How to Scale New Innovation Initiatives

How to Successfully Scale Innovation Initiatives Like a Pro

In this article, were exploring one of the biggest frustrations we see in corporate innovators – and believe us, we’ve been there!

So, you have the capability to identify exciting opportunities and validate new ideas. Great! The downside, however, is that nothing ever sees the light of day, because you can’t get new innovations to market.

If that’s enough to drive you a little loopy, you’re in great company.

Good assumptions

First things first. Let's assume that we've:

• done some horizon scanning to identify some interesting innovation opportunities,
• captured those opportunities as kind of our “might we?” statements,
• done some external research on how valuable the opportunity is,
• some internal research on how difficult capturing value is going to be,
• used that to assess each opportunity and map it based on its value creation potential, and its likely difficulty,
• turned those into a balanced roadmap of opportunities to go after,
• designed some value propositions in one of those opportunity areas,
• articulated an underlying business model that was called out and matched what the riskiest underlying assumptions are, whether they relate to desirability, feasibility, or viability,
• and (finally!) designed some experiments to run, in order to test those assumptions and check that they are, in fact, desirable, feasible, and viable.

Phew.

So you’ve done all that – gold star for you. Now, in theory, this scaling part should be the easy bit of your job!

But in reality, when the rubber hits the road, you’ve only got a ten percent chance of success. Only one out of every ten makes it to market, and becomes a profitable piece of the puzzle. Why is it that this happens, especially when you’ve ticked off that mammoth task list above?

Welcome to Innovation Island

We hate to break it to you, but too many innovation teams are operating as islands. If you’re working in any sort of silo, all that hard work you’ve just carried out is likely to fall off a cliff.

Now, to reassure you – those islands aren’t necessarily of your own making!

There are a number of tensions (ten, to be precise) that strangle your chances. These emerge from the fact that innovation teams and other teams are deliberately designed to operate on different paradigms.

Tension One

Culprit #1 – your business’s business model. Most businesses operate on a very defined business model, day in, day out. The models are managed, tweaked, and streamlined for eye-watering levels of efficiency.

These models like proof and results, whereas much of your work, even when it's validated, is still largely unproven. If you’ve felt your corporation being dismissive of new ventures, products and services, the threat to day-to-day ops is likely behind it.

Tension Two

In a highly regulated industry? Then the issues at hand might not stem from your business model, but from the certified set of external partners that come in to execute on your behalf.

Unfortunately, when those key partners are sourced by traditional procurement teams (who don’t really do innovation), the only thing that gets executed is the idea itself (and not in a good way, either).

Tension Three

Ah, tension – thy name is governance! In most companies, governance and authorisation come from the top down. We see this lead to a massive number of innovation issues, including death by committee, or suffocation by silo.

Innovation teams move fast – and often, it’s getting sign-off in a timely manner that can cause innovation inertia, instead.

Tension Four

How do you make your success make sense if your metrics mean something different to your core team? And it’s not just the metrics themselves that don’t measure up, it’s the time frame you view them from.

Traditional corporations tend to take a shorter-term, lagging view of success. If you’re an innovator, you should be looking for leading indicators instead, moving away from short-term revenue gains as a measure of success, for example. Shifting from focusing on lagging to leading measures can be horribly jarring for most financial people that exist in the core business: hampering your innovation efforts.

Tension Five

Is your business using complex, Sellotape-sticky legacy IT systems? Yeah, that’s going to cause innovators some frustration. Where we love lightweight, cloud-based services to manage us, Chief Information Officers tend to get nervous about using unfamiliar systems, without even touching on the friction that internal policies can cause.

Tension Six

How do you reward innovation? This is a subtle one, and not all rewards were made equal.

For many businesses, the rewards matrix is bonus-based and departmentally driven by those lagging metrics we wailed about in Tension Four.

In the world of innovation, we were more likely to be rewarded (or should be!) with some kind of equity in our portfolio or in its valuation. Of course, that’s much harder to define and predict as it requires a psychological switch to measuring and rewarding progress against those leading indicators of success.

Tension Seven

Tension Seven has everything to do with branding. Now, that might take you by surprise, but think about it this way: there are departments in your business (PR, marketing, even risk and compliance!) that are doing everything they can to protect its brand

But when innovators come along – all we want to do is take that brand and leverage it! It could work out brilliantly, or it could potentially damage the brand – but innovators in experimentation mode with the business’s brand could make a lot of people very nervous.

Tension Eight

Innovation culture and core business culture are sometimes fundamentally at odds. Looping right back to Tension One, the MO of any core business is to eliminate risk – whereas our MO is to ask that risk out to dinner, embrace it, and then reduce it through learning and experimentation.

This can be profoundly jarring for colleagues and teams who don’t live on Innovation Island – not least because there can be a real language barrier here. When we talk about throwing things away, experimenting and taking risks, we have to remember that our colleagues in other departments can have very different interpretations of our words.

Tension Nine

This can be largely summed up as asking someone “how many hats do you wear?”. In most core teams, the answer is likely to be just one, as with HR or Finance – and that’s fine! When it comes to innovation teams, however, we’re much more likely to wear lots of hats – something neatly summed up as being a ‘T’ shaped role. Taking an entrepreneurial approach, you’re likely to have a breadth of skills and a specialism in something, which can be hard for core teams to wrap their heads around – making recruitment for these roles more than a little tricky.

Tension Ten

Our final tension is a doozy – poor leadership. In most big companies, the people who occupy the top seats tend to be managers. Ironically, despite spending so much time in the top seats most managers don't always feel a huge amount of ownership – whereas, in innovation teams, we do.

When working in innovation, it’s very easy to get protective of our ventures. This can cause the opposite effect in managers, who get dismissive instead.

Explore vs Exploit

There are two broad categories in any innovation process: exploration, and exploitation.

The exploration phases are familiar to you! This is your opportunity identification, and your idea validation stuff – the stuff that, as an innovator, you love.

The second category of the process – exploitation – involves initiative scaling, and business growth. This is where innovation teams can sometimes be less sure of themselves.

Oh, Look! It’s the Valley of Death!

The riskiest bit of any innovation process is easily phase 3. This phase, where the exploration approach shifts into the realm of exploitation is where most new initiatives break down – and this is because these two fundamentally different worlds are coming together for the first time.

Put it this way: when we’ve validated our concepts, we want to hand them off to the core business for phases three and four.

Your core team obviously knows how to grow a material business, hopefully having done so for years, right? But it’s that handover phase from innovation team to core team for initiative scaling where things break down massively – aka “The Valley of Death”.

Help!

To avoid this, innovation teams need to get really, really good at that first phase of the exploitation process: finding those first customers, getting into a rhythm of regular releases, and conducting long-term analysis.

If you don’t do this, you risk being the victim of a painful, slow journey through unfamiliar territory that results in a) nothing! or b) a weird, miniature version of your original idea.

So how can you clarify whether you are, in fact, in the Valley of Death?

Diagnosis made Easy

Ask yourself the following:

1.  What real-world monetary value has innovation created over the last 3-5 years?

This will sound harsh, but if it’s not between 5-10% of the company’s revenue, then it’s failing. The innovation team isn’t scaling and getting things to market effectively.

2.  How often are validated ideas funded and staffed in your organisation?

If it’s not 90% of the time, and these validated ideas and business cases are racking up, then you’re failing, and you have a scale problem.  

3.  How much time do you spend fighting for survival and permission, instead of scaling your validated ideas?

If it’s more than 10% of your time, you know you’ve got a big issue here as well.

Underlying Causes

If you’re identifying with any of the above, there is good news – once you know why you’re going wrong, you know what you need to address. So why is your innovation team failing?

1.  You’re not validating ideas properly.

There’s no chance that you’re going to get funding to take your idea to market unless you have real-world evidence that it’s desirable, viable, and feasible. If you do by some miracle get funding for an idea you’ve not tested and it goes to market and fails there, then you can also wave goodbye to any future investment, too.

2.  Lack of regular budget and/or bad budget management.

The second reason teams fail is because your ideas validation stage just isn’t getting enough funding – or you only get part of it. Validating ideas should be relatively cheap, and for this to succeed, you need to be in control of the budget that you spend on validation. For innovation to work, that budget must also be a yearly investment on the part of the core business.

Think of these budgets as VC angel and seed funding – for the business to scale, you’ll need access to series A funding, too. This funding needs to be set aside in the business and protected, so that you have access to funds that you can invest in the winners that emerge from your validation phase – otherwise you’ll spend all your time fighting for funds that might not be there.

3.  You need more T in your team.

As mentioned earlier, start-ups and entrepreneurial approaches need T-shaped people, who can wear lots of hats and understand multiple different disciplines.

Ideally, you’d have access to people with design, engineering and product skills who can help you once you get to that scaling phase. Folks like this can be rare in corporate settings, though, for the reasons we discussed in Tension Nine, and getting recruitment for these hires onto the roadmap can feel like an uphill struggle.

4.  You’ve overlooked the boring stuff.

Look, we know you didn’t get into innovation for the mundane managerial stuff like KPIs, HR requirements, metrics tracking governance struggles and more – but you just can’t overlook these things.

Building something is tough, yes! But marketing your new venture, growing a team around it, taking it to market, and ultimately transitioning it into the business are all vital components of innovation that we sometimes forget to consider before moving into the exploitation phase of the process.

5.  Culture shock and paradoxical paradigms.

Some stuff is easy to do on Innovation Island. You don’t necessarily need to work externally with other teams when you’re identifying opportunities, testing ideas, and validating them.

You do, however, need to create a solid, productive partnership with your core team, so that you can become brilliant at initiative scaling and survive the switch from exploration to exploitation.

Innovator, Cure Thyself!

Now that you have all this knowledge – how are you going to scale more effectively? Well, the good news is that Future Foundry has finagled an almost-failsafe way for you to scale within your organisation and avoid a bunch of issues doing so.

The process – a two-sided, eight-step cracker! – is complex, yes, but as we can demonstrate below, makes a lot of sense once visualised.

The top four areas building, marketing, growing, and transitioning – are that much more successful when they’re underpinned by good governance, reporting, people, and collaboration – and it’s that last word, collaboration, which is critical.

The Collaboration Model

For initiatives to scale well, it’s essential that innovation teams and core teams collaborate effectively – and the opposing paradigms that innovation (agile, build-measure-learn, thrive in the unknown) and core (process driven, zero-mistake DNA, predictability emphasis) teams work within can make that tricky.

To play nicely together, you need to create some common ground:

1.  Establish why you’re doing this.

What are the benefits of what you’re doing for the customer? Why are you doing what you’re doing? What evidence do you have? What will the business impact be? How will this create long-term growth? Answering these questions together will help to create strong alignment between your teams.

2.  Explain and understand all expectations

Often, core teams can feel concerned or threatened by innovation. Understanding the shared risks and challenges will help people to feel heard. Plus, clarifying what the expectations are from each side – from assets to access to the customer – gets everyone on the same page from the get-go.

3.  Figure out how both teams can work well together

From long-term roadmaps to weekly check-ins, you need to set out some processes and procedures that will outline how you achieve success, and a comprehensive kick-off is non-negotiable.

If it helps, think of this as operationalising your approach, and consider things like practical work rules, protocols, and contingency planning, not to mention senior team involvement and plotting this work against your overall business roadmap

Key Takeaways

So what are your key takeaways for initiative scaling success?

Recognise that you’ll never go straight from idea validation to launch!

Accept this, go through the grieving process, and then commit to getting really good at initiative scaling. You can’t skip this process, so make it something you’re brilliant at, instead.

Clear up validation, budget, team, process, culture, and complexity issues before you start!

This helps you avoid the dreaded GIGO – garbage in, garbage out. If you don't have a rigorous method for testing ideas, protected budgets, a team that’s capable of scaling, or even permission to do so, you’re going to get nowhere.

Realise that you can’t build, market, grow and transition without good leadership.

Part of innovating is doing the boring stuff. Take ownership of establishing governance, set up reporting, involve HR, and get great at bridging the gap between the innovation and core paradigms.

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And if you’re feeling overwhelmed, we get that too. This work is like eating an elephant – best done a bite at a time. If you need a hand with getting going, book a call with us to chat things through.

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