10x your innovation results in a week

Years ago, I started working with a company just as a private equity firm bought it.

Based on the downward trajectory of the clients category, a bleak revenue outlook and struggling EBITDA, the firm overpaid by an order of magnitude. But they weren't there to cut costs, improve margins and flip it. Instead, they believed that the brand had enormous untapped potential for growth beyond its core business model, and the partners felt that when this future growth was considered, they'd bagged a bargain.

Over the next 12 months, acutely aware of the time pressures facing them and the promises they'd made to their own investors, the firm bombarded me and the company's venture team, who were tasked with unlocking this growth, with random links to consumer research, half-baked ideas for new products and services and startup pitch decks. The emails, texts and calls became so frequent that we had to appoint someone on the staff just to handle the messages, sift through them and summarise them for the team.

We spent that year serving our new paymasters by looking through hundreds of trend reports, assessing dozens of erratic ideas and sitting through dozens of aimless startup meetings.

We achieved nothing, and as a team, we were:

• Directionless: Inundated with so many potential growth ideas, we went down incalculable rabbit holes trying to explore them all.
• Overwhelmed: We spent more time managing the private equity firm and other senior stakeholders than what we'd been hired to do.
• Thinly Spread: We were a small team of twelve (3x entrepreneurs in residence, 3x researchers, 3x designers and 3x engineers), and we simply couldn't do a good job of everything being thrown at us.

We knew something had to change for the good of the team, the investment the PE firm had made, and the business at large. We needed a coherent narrative for where growth was likely to come from, a plan for directing limited financial and human capital to the right areas and guardrails around where we would and wouldn't spend our time.

Being investors, we knew they'd be familiar with the concept of an investment thesis -  they had one that specified the types of companies and markets they invested in. Surely we needed one to determine the types of territories, opportunities and ideas we'd invest time and money into?

So, we shut ourselves away for a week before a scheduled meeting with them to develop what later became known as our Growth Thesis.

• On Monday, we mapped the company's business model as it existed today to understand which revenue streams were in decline.
• On Tuesday, we did a deep dive into the market trends, industry forces and economic shifts driving this disruption.
• On Wednesday, we synthesised the trends, forces and shifts we'd identified into concise, single-sentence problem statements that everyone could understand.
• On Thursday, we prioritised three of the 20 statements and turned them into growth territories based on their imminence, our ability to play and potential payback periods.
• On Friday, we used those territories to create our growth thesis, a strategy that set out which growth territories we would invest in and a plan for identifying, developing and validating relevant new propositions.
  

The following Monday, we came back to the usual inboxes full of trend reports, ideas from the firm's partners and more press clippings on interesting startups - but we also came back with a renewed sense of focus, purpose and calm, and we walked them through:

1. Where the business is today
2. Which parts of the company are in decay
3. Which emerging trends, technology and customer jobs are driving this decline
4. What that meant in terms of threats, opportunities and competitive arenas
5. How we felt the business could best capitalise on these shifts
6. Our three territories of focus
7. A vision for what the company would look like if we succeeded

They signed off the plan, and we reorganised our three teams so that they each focused on a single growth territory for the year.

Over the next 12 months, we identified 300+ new business, product and service opportunities, developed 100+ propositions and experimented with around 20 of them in the wild. We successfully validated and found product-market fit for 5 of them, and over the next three years, 2 of those propositions made up 20% of the company's revenues.

We still got the emails, calls and texts - but they were helpful now rather than distracting and aligned with the growth thesis we'd signed off together.

If your innovation efforts in 2023 have felt stop-start, random and haphazard - do yourself a favour - lock yourself away for a week before 2024 hits. Assess what's going around your business and develop your own growth thesis. You'll deploy precious financial and human capital more efficiently, leverage the assets of your core business more effectively and rally everyone who matters around what you're trying to achieve as a team.

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