In part 1, we discussed how emerging technology can take several decades to become mainstream and deliver on its commercial promise—highlighting touch screens, voice recognition, and machine learning as examples. Now we want to dive into turning innovations into realities.
In our experience in building a corporate innovation function over the last five years, we have learned four important lessons on how to achieve practical, methodical innovation that leads to better ROI—and allows you to move quickly.
Be sure you are solving a pervasive issue and not one that is so unique to a small subset of customers or clients that it can’t become profitable. Some of our earlier innovations at West Monroe, while groundbreaking in their own right, didn’t pan out as expected because they were specific to the needs of a handful of clients—and that need passed. We were years too early on the alternative energy revolution and built a solution that was largely custom suited for the needs of a single (albeit, large) client. We had high hopes for this asset to have broad market appeal, but as hard as we tried it never hit the growth trajectory we projected in the early business plans.
We have since learned that more research, market testing, alignment to firm strategy, and clarity on the root issue being solved has led to innovations that have a much broader market appeal or pervasive nature, as well as shelf life. Along those lines, technology-led solutions are challenging to retrofit to a root issue or market need after it is built. We learned this the hard way. We have fallen deeply in love with emerging technologies but couldn’t even give away our services – it took almost a year for us to realize that it was time to put it on the shelf.
Surprisingly, more than half of the time and energy spent by our corporate innovation team is on communications such as email, intranet content, firmwide announcements, team meetings, leadership 1:1s, you name it. Innovation requires ideas. Ideas require collaboration. And collaboration requires people.
Frequently and consistently communicating innovation processes and, most importantly, how to get ideas into the funnel, is key. We are constantly improving our transparency and articulation of idea selection criteria at each phase. That way, when some ideas are funded and others are not, teams can understand why and not feel discouraged. As an example, it’s imperative that our innovations fundamentally relate to our uncommon blend of business savvy and deep technology expertise.
At West Monroe, ideas are required to have an executive sponsor. This person champions the idea and facilitates difficult conversations across the organization. Disruptive ideas that change the way people work or engage with customers take time to socialize until they are ready for adoption. We then partner them with a top-notch emerging leader who is a functional expert. The tag-team gives the sponsor enough latitude to play the role of champion across the organization while the functional expert focuses on driving the innovation project forward, “boots on the ground.”
However, the weight of an innovation project can’t fall completely on their shoulders. Early collaboration with back-office functions will help to avoid potential idea killers down the road—after time, capital, and mental energy have already been heavily spent. These experts ensure we catch the naysayers early on and help us account for additional funding. Our innovation projects have SWAT teams made up of representatives from marketing, finance/accounting, legal, and talent development (to name a few) that ensure we can be successful with:
Patent or trademark management
Change management and training
Financial analysis and funding procedures
Accounting for tax implications
Sometimes we pursue an innovative idea with the intent of developing a marketable offering. Other times we pursue an idea simply to learn – such as testing out how a new partner ecosystem works, applying a new technology to use cases in our core industries, or dabbling in an adjacent market segment. Knowing the intent going in helps to better define how much we are willing to invest, what our threshold for failure is, and how to structure intermediary milestones to evaluate progress.
Once we are clear on the intent, we set specific milestone objectives for funded teams and hold them (and ourselves) accountable to achieving those objectives. For example, a recent innovation team had a hypothesis that we could apply blockchain technology to a transactive energy scenario in the utilities vertical. A condition of their funding was to find a willing client that would allow us to partner with them on the project, keep intellectual property resulting from the project, and jointly author a few pieces of thought leadership. Another recently funded team is developing proprietary software—the investment is higher and the objectives are different. If teams don’t meet their objectives or we find that we have learned all we can from the opportunity, then we cease the reallocate resources (capital and people) elsewhere. Sounds straightforward on paper, but this is the most challenging of the lessons since it impacts our people the most. This is where we rely heavily on the groundwork laid in all the lessons above to ensure that participants have a solid understanding of the process, the criteria to proceed, and expectations on when we pivot, punt, or persevere.
Remember, running an innovation function is a marathon, not a sprint. Innovation investments take time to mature. It’s easy to lose sight of the forest from the trees when you are mired in the internal politics of launching a new concept, product, or service. Running a practical corporate innovation function means keeping the big picture in mind and moving quickly enough to make progress, but not so fast that you’re missing critical checkpoints. It’s also more about the portfolio mix of ideas than finding one money-maker: Not every innovation is going to be a home run, and some are going to be more successful than others (often this is by design). That should be expected and accepted as long as you heed lessons learned that ultimately strengthen the portfolio and your innovation processes over time.
Feeling the pressure to innovate is normal—if you didn’t feel it, you wouldn’t be making progress. On Innovation Day this year, we’re proud of how far West Monroe has come in being a practical innovator for both our clients and our own firm. But we’re nowhere near satisfied.