Digital Innovation & Transformation Hub

The Digital Innovation Hub was an innovation summit organised by the hhub to connect innovation leaders that took place on January 25/26 and brought together innovation leaders in London.

Mixer collated insights from the conference organised in three sections:

• Best Practice / Key Takeaways: Innovation techniques and procedures that were consistent across talks.
• Approaches to Innovation: Different programs created to spur innovation presented at the conference.
• Challenges & Questions: Address challenges and questions brought up by attendees.

Best Practice & Key Takeaways

Understand corporate DNA - don’t be a startup, be a corporate, but be more ‘startup-minded’

• Bring legal, finance, HR early into the conversation and involve them in the process -> setup Steering Committees if required

• The right way is what works for YOUR business

• Nobody owns innovation

• Biggest risk is not failure, its fear of NOT succeeding

Define Purpose

• E.g. Vestas –> securing competitiveness of wind energy

• E.g. Moleskine –> designs & manufactures objects for creativity

• E.g. Direct Line Group –> we are fixers

Open up to partners

• Build an ecosystem, don’t just make partnerships a brand extension

  • E.g. Thomas Cook Money partners up with leading VCs in the valley such as Greylock, A16Z, Sequoia, Light Speed Ventures

  • E.g. Lloyds partners with think-tanks (Innovate Finance), government agencies (Innovate UK, FCA), Incubators (FinTech Innovation Lab)

• True collaboration is key -> a bridge is a two-way street

  • E.g. Moleskine & Evernote / Adobe

• Attract best entrepreneurs in the world -> focus on 5-6 that want to make it happen

Truly ‘know’ your customer

• Deepen your understanding of what your customer really cares about e.g. Moleskine defines its user as the contemporary nomad

• Disrupt everything but the customer

• Since marketing sits closest to the customer, it’s really important to link innovation and marketing e.g. Direct Line Group

Test & Launch – “Do or do not, there is no try” -Yoda

• Think iterative, not waterfall

• You can have an idea of the impact but you cannot really do business cases in the early phases

• Rather, focus on low-risk / low cost experimentation to gain support and executive buy-in before taking bets on high-risk or moonshots

• Be prepared to change business model

• The objective of a POC is to prove something and validate or invalidate business assumptions -> define success criterion (all pass, all fail, a mix of pass and fail)

Manage innovation as a portfolio (define risk and uncertainty levels)

• Types of uncertainty

  • Technical

  • Market

  • Resource

  • Organisation

• It is not how much you spend, but how you spend your money

  • Try and set aside a pot of money

  • Innovation happens when there is a problem to solve

  • Understand which technology to bet on

    • E.g. Vestas focused on hybrid solutions (wind + solar, wind + storage, wind + solar + storage)

• Learn in increments to reduce uncertainty

• Look at digital portfolio as a portfolio as well

• Go wide to go narrow

Idea crowdsourcing can be very powerful

• Ideas should come from everywhere / idea concentration is negative

• All of the top companies use crowds to help prioritise and evaluate ideas

• Number of ideas is not the most important factor; Voting has a stronger correlation to net income growth than the number of ideas

• Collaboration and participation in ideation creates a multiplier effect

• Transparency is key in the process

Hacking corporate siloes is key

• Org structure:

  • Core team

  • External collaborators (startups, entrepreneurs, experts, strategic partners)

  • Internal collaborators (divisional and functional heads)

• Keep the team lean and agile - limit core team to must have capabilities to stay flexible and focused

• Exponential organisational - allow for horizontal and vertical scalability through short-term assignments

• Liquid workforce - create a flexible, adaptive and rotating workforce within a fluid innovation project delivery

Cultural transformation is the hardest bit

• Tech is stuck in 1998, product is from 2008, and organisation is in 1938

  • Need to re-imagine the way we run our businesses

• Different strategies to spur creativity

  • Bring the outside:

    • e.g. Lloyds runs Digital Espressos to give people an opportunity to share ideas

  • Take the inside out

    • organise trips to the innovation hubs to spur curiosity

  • Create experiences

    • internal hackathons can help

  • Create slack in the system (space to think)

  • Call leaders organisational engineers

  • Transparency and trust are “real” catalysts

  • Need to build a continuous learning culture

  • Diversity allows for serendipity

  • Teach innovation thinking

  • Empower and delegate

  • Break down siloes and create cross-functional teams

Communication is essential

• • Build a narrative around innovation e.g. Impossible is POCible (Thales Group)

  • Be visible e.g. pay for lunches

  • If you don’t communicate, people will forget

  • The language you use about innovation is really important

Good Quotes

• I’m looking for a lot of people to have an infinite capacity to not know what can’t be done

• Do you want to ‘do things better’ or ‘do better things’?

• Innovation is 50% serendipity

• Delivering innovation is like delivering a baby

• Innovation is about belief

• Without impact, innovation is just an idea with a promise

Other Thoughts

• Innovation is a top priority for 25% of the global CEOs and one of the top for 85% of global CEO’s

• Innovation pays off - Top 10 most innovative companies outperform the Top 10 R&D spenders

  • Revenue growth (5-year CAGR) – 50% vs. 40%

  • EBITDA as a % of revenue (5-year average) – 69% vs. 40%

  • Market Cap growth (5-year CAGR) – 65% vs. 49%

• Important Innovation skills

  • Collaboration skills

  • Critical thinking

  • Risk taking and management

  • Ability to look at innovation from different angles (customer, technology, product, industry)

• Six stages of an idea

  • Explore - proof of concept

  • Feasibility - prototype founders

  • Build - MVP

  • Validate/Pivot - market testing

  • Growth - product scaling

  • Maturity - optimise

• Be careful before opening up innovation platform to ALL customers

• Building blocks for a sustainable innovation capability

  • Organisational readiness

    • Innovation calendar

    • Innovation board

    • Innovation manager

    • Innovation budget

    • Innovation catalysts

  • Idea pipeline

    • Idea management

    • Idea crowdsourcing

    • Innovation accelerator

    • Open innovation

    • Innovation teams

    • Innovation workshops

  • Support network

    • Best practice networks

    • Tech scouting / watching

    • Exprety consultancy

    • Intellectual property management

  • Innovation is everyone’s job

    • Innovation training program

    • Recognition mechanism

    • Personal and team objectives

    • Time to innovate

  • Tools and methods

    • Prototyping tools & methods

    • Research tools & methods

    • Creativity tools & methods

    • Innovation handbook

  • Creative working environment

    • Innovation Lab

    • Mobile Innovation Lab

    • Collaboration zones

    • Environmental triggers

  • Corporate pull

    • Innovation Process

    • Portfolio Management

    • Competitive Intelligence

    • Innovation Scorecard

    • Scenario Planning

    • Customer Needs

    • Strategy & Goals

    • Technology Roadmap

    • Internal Marketing & Communications

Approaches to Innovation

Noteworthy Innovation Programs / Initiatives

• Bayer’s G4A (https://www.grants4apps.com)

• BT Infinity Lab (https://www.btplc.com/btinfinitylab/)

  • Since 2013, have run 12 competitions and reviewed 800 companies

  • Physical lab in partnership with TechHub community

• Moleskine Open Innovation (https://openinnovation.moleskine.com/)

• Barclays RISE program (https://thinkrise.com/)

  • Started in 2014, now spread across 7 global sites

  • 14 enterprise scale productions till date

• Thales Digital Factory (https://www.thalesdigital.io)

1/ Vestas Approach to Innovation

• Define Innovation Vision:

  • To bring new commercially relevant ideas in a profitable way, enabling Vestas to fulfil its vision: Global Leader in Sustainable Energy Solutions)

• Define Innovation Mission

  • Build a portfolio of incremental, next generation and breakthrough innovations through rapid exploration and incubation of new ideas fostering external partnerships, and a strong innovation culture

• Define Key Pillars

  • Apply commercially relevant technologies, leverage the world, manage as a portfolio

• Define Foundation

  • Innovation culture, Innovation as a discipline

2/ BT Open Innovation Platform

• Global scouting, Infinity Lab & Innovation Martlesham

  • scan the globe for new ideas from VCs, startups, partners & competitors; Identify trends and threats

• Innovation central & new ideas

  • Develop propositions to validate business case & identify new ideas

• Applied Technology Centre

  • concept demonstrations, rapid prototyping & testing, strong user & customer focus

• Customer Centre & Innovation Showcases

  • showcase new ideas and concepts

• Hothouse Team

  • bringing everyone together for rapid acceleration

3/ How Thales Group runs internal POCs

• Four-step process for Digital POC factory:

  • Scan (1 month)

  • Focus (1 month)

  • Act (5 months)

  • Select (1 month)

• Criterion for POC selection: 5+5

  • Potential business Impact

    • Compelling value proposition

    • Market traction

    • Value cost trade-off

    • Efficiency / Revenue / Margin impact

    • Game changing

  • Digital cultural change

    • Clarity of the business problem

    • Scope of the PoC

    • Defined expectation of success

    • Lessons learnt

    • Digital way

• Key benefits of Digital POC Factory

  • Digital POC Factory initiative is a strong catalyst to develop a “test and learn” mindset

  • The approach provides the opportunity to leverage internal existing digital assets and reveal digital champions internally

  • Helps put the emphasis on game-changing ideas

  • The pitch exercise helps to develop storytelling skills

4/ How Visa scales Digital Innovation

• Step 1: Create experience models for all your products

• Step 2: Create design systems that users experience

• Step 3: Create inclusive co-creation environment that integrates digital thinking

Challenges & Questions

How do you get people to participate in crowdsourcing initiatives?

• Contribution is reward -> make ideas visible

• Be transparent -> explain the logic for idea selection and provide feedback

• Pick sponsors across the organisation that are well known

• Good communication strategy for internal POCs -> e.g. KISS campaign (Keep It Smart and Simple) by Liberty Global, Impossible is POCible by Thales Group

How do you demonstrate impact if you do not have management buy-in?

• Start small, with whatever budget you can accumulate from Line Manager (e.g. Barclays started with £250,000 from Line Manager to avoid getting stuck in bureaucratic mess) -> think Shawshank Redemption, chisel vs. hole in the wall on Day 1

• Partner-up and bring experts in at a low cost

• Prove value quickly (e.g. Airbus executed first internal innovation program in 3 months -> identified 5 teams that got funded)

What skill- sets do you look for in the innovation team?

• Ventures team

  • Investor spirit

  • Entrepreneurial DNA

  • Tech geeks that are human-centred

• Accelerator team

  • Can challenge startups

  • Understand corporate needs and are good at stakeholder management

How do you get employees to participate?

• First stage - spare time w/ small budget and full autonomy for 3 months

• Second stage (once proven concept) - dedicate small percentage of work time (10-15%) with medium-scale budget for 6 months

• Third stage (concept can scale) - dedicate significant percentage of work (50-100%) with significant resources and team at disposal

Do cash reward incentives increase participation?

• • Upfront reward doesn’t work -> need to figure out the right recognition for the the right audience

  • Quality of ideas more important than quantity of ideas