That is rather a lot for a single post, and in fact, I’ve written a 350 page book on the subject for any one who wants to have the exhaustive details of how to do corporate innovation at scale.
But it is possible to summarise, I think, because everything you need to know about doing innovation happens in four stages.
The first is futurecasting. This is the process of working out what is likely to happen in the future so you can guide subsequent iterations of your innovation process. In the book, for example, I explain a specific futurecasting process based loosely on a scenario planning methodology, but anything that gets structured consideration of the future on the table is a good thing. Why is this important? Well, firstly, you can never ask a senior person for support on something new, especially if that new thing impacts current business or revenue, without rehearsal. They need time to think over consequences, and making them think about the future helps them do that. The second reason is that random innovation without a guide won’t always result in new things that solve the strategic problems of the firm. Out of the box thinking is all very well, but if you are not only out of the box, but out of the ballpark, it is usually not helpful.
So futurecasting is the first stage. The second stage is ideation.
Ideation is the process of collecting ideas and deciding how good they are relative to all the other ideas that you might have. The thing is, if you’re running a programme, you’ll likely have far more ideas than resources to execute them. So you have to have a way of deciding what you’re going to work on. Of course, if you’re still thinking that the answer to your innovation challenge is getting the good ideas, then you have some work to do. Ideas are everywhere, and usually all you need to do is find a good way of collecting them. Anyway, you’ll have more ideas than you know what to do with, so one of the main tools of innovation is a decent way to prioritise. Usually, people create various scoring systems to do this, but crowd based methods, such as voting and prediction markets work just as well.
The third stage is what I call the “innovate” stage, which is really all about the tools and processes you use to work out – in detail – the stuff that has to happen before an idea is actually fundable. Just because an idea sounds like a good thing and fits in with the priorities of an organisation, it isn’t necessarily something you can actually do. I was banging on about quantum computing and its use in financial markets for months before I worked out how far away usable hardware was, for example. Anyway, to get to the crux of the matter here, you need to answer three questions. “Can we do this?”, which is technically, operationally, and environmentally, is the idea actually possible. “Should we do this?”, which is primarily economic, i.e. can we afford it, and if we can, will anyone want it?. And, finally, “When?”, which is mainly about the response of competitors or internal players. Answering all that means you have a case which is a candidate for funding and delivery. As you’d expect, there are lots of things you do for each of those questions to get to decent answers for as little investment as possible.
Once you have money, the final stage is execution, which is all about building the thing and getting it out in the market. Key tools here include all the things you need to do to win over users, prove you know what you’re doing from an operational perspective (remember, its innovation, so its new, so noone will have made it work before), and a ton of other things. But I think the most important thing is you don’t even get to the Execute stage until you’ve done a substantial amount of ground work first.
Actually failure to all four stages is why I often make the observation that innovation programmes with their own large budgets usually fail. They don’t have to go through the rigour before they get to spend money, so invariably they spend money on the wrong things. Consequently, they also fail to get predictable in their returns quickly enough. Usually, at least in banking, you have 18 months to do that before your programme is killed off.
So, that’s my lightning summary of innovation tools in a corporate innovation programme.
In the meantime, some of you will likely be interested to know that I’m well into writing my next book, which I’m tentatively titling “One Big Thing”. Its all about how to use the tools of innovation to de-risk the situation people like founders and project managers have – one idea which just has to work. These are people who don’t get to spread their risk across a portfolio. They are laser focussed on their “one big thing”, rather than a corporate innovation portfolio. The consequences of failure are usually quite significant.
I’m also writing it in a much less academic style, with more interesting stories and far less focus on theory, than i used with FutureProofing. It is also not just about banking.
No idea on a date yet, but will keep you posted. I expect the manuscript to be done in about 4 months.
Update: Stupidly, I forgot to note that the whole of the first chapter of my book is online here, and it contains many more details about this stuff than I've written here.