an existing business model, towards a new way of thinking, geared towards the discovery new business models.

However, Ernest Hemingway once said to “never confuse movement with action” and it is imperative that now, when large incumbents need their innovation programs to work more than ever, that they don’t fall into the trap of celebrating movement without action.

In my work in the field, I’ve seen companies with the best of intentions slip up by launching lacklustre innovation programs that while encouraging on the surface, ultimately lack substance, structure and the critical thinking required to truly support the exploration of new business models and disruptive innovation.

I’ve taken the liberty of preparing a list of some of the common pitfalls, below.

Hackathons

Hackathons are a great way to bring together cross-functional resources with the common goal of quickly solving problems, building prototypes and validating market appetite. This not only helps teams test many ideas quickly to find out what works but also saves them by avoiding the trap of committing millions to building the wrong thing. Hackathons, done right, open people’s eyes to a different way of thinking and plant the seeds for a fail fast, “move quickly and break things” mentality, made famous by Facebook, that underpins innovation and the discovery of new business models.

What’s broken?

1 - No focus on market validation

Hackathons often stress building prototypes quickly around a central theme but don’t focus enough on understanding the customer job to be done, the problem being solved and value proposition, the development of business models and validation of underlying assumptions to best gauge market appetite for a product.

A friend of mine recently attended a corporate hackathon where one of the teams worked on an app to “help you find a warm place in the city”. How about getting out of the shade?

Tip: Use lean startup methodology to frame ideas around an actual problem and clearly defined value proposition. Use the business model canvas to determine key assumptions and build prototypes accordingly. A prototype should only be built to validate these key assumptions, otherwise it serves very little purpose.

2 - Teams lack cohesion

Oftentimes people turn up to hackathons and are thrown into groups of people that either don’t work well together, don’t bring enough unique and different cross-functional perspectives to the table and lack a broad skill set to make the most out of the hackathon.

Tip: Ensure that teams contain a good mix of skills such as designer, developer, marketer, business mind as well as people with industry experience. Including customers in the process can also be very value adding.

3 - Participants pitch their ideas to non-innovators

It’s no secret that large organisations usually require a business case when allocating resources to new projects. This business case includes metrics such as minimum gross margin and market size. But what happens when the market size is small or unknown, as is initially the case with most disruptive innovations?

Judges end up selecting safe bets, where the market is known. The problem with this is that we only choose innovations that are incredibly replicable, generate only some small short term value, serve only our existing customers and are ultimately incremental, not breakthrough or disruptive innovations.

Airbnb made US$200 a week in its first year - it’s now worth more than US$25B. Think about that next time assessing products based on market size.

Airbnb investment rejection letter


Tip: Use  
innovation metrics when selecting winners. Selection criteria such as scalability, business model and market validation should be stressed above market size, gross margins and other predictable indicators.


4 - No resources or plan to explore successful ideas post-hackathon

In the event of having built prototypes that show some early market validation, we should have a budget allocated to further explore the ideas, preferably in an incubated environment away from bureaucracy of the mothership.

Giving people movie vouchers for participating is great and all (I hear there’s a new Rocky movie out!), but it won’t stop your organisation being disrupted by the next Airbnb or Uber.


Idea Contests

Idea contests are a fantastic way to capture insights from across an organisation. Insights are usually confined to the cerebral cortex of employees which is tragic when you have thousands of employees working hundreds of days and dealing with hundreds of customers on an annual basis. The approach is simple enough. Set a problem, solicit ideas from your workforce and select winning ideas.

What’s broken?


1 - Ideas are often solicited without framing a proper challenge or problem.

While this encourages employee ideation, it results in hundreds upon hundreds of ideas.

Tip: Be clear about the objective of the campaign and frame idea submission around a theme, challenge or problem. 


2 - Type of innovation sought not specified.

Innovation can be incremental, breakthrough or disruptive, and each type of innovation requires a different strategy for selection and development.

As such, idea contests which make no distinction fail because they try to apply the same decision making criteria across all ideas, which means that most ideas will be selected or not selected based on flawed criteria.

Tip: Determine what kinds of innovation you’re after and provide criteria (see below) for submitting and voting on ideas.


3 - No criteria given for ideas

Often times contests may solicit hundreds or even thousands of ideas, which is great and signifies engagement. The problem is that most of the ideas lack quality.

Providing would-be idea submitters with some criteria to self assess the validity of their idea before submission not only ensures better ideas, but less and higher quality ones, making assessment of ideas easier and giving great ideas a chance to come to the fore, as opposed to getting lost in the noise.

Tip: Provide criteria for the submission of ideas. For example, if you’re after disruptive innovation ask would-be submitters to self assess their ideas using the disruptive innovation litmus test.


4 - Contests become a popularity contest

Most idea contests solicit votes and comments, purportedly to sort out the good ideas from the bad. While this mechanism can work, it is susceptible to abuse and can result in these campaigns becoming nothing more than popularity contests.

Tip: Providing would-be voters with some criteria (see above) to assess validity of their ideas before voting would help to mitigate the risk of idea campaign degenerating into a glorified popularity contest.


5 - Ideas selected based on flawed metrics

As was the case with hackathons, we need to steer away from traditional metrics when looking for disruptive or breakthrough innovation.

Tip: Use  innovation metrics when selecting winners. Selection criteria such as scalability, business model and market validation should be stressed above market size, gross margins and other predictable indicators.


6 - People don’t receive feedback

Usually only winners receive correspondence and everybody else falls by the wayside and is ultimately ignored, yet we expect them to be motivated enough to participate again the next time we run a campaign. Would-be intrapreneurs need to know why their idea was not selected, otherwise they may grow sceptical of the campaign and write it off as a piece of innovation theatre.

They end up leaving to start their own companies, join what they think is a more progressive company or grow disgruntled and their performance suffers. At a time where incumbents need to be nurturing their innovators more than ever, we need to embrace the innovators and the wantrpareneurs in our organisations and tool them up to to help achieve both their and the organisations innovation goals.

Tips:

  • Give some form of feedback to all participants and provide them with a reference guide around ideation, business model development and market validation. Perhaps next time around, they’ll come to the table with better ideas.
  • In addition, providing criteria to would-be submitters as in (3), while limiting the number of ideas, but also means that only the most serious intrapreneurs provide their ideas as they’re willing to go the extra mile.
  • Finally, it also means that it’s much easier to provide feedback to all ideas as there’s not as many to sift through!


7 - No mechanism in place to further explore ideas

What’s the point of an idea contest if winning ideas aren’t explored further? This amounts to nothing more than innovation theatre.

Tip: Ensure winning ideas get the opportunity to be taken further. Ideally this would take the form of a hackathon, focused on market validation, and subsequently through a startup incubator set in an innovation outpost.


8 - Insular thinking

 

Soliciting ideas from within our organisations only may limit the number and quality of ideas that come to the fore. We need to encourage unique insights and connect the dots between people that have varying experiences.

Tip: Consider opening up your idea contest to the public, otherwise known as open innovation. Soliciting ideas from suppliers, customers, partners and the public may not only generate more ideas, but more importantly, better ones!


9 - No guidance to ideate

Ideas come from many places but we should do our best to help employees come up with ideas rather than just leaving them to their own devices.

Tip: Tools such as the strategy canvas, future deck and analogs are just some ways to help inspire ideation.


Acquisitions of Disruptive Startups

Companies that can’t do, acquire. Well, while that’s not entirely true - a good mix of acquisition and internal innovation is best - many companies who don’t innovate stick to acqisitions to support their growth strategy.

What’s broken?


1 - Acquiring at the wrong time

Companies are acquired once they’ve already blown up and incumbents end up paying a premium for companies who haven’t got much growing to do, taking a hit to their share price in the process for acquiring at a premium.

Tip: Adopt a portfolio approach and look to invest in multiple, diversified companies at an earlier stage.


2 - Integrating the acquired company

Companies get acquired because they’re awesome. Too often large incumbents attempt to integrate these startups into the mothership’s way of life - infrastructure, process, values and so on. What happens is that the cost of running the acquired company goes through the roof, often pegged to legacy infrastructure, and the values and processes that made them great are replaced with bureaucracy. Long story short, the founders and many employees end up leaving and the incumbent has paid a premium for a potential unicorn that quickly turns into a lemon.

Tip: Know why you’re acquiring Company X. If it’s because their processes and values make them an awesome company, let them run an autonomous show and avoid integration at all costs. The benefits of complementing big company networks with the speed and culture of a smaller company are plentiful - keep it that way.

3 Tools to Foster Employee Driven Innovation

In his seminal book, 'The Innovator's Dilemma", Clayton Christenson stated that disruptive technologies are usually not developed by startups. Rather, these technologies are first developed by employees within an established firm, but it is the startups who commercialise the product itself. An infamous example of this isKodak - in 1973, 26-year-old employee Steve Sasson developed the first digital camera. Kodak quickly dismissed his (admittedly Frankenstiened) prototype, a mistake that would be their ultimate undoing.

One of the biggest mistakes is for companies to believe enterprise innovation is a top-down phenomenon, where managers (or a small team) come up with solutions, and push changes down the organisation. While managers have a significant role in innovation and change within an organisation, employees should be the primary drivers of change.

But of course, doing this is easier said than done. Many companies have major roadblocks when it comes to innovation, which is why disruption is such a major threat to multiple industries. But with a booming startup ecosystem, spurred by lower barriers to entry and technology-enabled business model innovation, employee-driven innovation is now more realistic and beneficial than ever. After all, one of your employees could be cooking up the next big thing that could disrupt your business!

Here are three tools your company can use to facilitate employee-driven innovation in your organisation.


1. Using Idea Management Platforms

Not utilising your employees in the innovation process means your business is missing out on a giant pool of potential. Your employees are often closer to the ground than managers, face very different problems, have different conversations with stakeholders (whether they're customers or other employees), and therefore, would have different solutions to problems they face. Capturing these insights is a veritable gold mine for companies. This is where Idea Management Platforms come into play. "In every organisation there are potentially valuable ideas or the spark of them, that never see the light of day", states Rob Wilmot, co-founder of Crowdicity. "We wanted to find a way to ignite this latent potential and let it shine". Such platforms capture and allow companies to manage ideas organisation-wide by encouraging employees to submit, evaluate and vote on ideas, and for companies to initiate challenges for employees to meet. These platforms are also a great way to connect employees across an organisation who would generally never collaborate. Where Idea Management Platforms shine is in 'co-creation', says Rob. "Everyone has the opportunity to discuss their ideas, and those of others with everyone else". Even previously disengaged employees become engaged in helping ideas grow. "Companies win because they nurture a positively engaged workforce where innovation becomes everyone's job."


2. Hackathons

When people mention hackathons, they often think big nerd fests, where programmers get together hack in scenes of absolute chaos.But internal, company-run hackathons have been considerably successful in allowing employees to come up with and build solutions and products in a small timeframe. Some of Facebook's most well-known features, such as the Likebutton and the Timeline all came from internal hackathons run by the company. Commonwealth Bank, Telstra, Bankwest and others run these on a constant basis.

In a conversation we had recently, Ajay Bhatia, CPIO of Carsales.com, states that his company runs three to four internal hackathons a year, generating nearly "90-100 ideas" a year, with "56% of the ideas from [their] last two hackathons either at the completed stage or in progress". 

Carsales.com divides hackathons into 'tribes' formed up of people who look after a particular customer segment. Tribes are made up of technical people (i.e. programmers), as well as the non-technical (i.e. marketing), giving teams an all rounded approach to developing not just a product, but new business models. Not all successes have been about developing new products either - one of the problems raised during a hackathon was the lack of adequate peer recognition, which was addressed with the developed of an internal tool called Shout. Shout allowed staff members to acknowledge their colleagues, which would be then broadcast company-wide on screens installed throughout the company.

One of the keys to successful hackathons lie in the support pre and post-hackathon. It's important that team members get a chance to not only get to know each other before the hackathon but also get an opportunity to get upskilled. For example, this means running a few workshops for programmers to improve their skills in a language they might not be familiar with, or teaching your marketing staff how to pitch a product. Post-event, it's also important to give teams confidence their ideas and products generated during the hackathon don't just go to waste. High adoption rates, incubation programs, and offsite accelerators are great ways to get maximum value out of hackathons.


3. Collaboration Tools
 

Collaboration tools have become indispensable in creating and maintaining agile and fluid teams. Platforms such as Trello and Invision allow team members to contribute to, complete and give feedback on tasks, no matter their geographic location. Such tools often enable users to see changes and updates in real-time and give instantaneous feedback, allowing for rapid iterative improvements and transparency.

Just like Idea Management Platforms & hackathons, collaboration tools foster a sense of community, where people can connect regardless of their position and area of expertise. Community means happier, more productive and educated workforce, which all go a long way in fostering an innovative environment.

Of course, innovation is more than just using the right tools, and successful implementation of these programs requires a cultural shift. An extra challenge is a companywide adoption without making it feel like it's just another extra job employees need to do. However, companies that have started to use such programs and platforms already see the benefits, and when it comes to innovation, it's about moving fast and breaking things. It's then up to the leaders to create the right environment to grow and nurture the right ideas.

Can Large Companies Disrupt The Start-Up Ecosystem?

Disruption is something we often associate with start-ups these days.

We think of nimble companies like AirBnB disrupting hotels, UBER disrupting taxis, Netflix disrupting video distribution, Tesla (potentially) disrupting automotive, iTunes and later Spotify disrupting the music industry and Amazon disrupting almost anything it sets its eyes on.

Sure, many of these companies have grown from tech startups to listed behemoths with multi-billion dollar market capitalizations, but they are all reflective of today’s disruptive innovations and when it comes to disruption, we expect that the start-ups that aren’t tied down by prohibitive process, investorshort-termism and unrealistic growth targets like their corporate equivalents, will come out on top in a battle against their slower moving corporate adversaries.

But… what happens when corporates learn to innovate?

What happens when corporate companies heed Clayton Christensen’s Innovator’s Solution and set up an environment that is conducive to developing disruptive innovations? What if they set up small teams independent to the organization and give them the time, financial resources as well as access to networks and strategic partners that can accelerate their learnings, development efforts, time to market and achievement of traction?

Early stage start-ups often lack financial and physical resources, networks and strategic partnerships and can take several years to go from idea to profitable. The lean start-up was born out of the need to be diligent with expenditures and develop ideas based on validated hypotheses and market learnings, ultimately resulting in a much higher chance of success. But it was also born out a start-up’s nature of being cash-strapped and tied to its runway. A start-up’s runway is its life. If you only have 12 months to live based on your burn rate, will you not look for ways to turn that into 24 months or increase your chances for success in those 12 months?

Customer discovery methodologies and The Lean Startup helped give companies with little to no cash the best chance of success through the application of validating and iterative learnings. This is just one of the main reasons why it is so easy to start a business these days.

So with enablers such as cash and networks already in place at an established, well connected company, one might conclude that ‘corporate start-ups’, those spun out of established large companies, could innovate, commercialize and scale much quicker than your stereotypical garage dwelling, ramen noodle eating (excuse the stereotype!), tech start-up entrepreneurs.

Is it possible that ‘corporate start-ups’ can disrupt the start-up ecosystem as we know it?

Different Purposes

First, established companies and start-ups serve different purposes. The corporate machine has been set up to support the operations of a validated, scalable and winning business model, not to discover new ones.

Corporate systems, people and finances support operations, and at most, sustaining innovations. They do not support disruption.

Growth targets and key performance indicators (KPIs) are a perfect example this, according to Professor Clayton Christensen. Growth targets at large companies tend to be based on the overall revenue of the company so if I’m a large company with $1B in revenues, in order to reach 5% growth targets, we’d need to generate an additional $50m next year on top of the $1B we expect to generate again. How many tech start-ups do you know that generated $50m, or $5m or $500,000 in their first year of operations?

AirBnB had revenues of $200 per week for its first year, eBay did $400,000 in its first five years while it took Google more than three years from inception to become profitable.

Start-ups are like a plant. They need lots of sunshine, fertilizer and water (money, networks, time, systems and support) to grow before they will bare fruit. Don’t expect to be picking off juicy apples or oranges from day one.

It can take years for disruptive ideas to scale and get to a point where the revenues they generate are attractive to a large company and as a result, winning ideas are unlikely to get the time and support they need to satisfy executive management and shareholders, both of which tend to be guilty of short-termism in today’s business environment.

AirBnB is a great example of disruptive ideas taking considerable time to scale.

As such, even where established companies set up new initiatives to develop innovative products, they are often scrapped in favour of other areas where the immediate rewards are much higher and the existing customers and shareholders can be appeased. Such is the nature of a resource dependent environment, particularly when the going gets tough, and especially where corporate bonuses are tied to short-term revenues.

Add to that human resources whose job it is to sustain existing business models, tend to be specialists in one area and not generalists, like those involved in early stage start-ups. If you’re in HR, Finance or IT, that’s usually all you are and your position description will no doubt centered around supporting operations and making improvements to existing innovations (or sustaining innovations).

You will likely report to equally process-oriented managers and as such, should you have any grand ideas, they probably won’t make it past the first sounding board. Entrepreneurs tend not to be attracted to corporate companies who starve them of their creativity and need to operate in fast moving environments where they can wear any number of hats, implement at will and see the fruits (or lack thereof) of their labor in days or even hours.

We’re not done yet. Waterfall development methods, commonly used at large companies, can take years to commercialize a product and are not akin to start-up development or nurturing entrepreneurial minds.

Idea incubation and knowledge sharing is hampered by functional organizations who tend not to share knowledge (SONY could have released the iPod but their record label and portable music device departments operated in silos and competed with each other).

As such, it is with no surprise that large companies find it incredibly difficult to innovate because the corporate machine has not been built in a way that is conducive to innovation.

So what are large companies doing to battle their inherent disability?

Large companies are learning The Lean Startup. A fantastic example of this in action can be found at none other than General Electric, the forth-largest company in the world. The company has launched an initiative dubbed Fastworks, in collaboration with Eric Ries, author of The Lean Startup.

Essentially, the company trained almost 80 executives in the methodology underpinning The Lean Startup, set up growth boards to approve or reject potential projects pitched by employees (not dissimilar to entrepreneurs pitching to a panel of VCs or angel investors) and formed independent teams with the mandate to develop products unobstructed by the growth targets of the parent or subsidiary GE company in which they operate.

Other companies such as Procter & Gamble (P&G), Nestle, Ericsson and 3M are also now no stranger to the lean start-up as well as Alexander Osterwalder and Yves Pigneur’s Business Model Generation approach.

At GE, the initiative has already spawned successes such as a high-output 7HA gas turbine, developed 40 percent cheaper and two years faster than it would have been via traditional means, a light bulb with a built-in wireless dimming chip and an oil well flow meter, being developed in collaboration with Chevron.

Entrepreneurship is a Calling, Not a Job

Sure you can teach techniques and methodologies, but can you teach vision?Is there a syllabus for ‘how to spot opportunities for disruptive innovation’?

Can you teach people to see something that’s not there?

By now, you’re probably beginning to see my point (at least I hope you are).

These questions all point to the same thing and serial entrepreneur, academic and father of the lean start-up, Steve Blank, puts it best in his view thatentrepreneurship is a calling, not a job.

Ramming this point home, entrepreneurship has also been found to besurprisingly genetic in a study carried out by Scott Shane, an entrepreneurial professor at Case Western. Such genetics impact:

1. People’s likelihood to start a business2. The ability to identify new business opportunities3. Ability to gain self-employment income4. Entrepreneurial extroversion

So how do you teach someone to see industry changing products like the iPod, iPhone or iPad? Can the vision that drove the late Steve Jobs be taught?

Probably not…

…most definitely not.

You can't teach this

.

Only 1% of over 200 American entrepreneurs surveyed believed that higher education played a role in their entrepreneurialism and almost two thirds credited their inherent drive. Successful entrepreneurs are said to be ‘hypomanic’ which is defined by John Gartner as a genetically based form of mild mania that endows entrepreneurs with energy, creativity, enthusiasm, and a propensity for taking risks.

They are said to be brimming with infectious energy, irrational confidence, and really big ideas. They think, talk, move, and make decisions quickly. Anyone who slows them down with questions “just doesn’t get it.”

Despite your view on whether or not entrepreneurs are born or made, the real question here is can corporates attract and/or retain entrepreneurial talent.

Entrepreneurs are anti-conventional and anti-authoritarian by their nature. They generally want to own a majority share in what they’re working in. They want to be in control of creative and strategic direction. They want to be able to make decisions quickly and implement almost as quickly. They value time and flexibility and loathe innovation-stifling policy and procedure and the time-bound, desk-bound performance reviews common at many large companies.

As such, in the rare event that large companies are successful in attracting entrepreneurial talent, they may struggle to retain them.

Nonetheless, large companies can put into place an environment that facilitates the acquisition of entrepreneurial talent, and what of those entrepreneurs who never ‘got a chance’?

It’s no secret that people who are single and lack dependents lead a much more entrepreneurship prone lifestyle than someone with 2.3 kids and a mortgage. The risk for the latter is often much higher than that for a single person.

As such, many entrepreneurial minded people who got married young or had children young are likely to find themselves taking home a steady paycheck via the comforts of a large company, but, does this make their mindset or their innate abilities any less entpreneurial? Probably not.

Companies should look to seek out entrepreneurs, or intrapreneurs, in their organizations, and empower them with the opportunity to identify and bring opportunities and ideas to fruition.

Creating an environment that supports intrapreneurialism will help to not only attract talent but retain talent and get the most out of existing employees who have the power to create, but don’t necessarily want to forego the comforts of the regular corporate paycheck.

A great example of this is PwC Digital. The firm is best known as one of the ‘big four’ accounting firms globally, but these days it generates almosta third of its revenues from advisory and consulting services. PwC Digital brings together great minds with backgrounds in lean startup and customer discovery, design innovation, product management, front and back-end web development and user experience design.

Granted, while not all in this space may bring innate entrepreneurial flare to their roles, they are laying the foundations and providing the tools necessary to promote innovation and agile product development, not only within firms like PwC but at many of their Fortune 500 clients.

The state of play

It is still far too early to tell whether corporates could in any way, shape or form disrupt the start-up ecosystem. Chances are, it won’t. At best, we may see a lot more innovations and faster time to market at large companies in the future and a growing desire from entrepreneurial and creative types to work at such companies, but ground up is ground up.

Natural born entrepreneurs want to build their own things. They want to be in control and are happy to take the blame (and the lessons) when they fail and collect the accolades when they succeed. They would rather cash out big by getting in on the ground floor. They want to leave a legacy. And some want to change the world.

It is arguable how many of this they can achieve working for a large company, albeit within a ‘corporate start-up’.

The trend of corporates and large companies acquiring web and tech start-ups continues to grow and this may be the best way for large companies to cash in and mitigate the risk of disruptive innovations, while giving aspiring entrepreneurs and interested investors viable exit strategies and the incentives to drive the next wave of innovation. This approach also de-risks investments for large companies, despite taking a lean startup approach, and allows them to focus on what they do best, being large companies.

It is incredibly difficult to imagine that the start-up ecosystem as we know it will ever die. Given social change, it is far more likely to grow as subsequent generations embrace the freedoms that come with a rapidly shrinking world where businesses can be started virtually overnight and children are raised in an environment where they aspire to be the next Steve Jobs as opposed to the next Donald Trump.

Healthy competition can bring the best out in people and businesses, so regardless of whether or not large companies actually go on to become more innovative, the ultimate benefactor stands to be us, the consumer, and that is something I think we can all vouch for.

Henry Ford's Customers Didn't Want A Faster Horse

“If I had asked my customers what they wanted they would have said a faster horse.”

We have all heard Henry Ford’s famous quote many times before and it serves as a battle cry to many a visionary entrepreneur who swears against asking customers what they want.

Steve Jobs had a reputation for, amongst other things, his stance against customer input. “It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them”.

Granted, many people didn’t know they wanted an iPad until Apple showed them and focus groups are frought with inherent weakness. There is often a gap between what focus group participants say and do, small samples can’t be generalised, participants have varying motivations, introverts lose their voice and group leaders can influence the direction of discussions.

So What If You’re Not Blessed With Steve Jobs’ Vision?

Few are blessed with the vision of Steve Jobs and most entrepreneurs must instead rely on the ability to identify problems and find cheap and quick ways to test and iterate on the underlying assumptions in order to get to product market fit before the well runs dry.

It is these teachings, popularized by lean startup protagonists Steve Blank and Eric Ries, that the entrepreneurs of today have come to swear by. These entrepreneurs don’t start off with a grand vision. Oftentimes they start off with what they think is a problem and what they think a solution to that problem might be and iterate from there.

So, back to those faster horses. What did it really mean if customers had said that they wanted faster horses?

While it is easy to interpret this quote as a reason to never speak to your customers or target market again (!), closer inspection reveals something a lot more profound, particularly for innovators and product managers.

Ultimately, Henry Ford did give his customers exactly what they wanted.

What purpose would a faster horse have served? Faster transportation. That is essentially what they were crying out for.

The underlying message was that they wanted a faster method of getting from A to B in order to spend more time doing other things popular in the 1900s such aswatching baseball, football and playing games (evidently, the more things change the more they stay the same).

Faster transportation was essentially their ‘job to be done’ and getting to this answer might have been as simple as asking why they wanted a faster horse.

Knowing what the underlying problem and need is gives entrepreneurs a much higher chance of success in developing a solution that fills that need. It sounds simple but given that more than 90% of startups fail, perhaps the concept isn’t widely acknowledged, understood or adopted.

Uncovering Jobs To Be Done

Decorated innovation academic Clayton Christensen has argued that both people and customers have ‘jobs’ that arise regularly and need to get done. Furthermore, marketing professor Theodore Levitt is quoted as saying “people don’t want a quarter inch drill, they want a quarter inch hole.”

Essentially, when developing products you should ask your customers what they want and use that as a starting point to discover the underlying pain points and jobs to be done. Don’t build the product the customer wants, build the solution to their underlying problem, something that helps them get their job done.

The Innovator’s Method by academics Nathan Furr and Jeff Dyer outlines tools and techniques to integrate lean startup, design thinking and agile into the large and often slow moving, large wasting enterprise.

Furr and Dyer also remind us that these ‘jobs to be done’ can be functional, social, emotional or a combination thereof.

A Gucci handbag, while serving some functional purpose, is more about social status and feeling good than it is about having somewhere to keep your purse and car keys.

So how does one identify jobs to be done?

1. Question, Observe, Network and Experiment

According to The Innovator’s Method, we must first question, observe, network and experiment in order to identify some potential problems.

Engage and think broadly.

Too many corporate executives suffer from a lack of curiosity, read far too littleand have limited interests outside of their direct responsibilities.

Ask questions of customers, co-workers, suppliers, partners, family, friends and so on. Ask open-ended questions. Ask why.

Network aggressively with people from inside and outside your industry. Read lots of different blogs and magazines. Step outside of the realm of familiarity and get interested in lots of different subject matter.

Being able to think laterally and draw examples from one industry that can be applied in another, often lends itself to innovation.

These tools will put you in a position to better identify potential problems to be solved.

2. Painstorming

Painstorming, a concept outlined in The Innovator’s Method, is used to map the customer journey, identify pain points, root causes and assumptions underlying key problems.

Begin with your problem hypotheses using jobs to be done, perform root cause analysis and focus on key assumptions underlying the root causes.

Root Cause Analysis and The Five Whys

Toyota founder Sakichi Toyoda was no stranger to asking questions and being curious. The Japanese industrialist popularized use of 'the five whys' to get to the root cause and effect relationships underlying a problem or need. Ask why five times to get to the root cause, simple right?

It is, actually, and it is also very powerful but often neglected.

So, Apple’s iPod was often seen as an incredibly visionary and innovative product (and it was) but let’s say Steve Jobs had asked his customers what they wanted in a portable music device. Might they have said a CD that can store their favourite band’s entire discography?

  • Why? So they don’t have to change compact discs (CDs) all the time?
  • Why? Because they want to listen to more than just 10 songs
  • Why? Because they want to listen to lots of music without having to carry around and change CDs
  • Why? Because CDs take up a lot of space and aren’t something you can keep in your pocket

I have only asked why four times and already we have several important insights:

  • customers want to listen to more than just 10 songs
  • customers don’t want to carry around lots of CDs
  • customers want something they can carry in their pocket

Sure, the advent of iTunes which complemented the iPod took the latter and made it a game and industry changing innovation, but as for the product itself, the five whys might’ve revealed lots about the customer’s jobs to be done and some of these insights look eerily familiar to the feature set of the iPod’s ‘1000 songs in your pocket'.

Of course, it is very easy to make such bold claims in retrospect but still not hard to imagine the five whys giving us similar insights back in the days of the Sony Discman.

3. Walk In Your Customer's Shoes

No technique helps you understand your customer's pain points better than walking a mile in their shoes. To do that, you’ll need to take your own shoes off and truly immerse yourself in the day in, day out activities of your customers. Doing so should reveal lots of insights, potential opportunities and give you a better appreciation for the size of problems.

4. Problem and Solution Discussion

Once you have an idea of what the problems facing your customers are and a relative idea of your solution, discuss this with your customer. Show them what you think the key problems are, get them to rank the problems and confirm whether or not you’ve missed any major pain points.

When you’ve done that do the same with your solution. It’s important that you have a firm grasp of the problems you’re trying to solve, the magnitude of the problem and what the reaction to your initial solution hypotheses is.

What you are ultimately looking for is a pain that is big enough (i.e. affecting more than enough people to build a sustainable and scalable business on) and a solution that solves this problem for less than what it costs to deliver.

Closing Remarks

Of course, you could simply take Henry Ford’s quote on face value, continue to disregard customers wants and build products that nobody wants. Or you couldput first things first, take the time that’s necessary up front to walk a mile in your customer’s shoes, gain a true appreciation for customer pain points and then think about developing a solution.

You might just end up saving yourself a lot of time, money and heartache.

How To Run An Effective Idea Submission Program

Leaders of large companies are coming under more intense scrutiny and pressure to drive innovation within their organizations, in order to avoid being disrupted by smaller, more nimble competitors. Many are responding to this threat by flagging innovation as a corporate value and running idea submission contests, designed to promote thinking outside the square and maintain competitiveness.

While it’s encouraging that the innovation agenda is at least being given some mandate at most large companies, often the idea submission contests amount to little more than a case of innovation theatre. That is, leaders often need to be seen to be doing something in response to innovation so what better way than a very visible idea contest that garners hundreds of submissions. Unfortunately, movement is not akin to productivity, and these contests usually deliver little, if any value at all.

The Typical Idea Generation Contest

If you work or have worked for a large company, you may be very familiar with idea generation contests, also known as innovation jams, bright idea contests and so on…

Usually, an online platform is set up on the corporate intranet designed to do little more than collect ideas and facilitate the voting and commenting on ideas.

An email is promptly sent to all staff promoting the initiative and those companies with a few spare dollars to burn might even go as far as hosting a catered event promoting the launch of the initiative!

Posters, complete with flashy images of light-bulbs and innovation buzzwords, are strategically positioned in common areas such as kitchens, meeting rooms and doorways across the office, complete with flashy images of light-bulbs and buzzwords like Apple’s “think different”.  Unfortunately, most companies lack the DNA of an Apple and neglect to implement the processes required to be anywhere near as a innovative as the darling of Silicon Valley.

Ideas submitted are finally ranked in order of votes collected. Top ideas are sent to senior management to review and select some winners from, despite the fact that these same senior managers have never innovated themselves.

That’s usually the end of the show. The cast takes a bow, the curtain promptly drops on ideas and the innovation theatre comes to a close. The whole process ultimately amounts to little more than innovation theatre and is broken for a number of different reasons.

Eight Reasons Why Idea Generation Contests Are Broken – And How To Fix Them

1 – Idea Submission Portals Don’t Facilitate The Shaping Of Ideas

Platforms used by large companies tend to be very simple and lack the ability to build on top of or add to ideas submitted, essentially the essence of creativity and an inherent advantages that a company with thousands of employees has over startups with less than 20. Comment boxes, while helpful, do not support building on top of ideas in any seamless, effective manner.

The odds that one person will come up with a commercially viable idea at the outset is incredibly remote. The products we know and love are the result of emergent strategy and evolution over time, based on validated customer learnings.

The best ideas are those that bring together the perspectives of different people with different experiences from across cross-functional roles.

Steve Jobs was a classic example of a broad thinker who was able to draw from his diverse experiences.

“Creativity is just connecting things. That’s because they (innovators) were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.”

In the absence of one having the broad experiences of Steve Jobs, we can leverage off the broad experiences and perspectives from across an organisation to connect dots and come up with better products.

How To Fix It

Platforms like BrightIdea and Spigit both facilitate emergent, collaborative idea generation while numerous other platforms are available that facilitate building on top of ideas.

Read the other seven reasons here at Innovation Excellence

Applying Lean Startup to Health Insurance

Before you ask what startups have to do with large, over-regulated and bureaucratic insurance firms, perhaps a definition of startup is required. 

What is a startup?

A startup, as defined by Steve Blank, the father of the lean startup movement, is characterized as a temporary organization designed to search for a repeatable and scalable business model. That’s it.

It makes no difference whether the startup is a two-bit operation working out of a café or whether it is a well-funded project at a global enterprise, if its primary purpose is to find product market fit, then it is a startup. 

And startups by nature are risky business. 

According to Deloitte, almost 96% of startups fail to scale.

Even venture capitalists, what with their years of plowing through countless term sheets and sitting through countless pitches, only ever return investor’s capital in one out of four investments (notice how I said return on investment – this isn’t remotely close to striking gold).

So, why do most startups fail?

According to Eric Ries, the critically acclaimed author of The Lean Startup, it’s got nothing to do with whether the product works or not.

Usually, it’s because startups build products that they think people will want and waste all of their resources perfecting their product before showing it to customers… who don’t want to buy it.

The startups that succeed tend to be those that manage to make enough changes to their product, based on continuous customer feedback (or validated learning) before they run out of resources.

This is also known as emergent strategy and is the essence of the lean startup movement, which over the past five years ago has been shaking up the way that both emerging startups and established industry incumbents, such as GE, go about developing new products.

What does the lean startup look like?

Essentially, the lean startup process looks a little like this:

  • Map out your business model;
  • Define the key make or break assumptions underlying your business model;
  • Build a virtual prototype or minimum feature prototype designed to test these assumptions;
  • Get out of the building and put the prototypes in the hands of real people and get real feedback based on what customers actually do and unlike focus groups, not just what they say they do;
  • Capture the right metrics and measure against a pre-defined metric of success, aiming to validate and invalidate assumptions as quickly as possible;
  • Based on the validated learnings, make product changes and iterate towards that metric of success and product market fit; and
  • At some point, teams employing this model will either be onto a winner, make an adjustment to their business model (aka pivot), or call it a day and do something entirely different.

Why should health insurers care?

If any industry is in need of applying emergent strategy to its product development methods, it’s health insurance. 

The health insurance industry is facing significant disruption on a number of fronts, such as but not limited to:

 Okay, okay, so how do we go about applying lean startup methodology to a highly regulated, bureaucratic insurance industry incumbent then?

Highly regulated indeed. In Australia, health insurance products need to be cleared by the regulator, the Private Health Insurance Administration Council(PHIAC), before going to market.

Not only that, but policy prices can only be changed once a year on April 1.

So given these nuances, how does an insurer go about getting out of the building and testing their assumptions with real people and real customers?

Applying lean startup to health insurance product development

 I recently met with a number of insurance industry innovation leads to find out if and how they went about applying the lean startup philosophy to their product development pipeline.

One such company has successfully used lean startup principles to develop a winning product.

So, how did they do it?

Well, once they had mapped out their initial business model and defined the key assumptions underlying this specific product, they decided that they would tap into the wealth of customer opinions at their fingertips…the 5,000+ employees in the building.

Insurance company employees need health insurance too and the demographics across the building vary considerably.

Yes, I know I said get out of the building, but that was purely figurative!

The company installed both iPads and posters across the building which aimed to engage employees passing by and gather initial feedback on product features.

On a daily and weekly basis, different product features would be tested, essentially a form of A/B testing, or split testing (a method used by lean startups to determine which product variables perform better).

Once the results were in, the product development team refined their initial product based on these new learnings and then decided to physically get out of the building. 

In plain clothes, on a busy street in Melbourne’s central business district, the product development team used iPads and aimed to see if any passer-byers would want to buy the product. Now, getting passer-byers to stop and engage with you on a busy Melbourne street is no mean feat at the best of times, as many a charity fundraiser will attest to, but the team managed to speak to quite a few people and was ultimately successful in ‘selling’ the product, without finalizing any sales of course.

This helped to provide more comfort that they were onto a winner.

The Buffer Case Study 

The unsuspecting test case was readily told that the product wasn’t actually available yet. One successful web startup that employed this very strategy is email marketing platform Buffer.

The Buffer team essentially tested demand for their product with a website widget that asked customers who had read all about the product features to ‘buy now’. Those that were ready to open their wallets were readily told that the product wasn’t ready quite yet but that they would be placed on a mailing list. This gave the Buffer team some comfort before they spent resources developing their product, today worth more than an estimated US$50 million

Lean Startup in the 1950s

This concept of emergent strategy, or stretching your resources until you stumble upon a winning formula, is nothing new. 

Honda did the very same thing with the entry of its Supercub motorcycle into the American market in the 1950s. Initially, Honda had aimed to tackle Harley Davidson head on, but soon discovered that its bike, used to short trips in Japan, was simply not built for long highway trips. Not only that, but motorcycle distributors preferred to focus on the higher margin Harley, and not compromise their relationship with the incumbent American manufacturer. 

But Honda didn’t waste all of their resources pursuing this deliberate. They discovered that the few people who had purchased a Supercub were using it in a way that they hadn’t expected – for recreational purposes. And with that, Honda hatched a distribution deal with sporting goods retailers and the dirt bike phenomenon was born.

Emergent strategy, or validated learning, can be the difference between success and failure when it comes to new product development, particularly when operating in uncertain environments with previously untested products. 

So, you work for a big over-regulated industry incumbent that can’t innovate do you?

Why Corporates Should Partner With Startups

Global innovation consulting firm Innosight flagged the scale of disruption that looms large over corporates back in a 2012 study, projecting that three quarters of the S&P500 will disappear from the list by 2027.

Large companies faced with the imminent threat of disruption posed by technologies such as cloud and mobile are having to reassess their place in the business landscape. Corporates need to figure out how to stay relevant not just in today’s ultra-competitive environment but also well into the future, to avoid having their bottom lines wither away.

Companies do a great job at stretching their existing S-curve through incremental product improvements, investment in new geographic markets and customer segments, innovative pricing models and unbundling products. However, in order to find the next S-curve and future growth markets, companies need to embrace disruptive innovation.

Read more at: Innovation Excellence 

Solving myki's Problems using Human-Centred Design

Myki, Victoria’s now three-year old public transport ticketing system has been the subject of public abuse and endless scrutiny since its roll out in 2013. Not only was it delivered seven years late and half a billion dollars over budget, but in 2014 the train body received over 190 complaints a day regarding Myki.

Myki was introduced to bring Melbourne’s ticketing system up to par with the smart card systems of London and Hong Kong. Hong Kong’s Octopus card for example is more than just a ticket to ride. It has grown to be used for payment in retail shops across Hong Kong, from convenience stores, supermarkets and restaurants through to parking meters, car parks, service stations and vending machines – a truly holistic smart card. While Octopus has not been without its problems, it initially cost $100 million to introduce, a negligible fraction of the $1.55 billion that myki has cost.

Today, Myki can be used on trains, trams and buses – this does not represent a departure from its predecessor, which was not very dissimilar to the New York City subway’s ticketing system. Mind you, New York’s subway delivers over 1.75 billion rides a year, compared with Melbourne’s 120 odd million.

This brings us to the question of human-centered design, or lack thereof, as it applies to Myki’s design and development.

Whether the $1.55 billion could have been put to better use is one question.

Given that the decision was made to invest in it – best efforts should have been made to ensure that end-user benefits were realized. Based on the ongoing complaints that the transport operator receives and various concessions made by the operator in light of these complaints, this did not appear to be the case.

Human-Centered Design 

Steve Jobs famously said that “design is not just what it looks like and feels like - design is how it works”. This is essentially the premise underlying human-centered design, or design thinking.

In its simplest form, design thinking is a process—applicable to all walks of life—supporting the creation of innovative ideas and solving problems that cut to the core of need and emotion.

Design thinking follows a process of identifying and empathizing with the audience, thinking broadly, defining their challenges, identifying potential solutions, rapidly generating prototypes and testing them with real users to get obtain genuine feedback in order to iterate towards what wows, not just what (barely) works.

Key tools in the design thinker’s toolbox are persona, customer journey and empathy mapping.

Persona mapping essentially defines who the end user or customer is (note, this is not always the same person). Think demographics, key motivators and behaviors. Without first identifying for who you are designing, chances are the solutions you develop will fall short of the mark.

Customer journey mapping is a visual representation of the end-to-end user story insofar as their relationship with an organization, product, system or service is concerned. It is used to tell a story of each and every individual touch point a user has and by doing this, facilitate the identification of potential pitfalls, emotional highs and lows and moments of truth – lasting impressions made on the user.

Empathy mapping is essentially a study and definition of what users hear, see, think, feel, say and do.

  • What pains are they looking to kill?
  • What gains are they looking to create?

Cohesively, these tools put product teams in a much better decision making position when it comes to the design and provision of products and services.

If we revisit the problems that myki’s system face to this day, it’s clear that they forgot to design for the user.

  • They forgot to design for tourists and irregular travelers, evident by the lack of single use or short term ticketing options.
  • They forgot to design for customers touching off in the suburbs during peak hour, evident by the congestion of people scurried around myki consoles waiting impatiently to touch off (note: additional consoles were rolled out at many stations after initial observations were made shortly after myki’s rollout)
  • They forgot to design for customers using busy trams during the day, evident by people complaining of being fined for not able to touch on or over-charged for not being able to touch off. The CBD has since become a free tram zone costing the Government $100 million each year. Whether this move is related to the myki bungle or not is unclear.
  • They forgot to design for people who board trams at suburban tram stops where many myki machines are either not present or limit top up to those commuters who happen to have a spare $7 or so worth of coins on hand. Consequently, honest people looking to get to work or to social outings have been fined for not being able to do the right thing or have looked for alternative methods of transport.
  • They forgot to design for people catching a train on a busy peak hour platform. Topping up your myki card can be a painstakingly slow process, particularly if paying by card. This is best evidenced by the long queues at any suburban railway station, particularly on a Monday morning. The result? Missed trains, late arrivals to places of business and other commitments and ultimately disappointed users.

I’ll now examine whether using the aforementioned design thinking tools could have helped to drive better outcomes for Victoria’s public transport using public.

Note: I am simplifying the process for the sake of keeping this article as short and concise as possible and focusing on limited touch points. Design thinking is a skill that is essentially easy to understand but difficult to master and the ability to connect with the underlying emotions, motives and behaviors of people.

 Persona Mapping

Who travels on public transport?

  • Office workers
  • Builders
  • University students
  • Primary and Secondary School students
  • Tourists
  • Single parents
  • Socialites
  • Young people
  • Seniors
  • Occasional users
  • Others… 

There will no doubt be variations for each of the above and it is important that each is identified so that certain cohorts are not underserved by the system, for example in myki’s case, tourists.

I’ve offered a very scaled down persona map for an office worker.

In most cases a persona map would extend to more detailed demographics, personality information and motivations.

The job to be done essentially represents the underlying reason they catch the train. For example, we don’t go to school to sit in a class room and read. We go to school to learn and to help us get not only job ready, but functioning members of society. That is the underlying job to be done. If you fail to properly identify the user’s job to be done, you are likely to create a solution that misses the mark. If you ask the wrong question, you will get the wrong answer.

 

  

Customer Journey and Empathy Mapping

Normally you would map a user’s entire journey from start to end and define every touch point along the way. For the purposes of this article I’ve honed in on two key touch points that Sarah would encounter during her daily exposure to Melbourne’s train system, assuming she is travelling into the city from the suburbs.

 

I’ve only selected two customer touch points here and already we can see that two of the common complaints or grievances surrounding myki are being fleshed out early.

Performing comprehensive customer and empathy journey mapping for a complete set of users will help to identify all touch points and hone in on design requirements that support the delivery of a solution that works, one that doesn’t leave people frustrated and disapproving.

There are numerous other questions to be asked when it comes to myki.

  • Why was an unproven vendor used?
  • Why was a solution built from scratch when numerous successes already existed in other markets?
  • Why was the system needed in the first place?

But those questions are beyond the remit of this article.

The purpose of this article is to demonstrate that whatever the product, service or system being developed, taking a human-centered approach can help to flesh out a lot of potential pitfalls and pain points that drive public perception.

Connecting with the end user’s emotions and designing for them supports the delivery of a solution that not only satisfies, but also delights.

Practical Education v Universities

The average person will change careers seven times and have more than ten jobs by the age of just 42 according to the US Bureau of Labor Statistics.

While Gen X and Y are more adept at chopping and changing between employers than their predecessors were, going forward this will likely be born at out necessity and the numbers are sure to rise.

Why?

With 65% of the Australian economy facing significant disruption, it’s predominantly a case of out with the old and in with the new.

And it’s paving the way for disruptive education models.

Whether it’s the unfortunately named MOOCs (massive open online courses) such as Coursera and Udacity, practical educators like Galvanize who recentlypartnered with Google, or short-term certifications being offered by independent organisations, the education landscape as we know it is changing fast to accomodate for the equally fast changing employment landscape.

A number of factors are driving disruption.

Technology

Technology is paving the way for new jobs. The emergence of big data, cloud computing, mobile and social media for example have created an abundance of new jobs that now find a home across organisations of all shapes and sizes.

In the last ten years alone we’ve seen a proliferation of new jobs that didn’t exist previously become commonplace. For example, social media manager, iOS developer, digital marketer, data scientist, 3D designer, user experience designer…the list goes on.  And the future will bring with it a whole new spectrum of jobs (drone operator anyone?!).

A quick look at how vacancies for traditional occupations stack up against modern occupations in Australia reveals the following:

  • Engineer -12,939
  • Accountant - 10,920
  • User Experience Designer - 4,783
  • Digital Marketing Manager - 2,961
  • Social Media Manager -2,877
  • Lawyer - 2,399
  • Cloud Consultants - 2,214
  • Data Scientists and Analysts - 1,410
  • Mobile Developer - 1,087

The disruption to the employment landscape is also reflected by the fast dwindling time a Fortune 500 company is expected to spend on the index, which has dropped from 60 years in the 1950s to just 15 years today, according to research conducted by innovation consultancy Innosight.

This is symptomatic of the rapid change in technology that large companies and large educational institutions alike, such as universities, are too often slow to respond to.

Universities, like most large organisations, are bound by process, procedure and value systems that don’t lend themselves to moving quickly in response to market demands for jobs.

A quick inspection of the average marketing degree offered by Universities in Australia shows that the following marketing subjects are undertaken:

  • Prices and markets
  • Marketing principles
  • Marketing Communication
  • Market Research
  • B2B Marketing
  • Global Marketing
  • Strategic Marketing

What is frighteningly obvious here is that digital marketing is missing.

In an age where the consumer has all the power and marketing campaigns are becoming targeted, it seems that much of this particular University syllabus focuses on old world above the line marketing concepts and ignores modern, lean techniques around social media, content marketing, web analytics, search engine marketing and optimisation, influencer outreach, email marketing and so on.

Busy professionals, often with mouths to feed, can also ill afford to take time out of their days to explore full time courses. Some universities have answered this call with accelerated and online MBAs for example but these tend to be expensive and still require a significant amount of time out of work.

Occupation Obsolescence

While a new army of jobs has appeared, yesterday’s sure fire winners, the kinds of jobs many of us were told to pursue by our parents or career counsellors, are now being commoditized and find themselves in saturated industries.

A combination of automation and offshoring is driving this disruption.

A 2013 paper by the University of Oxford, argued that jobs are at high risk of being automated in “47% of the occupational categories into which work is customarily sorted”. That includes accountancy, legal work, technical writing and a lot of other white-collar occupations.

In addition to automation, offshoring to cheaper labour markets such as the Phillipines and India is also taking its toll on those looking to build a career in these spaces. “In auditing, the larger companies are no longer going to recruit graduates because they can outsource the work to China”, says Lynnaire Sheridan, co-ordinator of the University of Wollongong’s internship program. She went on to tell the AFR recently that for every 20 undergraduate students, there are one or two corporate accounting internship roles available.

Changing employer  and recruiter appetites

“Hire for attitude, train for skill” is fast becoming the new mantra, best exemplified by Mark Murphy in his book, Hiring for Attitude. Murphy found that 46% of new hires failed within 18 months. When new hires failed, 89% of the time it was for attitudinal reasons and only 11% of the time for a lack of skill. Lack of coachability, low levels of emotional intelligence, motivation and temperament were the key drivers behind these failures.

More and more employers, particularly in the emerging job space, are responding to this reality by crafting their recruitment processes and hiring criteria accordingly.

The traditional University degree has not lost its place in the world. However,  when it comes to ongoing upskilling and reinvention, professionals simply don’t have the time nor the appetite to commit to a lengthy University degree, nor do they have the liberty of time available to invest in such courses if they are to take advantage of the emerging job market.

Employers and recruiters  that want to take advantage acknowledge this and see ongoing professional development and practical education providers as the solution to these emerging needs.

Candidate characteristics such as attitude, emotional intelligence, broad experiences and cultural fit are gaining favour over purported skillsets.  Outcome-based education, which gives people the opportunity to ‘cherry pick’ training and plug knowledge gaps progressively when needed, are also gaining acceptance amongst employers and recruiters above certifications in many cases. This offers flexibility, affordability and relevance.

For example, web developer schools such as Flatiron School and  Dev Bootcampproduce new web developers in 12 week immersive courses, offering direct paths to careers in technology through industry networks.

At Collective Campus we run evening short courses on topics such as Data Science which have been incredibly popular. The classes, which are built around the R-programming language, run just twice a week from 6pm to 8:30pm, offering flexibility for those employed in full time roles who also have families and social lives to tend to during the week. While not everybody will come out of the short four week course a data scientist, most of the students develop the requisite skills they need to apply data science fundamentals to their jobs in marketing, financial services and so on in order to add significant value and radically improve the way they work and outcomes they generate. This, in most cases, it’s all that’s needed.

Balance

It’s not a case of ‘either or’ when it comes to traditional versus practical education. Both serve a purpose and if anything the role that practical educators play is perfectly complementary to Universities. It’s awfully difficult to envisage pumping out surgical doctors in 12 week short courses, however when it comes to upskilling and developing fundamental skills where lives are not at risk, the role of the practical educator is critical in a fast moving landscape.

For business professionals, University provides a solid foundation upon which practical education can add further value by way of online learning and practical education.

What practical education providers offer is an opportunity to learn flexibly, either after hours, on weekends and in short, high impact bursts. Add to that the lure of the reverse classroom, online learning and in class outcome facilitation, and the value generated becomes obvious.

Given the realities of the day, the role that disruptive educators play is both timely and very fitting and it is becoming clear that unless you are willing to disrupt and reinvent yourself, then you will likely be disrupted.

4 Week Startup - How We Did It

Collective Campus recently held its first Lean Startup Short Course. The course, held for 20 hours over four weeks, brought together seven budding entrepreneurs and exposed them to the world of build, measure and learn

Why is this concept of build, measure and learn so important to startups?

96% of Australian startups fail, according to Deloitte, and it’s not because they build products that don’t work. Essentially, it’s because they build what nobody wants to buy. 

Entrepreneurs with dreams of escaping the 9-5 and making a big exit usually go straight from idea to trying to scale (prematurely) without doing any of the real, painstaking legwork that goes on in between to get out of the building and test key assumptions with real customers.

Startups that succeed are those that manage to make enough changes to their product, business model and marketing strategy, based on validated market learnings, before running out of cash – that’s it.

Using elements of design thinking and the lean startup methodology, our lean startup practitioners learned the ropes of how you get an idea out of your head, into the customer’s hands and test whether or not they are picking up what you’re putting down, without spending too much time or money finding out –essentially advocating a fail fast, learn by doing philosophy. This empowered our students to be able to test lots of different ideas to find what works rather than commit the next 24 months chasing one bad idea.

What did our students learn?

  • How to identify the customer job
  • How to prioritise jobs , problems and solutions
  • Ideation sources
  • The nature of disruptive innovation
  • Traps to avoid
  • How to identify customer pains and gains and craft a compelling value proposition
  • How to build a business model
  • How to identify key make or break assumptions underlying a business model
  • How to conduct problem and solution interviews
  • How best to test these assumptions using prototypes
  • How to get customers to actually interact with your prototype
  • How to define key actionable metrics to test success rates of your experiments
  • When to pivot or proceed
  • How and where to look for funding
  • The basics of pitching

So who were our students?

Our students came from a broad array of backgrounds. Amongst them were management consultants from PwC, an innovation projects coordinator from Swinburne Design Factory, a product manager from CarSales, a business improvement analyst from Telstra, a marketing specialist from Symantec, a business analyst from ANZ and an electrician!

The team came to the course with a number of different ideas that evolved quickly over the course of the four weeks as the students implemented what they learned by building quick prototypes to test their key assumptions. 

Class discussions also proved to be a great source of idea refinement. Great ideas are rarely the result of insular thinking and often evolve over time, which is why the classroom setting was so powerful for these students.

Above: Two of the ideas that came through the course

Ideas spanned the gamut of industries from real estate, market research, not for profit fundraising, travel, and logistics to health and education.

The course wrapped up with a pitch night where students were given the opportunity to get some experience pitching their ideas and thinking about their ideas from the perspective of investors.

This included guest speakers from companies such as Parent Paperwork who successfully raised $400,000 for their education admin startup and Winston Watches who successfully hit their $15,000 funding campaign on Kickstarter on day one and went on to raise another $32,000 more. 

"The Lean Startup Short Course at Collective Campus equips you with the fundamentals required to take your startup idea to an MVP and validate it. Interactive classroom sessions, hands-on exercises and guest speakers who talked about their startup journeys were the highlights of the course for me." - Hima Tk, PwC

How To Get Buy In From The Top For Corporate Innovation

It’s been over 12 years since Clayton Christensen’s The Innovator’s Solution answered the questions posed of corporate innovators, leaders and managers by its influential and evergreen predecessor, The Innovator’s Dilemma.

We’ve seen the emergence of methods and philosophies such as human centred design, lean startup and agile project management which have taken center stage, at least amongst circles of innovators. 

A growing number of industry incumbents are collaborating with the outside through different interpretations of open innovation such as corporate incubators, hackathons, open data platforms and online crowdsourcing campaigns.

Organisations are spinning off independent companies with their own processes, values and resources in order to get out of the building and test potentially disruptive concepts that they normally wouldn’t be able to do from inside the walls of the mothership. However, the technology adoption curve, made famous by Geoffrey Moore in Crossing The Chasm, stresses that initially, only about 2.5% of an eventual market adopt a new technology. This can also be applied to the rate of adoption by corporate executives of the above mentioned mindsets, methodologies and tools.

Many are simply yet to acknowledge the need, demonstrate an appetite for or simply prioritise innovation and break out of ‘the way things have always been done around here’ mentality. Despite the fact that at current rates of churn, 75% of the S&P500 is set to be replaced by 2027.Most organisations are full of decision makers who ultimately got to a position of authority because they were great at playing politics, executing set procedure, stretching the S-curve and achieving short term goals. Unfortunately, in order to stay competitive we must look not just at stretching our existing S-curve, but at ways to catch the next S-curve.

Exploring disruptive innovation is anything but procedure, certainty, safety and achieving quarterly KPIs. As such, it does not present decision makers with an obvious green light to invest. Often, executives might pay lip service to lean startup and disruptive innovation and the need to be bold but stop short of defining what this actually means and more importantly, how to go about it. 

As far as they’re concerned, it all sounds a little too risky, it feels radical, and if I’m getting paid a pretty penny for doing the duties outlined in my position description – which doesn’t include shaking the tree - then why should I go out and do something purportedly ‘crazy’ when none of my peers appear to be doing so and I’m due to collect a bonus so I can take my family to Hawaii this summer?

As a result, intrapreneurs often bang their heads against their desk, figuratively and possibly literally, as they’re told to focus on only their core competence, again, as outlined in their position description and annual performance review.

They often either leave the organisaion to join more progressive companies, start their own company or stay onboard but become progressively disgruntled and unproductive. So, if you’re currently banging your head against your desk but don’t necessarily want to take the aforementioned paths, what can you do?

Through our conversations and observations of how intrapreneurs at different companies have gone about doing this, we’ve outlined a handful of strategies that you can try to secure buy in, support and resources to foster enterprise innovation.

  1. Present Relevant Case Studies to Decision Makers

Corporate executives want you to speak their language. There’s no point showing them examples of companies like Airbnb disrupting the hospitality industry if you’re in mining. Find relevant case studies from like companies operating in similar countries, industries and facing the same kind of economic, political and regulatory challenges. Show them examples of companies that have adopted new practices to explore disruptive innovation and more importantly the outcomes that these campaigns have generated. For example, have they run idea campaigns that have gone on to generate 500 ideas, 30 of which were commercialized and are now generating millions of dollars?Show them examples of companies that have failed to address disruptive forces and have now found themselves and their market share being marginalized due to new players and/or new business models.

2. Use the cost of employee churn

Within any large organisation, sponsorship is usually required from different business units to free up resources and support new initiatives. Somebody has to pay right? For example, inSync Surveys recently found that an average staff turnover rate of 18% costs organisations with 100 employees around $1 million every year. Got thousands of employees? Tens of thousands? Multiply it.

This cost is attributable to variables such as employee on and off-boarding, training, interviewing and recruitment costs, lost knowledge, productivity downturn and the overworked impact on remaining staff. Giving employees more say over company direction and strategy through initiatives such as idea contests, hackathons and corporate incubators can give them a greater sense of ownership and belonging which prompts greater loyalty and a longer stay at a company, particularly amongst natural innovators who are the employees that many companies need most in what is an era of rapid disruption. Find out what the average cost of employee turnover is at your company. Then go and speak to Human Resources about how innovation initiatives can help to bring this down.

 3. Conduct a ‘premortem’ to gauge risk profiles

Oftentimes, innovation doesn’t get buy in because decision makers and corporate executives can be seen as risk averse and with short term incentives and shareholders at front of mind. As such, putting everything on red tends not to make sense. But it is definitely not a case of all or nothing when it comes to exploring corporate innovation. We need to encourage taking lots of small bets.

You need to find out what the worst possible outcome the decision maker is willing to accept. If you know what this looks like then you can frame your business case around it and if it’s clear that the worst possible outcome will fall within the boundaries set by decision makers you’re much more likely to receive support than you would if you didn’t provide this comfort.

4 – Blackops: Ask for forgiveness, not permission

Many intrapreneurs are setting up their own hackathons, agile and lean startup guilds to get people talking and doing things in their own time around different innovation practices. Oftentimes they build prototypes in their own time and show them to executives or if they’re really keen, show them to a select group of customers and get some real feedback that they can take to decision makers. Either you will win them over or have to ask for forgiveness.

Worst case scenario? You get fired. Perhaps working for a company that doesn’t encourage out of the box thinking and employees who take ownership and initiative isn’t where you want to be anyway!Sue Hogg, an Iteration Manager at Australia Post, ran informal hack days with staff that wanted to participate, in their own time. Eventually, these grew so popular that they’ve now received sponsorship to run these events as part of business as usual. She called this approach "blackops!". 

5 – Use Innovation Metrics, Not Accounting Metrics

If you've managed to get buy in for a project, it’s just as important to keep buy in. Oftentimes, companies pull the plug on innovation projects because they’re not generating X ROI within a few months of launch. Airbnb made $200 a week in their first year. They’re now worth US$25B. Such is the nature of disruptive innovation – initially the market is insignigicant and the only people interested in a product make up about 2.5% of the eventual market. As such, we need to give projects time. But how do take small bets if we give every project 2y ears? How do we know which projects to give time to and which to pull the plug on?

We need to encourage the use of actionable innovation metrics which track customer engagement against changes to the business model, product or marketing strategy. If we can align our actions with a progressive improvement in customer acquisition, activation, conversion and retention then we can present this data back to decision makers and show that we’re on the right track. Perhaps set weekly, monthly or quarterly go/no-go checkpoints.

If we’ve made a hundred changes based on validated customer learnings and still can’t get the engine started, then it might be time to make an executive decision and invest time and money in another project.

Applying the survey results to a company with 10,000 employees, the annual cost of employee turnover becomes $100 million. Suddenly, being able to justify, say a $100,000 investment in employee time and resources to an innovation project, which may serve to bring down that $100m cost, doesn’t seem like such a bad idea. 

6 – Protect The Brand

Oftentimes, decision makers are fearful, and rightly so, of doing reputational damage to their brand by releasing half baked prototypes to market.

But that needn’t be the case.

Perhaps make it clear that the product is in beta and target only a segment of customers, cap the number of users that can try the product or release it to market under a unique brand. These methods help us avoid reputational damage while still tapping into the value of obtaining customer feedback and validated learnings early in the piece.

7 – Invite executives to participate in short hackathons

Show, don’t tell. Foster those “aha” moments that are absolutely critical in getting people to change long held beliefs. If you can get a decision maker to give up, say three or four hours of their time (not easy but doable) to sit in on say, a lean startup bootcamp, should get you much closer to opening their eyes to the need to explore disruptive innovation and the value of taking lots of small bets in order to explore it successfully. If you can’t get them for a few hours, perhaps organize a keynote speaker to come in and give a lunchtime talk on the premises on disruptive innovation as it applies to industry incumbents.

Do whatever you can to foster “aha” moments – particularly when those moments are fostered by an independent third party with social proof, having done work in the space with comparable companies.  ---Check out Eric Ries, author of the Lean Startup, talking how he went about getting buy in at one of the world's biggest companies, General Electric, in this video

Go ahead, try one or more of these different strategies. What works at one company, on one executive, might not work on another. But each experiment brings us one step closer to yes. With each objection, we learn what the hurdles are and become better equipped to jump them. Successful startups tend to be those that make enough changes to their business model before running out of resources. Intrapreneurs who are successful at securing buy in for enterprise innovation projects are those who make enough changes to their approach based on executive feedback before they run out of patience. So... go forth and experiment.

$60M LaunchVic Fund Announced

The Victorian Minister for Small Business today announced LaunchVic, a $60m fund aimed to accelerate the growth of Victoria’s start-up ecosystem.

“We want Victoria to be the location of choice for start-ups worldwide, and LaunchVic will make it happen. The recent moves to Victoria from leading tech companies Zendesk, GoPro and Slack show that it’s within our grasp,” he said.

“We want to work with existing organisations in the start-up ecosystem to collaborate and build together a successful start-up sector that will help boost jobs, grow private investment and exports and further strengthen Victoria’s economy.”

As part of the announcement, we were lucky enough at Collective Campus to host Minister Dalidakis as he visited several of Melbourne’s hotbeds of innovation and entrepreneurship. We’ve been home to the likes of local and international startups such as Uber, General Assembly, Zomato, CoinjarDrawboardParent Paperwork, Metaverse Makeovers, SuppertimeBooktopiaSeed DigitalJobbop,Digital Affair and industry bodies such as Startup Victoria and Startup Grind Melbourne and it was a pleasure to have some of our successes acknowledged.

Minister Dalidakis with the team from Collective Campus and Seed Digital

Collective Campus was singled out given that we not only provide an inspiring, collaborative space for Melbourne’s startups to work from, but also play host to more than 150 educational, innovation-centric events each year, most of them free, across topics as diverse as IoT (the internet of things), 3D printing, virtual reality, data science, software development, digital marketing, enterprise innovation, design thinking, capital raising, women in tech and more.

We regularly run educational business building workshops to help sow the seed of entrepreneurship, helping budding entrepreneurs not only learn how to get their idea off the ground, but also how to quickly and effectively validate market appetite for an idea before over-committing time and money to something that doesn’t solve problems or add any value. This helps newfound start-ups avoid falling into the trap that most failed start-ups fall into - building what nobody wants to buy. More importantly, this approach conserves their resources and morale so that they can spend more time finding what works!

Leveraging off the success of this philosophy, we recently began working with large organisations by offering corporate hackathons and incubators, where they can not only learn how to move and act like a start-up, but accelerate the exploration of new business models and potentially disruptive innovations in a safe to fail incubator environment, free from the corporate bureaucracy. This also gives large organisations an opportunity to drive cultural change and tap into the resources, talent and unique perspectives of the broader start-up ecosystem, facilitating connections between start-ups and large organisations that prove to not only be complementary but deliver mutually beneficial outcomes for all.

This start-up ecosystem extends beyond our walls of course. Our partners and friends at collaborative spaces and hubs such as York Butter Factory, inspire9, The Hub and The Cluster have also worked tirelessly hard over the past few years, having played an absolutely pivotal role in helping to develop the local start-up ecosystem and provide conditions under which entrepreneurs are given the best chance of success.  

The team at Collective Campus is excited by the growing appetite the Government has demonstrated for strengthening Victoria’s start-up ecosystem, and both welcome and applaud today’s LaunchVic announcement.

Stop Brainstorming To Drive Innovation

65% of the Australian economy faces significant disruption according to a recent report from Deloitte.There has been much said and written about how companies can disrupt, rather than be disrupted. A key component underpinning a company’s ability to become more disruptive is its ability to capture and harness the unique and diverse opinions, insights and perspectives of its workforce. Companies that have tens of thousands of employees are usually at the greatest risk of disruption because of their legacy infrastructure, a culture of avoiding failure at all costs and processes implemented to sustain, rather than create.

Should we not just leave innovation to the innovators?

Innovation is as much about connecting the dots as it is about having a Steve Jobs moment.

In fact, Steve Jobs himself was all about connecting the dots and many of Apple’s most iconic innovations weren’t the result of a lightbulb moment, but were an evolution of previous innovations and Steve’s own personal experiences.

Case in point, the original Macintosh typeface was the result of Jobs dropping in on calligraphy classes at Stanford, the minimalism of Apple’s hardware is a testament to Steve dabbling in Zen Buddhism, the Graphical User Interface (GUI) of the original Macintosh was in fact ‘borrowed’ from Xerox after Steve had visited the company’s research centre.Jobs famously said “You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”

Every employee is capable of contributing dots.

Every Workforce Offers a Wealth Of Untapped Knowledge

Whether a company has a hundred, a thousand or one hundred thousand employees, it has access to an untapped resource of unique, diverse and broad perspectives and insights that employees of these companies don’t share effectively.

Any company with client facing staff has employees who each and every day make hundreds of observations and generate new learnings, either consciously or subconsciously. These insights aren’t being captured anywhere that's visible to or useable by the rest of the organisation and as such, aren't being capitalised on.

The ‘dots’ and insights that underpin innovation are driven by the questions we ask, the observations we make and the people we meet. For client facing companies in particular, these are plentiful and golden.

For example, a large consultancy such as McKinsey has a distributed workforce who all have access to different companies where consultants establish an intimate understanding of the inner workings of the client companies and are well placed to identify problems or challenges faced.

What if that one employee doesn’t have a solution to a problem they’re seeing but somebody else in the organisation does?

What if  one employee has a solution that others in the company also see value in because their clients face similar problems?

What if that employee has a half-baked idea that with input from others across the organisation can evolve into something seriously compelling?

Knowledge is Power

If we aren’t capturing knowledge effectively then we are essentially shooting blanks.

Failing to capture the knowledge of our workforce is nothing short of tragic, particularly in an ultra competitive landscape where companies need to be doing everything they can in order to just stay relevant and maintain market share.

The Problem With Brainstorming

Traditionally, companies have run the occasional brainstorming session with client facing staff or performed infrequent interviews, trying to capture some of that knowledge.

This approach is flawed for a number of reasons.1 - It doesn’t capture everyday observations and only those that are fresh in the memory so we only capture a very small percentage of the employee’s experiences

2 - inspiration can strike at any given time (often while exercising, in meetings, upon waking up, or for many, in the shower) - it can not be forced upon us in brainstorming sessions, the mind simply does not work that way. Often the opposite is true and these sessions can be counterproductive, participants feel pressured to contribute during brainstorming sessions and come up with poor ideas at these sessions and do so for the sake of doing so, not because they are actually good ideas.

3 - the cost of interviewing staff individually or in groups over time is very expensive and again, it does not capture the insights collected throughout the year and only those that are fresh in the memory

How Can We Better Capture and Harness Knowledge?

Idea management platforms have emerged as a much more effective way to capture knowledge centrally so that visibility is ensured, dots can be connected and new opportunities for growth can be capitalised on.

How do idea management platforms work?

Essentially every member of your organisation can submit problems, challenges, ideas and so on, which can be accessed centrally by the entire organisation.Submissions can be tagged according to different areas of interest and can also be aligned to a particular question or challenge that the company sets. For example, the telco Three ran a four week campaign asking people to submit accounts of when they had gone the extra mile to make things right. In just four weeks 292 ideas were submitted and 5800 votes registered. The results of this campaign fed into a successful marketing campaign around how Three differentiates itself from competitors through its above and beyond customer service.

How To Run A Disruptive Innovation Idea Campaign

It’s important to first define your objectives and clearly understand what you are hoping to achieve by using an idea management platform.

Are you looking to capture general ideas, problems and challenges that employees observe or run a campaign around a particular theme or problem that the company is facing?

Where running a campaign, it’s important to ensure that questions are asked in a way that prompts smart answers and submissions so that the quality of submissions remains high in order to support effective review of submissions later on and avoid death by volume.

Where possible, we should also look to provide some guidance around submissions.

For example, if we are looking for ideas with the potential to disrupt then we need to provide people with guidance and context as to what a disruptive idea might look like.

Using the disruptive innovation litmus test, made famous in Clayton Christensen’s The Innovator’s Dilemma, we can give would be idea submitters a lens through which they can look at their idea to ensure it fits the criteria before submission.

Far too often companies that run idea management campaigns to spur disruptive innovation solicit hundreds or thousands of ideas and far too often only a very small percentage of these ideas actually meet the definition of an idea that has the potential to disrupt.

For example, if it’s disruption we’re after we should ask people to answer yes to these questions before proceeding.

For disruptive ideas that build entirely new markets:

  1. Is there a large population of people who historically have not had the money, equipment, or skill to do this thing for themselves, and as a result have gone without it altogether or have needed to pay someone with more expertise to do it for them?
  2. To use the product or service, do customers need to go to an inconvenient, centralized location?

For disruptive ideas that deliver cheaper disruptive solutions to over-served markets (a low end disruption).

  1. Are there customers at the low end of the market who would be happy to purchase a product with less (but good enough) performance if they could get it at a lower price?
  2. Can we create a business model that enables us to earn attractive profits at the discount prices required to win the business of these overserved customers at the low end?

It’s also a fine line between this approach supporting ideas and discouraging them, but essentially the value of idea management is in the outputs, not in the inputs and the added value of framing idea submission is that it will get people thinking about their ideas critically beforehand and in this case, begin to embed a culture of and knowledge of disruptive innovation throughout the company.

The Need To Build Upon Ideas

As indicated earlier, ideas are rarely great in isolation and we need to connect the dots between different insights and experiences. As such, idea management should let people from throughout the organisation comment on and build upon ideas. It is usually over a number of iterations and adaptations that ideas start to look compelling enough to be considered a commercial viability.

Votes Are Not Enough

Most idea management platforms provide you with the ability to vote on ideas and submissions. And that is absolutely imperative to helping make ideas more manageable and assessable.

But if we’re working for a large financial services company, how many of our staff are well positioned to be determining what good looks like? How many of them have built a startup? How many of them have experience commercialising new products?

As a result, it is recommended that votes too are wrapped around particular guidelines.

For example, if we’re looking for disruptive ideas we could consider asking people whether to ‘up vote’ or ‘down vote’ an idea on the following sample criteria:

  • The disruptive innovation litmus tests are satisfied
  • Analogs and antilogs (evidence where the idea has worked and hasn’t is favourable)
  • Value to target customer appears high

Other potential criteria could include:

  • Technical ability to deliver on the idea
  • Cost to deliver prototypes to test ideas is not prohibitive

Companies should steer clear of using the following criteria as it often doesn’t apply to disruptive innovation:

  • the technology is good enough for our existing customers
  • the market is big enough to help us meet our growth targets

It takes time to grow a new market and for the quality of disruptive innovations to become good enough for the mainstream - just look at Netflix and Airbnb.

Selection of Winning Ideas

Often times, companies will run a campaign and select the most popular ideas for either subsequent exploration or commercialization.

However, it’s important that people selecting ideas have experience with innovation and are well placed to select ideas. Ideas should be selected based on the voting criteria above as well as innovation metrics (i.e. are customer interactions with our product moving on a positive trajectory) as opposed to traditional accounting metrics around ROI.

Often times, companies will allocate resources to ideas are ready for their market, where the market is big enough and so on however this only opens us up to small, safe, incremental innovation.

Disruptive innovation, by its very nature, is uncertain, the market is usually unknown and the technology is usually not good enough for the mainstream. As a result of this, these ideas don’t get selected by executives who are from a traditional school of management and of avoiding failure at all costs. These same executives have short term incentives and shareholders they are accountable to so they are perhaps not best placed to be selecting ideas based on professional judgment because of an apparent conflict of interest.

Finally, if we do select potentially disruptive ideas for further exploration post an idea submission campaign, we need to understand that they will not generate a ROI within 6 months or help us reach our growth targets.

Ideas take time to ferment. It can take years for ideas to become commercially viable. Airbnb made $200 a week in its first year of operations. It’s now worth US$25B.

However, if we run milestones say every 4 to 12 weeks and define and measure the right innovation metrics, we can see whether ideas are on track and are slowly improving towards mainstream viability. If not, we can move on to other ideas if our key metrics are not tracking in the right direction after numerous adjustments to our business model and if the key assumptions underlying our business model appear flawed.

Outcomes Drive Engagement Drives Outcomes

Ensuring that tangible outcomes are delivered will also ensure that the innovators in the organisation, the intrapreneurs, will support campaigns the next time they are run as they become more than just theatre and are visibly being used to drive the company’s growth strategy. In the absence of this, the most innovative employees will join equally innovative companies, leave to start their own companies or simply become disgruntled and unproductive.

Done right with tangible outcomes, harnessing the knowledge of a large, distributed workforce can be a goldmine for companies.

It will help capture new growth opportunities and limit the duplication of effort and cost through lack of sharing knowledge but it will also result in a more engaged and fulfilled workforce with more control and ownership over the company they work for.

Summary:

  • Companies are sitting on endless amounts of untapped employee knowledge
  • Traditional approaches to capturing knowledge such as brainstorming are flawed as they focus on a point in time as opposed to all the time and are expensive exercises with questionable returns
  • Idea management platforms are an easy and effective way to the capture and harness the untapped knowledge of a large, distributed workforce
  • Wrap your campaigns around good questions and get good answers
  • Ensure there is guidance provided around why people should up-vote or down-vote an idea
  • Ensure that when ideas are selected for further exploration, that they are done so for the right reasons and in the case of disruptive innovation not based on existing market size or capacity to serve existing clients
  • A strong idea management campaign can not only drive growth and cut costs but it can improve employee engagement and retention through a sense of greater control and ownership of company direction

The Recipe For Corporate Innovation

Innovation has become the definitive buzzword throughout large companies across the globe.

More often than not though when executives encourage the masses to ‘go forward, be bold and innovate’, it often amounts to nothing more than lip service.

Innovation is more than just a state of mind and these vocal pronouncements of intent to innovate aren’t met with strategic inputs, and more importantly, successful outcomes.

Yes, we’ve seen the rapid emergence of ‘chief innovation officer’ and ‘head of innovation’ roles across many large companies. We’ve seen the establishment of innovation teams and the odd hackathon being run. Often times this amounts to nothing more than innovation theatre.

Those same ‘heads of innovation’ are often plucked from inside, from roles that aren’t necessarily aligned with innovative thinking, so much as they’re about executing process. Often it’s benefactors of popularity of political navigation contests. I recently asked a ‘chief innovation officer’ from a large accounting firm about his role and the first thing he said was “don’t ask me what I do...I’m not sure yet.” This same executive was hired from within and was previously a partner in a tax practice after having spent more than 10 years in this field. Now there’s nothing in the rule book that says people who come from traditionally mechanical roles can’t be innovative, but to be overseeing the innovation efforts of a 10,000+ employee strong company?

The establishment of these roles and initiatives such as hackathons are all very positive developments in what up until now has been a predominantly overlooked subject.

Today’s volatile business landscape, where technology is driving change ever faster than before, leaves executives with no choice but to try and embrace disruptive innovation in order to stay competitive, lest the companies they manage go the way of Kodak and leave a big black blemish on their CVs.

The challenge lies in the fact that these same executives got to where they are not by embracing disruptive innovation, but by embracing the antithesis of disruptive innovation - I’m talking about a mindset of risk mitigation and process execution. While this may be perfectly fine under conditions of extreme certainty where we’re dealing with familiar products, customers and business models, when it comes to exploring disruptive innovations, we are dealing with unfamiliar and uncertain circumstances. As such, we can’t rely on set processes and “the way things have always been done around here” to deliver successful outcomes.

According to HBS professor and author of The Innovator’s Dilemma, Clayton Christensen, some of the key characteristics that contribute to the make-up of an innovator include:

  • challenging the status quo
  • taking calculated risks (manage risk by doing)
  • asking questions
  • taking many small bets quickly
  • seeing failure as a necessary way to learn
  • seeing threats as opportunities

Contrast this with the attributes that have made corporate executives successful throughout the 20th Century and much of the 21st Century:

  • avoiding risk (manage risk by analysis)
  • “failure is not an option”
  • conforming with policy and procedure
  • taking few large bets slowly

So what becomes of this?

Well, try as they might, corporate executives who have an appetite to follow in the footsteps of their peers at companies like Google and Amazon, tend to fail at their innovation efforts because it takes more than throwing money at something and running what amounts to token innovation events to achieve this success.

Innovation must be holistic, ongoing and more than an isolated one off event.

Key processes: How assets are created

Patterns of interaction, coordination, communication, and decision-making through which resources are transformed into products and services of greater worth.

Some common processes and metrics which inhibit disruptive innovation:

  • Gross Margin
  • Opportunity Size
  • Time to breakeven
  • End-product quality
  • Owned versus outsourced
  • Channels
  • Pricing
  • Performance Demands
  • Brand Parameters

Key values: Culture and how decisions are made

  • Just some of the ways that values can be a thorn in the side of disruptive innovation:
  • Short-term, incentive based mindsets
  • Risk mitigation by analysis as opposed to managing risk by doing
  • “The way things have always been done around here”
  • Threats are seen as something to defend against as opposed to opportunities to explore
  • Efficiency and predictability take precedent

Key resources: Assets, tangible and intangible, that contribute to what an organisation can accomplish.

Resources include:

  • People
  • Equipment
  • Technology
  • Product designs
  • Brands
  • Information
  • Cash
  • Relationships with suppliers, distributors, and customers.

It is imperative that the processes, values and resources of any innovation initiative are perfectly aligned to support innovation. Otherwise, they are doomed to fail despite best intentions.

For example, idea generation contests are often put forward by many large companies as an example of their innovation efforts but also often failing to bear any real fruit. This is because executives charged with selecting winners do so using an existing value set which means they tend to select those safe ideas which satisfies their existing customer base and for which there is an existing market. The result of this is that small, incremental innovations are selected which won’t help a firm catch the next S-curve, and miss out on disruptive opportunities which by their nature are commercialised in insignificant markets initially.

Disruptive innovations help companies catch the next S-curve.

Often times innovation projects are selected based on the margins that they promise, however disruptive innovations initially promise lower margins and not higher profits, so disruptive innovations will again not be selected for exploration.

Finally, if our values only support projects that generate X$ in revenue within the first 12 months based on existing product lines and markets, chances are if we do select a potentially disruptive innovation for exploration, we are likely to pull the plug because it doesn’t generate an increase in 5% of revenues within the first 12 months.

Corporate innovation is kind of like baking a cake, having one ingredient missing can throw the whole thing off.

It may seem like a Herculean task to redesign an entire organisation to support disruptive innovation and it may also seem like suicide given that the majority of revenues rely on existing processes, values and resources - which is why they were put in place in the first place. However, there’s a number of things that companies can do to help align processes, resources and values without turning the mothership on its head, because after all, while we must not lose sight of where the puck is today, unless we have leg skating to where the puck will be tomorrow we will find ourselves trapped under ice.

Some options for large companies to successfully circumnavigate the challenges that misaligned resources, processes and values bring include the following.

Create an independent organisation

Create an independent organisation with its own processes, values and resources and KPIs small enough to get excited by the initial small market opportunity

Example: GE Fastworks

Reconfigure Policies

Father of the lean startup movement, Steve Blank, has discussed the merits of requesting the creation of a new policy or procedure from support functions (legal, HR, finance, sales, branding etc.) to effectively support the exploration of disruptive innovation. He calls this, “getting to yes” for corporate innovation. This approach doesn’t destabilize business as usual because we are not changing any of the existing execution procedures, incentives and metrics, rather we are writing new ones for innovation projects.

According to Blank, if we were successful, innovation and execution policies, processes, procedures, incentives, metrics would then co-exist side-by-side. In their day-to-day activities, the support functions would simply ask, “are we supporting an execution process (hopefully 90% of the time) or are we supporting an innovation process?” and apply the appropriate policy.”

Train the Troops

Train the troops in disruptive innovation theory so that they can make better decisions when charged with overseeing innovation projects.

In product development methodologies:

Methods and mindsets such as human centred design and the lean startupeffectively support taking many small bets quickly, failing fast and iterating towards finding product market fit.

According to Eric Ries, author of the lean startup, “Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting.”

The lean startup advocates getting ‘out of the building’ and putting prototypes in the customers hands as early as possible to get real customer feedback, validated learnings and co-create solutions to real customer problems.

Given that this approach supports taking many small bets, it supports a ‘portfolio investment mindset’ which is imperative to success. While we have historically had a ‘failure is not an option’ mindset in large companies and bureaucracies. The fact is that failure is necessary when it comes to disruptive innovation, not only in the exploratory phase for a single product but across a portfolio. When a VC invests in startups, they invest in 10, expecting, nay, hoping, that maybe 1 will be the big pay off to cover their costs and get a sufficient return on their investment. This is VCs investing in startups who are built to innovate. So why should large organisations who are not built to explore disruptive innovations have any greater chance at success? Simply, they don’t.

Partner with, invest in and acquire disruptive companies

Corporate incubators and venture arms are becoming commonplace.

Google ventures, Citibank Ventures, Westpac Reinventure, Telstra Muru-D and so on.

This is one way large companies can hedge their bets and diversify into different areas and emerging technologies by taking small investments in startups, offering some mentorship as well as leveraging some of their existing resources such as customers,marketing and distribution networks to give startups the best chance of success and subsequently, generating a ROI.

Engage in OPEN Innovation

Outsource internal innovation to external innovators. According to Henry Chesbrough, the term’s originator and director of the Center for Open Innovation at the Haas School of Business at the University of California, “conceptually, open innovation is a more distributed, more participatory, more decentralized approach to innovation, based on the observed fact that useful knowledge today is widely distributed, and no company, no matter how capable or how big, could innovate effectively on its own”.

So what does this mean? Essentially, sharing your problems, challenges and data with the world, in order to leverage the power of the crowd - external innovators, designers, developers, data scientists, startups and so on.

A great example of this Public Transport Victoria’s (PTV) recent Tripathonefforts. Tripathon was essentially an initiative where the public transport data for the State of Victoria (Australia) was made available to the public during a hackathon. With mandate to create numerous ideas and prototypes came out of the event. Perhaps of most significance was a GPS tracking app for buses so people could know when their bus was due to arrive and not just what it says in a timetable. Doing this internally would have been fraught with cost and resource issues but over the space of one weekend, external innovators were able to develop something credible.

Get the RIGHT people on the bus

Create an innovation team and company wide ‘champions’

People underpin everything. If you are serious about innovation you will get people who have been there, done that, understand the trappings and the realities of trying to be innovative within a large organisation and successfully avoid corporate land-mines that destroy innovation.

When it  comes to innovation there is simply no silver bullet. Experimentation is critical to finding what works for any single innovation, however by leveraging off what has worked at other organisations we may find what works a lot quicker than if we were to try and reinvent the wheel from the ground up.

The above is not so much a recipe for corporate innovation, rather more akin to take-out for corporate innovation but they should provide a number of talking points to get the conversation started in your organisation. 

Teaching Entrepreneurship to Australia's Youth

There is a very distinct buzz permeating throughout the innovation and startup ecosystems of Australia. Ever since PM Malcolm Turnbull took centre stage and called for a more “innovative, creative and agile” Australia, innovation has become a hot topic and the amount of activity surrounding our ability, as a nation, to deliver has ramped up significantly.

First, a number of new funds have been established:

This is in addition to announcements made earlier this year by Brandon Capital for a A$200m HealthTech fund, National Australia Bank’s A$50m venture fund and a push by billionaire Melbourne investor Alex Waislitz to establish a new A$100m for tech companies in Australia and Israel. Clearly, one of the Australian entrepreneurs long heralded sore points, lack of funding, is being addressed with renewed vigour and enthusiasm in our local technology and innovation scenes.

Government Taking a Hands-On Approach

Far from taking a hands off approach to innovation like their predecessors, the Government have also been paying more than just lip service to our need to become more innovative in order to offset the slowdown of yesteryear’s industries, which for so long have secured our quality of life.

Within four weeks of taking Government, the new Assistant Minister for Innovation, Wyatt Roy, teamed up with startup accelerator Blue Chilli to host Policy Hack. The collaboration brought together 300 public servants, entrepreneurs, investors, scientists and educators in Sydney.

The purpose of the hack was to identify solutions to the challenge facing Australia in becoming a more innovative country to rival the likes of Israel, Singapore, London and the US.

One of the four key recommendations that came out of the initiative was an education initiative proposed by DICE Kids founder, Erin Watson-Lynn, aiming to instill a culture of entrepreneurship in young Australians, particularly at a primary and secondary school level.

The Need to Develop Entrepreneurship amongst Today's Youth

It is anticipated that 40% of Australian jobs will be replaced by technology by just 2025. In addition, about 75% of new jobs will require scientific and/or entrepreneurial skills. Today’s youth can look forward to having between 7 and 10 careers and more than 15 jobs during their lifetime.

Traditional industries such as mining, manufacturing, accounting and legal are either slowing down, becoming saturated, being offshored or are becoming increasingly automated. Safety, security and longevity in any given industry is no longer assured.

As such, the ability to reinvent oneself will be key to success in an increasingly fast moving and uncertain technological and commercial landscape.

The primary and secondary school curriculums, while still playing an incredibly important role in the development of our youth, have not changed significantly with the times in order to keep up with changes in technology and business. We are still taught not just throughout primary and secondary school but also at a tertiary level and particularly within the corporate workplace that failure must be avoided at all costs. However when it comes to exploring potentially disruptive innovation and delivering new business models, failing fast is imperative to learning and finding product market fit for new business models.

Tesla, Space-X and PayPal founder Elon-Musk says "if you're not failing, you're not innovating".

We need to be teaching the next generation of entrepreneurs and innovators the fundamentals of building new businesses from an early age, today, in order to prepare them for action tomorrow and to help capitalise on the new ecosystem that the nation is building. 

We’ve been working on our own Lemonade Stand program at Collective Campus, which will be rolled out these summer holidays for children from Grades 5 & 6through to Years 7-10. The program aims to instill business fundamentals, the innovator’s mindset and innovation practices such as human centred design and lean startup into the psyche of today’s youth.

Adaptability is Key

We are however piloting and practicing what we preach. Lean startup philosophy for example, is all about building prototypes to learn from real customer interactions, validate and invalidate business models and make changes to support the achievement of a sustainable business model.

It is important that whatever initiatives the Government decides to embark on, that we don’t put a traditional certainty lens on things. For example, we’ll commit 3 years and A$20m to delivering said deliverables. However,  when we’re delivering programs that have not been delivered before, there are so many unknowns and we cannot be certain of benefits realisation without the application of trial and error and real customer interactions.Adaptability is critical. Just like today’s entrepreneurs and innovators are adaptable in their approach to finding product market fit for new innovations, we need to be adaptable in order to deliver a strategy that truly support the development of our innovation ecosystem both at a youth and adult level.

Let’s not overcommit to building what doesn’t work in order to show that we’re doing something. Let’s not confuse movement with productivity.  

In order to figure out what works, we need to take lots of small bets, be adaptive and continuously improve towards finding what works because there's no silver bullet when it comes to innovation.

Our future depends on it. 

5 Reasons Your Marketing Views Are Outdated

"Advertising is based on one thing - happiness"

Don Draper, Mad Men

Everyone loved the show Mad Men. It brought back Madison Avenue’s advertising world of a bygone era, replete with powerful executives, billowing cigar smoke, and tailored suits.

While long gone are the 1960’s, it feels though that many companies haven’t moved on, especially when it comes to their marketing. They still live in an era where outrageous Don Draper style, top-of-the-mind billboard advertising is the way to go.

While Don Draper certainly did well for himself, the rise of digital technologies have not only give companies new opportunities, they have also changed the way people consume and make decisions in a fundamental way. Not changing and adapting your strategy constantly is a surefire way of getting left behind.

Here are five ways your marketing is outdated, and why Mad Men style advertising won’t work as well in a modern day marketing strategy.

 1. You Dismiss New Platforms, Preferring to Stick With What Works

When a new platform or feature comes along (and that’s something that happens quite often), many companies will often dismiss the new, and just stick with what they’ve been doing. Reasons that  often cite is that the platform doesn’t look right for them, or they don’t have time to try something new out.

But with the pace consumers and the landscape moves, not trying new things out often would be a grave mistake. Sure, not every platform or new feature is going to work out (look at Google+), but you only need to be an early adopter of one successful platform, or to nail one new feature before anyone else does, for the returns to be worth it all. If you stick to the 80/20 rule, and you’re always experimenting and testing new things out, you won’t regret it.

Live streaming is gathering momentum, and new advertising methods are now popping up all the time as major social networks start rolling out their monetization strategies.

 2. You Think Social Media is Free

Many people believe that you don’t have to spend any money on social media to see returns. In fact, many companies consciously avoid ‘buying Likes’ on Facebook and are extremely wary about the efficacy of advertising on social media.

This all comes down to a bit of misinformation. Sure, social media is free-to-play, but not using advertising methods would mean you’re missing out on real opportunities to drive direct returns from social media. It also means you’ll be left behind while other companies surge ahead.

Social media analytics suites nowadays are comprehensive. Advanced view filtering, conversion pixels and more graphs and numbers than you can point a stick at mean you’ll be able to track your spend and ROI extremely easily.

 3. You Don’t Update & Improve Your Website Consistently

Websites are expensive to build. As a result, once made, many companies don’t change their site again, apart from updating the content now and then. As a consequence, there are a surprising amount of websites out there that look like they were built in the 90’s.

If you don’t think updating your website is a big deal, think again. Earlier this year, Google rolled out an SEO update that heavily punished websites that didn’t have a mobile-optimised website. As SEO rules, UI conventions and customer expectations change, your website will need to keep pace.

The primary goal, however, is to improve your website’s conversions. Conversion expert Bryan Eisenberg, states that “most websites don’t have a massive traffic problem, but every website in a world has a conversion problem”. To make sure your site is always performing at its best, you’ll need to consistently use Analytics and A/B testing to improve its ability to convert over time. It’s virtually impossible to build the perfect website in one go, so it’s something you’ll have to keep developing over time.

 

 4. You Think Marketing = Sales

Nod if you’ve heard the role ‘Marketing & Sales’ before. Chances are, you nodded.

Previously, this dual role would have worked, but not now. Marketing is not about selling your product (although the end goal is to obviously get consumers purchasing). Marketing is about understanding your customer, and building a relationship with them. Sales are about persuading someone to buy from you right then and there. While it might seem like subtle nuances, the mindset is completely different.

Don’t use your marketing channels to sell. Especially on social media, this approach just won’t fly. Instead, use marketing as a way to build relationships and find opportunities. While salespeople have their place in a modern company, your marketing team should not be it.

 

 5. You Think It All Comes to Promotion and Virality

It’s great to be at the top of everyone’s mind - awareness is certainly a major part of a customer’s purchasing decision. However, it’s important to realise there are different ways to be at the top of someone’s mind. One way to do it is to incessantly shove your product down someone’s throat. Sure, people will remember you this way, but you’re not going to win friends.

While the Mad Men traditional approach to advertising is now outdated, one thing they do right is build an emotional connection with consumers. This is something that’ll never go out of style. By engaging your consumers in a meaningful and fulfilling way, you’ll secure customers who will remain loyal (and valuable to your business).

Oh, and forget trying to ‘make’ something go viral. Arguably, you can't just engineer virality - while there are certain elements of virality that can be replicated, you can’t just create something and bank on it becoming viral. Focus on building that relationship, and who knows, something good might come your way.

 

Modern marketing is constantly on the move, and it’s easy to be left behind. Over to you! What kind of old-school advertising elements do you think remain valid today? Do you have any other tips on keeping your marketing updated?

3 Reasons Data is Better Than Creativity for Your Marketing

A few weeks ago, I hosted a panel talk about digital marketing trends. During Q&A time, someone towards the front of the room raised her hand and asked one of our speakers something along the lines of, "If you had a budget of $10,000 and you were faced with the choice of using the money to create a video that could go viral, or you could put it into advertisements, which one would you do? Would you go for the creative option, or would you go for the data-driven advertising method?"

Her question gave our panellists a bit of pause for thought - it was certainly an interesting question, and one that marketing professionals struggle with a lot.

After all, the marketing campaigns we hear about are the creative ones - the ones with a viral video, or a super catchy slogan, or a multi-faceted guerilla marketing campaign involving a gamified mobile app and hidden smart stickers, or whatever crazy new initiative a marketing executive had dreamt up. Very few go to their friends and say, 'Oh my God, did you see how cleverly that company hit me with dynamic retargeting ads on Facebook? I thought that was so creative/smart/clever!"

We all love ads like these. But do they actually work...?

These high-level, creative type campaigns are also often what is encouraged in universities - recently, a friend informed me that for one of her university marketing assignments, she was working with a non-for-profit organisation, and had been tasked with fixing the issue of declining funding. Her solution was to build an app that would encourage kids to take an active role in caring for a particular animal. The idea is certainly creative and cute. It's also faithful to one of the core tenets of marketing, which is to create emotional connections with audiences. In that aspect, something like that would work...

...if the organisation has a lot of money to burn.

For some companies out there, this might be the case, in which case I say, 'Good on you! Feel free to go crazy with crazy brand-building campaigns."

Viral campaigns like Red Bull's here are powerful brand building exercises. That's because their budget allows for it.

 

But for most companies, I suspect that they can't say the same. Budgets are always tight, even more so for marketing - history shows when times get a little harsh and companies have to run leaner, one of the first things that get cut is the marketing budget. That's because it's easier for a company to say, "well, I'm in bad times, and it doesn't look like my marketing is helping out anyway," than to start firing people. 

But when marketing budgets do get cut, the only people we can blame are the marketers ourselves.

Why?

Because we do such a bad job at proving our marketing is helping the business.

This brings us back to the question the lady posed to the panel. Be creative, or use data and run advertisements?

While the other panelists stated it was a fusion of both, I'd have to argue that when it comes to marketing, there's no issue smart use of data cannot fix. In fact, I'd even say data, both quantitative and qualitative can almost replace creativity in certain aspects. Companies can get by without sinking huge amounts of money into big campaigns. 

So here are 3 reasons why investing your budget into data and advertisements is better for your business.

1. Data allows you to ID low hanging fruits you can target with ads

When you use data, i.e. from Google Analytics, you can quickly identify new opportunities for your business, i.e. new demographics, which you can then subsequently target with ads. For example, if your Google Analytics is showing you have frequent repeat visitors to your website, this might mean you have people who are interested in your product, but are still unsure whether they want to buy. This might be an excellent opportunity to retarget these visitors with ads showing a compelling special offer to push them over the line.

The best thing is, the more you use ads to target opportunities, the more useable data you'll collect. For example, pretend you're own a store that sells golf clubs, and you decide to experiment with Facebook ads because you got quite a bit of a following on Facebook. At first, you might start off with a pretty broad targeting of 30-65 year-olds who like golf. After a few weeks of running mildly successful ads, you can look into your advertising reports and see that the demographic of male 45-50 year-olds performs better than the rest of your cohort. That demographic then would be your new low-hanging fruit, and so you can create a new ad set that targets that narrower segment. 

2. Data-driven ads are scalable and trackable.

Advertisements really shine in their scalability. If you decide to test Facebook ads, you'll be able to start on a budget of $10 a day. If it's not working for you after two weeks, then it's something you can just switch off. If it is working for you, then you can scale up to $20, and then maybe even to $50 a day, and the results would often scale with the budget without requiring any more effort on your behalf. Because advertisements analytics are so good nowadays, you can also see exactly how much your ads are adding to your bottom line. There will be no doubt as to whether they're working for your business or not.

On the other hand, a creative video campaign has an upfront cost, and there's limited scalability. If you spend $10,000 creating an epically emotional video, and it works, you can't exactly spend another $10,000 and expect double the results. Creative campaigns require phenomenal amounts of effort that can't just be turned up or down - they're all or nothing. The ROI from creative campaigns is also very hard to track, at least for small businesses. Your video could be seen a million times and shared by hundreds, but whether it does what it's meant to do, i.e. sell your product, is very hard to track (refer to the Dumb Ways to Die campaign). It's this inability to clearly track the ROI that makes it hard for companies to see the value in marketing. 

3. Qualitative data replaces the need to be creative

One of the worst mistakes a company can make is to assume the creatives things they think of is what their clientele is going to engage with.

A better practice is to turn to your customer and get qualitative data from them. Look through your reviews and go through your customer insights to find out what people are saying about you, and then use their language. Often, you can craft strong marketing messages from what your customers have said, verbatim. You can also look at your customer insights to see what kind of content they engage with and share around the most, and work from there. For example, if you realise that any videos you share onto your page get the most amount of engagement, or that your target audience seems to share listicles type blogs, then those are the types of content you should be looking to create yourself. There's no point trying to carve out a demand that isn't already there. Again, it's about going for the low-hanging fruit first.

 

While I know a lot of people won't agree with my stance, and will argue that creative campaigns do drive home results, and can be quite cost-effective, I believe that this kind of mindset is incredibly dangerous, especially for small businesses. A company's aim should be always to quickly test, and use data find the methods that work best for them, before taking on riskier approaches. Data will also allow us marketers to prove exactly how much we're contributing to business's success, which is the most important thing. Sure, this approach makes marketing a lot less sexy, but it makes it a lot more effective. 

Over to you! Do you agree with my stance? If you've run an awesome creative campaign, I want to hear about it too!

5 (More) Ways to Redefine Innovation in Enterprise

Kaan Turnali recently wrote about redefining innovation in the enterprise. He raised a number of critical points, including embracing innovation as a mindset rather than a process, and finding new solutions to old problems.

In an age where a firm’s innovation strategy can make or break the company, it’s more important than ever for companies to define what it means to innovate, what disruptive technology means to them and most importantly, how to go about successfully exploring new business models.

So here are five (more) ways we can redefine and rethink innovation in enterprise.

1. Understanding you won’t have product market fit

Large, successful companies are large and successful because they managed to find product market fit and successfully capitalised on it. Over time, these companies have continued to improve their core competencies and products, solidifying their customer base and establishing themselves as the go-to place for a particular outcome.

The fruits of innovation programs, however, will often lead to completely new products, services and business models which might not appeal to the company’s current customers. This might lead to bleak projections from the company’s marketing and sales teams, resulting in new ideas never seeing the light of day.

However, it’s important to keep in mind that disruptive innovation, by its very nature, is inherently not meant to appeal to your current customer base. It’s completely normal not to be able to find product market fit for a number of months or even years. As such, disruptive technologies will initially underperform according to established methods and metrics used to define and measure success It’s important, therefore, to remember some of the world’s most famous and successful startups, such as AirBNB and Slack, were unable to find product market fit until they tested and measured and tested again...multiple times. AirBNB made $200 a week in its first nine months and it is now worth US$25B. Capturing new markets depends on…

 2. …Exploring Disruptive, not Incremental Innovation

When a company keeps iterating on its current products to continue satisfying its current customer base, it’s investing in incremental, or sustaining, technology and extending its current technology S-curve.

The problem with this approach is that eventually, the S-curve plateaus, and the return on  R&D investment begins to dry up.

Disruptive technology, however, creates an entirely new S-curve, and with it, a new growth market. It might only initially appeal to a very small, niche market, but this is one that can be used to drive initial revenues and test and improve the product before going upmarket.

S-Curves plateau so it’s up to the company to keep looking for the new S-Curve (without compromising its core competencies too much).

There’s also so much more to developing the new S-curve than just being the ones who did it before it was cool. Research shows late entrants face significant challenges when being late to the party - Clay Christensen states companies that enter the market within two years of a disruptive innovation first appearing are six times more likely to succeed than later entrants. Early entrants establish cost and operational efficiencies, distribution channel relationships and brand awareness and loyalty that provide them an often unbeatable advantage over large players that come late to market.

One of the distinctive marks of a disruptive technology is it’s only obvious in hindsight, so don't fall for this. 

The S-curve

3. Startups are not the enemy

It’s common practice for incumbents to point the finger at disruptive startups and blame them for dwindling market share. As such, these companies will either deal with startups aggressively by fighting them through litigation or mud-slinging, or passively - simply ignoring them in the hopes they will just disappear.

However, there’s much incumbents can learn from startups (and vice versa). Processes that startups use, such as the Lean Startup methodology, customer-driven development, hackathons or incubation/accelerator programs can easily be employed by enterprises to hatch, develop and test new ideas and products rapidly.

Engaging with the startup community directly also provides a company with access to a hotbed of talent, ideas and solutions to existing problems. For example, hosting a 48-hour external hackathon, inviting the startup programmers to participate and encouraging them to develop solutions to a problem your firm faces will allow you to kill several birds with the same stone.

Some corporations have already started to engage with the startup community  by running open innovation programmes, hack days, incubators and venture capital wings. Find below a link to some open innovation programs run by large organisations.  

Unsure how to start talking to startups? Startup co-working spaces are a great place to start. Angel investment groups and startup communities such as Startup Grind (or your city’s equivalent) can also point you in the right direction.

4. It’s OK to Fail

When a company fails  because of disruptive technology, it's easy to look back and blame poor management for not recognising and addressing shifting market demands.

Good  managers, however, do their jobs well. They're good at executing existing processes, and they make decisions based on what will help them meet performance targets and make the company money. Good managers are risk averse and mitigate failures.

However, risk-aversion flies in the face of what successfully exploring disruptive innovation requires.

The key is to learn how to fail fast, fail often, and learn faster than anyone else. Throwing huge amounts of resources at a project, and then shrugging when it doesn’t stick, isn’t a feasible way of doing things. Taking small bets, building prototypes and constantly testing the set hypothesis with data and results before pivoting if needed are fundamental principles corporate innovation teams need to understand and use when building something new. Failures aren't the be-all-and-end-all of new products, but rather, critical lessons that will help you refine your product over time and find product market fit.

The lean startup methodology isn't just for startups

5. Getting Out of the Office

This is both a metaphorical and literal.

Often innovation programs within large organisations fail because they're smothered by all the regulations, processes and values the organisation have already set in place. These regulations are there to help the company execute a repeatable business model but are often not conducive to innovation or looking for a repeatable business model. However, size kills speed and speed kills innovation.

It's nigh impossible to affect organisational-wide change in values and processes towards one that's more conducive towards risk-taking innovation without the company's core revenue streams. Therefore, it's vital for an organisation's innovation team to work away from all existing processes and values. Using a completely different set of KPIs and metrics (read: innovation metrics) would be required to assess progress and determined success. Even physically getting out of the office is a good idea, even for a temporary off-site program.

While your team is out and about, it's a great opportunity to get involved with the startup community! Collective Campus (disclaimer: this is where I work) is an enterprise innovation hub and startup co-working space. We've hosted a number of off-site innovation programmes, including working with a team from Sportsbet. “We wanted our team to know what it’s like to be an entrepreneur and what it’s like to work in a startup environment”, said Oliver Hoy, Innovation Manager at Sportsbet.

A new environment and a fresh breath of air might be all your team needs to spark the curiosity needed to fan the flames.

Get Out Of The Building for Corporate Innovation Efforts

‍Large corporations can have what seems to startup founders to be vast amounts of resources - more than they know what to do with (this can often be the case where companies elect to pay out huge dividends instead of investing in R&D). So why don’t large companies with millions and sometimes billions of dollars in capital reserves come out with the next big thing, the next UBER or the next Xero?

What many startup founders, particularly those who haven’t worked in the corporate space, neglect to appreciate is that large organisations are bound by resource allocation procedures that make the political and diplomatic effort required to access them akin to parting the red sea.

In addition to that, large organisations are mature and unlike startups who are looking for product market fit, have already found product market fit. As such, they have implemented process and procedures which exist simply to execute a sustainable business model that makes the organisation money.

Policies, Procedures and Cost Centres

The larger an organisation gets, the more policies, procedures, business units and cost centres it puts into place.

The more cost centres, the harder it is to rally troops from across the organisation to collaborate under one banner, bring unique and diverse experiences to the table and innovate.

Internal Silos and Competition 

They are actually more likely to compete in a traditional business structure, as proved fatal for Sony - once custodian of the world's biggest portable music device and largest recorded music label. Unfortunately for them, Apple managed to connect the dots between the two to create the iPod and not Sony's competing business units. 

Size Kills Speed, Lack of Speed Kills Innovation

The more processes an organisation puts into place to cope with its size and growing regulatory oversight, the slower the it becomes.

For example, in my contracting travels I have delivered innovation consultancy services for a large accounting firm. I rudely discovered that in order to send an invitation to a group of 20 clients in order to perform some customer testing, that I would have to go through marketing. Marketing promptly provided me with a number of forms to complete to ensure that the communication aligned with the company’s branding and privacy requirements. Once the forms were completed, the designated personnel would have to sign off on it.

As such, sending a simple invite could take days and sometimes weeks.

Innovation simply does not work prosper under such circumstances.

Innovation is not Incentivised

In addition to this, employees of most large professional services firms for example are not judged on their ability to come up with new ideas or successfully explore and deliver uncertain outcomes, which is the nature of disruptive innovation. They are assessed based on their billable hours and dollars generated. As such, they focus on the now - existing products and existing customers - where it is easier to meet targets. 

So what is a large organisation looking to build a culture of innovation to do?

While, they can try to influence culture and the mindset of people to shift from a fear of failure and focus on certainty to one of taking risks, this would not only take a lot of time and require the reconfiguration of organisational values and processes but it would probably come at the expense of the core business - you know, the one that makes all the money right now.

Independent Teams, Independent Processes, Independent Resources

What forward thinking companies in this space have been doing is setting up independent teams, free from the values, resource allocation procedures and processes of the mothership to do exactly this.

They are given the time and mandate to make lots of small bets by running lots of short sprints using human-centred design and lean startup methodology. They build business models, determine key assumptions, build prototypes to test these assumptions and engage with customers almost from day one. This helps them move quickly towards failure, learn from these failures and find product market fit without the burdensome, insular, slow and expensive nature of traditional product development inside a large company. 

Establish Innovation Teams and Centres

A recent CapGemini report found that 38% of the largest 200 companies by revenue have already set up innovation centres. Companies such as IBM, Cisco, CSIRO, National Australia Bank, Telstra, AT&T, BMW, McDonalds, Sephora and Walmart have all set up innovation labs, oftentimes in the middle of the tech ecosystems, accelerators and coworking spaces of cities such as Silicon Valley, New York, Tel Aviv, London, Berlin and Melbourne.

Get Out Of The Building

Oliver Hoy, an innovation manager at Australia’s largest sports betting company Sportsbet, sent his team to Collective Campus (note, I am a co-founder) in order to learn all about lean startup methodology in a different environment where failure is embraced as a necessary learning tool. “We wanted our team to know what it’s like to be an entrepreneur and what it’s like to work in a startup environment”, said Hoy.

Physically locating an innovation team, best comprised of people from throughout an organisation, in an external innovation hub where they can not only co-locate in a different, dynamic environment but also learn the ropes of entrepreneurship and customer driven development through targeted workshops and mentorship and networking with startup teams, gets them thinking and behaving in a way that is conducive to supporting the discovery of new disruptive innovations.

Collaborate With Outsiders

Companies such as AT&T, Shell and Proctor & Gamble have partnered with startups and outsiders in what is dubbed as 'open innovation' efforts. P&G’s open innovation program, Connect + Develop, has been incredibly successful. Just some of the innovations to come out of the program have included Clearblue andBounce Dryer Bar.

It is nigh impossible getting the same outcomes within a traditional, hierarchical organisation.

In summary, large organisations can circumvent some of their inherent constraints by:

  • set up independent innovation teams with their own processes, values, resources and KPIs to successfully support the taking of lots of small bits
  • bring cross functional people together under the one banner so that varied and unique perspectives are captured
  • co-locate innovation teams in tech coworking spaces and accelerators
  • engage in open innovation campaigns where corporate problems are solved collectively by engaging with external startups, entrepreneurs, designers and developers

How to Think Like a Startup - Keynote at IBM's Symposium

I had the pleasure of attending and speaking at IBM’s annual A/NZ Partner Symposium at Luna Park in Sydney yesterday where the hot topics of innovation, disruption, transformation and startup agility were central to the day’s discussions. 

Some of the executive team getting the day started

The crowd of more than 350 IBM partners assembled to hear from the likes of IBM executives such as Rhody Burton and Kerry Purcell. They touched on critical topics affecting the distributors, systems integrators and the ICT industry as a whole such as cloud adoption and the need to challenge the status quo in order to keep pace with the rapid change facing the technological landscape.

A full house at Luna Park

I was lucky enough to be given the limelight to deliver a keynote on ‘how to think like a startup’, given that many of the challenges facing larger, established players in ICT centre around the inability to move quickly due to processes, legacy systems, resources and values that have been established to keep their businesses ticking over like a well oiled machine.

Decided to take a selfie before my keynote. This iteration failed. 

But what happens when that well oiled machine is going down one track and the rest of the world is going down another track?

According to Deloitte, 65% of the Australian economy faces significant disruption and larger, established organisations need to become more adept at exploring new business models, while keeping their core business going as long as possible. After all, that's where the money is made...today.Some initiatives I touched on that larger organisations can begin to explore to embrace startup agility and thinking include:  

We need to do more than just talk about innovation but create an environment under which innovation can truly flourish. The alignment of processes, values, systems and resources is critical to this.

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Here at Collective Campus, we help companies run idea contests, hackathons and incubate innovation teams in an immersive environment, surrounded by tech startups, where they embrace startup thinking and receive ongoing mentorship and guidance to move quickly, build prototypes and fast track customer validation in a safe to fail environment, free from the corporate bureaucracy.To find out more about how we can help achieve your innovation goals, get in touch!

Forget ROI - Innovation Requires a Different Set of Metrics

I was fortunate enough to take some time out to attend the Melbourne Cup Carnival this year on what turned out to be an absolutely gorgeous spring day, perfect for a day at the races. As one tends to do when they attend the races, I decided to, as Australians tend to say, “have a punt”.

I set myself a budget of $100 and placed some bets based on variables that had absolutely nothing to do with knowledge of horseracing.

I’m talking about odds, the horse’s name and the jockey’s colors. Now, while this strategy may be flawed, I acknowledged that this was a high risk strategy and hedged my bets across several runners, hoping to at least cover my initial outlay. I managed to recoup my costs and came out on top by a reasonable margin. However, if I had taken this $100 and deposited it into say, a term deposit with a bank, my motivations for doing so and expectations of returns, would have differed significantly.

One strategy is obviously high risk and high reward, whilst the other is predictable, low risk and low reward. However, if we take this simple concept and apply it to how large companies tend to allocate resources for innovation projects, a disconnect becomes apparent. Large organisations apply the same metrics and evaluation criteria on potentially disruptive, risky, ‘out of the box’ innovation as they do for incremental improvements and business as usual investment decisions. Clearly this makes no sense.

Traditional Accounting Metrics Don’t Work

Large organisations exist to execute on a repeatable business model, and as such processes, policies and frameworks have been implemented to ensure this execution goes off without a hitch. Decision makers, as such, tend to place only safe bets that promise low to moderate rewards, based on an criteria of evaluating investments on some or all of the following variables:

  • market size
  • gross margins
  • revenue potential
  • time to breakeven
  • performance demands
  • existing customer requirements
  • return on investment
  • risk profile
  • short term KPIs

 

But the nature of disruptive innovation is such that:

  • the market is small or insignificant, initially
  • they promise low margins, initially
  • they deliver small revenues, initially
  • they can take years to deliver a sufficient return on investment
  • they are often not good enough for existing customers, initially

Disruptive innovations however get better over time and as such, the market grows, the margins get larger and the revenue potential becomes significant.

The consequence of this is that large organisations miss out on opportunities to invest in or support potentially disruptive innovations and find themselves investing only on stretching their existing S-curve and sustaining their existing business model until they are disrupted by newcomers who embraced the disruptive innovation in a timely manner.

Just ask Blockbuster, Kodak, Compaq, Borders, Foxtel, taxi networks, mainframe vendors and on.

Airbnb is a great example of a company  that made only US$200 per week in its first year of operating, but today is worth US$25B, a market capitalisation greater than that of the Starwood, Marriott and Hilton Hotel groups respectively. Clearly, not investing in or pulling the plug early on disruptive innovation based purely on traditional metrics such as return on investment can not only restrict a company from exploring new growth opportunities, but render them unable to compete in a disrupted landscape.

Think Innovation Metrics

So, what can large companies with a repeatable business model to execute upon and external constraints and considerations such as regulators and shareholders do?

Two questions we need to ask:

  • What evaluation criteria should we apply when assessing disruptive innovations?
  • How do we determine and measure success to justify ongoing support of a project?

First, we must recognise that our objective at this stage is not so much on delivering a fully fleshed out product to market. Rather, our objective is to findproduct market fit. Unlike the mothership, we are searching for a repeatable business model, not executing upon an existing one. The risk associated with doing something new is at its highest at inception, and we need to focus our efforts on lowering that risk through immediate customer interactions towards finding product market fit.

Second, it’s imperative that we step away from traditional metrics and look at disruptive innovation through the lens of innovation metrics.

What evaluation criteria should we apply when assessing disruptive innovations?

  • apply the disruptive innovation litmus test (does this idea have the potential to disrupt or is it a low risk, low reward incremental improvement?)
  • what customer job are we addressing and are customers over-served or under-served by existing solutions?
  • value proposition (are we actually solving a problem?)
  • ability to deliver technology (can we build it?)
  • existing competition (are we entering a treacherous red sea or a clear blue sea?)
  • analogs and antilogs (has it been done before? are there stories of success and failure?)
  • testability (can we test it relatively quickly, economically and effectively using our existing networks and ability to prototype?)

So, say these metrics have been satisfied and some funding has been allocated to an innovation project to explore a potentially disruptive concept.

How do we determine and measure success to justify ongoing support of a project?

First, we need to determine our baseline - where we are today? Second, where do we want to be tomorrow? Ignore dollars for the moment and focus instead on customer engagement.

Measuring Progress and Success

We should be focusing on what Lean Startup author Eric Ries refers to as actionable metrics, you know, metrics that actually help us make decisions and take action. There’s no point knowing that visitors to our prototype website doubled, if we don’t know why.

Actionable metrics include:

  • per customer metrics (for example, the number of pageviews per new and returning visitor)
  • split tests (A/B experimentation where we can simultaneously test different variations of offers to learn what works and what doesn’t)
  • funnel metrics (measuring acquisition, activation, retention, referral and revenue with each customer interaction - the focus being mostly on acquisition and activation initially)

For example, say it’s 2006 and we’re building a cloud storage solution. We have a number of assumptions underlying our business model.

Two that stand out include:

  • people will store their files online instead of on local storage devices
  • people will pay a monthly subscription fee of $X fee to do so

Rather than look at this through a traditional lens and say something like “we expect this new innovation to generate 5% of our revenue growth target for the year and if it doesn’t within 6 months we’ll can it”, we should be bringing it back to the aforementioned innovation metrics.

Where are we today and where do we want to be tomorrow?

Say, we build a simple prototype - a landing page with an overview of the proposed product and a form asking visitors to leave their email address to express interest. This is before we’ve built anything at all and are simply trying to determine market appetite for the concept. Perhaps we can take it a step further and include a “subscribe now” button with a “$10 per month” price next to it.

Using the aforementioned metrics, we might measure the following:

  • for every 100 visitors, how many express interest?
  • for every 100 visitors, how many hit the mock subscribe now button?

 

Where are we today?

We might find that, initially, for every 100 visitors, perhaps for the first few weeks we get 0 expressions of interest. What then? Do we can the project? Or do we start making changes?

Initially, the market size is small and new concepts take time to ferment. We might find that our initial market is a group of techies who are keen on trying new things as opposed to the broader mainstream who are yet to come to terms with such a new technology. There are so many business model unknowns when exploring disruptive innovation such as the target market and customer persona, how best to reach them, what the pricing model should be, what the marketing message, branding and ad copy needs to look like, what core features people actually care about and so on. Get one thing wrong and it could be the difference between success and failure.

So we start making changes of course. Changes to ad copy, to price points, to customer acquisition strategies, to target markets and so on. We can then apply innovation metrics to see whether or not any of these changes had a positive effect on visitor engagement.Assume we brought back the price point and shifted our target market from a B2B model targeting enterprise to B2C, targeting tech-heads. Suddenly, at the end of our second month we’re finding that 10 out of 100 visitors are expressing interest and 3 are hitting the mock subscribe button. We are moving in the right direction and as such, the numbers should be used to report learning, an improvement in visitor engagement and ongoing support for the project.However, if we run hundreds of smart tests over several months and see a negligible improvement in metrics, then perhaps it might be worthwhile exploring a different idea or concept.

Using this approach, we can set monthly or preferably quarterly milestones, where reporting is based on innovation metrics and learnings as opposed to ROI. Once we’ve reached where we want to be tomorrow (say, 5 out of 100 visitors ‘sign up’), we can then begin to apply a slightly more traditional lens having more confidence that we’ve found product market fit and are putting to market a product that solves problems people are willing to pay for.

Finally, it’s incredibly beneficial for the ongoing support of innovation projects that we adopt a mindset of being patient for revenue, but not profit. Any profitable pursuit, even if it’s barely in the black, is unlikely to get canned in times of corporate restructure and cost centre culling.

In summary:

  • traditional accounting metrics don’t support the allocation of resources to potentially disruptive innovations
  • if we don’t explore disruptive innovations we are likely to find ourselves disrupted by companies that do
  • we should explore using innovation metrics when evaluating potentially disruptive ideas and measuring success
  • metrics should be actionable
  • be patient for revenue, but impatient for profit

How To Identify Innovators Amongst Accountants

If you're an accountant, don't be offended by the title of this article. I spent almost three years working at an accounting firm myself and it was anything but unsexy!

But if you’re not recruiting for the likes of Google, a high growth technology company or a promising startup, attracting innovative thinkers, sexy or otherwise, can be challenging, especially if the industry you’re recruiting for is not synonymous with innovation.

So how do you go about finding and hiring such applicants when your company insists on candidates meeting criteria such as being a certified accountant which tends not to lend itself to right-brained, creative thinking. 

One should not make the dangerous assumption that one’s choice of study or occupation is any indication of their ability to think laterally and see things differently. While accountants, real estate agents, insurance brokers and bankers might normally excel in process-oriented, linear thinking roles, it doesn’t mean that they can’t also apply the kind of thinking that supports the development of both sustaining and disruptive innovations.

Large professional services firms, such as accountancy firms, have significant human capital. The big four accounting firms each has over 150,000 employees worldwide and over a thousand employees in most of their city offices so it is highly unlikely and almost impossible that an organization of this size would be completely devoid of right-brained thinkers. 

People are usually born with the innovator’s DNA but for a myriad of reasons, whether it be social status, family expectations or economic factors, they often find themselves in less than progressive roles. This does not preclude them from being able to innovate, it just means they haven’t seen or been given the opportunity to do so.

So what is the innovator’s DNA all about? 

The theory, popularized by Jeff Dyer and Hal Gregerson in their book of the same name, suggests that innovators normally exhibit the following attributes:

The Courage to innovateBehavioral skills that support ideation and innovation; and an ability to connect the dots 

The Courage To Innovate

First, entrepreneurs (and intrapreneurs within large companies) are by nature troublemakers. They tend to question authority and it’s par for the course for a self-aware but neglected intrapreneur to either resign from or get fired from a high paid corporate gig.

So perhaps word of caution is necessary.

It’s not just enough to hire innovative thinkers, but you must ensure that the right environment is created to recognize, support and nurture their abilities. Otherwise your investment in finding and training the right people, may go unrewarded and you may have just been better off hiring run of the mill process-oriented thinker, for if nothing else, their payback on the initial hiring cost.

Behavioral Skills To Support Innovation

Dyer and Gregerson identified four key skills to support innovation, as follows:

QuestionObserveNetwork; andInnovate

Innovators are curious beasts, often with broad and diverse interests, experiences and insights. This is what gives them the unique ability to connect the dots and find novel ways to identify and solve problems.

Connecting The Dots

Diverse experiences and an ability to connect the dots is what made people like Steve Jobs so great. Jobs was fortunate enough to grow up in San Francisco in a time when various countercultures were brewing and he was exposed to and embraced the burgeoning tech revolution, its hacker subculture, LSD (the drug, not the music group!), the hippie movement, Zen Buddhism, Hinduism and spirituality which for a while caused him to eat nothing but apples…essentially a 100% sugar diet. (Note: The writer does not advocate a 100% sugar diet!)

“A lot of people in our industry haven't had very diverse experiences,” he once said. “So they don't have enough dots to connect, and they end up with very linear solutions.” 

These broad experiences are the essence of design thinking, a process popularized by creative consultancy IDEO which stresses the following:

Ignore constraints;Consider anything possible; andAssemble cross-functional teams with broad experiences

This helps teams think like innovators collectively because it helps them paint broad problems and narrow in on solutions one simply can’t paint on a narrow canvas.

So How Do You Find These People For A Gig At An Accounting Firm?

Sure, most, if not all of the candidates applying, will be certified accountants (as it is probably company policy), but you can always look for cues that tell you things about somebody’s personality.

Fortunately, in the age of social media, this isn’t all that hard. 

People who exhibit some of the key behaviors outlined in The Innovator’s DNA such as questioning and networking are likely to demonstrate this on social media as well, which is simply an extension of their personality. 

On LinkedIn, look for people who:

Follow influential bloggers across a range of areas;Have joined a number of diverse groups;Have published blog posts, or at least shared and commented on other blog posts; orIdeally but not essentially, have at one time or another worked for a startup or been otherwise involved in the startup ecosystem

On Facebook, Twitter and Instagram, privacy settings permitting, look for people who:

Have diverse interests when it comes to the books they read, the music they listen to, the sports they partake in and play and the artists they admire;Demonstrate an appreciation for countercultures that go beyond the mainstream – innovators often reject the status quo and by extension, the mainstream; orOn the flipside, be wary of people who have reached level 150 on Candy Crush Saga and repeatedly post about reality TV shows – people who are genuinely curious do not spend all of their spare time scaling the heights of mobile video games

On Meetup and Eventbrite:

See if potential candidates have joined any groups or attended any events and if so, what kinds of groups and events do they associate with? What does this say about them?

Signals such as these all point to an applicant that is at least curious, asks questions. The more questions one asks, the more answers, perspectives and dots they have to ultimately connect.

What if their online identity doesn’t offer enough clues? 

You can always ask questions to this effect in initial phone interviews and the like, however be wary of applicants who haven’t taken the time to at least keep their LinkedIn profile up to date, upload a photo and follow a number of influencers. Entrepreneurs and innovators are shameless self-promoters and this skill is a necessary evil in the corporate world, where the ability to convince decision makers into making funds available to pursue seemingly risky, but potentially disruptive and value adding innovations, is essential to success.

So while applicants may be certified in a normally process-oriented, linear thinking profession, and may be looking for a job that aligns with this, they may still have the capability to innovate and add more value to an organization than the majority of their peers, simply if given a genuine opportunity to do so. 

There’s no doubt that they would relish this opportunity and become a much much greater asset to the company, particularly in an era where Gen-Y and high performer retention is low and the ability to innovate has become essential to survival.

Why Big Companies Choose Not To Innovate

Clayton Christensen’s conclusion that small markets don’t solve the growth needs of big companies was best captured in his bestselling classic The Innovator’s Dilemma, which gave us many insights on why big companies with far more resources than market entrants, often fail to embrace disruptive innovations until it’s too late.

Furthermore, Christensen argued that competent employees have been trained to know what’s good for the company and how to build a successful career within a company. This is directly tied to company growth targets and employee incentives, both of which are evaluated on an annual basis at most listed companies and large private companies.

I recently argued that short-termism plagues the modern company and that companies can learn a lot from the German national football team who were given the mandate to develop something truly special over a period of ten long years, culminating with their success at the 2014 World Cup in Brazil.

More and more companies that were once small and built their reputation on disruptive innovations, are now big, have large value growth targets, are watched like hawks by the business media and report to shareholders who usually demand short-term returns on investment.

They have become victims of their own success.

This also explains why many once innovative companies, like Apple, have turned to high profile acquisitions to bolster their growth strategies.

The trickle down effect of these pressures on company executives ultimately results in decisions being made that align to the short-term growth needs of companies. The only way to achieve these short-term growth needs?

By focusing on sustaining existing markets as opposed to disruptive ones.

Consider the diffusion of innovation theory, popularized by Everett Rogers. The theory states that innovations spread through social channels over time. Innovators first embrace a disruptive technology and are followed by early adopters, the early majority, the late majority and finally, the laggards.

Source: Everett Rogers

Essentially, what this implies is that the early market for disruptive innovations is generally quite small (the innovators number just 2.5% of the eventual market) and thus, does not solve the growth needs of large companies who may require, say $500m in revenue growth, to satisfy a 10% revenue growth target.

Furthermore, Geoffrey Moore, author of Crossing The Chasm, suggests that fordisruptive innovations there is a gap, or ‘chasm’, between the first two adopter groups and the early majority. This further draws out the time required to realize a return on investment on disruptive innovations.

As such, executives charged with making resource allocation decisions are forced to focus on the near term wins which are usually fueled by existing paying customers, who already represent ‘the majority’, and whose business models are driven by existing technologies rather than disruptive ones.

For example, if I’m in the business of selling LCD displays to Apple who then use the displays in the sale of 9 million iPhones in one year, it makes more sense to make small innovations to what Christensen calls ‘sustaining technology’ and appease the existing market than it does, say, to focus on a disruptive type of screen that our customer, in this case Apple, would have no immediate need or desire for.

To best illustrate this point, I have compared the time in years it took for some of the most disruptive innovations and companies of the last sixty years to go from development to mainstream success.

* I have defined mainstream success as widespread consumer or industry adoption for innovations such as the pocket calculator and minicomputer respectively and net profits above $500m for the companies listed. Essentially, I define mainstream success as the market penetration required to interest or satisfy the growth needs of a large, profitable, listed company or private company that is an industry leader.

When compared with the one year employee incentive lifecycle at most listed companies and large private companies, it’s not difficult to see why large companies, who have the resource capacity, generally don’t invest in disruptive innovations. When they do, projects are often shelved because the return on investment is not delivered quickly enough to satisfy revenue targets.

Add to this the fact that millennials, who will make up 75% of the workforce by 2025, expect to stay in one job no longer than three years, and it’s easy to foresee innovation going the way of the dodo in large established companies.

Today’s run and gun world of the tech startup is fueled by an ecosystem of venture capitalists and angel investors who generally expect a return on their investment after not one year, but usually five years. Investors experienced in financing early stage, disruptive technology companies understand that the lifecycle from customer discovery through to market creation and penetration takes time. In many cases, five years may not be enough to achieve mainstream success, but it is enough to gain valuable market insights, gauge commercial viability and develop enough traction to welcome a significant increase in company valuation.

Do the same laws of nature not apply to large organizations? Of course they do. As such, Christensen argues that companies should create new organizations, independent from the growth targets, values and processes of the mothership, where goals are aligned with the motivators of passionate innovators charged with developing the disruptive technology and finding a market for it, rather than building technology for an existing market who may not need the technology.

To further increase the likelihood of success, these independent companies need to subscribe to lean and agile product development theories. They are creating disruptive innovations for unknown markets and as such should focus on short development cycles where feedback loops derived from customer discovery activities, like those prescribed by Steve Blank, are incorporated into the iterative development process. This not only raises the likelihood that there will be a market for the end product, but also extends the funding, or the ‘runway’ available for a project, so that those in charge can fail their way to success.

A fantastic example of this in action can be found at none other than General Electric, the forth largest company in the world. The company has launched an initiative dubbed Fastworks, in collaboration with Eric Ries, author of The Lean Startup.

Essentially, the company trained almost 80 executives in the methodology underpinning The Lean Startup, set up growth boards to approve or reject potential projects pitched by employees (not dissimilar to entrepreneurs pitching to a panel of VCs or angel investors) and formed independent teams with the mandate to develop products unobstructed by the growth targets of the parent or subsidiary GE company in which they operate.

‍Source: GEReports.com

Already, the initiative has spawned successes such as a high-output 7HA gas turbine, developed 40 percent cheaper and two years faster than it would have been via traditional means, a light bulb with a bult-in wireless dimming chip and an oil well flow meter, being developed in collaboration with Chevron.

It may be seventeen years since The Innovator’s Dilemma was first published, but it is not any less relevant. Its findings, combined with lean project and product development methodologies popularized in the past five to ten years, provide the modern executive with the playbook required to stand any chance of surviving in an age where disruption, particularly of the digital persuasion, is unrelenting.

"The lean startup bootcamp is a great way for employees to learn the fundamentals of entrepreneurship, life in a startup and how to diverge from their normal way of thinking. Highly recommended."

Sportsbet
Oliver Hoy, INNOVATION Manager

"The Lean Startup Short Course at Collective Campus equips you with the fundamentals required to take your startup idea to an MVP and validate it. Interactive classroom sessions, hands-on exercises and guest speakers who talked about their startup journeys were the highlights of the course for me."

PWC
Hima Tk

"Steve is extremely knowledgeable around innovation theory and start up methodologies and provides great commercial perspectives on disruptive innovators. Definitely worth a listen for any company not currently disrupting themselves"

AusPost
Sue Hogg, Iterations Manager

The workshops I’ve taken at Collective Campus were highly relevant to my career, pitched at the right level and delivered to perfection. CC provides a productive environment for high-quality, tailored training from a comprehensive list of contributors.

NAB
Doryan Gowty, Portfolio Manager

“Steve’s presentation on disruptive trends was insightful and engaging. His presentation skills kept the audience captivated as he shared his interesting perspective on what is happening in the market and the relevance these changes have to us.”

Capgemini
Barbera Kiefte, Applied Innovation Exchange Lead

"A really good bootcamp on SCRUM! The bootcamp replicated a real world SCRUM team and everything, including breaks, was being time-boxed to help reinforce agile concepts and ideas”

Bluedot Innovation
Bala Thavarajah, Chief Technology Officer

“In your presentation, you have made it so much easier for me to explain on how this is possible with cross functional communication in Carsales. What I appreciated most about it was everyone is excited the Lean Startup and wanted to try it out for their innovation ideas in their team.”

Carsales.com
Lay Clough, carsales.com

[Collective Campus] is without doubt one of Melbourne's best co-working spaces for its organisation, desk spaces and facilities, making it a productive place to work. It has a close connection with the startup community in Melbourne, so you're always sure to make a new connection or hear about a new event to head along to. I highly recommend [CC]!

Uber
Dan Angelini, Marketing / BD / Partnership

Parent Paperwork got its first office at Collective Campus. CC gave us a lively, interesting environment to be part of. We found CC to be a friendly and helpful community of startups. There’s always something special happening... CC is a fabulous nest for the early days of the startup journey.

Parent Paperwork
Fiona Boyd, Co-founder & CEO

The Collective Campus team have provided great local market information, backed by international best practice, aiding the KWM Innovation Hub to navigate their innovation journey.

King & Wood Mallesons
Michelle Mahoney, Executive Director, Innovation

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