On pilots and prototypes

I found another bank innovation team the other day that spends its life doing pilots. Now, don’t get me wrong. That is a perfectly good way to make innovation investments. Pilots are an important outcome of the innovation process because they let an institution “suck it and see” before they take whatever-it-is to a broad base of customers.

But I was struck, when talking with this group of innovators, by the fact that they were confusing the terms pilot and prototype. It is a mistake that so many people make.

There is only one reason to run a pilot: to get learnings about how to operate an innovation before you put it in the hands of customers or end users. Pilots are about trying the innovation for real and making sure that everything works. They are about preparing to scale up to production.

However,  a pilot is not a technology experiment to see if people will “like” the service.

A pilot is not a proof point that whatever-it-is can be made to work in the first place.

Neither is it a sales tool used to help win funding.

These are the roles of a prototype, which is a small demonstration of the doability of a new innovation.

Prototypes are good for resolving technical and political ambiguity. They are small, hardly functional, demonstrations of what something could look like if it were built. Or they are experiments that show that the process or technology involved can work in this new, novel way.

And, of course, they are entirely throw-away, since they don’t do anything very useful, other than illustrate one, specific point.

The mistake that some innovators make when they confuse a pilot and a prototype is they commit significant resources to building something for real before they have achieved agreement that whatever-it-is will go ahead.

This point seems not to be obvious, and I have to admit I’ve made the mistake myself. I continue to do it whenever I let my excitement with something new run away with me.

But in the end, asking a simple diagnostic question is helpful. In order to win this funding, what is the minimum I have to do?

Most often, the answer is provide a few static screen shots or a proof point that whatever it is that’s novel works.

Since, most of the time, things will not go ahead, spending as little as possible up front results in far more innovation being possible in the long run.

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