Transcript of Driving Innovation Within Large Organisations - 383 Byte
- 1. - John Newbold from 383 - Were talking this morning about
driving Innovation within large organisations - Specifically
looking at how organisations are achieving both innovative
cultures, and executing on their innovation strategies at
scale
- 2. USE FULBR A N DSPLA Y BO OK .C O M - but before we start its
always helpful I think to bring a bit of reality to proceedings
when were talking about the word innovation. - Its a bit of a
loaded word, it can conjure up pictures like this in your mind - Im
sure people are familiar with Skymall theres some fantastic
products in there. Things like the Noodle splash guard, the back
scratch grid - Amusing, yes. But not the type of innovation were
talking about today.
- 3. USE FULBR A N DSPLA Y BO OK .C O M - So when we talk about
innovation at 383, we often lean on this thinking from Tim
Kastelle. - His definition of an innovation is this; - something
that is a new idea - that creates new user value - and that has
become a reality - And the venn diagram, the synthesis of all three
of these characteristics is important. - An idea that could create
value but cant become a reality is just a concept - And an idea
that has become reality, but creates no real user value is just a
novelty. Thats the stuff you see in Skymall.
- 4. USE FULBR A N DSPLA Y BO OK .C O M - So we have a definition
of what innovation is. - But what about the environment you need to
create to be able to turn a useful idea in to reality at a large
organisation? - I think here there are three key components -
Firstly organisational culture - the people who work at the
organisation and how they behave. - Next a strategy that sets the
mandate for how things get delivered - and lastly the ability to
execute, to actually make things. - Youll notice from my amazing
diagram that that strategy interlocks with the culture. And thats
really to illustrate that in my mind one of the primary reaso -
Organisations try and solve people problems with strategy, or they
encourage people to be entrepreneurial but without a culture that
allows them to do so
- 5. USE FULBR A N DSPLA Y BO OK .C O M - If you think about it
all as one sentence, what I believe organisations need to be
pushing towards is this; - A culture that enables the strategy and
a strategy that enables execution. - Without culture, strategy wont
happen. And if your strategy isnt execution focused all you have is
process and no product.
- 6. USE FULBR A N DSPLA Y BO OK .C O M - This seemed a good
point to bring in some visual metaphors. - And if youve been to a
Byte before youll know that one of my favourites is to describe
culture in large organisations as being very sloth like - This
video of a sloth crossing the road is particularly tedious and this
is often what the pace of change can feel like at many large
organisations - Things happen slowly, people need cajoleing along
and it takes a long time to head in a different direction.
- 7. USE FULBR A N DSPLA Y BO OK .C O M - Ive also been fishing
over the last year or so for a good visual metaphor for what we see
at 383 in a lot of large organisations and I think Ive hit on it
with - You see, many organisations are not designed to enable
innovation. In fact often, getting an idea to transit through an
organisation is often a real imposs - Organisations are slow by
design and ideas often get trapped.
- 8. USE FULBR A N DSPLA Y BO OK .C O M - The story often goes
like this, it might be familiar to some of you - so innovation
maybe starts with a boot from the board a big directive of a
rallying call for a business to try something new -an idea then
emerges in a team and rolls along, zig zagging through multiple
departments and stakeholders - eventually a project reaches the
technical definition phase and you get in to leaky budgets and
scoping builds before youve actually made anyt - followed up by a
leap of faith with legals - and ultimately getting locked down by
IT.
- 9. USE FULBR A N DSPLA Y BO OK .C O M - So the problem becomes
pretty clear - if you take a slow sloth like people culture and you
try and navigate your way through really convoluted organisational
design and strategy your - What then is the alternative?
- 10. - well today Im going to look briefly at answering two
questions which I hope will help to push toward some of the answers
1) How do you create a stronger innovation culture and 2) How do
you design an execution led innovation strategy, where the emphasis
is on making, not just process. Lets start with culture
- 11. USE FULBR A N DSPLA Y BO OK .C O M - Now this is of course
complete co-incidence but Mousetrap the board game was first
released in the 60s
- 12. USE FULBR A N DSPLA Y BO OK .C O M - and the 60s were
interesting too not just for board games, but for organisational
design. - - so the 60s were really the height of whats called the
burecratic organisation - this is an organisational model which had
grown out of a period of mass industrialisation and globalisation -
as businesses scaled they became highly bureaucratic, - so you see
lots of layers of management, - lots of hierarchy, - lots of people
fulfilling very specific types of jobs and tasks - and also lots of
rigid procedures and policies alongside
- 13. USE FULBR A N DSPLA Y BO OK .C O M - then new technology
came along, and really during the 1980s lot of new post
bureaucratic organisational models emerged - computers took a lot
of the lower level jobs that existed in certain organisations -
technology automated a lot of tasks - company products and process
changed as a consequence - So as computers ate away at lots of the
old ways of doing things a fair few post-burecratic organisational
models emerged - things like divisional when business were carved
up in to flatter hierarches - team structures, where people were
organised around specific features of a product - or network, where
there was more fluidity between teams and roles
- 14. USE FULBR A N DSPLA Y BO OK .C O M - Gideon Kunda has a
very famous book called Engineering Culture and he talks about the
fact that the post-burecratic era was very much more about com
- 15. - So briefly, I wanted to show you 5 examples of post
bureaucratic organisational design that exist today so you can see
in real world terms how this think
- 16. USE FULBR A N DSPLA Y BO OK .C O M - so firstly, Spotify
organise their teams in a super interesting way. - they have very
fluid structures where teams are organised in to chapters, squads
and guilds. - the design here is all about enabling a culture which
is product and user focused first, and encouraging people from
different teams to have very grey edg
- 17. USE FULBR A N DSPLA Y BO OK .C O M - Zappos, are another
company who demonstrate a very innovative post bureaucratic
culture. - Theyre incredibly people focused, both obesessionally
about their customer but also in realising that their culture is
their brand. - This book, is their 2014 culture book. You can
download it for free online. - Each year they publish this, which
is co-written by all the staff, as a manifesto for the values and
culture that they believe in. - - Inside youll find stuff about
their core values and vision, their flat self organising structure,
notes from new joiners on what joining Zappos has done for th
- 18. USE FULBR A N DSPLA Y BO OK .C O M - It wouldve been hard
to touch on innovative culture without mentioning google - this
slide is taken from a great deck Id recommend you take a look at on
slide share called How Google Works and its a very astute google
like observa - It simply says innovation cant be owned or ordained,
it needs to be allowed. You cant tell innovative people to be
innovative, but you can let them. - And its thinking like that from
Eric Schmidt and the team at Google that has really enabled them to
scale this entrepreneurial, inquisitive mindset througho
- 19. USE FULBR A N DSPLA Y BO OK .C O M - I love this example of
post bureaucratic thinking from Nordstrom - This is a company with
67,000 employees and this is there employee handbook. All of it. -
So on one side it says employee handbook and on the other it say
our one rule. Use good judgment in all situations. - I think this
is a real demonstration of a company who are trying to drive
culture by focusing on value, not policies.
- 20. USE FULBR A N DSPLA Y BO OK .C O M - Lastly, if youre
looking at innovative work culture, I think its good to look at the
work environment itself. - This is a google image search for
WeWork, who are a super fast growing co-working space. - Their
business model is essentially to design and rent office space, but
the way they describe themselves is as a global platform for people
who want to e - I think its key that in this image search as well
as cool spaces what youre also actually seeing is lots of people
doing effective work. - WeWork by the way are valued at $5 billion
- This is Regus, their nearest competitor, valued at about 2
billion. Lots of compartmentalised workspaces, lots of logos, and a
lot less people.
- 21. USE FULBR A N DSPLA Y BO OK .C O M - So, thats a bit on
culture. - The other part then, is what strategies are large
organisations pushing towards to do better innovation.
- 22. USE FULBR A N DSPLA Y BO OK .C O M - and I wanted to point
out here, that I dont have a silver bullet - there are lots of
different innovation strategies, many of which you will have heard
about at Byte before - So, companies are choosing to spin out
incubated startups and build their own innovations like British Gas
with Hive. - Some organisations are partnering to bring innovation
in, which is what Jeremy from Unilever is kindly going to chat to
us about in a moment - Or, organisations are buying innovation in,
by changing their offering through acquisition with things like
Hoopla buying uSwitch to extend their ecosyst
- 23. USE FULBR A N DSPLA Y BO OK .C O M - but away from those
three strategies of build, partner and buy, I wanted to talk to you
about another which is much more about how to do innovation along -
And for convenience Ive called it integrated innovation
- 24. USE FULBR A N DSPLA Y BO OK .C O M - And this is a strategy
invented by Steve Blank, which blends a process from about ten
years ago called the 3 horizons of innovation, with many of the
lean LEAN INNOVATION MANAGEMENT - STEVE BLANK
- 25. USE FULBR A N DSPLA Y BO OK .C O M - And it looks something
like this. - So, the 3 horizons of innovation first emerged in the
late nineties through the work of Bag-hi, Coley and White - On the
bottom of the diagram we have time, and how far off the innovation
might be in the future. And on the left we have value, which is
representa - Horizon 1, is about extending the core business
models. - Horizon 2, is focused on developing rapidly growing
emerging business models - And Horizon 3, deals with finding early
stage new business models - At the emphasis here is one
organisation executing ideas and thinking across all three of these
horizons at the same time. - Pushing for very near short term gains
and placing bets on innovations and future business models which
might be much further away.
- 26. USE FULBR A N DSPLA Y BO OK .C O M - And, zooming in a
little, I wanted to give you a practical example of what these
horizons might look like and show you how weve been putting this in
to pr - So, zooming in to horizon 1. This is very much about
developing fully known business models. - Innovation here is
focused on doing more around the core services the business already
has through sales, operations and process innovation. - You always
expect innovation here to be very execution led because youre
operating very close to the core existing business and can be
fairly certain tha
- 27. USE FULBR A N DSPLA Y BO OK .C O M - In real world terms
for our work with Hilton, this is a typical Horizon 1 innovation. -
This is a product called Hilton weekender. We have it in the UK and
US markets currently and are rolling out worldwide as we speak. -
The aim of this product is to intercept new customers for Hilton
further up the sales funnel by offering utility around city guides,
content and user generate - Its very much a departure from the
typical marketing they were doing, by launching a more lifestyle
led mobile and desktop product, but its working huge
- 28. USE FULBR A N DSPLA Y BO OK .C O M - Horizon 2, is about
what we call partially known business - This is really about
searching for new revenue and customer experiences, building
prototypes and validating which ones might have the headroom to sca
- Then we take that validated business model which sits outside of
the core revenue for the organisation and develop that in to a
large asset at scale.
- 29. USE FULBR A N DSPLA Y BO OK .C O M - In practical terms,
this is a Horizon 2 innovation were piloting for Hilton at the
moment. - Its a new post authentication wi-fi page which we
currently have in around 60 hotels across New York. - The idea here
has been to strike up new partnerships with other providers that
provide the guest with a really useful localised start page when
they first log - Here, weve got car rental APIs, live flight times,
ticketing integrations, weather forecasting and news content, all
available for the guest and of course, all o - I cant go in to
specifics on the revenue here, but suffice to say with over 300
million sessions per year globally this was a really under valued
part of the H - Were hoping to have this in 3 and half thousand
properties by the end of September.
- 30. USE FULBR A N DSPLA Y BO OK .C O M - And finally Horizon 3.
- Horizon 3 is about placing bets on distant and potentially
disruptive unknown business models. - So here, there ideas will
typically be very hard to do within a business existing
infrastructure, or market, but represent a revenue opportunity that
could
- 31. USE FULBR A N DSPLA Y BO OK .C O M - I cant talk too much
about all the projects were running in Horizon 3 for Hilton, but
one worth mentioning is a current exploration were doing to reimagi
- Many of you Im sure will know that this experience is currently
far from optimised, - and with a bit of imagination you can
probably guess the types of things were pushing towards without me
needing to spell them out!
- 32. USE FULBR A N DSPLA Y BO OK .C O M - so, thats a quick
overview of how the 3 horizons work in practice. - One thing worth
pointing out is that from a large organisation point of view this
strategy is great because it allows you to do innovation
continuously acros - So with Hilton, our near term innovations are
typically delivered with the marketing & digital teams who work
on the here and now. - Medium stage horizon 2 projects like Wi-fi
are co-developed with the new revenue development teams, but then
onboard operationally through IT - And horizon 3 is worked out
initially purely with new revenue development. - As an aside, for
the next Byte, Dominic whos our client at Hilton is going to be
sharing in a bit more depth the stories behind some of the projects
Ive sho
- 33. USE FULBR A N DSPLA Y BO OK .C O M - So, if the 3 horizons
are the vehicle, then lean tools are kind of the fuel for all of
this. - Many of you will be familiar with tools like the business
model canvas, value proposition canvas or sites such as lean
launchpad or lean stack - By combining these two methodologies you
have a pretty robust toolkit for exploration, validation and
execution in very rapid time frames
- 34. USE FULBR A N DSPLA Y BO OK .C O M - and again, this
combination of processes has been pioneered only recently by Steve
Blank. - Theres an article on venture beat which you can read in
the background where he talks about putting this strategy in place
with the US Government and
- 35. - So in summary then, how do you create a stronger
innovation culture? 1) By understanding that technology has changed
organisational models for the better and enabling people to work
creatively in less bureaucratic system 2) By placing faith in trust
and values over policy and procedures and 3) by understanding that
there is no strategy without a solid culture to sit in on top
of
- 36. - Finally, how do you design an execution led innovation
strategy 1) Again, by mapping a strategy to your culture and
understanding whats actually going to be an actionable mandate for
the type of organisation you are 2) Secondly, by blending tools and
methodologies. As I said, theres no one silver bullet, but there is
a ton of god stuff to test and learn on top of And thirdly, if your
a large organisation Id really encourage you to push for innovating
across the there different horizons Ive showed you today.
- 37. USE FULBR A N DSPLA Y BO OK .C O M So, thats all Ive got to
say. - delighted next to welcome Jeremy from Unilever - mentioned
three strategies > Build, Partner, Buy - welcome Jeremy from
Unilever Foundry to talk about brining innovation in through
partnering with startups.