Future Foundry LIVE: The Science of Corporate Innovation

4 min read
Feb 9, 2022 5:34:18 AM

Too many innovators sit around waiting for inspiration to arrive. 

They’re holding out for a game-changing stroke of genius - a “eureka!” moment, if you will. 

Luckily, that’s not how innovation actually works. In Episode #2 of Future Foundry LIVE, we dove into the importance of a deeply scientific approach to value creation, and what you need to do to make that happen. 

Begin at the beginning

Rather than leaping into solutions-mode, taking the time to consider the obstacles in your way will help you identify more quickly what you can and can’t feasibly do when trying to innovate. Common innovation-blocking culprits include a lack of time, a lack of skills, and a lack of data. 

Too much focus on optimising existing businesses, products and experiences can take precious time away from finding new ones. 

Added to that, too many companies try to innovate using their existing skill sets. What’s the issue with this? Well, if you always do what you’ve done, you’ll always get what you’ve always got. 

And lastly, that lack of data can prove fatal when innovation initiatives are pursued because of strong opinions, rather than concrete evidence. 

Lack of time, skills, and data – plus the myth that inspired genius = innovation – is a recipe for stagnation, frustration, and ultimately, failure. 

 

The solution? 

The scientific revolution, one of the most significant episodes in human history, has been the biggest single driver of improvement to our quality of life.

Prior to the 1500s, science had mainly been focused on affirming that actually, yes, we humans do know it all (spoiler alert: we definitely don’t!). Innovation, or discovering and trying new things, simply wasn’t on the academic radar. 

After the revolution, and over the last 500 years, we’ve achieved unthinkable scientific marvels from the discovery of microorganisms to the moon landings. 

For these things to happen, however, humanity had to…

  1. Admit its ignorance.
  2. Obtain new knowledge. 
  3. Turn that knowledge into power.

Enter the scientific method. Firstly, we begin with a research question – something we want to answer. Then, we develop a hypothesis – a theoretical answer – and conduct experiments to test whether the hypothesis is correct. 

We gather the results from those experiments, draw conclusions, and hold them up against our research question, to see what answer we now have. So how does this apply to corporate innovation?

Two Priests, a Widow, and Some Orphans

No, it’s not a Cards Against Humanity answer. Let’s head back to 1744, when two Scottish Presbyterian priests decided to instigate one of the first pensions for widows and orphans, to help alleviate poverty and reduce hardship. 

Alexander Webster and Stephen Robert Wallace had a research question.

How could they best create an insurance fund that would support priests, widows, and orphans with a pension? 

 

Their initial idea was that priests across Scotland would all contribute to the fund, which would be invested in securities. Then, when a priest passed away, dividends from that fund would go to their widow and/or children, enabling them to maintain their livelihood. 

Though this seems like a solid business case on the surface, there were a few key questions that needed to be answered for it to really be successful. 

How long did priests tend to live for? How much money was needed? How long would the widows survive their husbands? What about the lifespan of the orphans?

Enter Colin with the Good Hair*

To solve these questions, the priests turned to Colin Maclaurin, a professor of Mathematics at the University of Edinburgh. Together, they gathered the vital data they needed to be able to develop a strong case for the pension scheme.

Even though it was nigh-on impossible to predict when an individual priest would meet his proverbial maker, they were able to identify the death probability of a person at a certain time in their lives. They did this using a mortality chart, plotting trends over time that proved to be largely accurate.

Their hypothesis was validated. Maclaurin, Webster, and Wallace identified that they would need a £58,300 trust to support the widows and orphans of the Scottish Church. They had used the scientific method to mitigate risk, reduce uncertainty in their venture, and quickly take their idea to market. 

You might know the fund by another name: Scottish Widows. 

Applying the Scientific Method to Leaps of Faith 

Fast-forwarding from 1744, Facebook could be said to have used the scientific method to test two very large leaps of faith. 

  1. Can we build a large amount of people’s time and attention, for free, through viral growth?
  2. If we have that massive asset of people’s time and attention, can we monetise it by selling that to advertisers?

Eric Ries, author of The Lean Startup, advocates for the application of the scientific method when it comes to building sustainable business. 

Just like the scientific method, the corporate innovation method begins in ignorance, with a question that needs to be answered. 

From there, the steps are the same – identify your hypothesis and iterate quickly with experiments. Then, gather results, and draw conclusions, and begin the process all over again.

Learn, measure, then build

You’ve heard of this process – it’s known as an MVP. The science of innovation works when you work in short cycles, identifying as quickly as possible what it is that people are looking for, building a small piece of that product, testing it again, and then iterating towards delivering more of the right thing. 

The Magic Test

Can you sell magic? If you can, you should. A key factor in innovation success is to quickly confirm whether people will pay to have their problem solved. Don’t build a solution that people aren’t willing to pay for. 

Map Your Assumptions

The last key thing you need to do to make this work for you is to test your assumptions. Understanding (cheaply!) whether this idea is desirable, feasible, and viable is paramount. 

Running experiments to help you map out and confirm your assumptions about your idea is critical. Can we build it? Will anyone buy it? Get answers to these questions as quickly and inexpensively as you can. 

One Powerful Question

There’s a wealth of corporate advantage to getting stuck in with these methods, and the approaches have tangible positive knock-on effects (better business reputations, a higher degree of trust, engagement with and access to customers, working capital at your fingertips) – but the key, as with all things, is getting started.

One question we like to ask our clients to ask themselves is:

How might we…?”

What pain could you solve for customers? What job can we help them do better? Now apply the scientific method. Eliminate risk. Prove your business case – and do it all over again.

Innovation really is more science than art, but if you need support doing new things in your business, we can help. Get in touch, or book a demo now.

 

*You do need to watch the episode for this one 👇.