Building an Innovation Ecosystem with Northumbrian Water’s Innovation Team

Good. So, hello everybody. For those of you who are already here, I think some more will trickle in. I think next time we might open actually the room up five minutes earlier. Let everybody come in. So we have a great session today about innovation readiness and we have special guests Tenday is going to introduce in a second and we're going to look at a couple of tools, but not just in theory, how they were applied with our special guests. So hosts today, Tenday, Vicky, who you know, and myself, we always like to present our two books. Tenday always likes to turn this into a competition, which one is selling better. So we'll let the audience decide. I always think that you need both anyway, so you don't have to choose. You just go to your favorite bookshop, online or offline and get both of them. Now, Tenday, I'll let you quickly introduce our guests today.

Yeah. So thank you everyone for joining us and really honored today to have two guests from the Northumbrian Water company from the uk. We've been working with them to assess their innovation ecosystem. So on the call with us today is Angela McOskar, who's actually the head of innovation for Northumbria. Want to say hello, Angela.

Hey everybody. Great to be here today. Thank you for the invite.

Thank you. And then, yeah, Angela's colleague Nigel Watson, who's the group information service director at Northumbrian Water, who also helps Angela drive the innovation ecosystem there. So, hey, Nigel.

Hi, good to see you again. Tendayan, lovely to meet everybody else.

Great, great. Thank you so much for joining us and we look forward to having a conversation with you. Over to you back, Alex.

Okay. And I'll already answer one of the questions that comes up a lot. You are going to get the recording. We have a lot of people who sign up and then watch the recording later. So these events are always sponsored by some of our products. So here you get a discount promo code on the Testing Business Ideas virtual masterclass with David Bland will be leading it and I will be co hosting with him. So if you're interested, sign up for the Testing Business Ideas. We really go deep, deep into the techniques of how to test and de risk business ideas. Now let's get started with the content for today. The theme is innovation readiness and in particular the assessment of innovation readiness. But now let's look at a quick statistics number out there in recent Accenture report. We'll take this as a proxy. They studied how many companies have extensive innovation governance and if you look at it, it's actually very few. Only 12% have innovation governance. 88% don't. Now, a lot of companies, as you can see in the next five years, they plan to invest more in innovation. And one of the things to really make sure is you understand where you have strengths and weaknesses today when you move towards innovation. And that's what innovation readiness is all about. But if we take this as a proxy, do you have strong innovation governance today? We'll actually just throw up a quick poll to see what's the case in your organizations. Do you have strong innovation governance or not? And if you are a coach or consultant, please pick a company that you work with or for as an advisor, Gab who is in the background always. Thank you Gab already for making this possible, otherwise we wouldn't be here. Maybe you can throw up the poll for us, the first one, which is all about strong innovation governance. So do you or your clients have strong innovation governance? Please hand in your vote now. Practicing voting like other countries do that live still always fun to make a bad joke. Okay, so don't just type into the chat window, please share in. So I think everybody can see the voting. We'll give it another couple of seconds before we close. And Tendai, from your experience, the companies that you've worked with so far, how many have strong innovation governance?

Very few. I'm actually surprised that the 20% or the 12% that they say have had strong innovation governments. A large majority of companies don't have strong.

Okay, so here we have a group with 64% who don't have innovation governance. 21% so actually pretty close to what we've seen. And 15% are unsure. So very close number. So we can confirm what Accenture tells us. That's a pretty extensive study, so you can Google it. It's a pretty interesting study to look at. And we'll show actually one more thing from that study. So what they also show is that the revenue trajectory of companies that really have or have adopted innovation governance is more positive. Right. So it's not just something you do because you want to have innovation theater there, but it's something that does have an impact. These are the kind of statistics we also use to convince our clients of working on innovation governance. We call it, before we get to innovation governance, innovation readiness. What is innovation readiness for us? I'll do a quick intro before I throw it over to Tenday to actually look at the real world case study. We look at three things when we start working with companies to assess the innovation readiness. The first one is how does the innovation portfolio look today, what types of initiatives exist because there is no company probably on the planet that doesn't do any form of innovation. The second thing we look at, and this is probably new to many of the listeners, is the an assessment of the innovation programs. So not just the activity, but what is the impact of the programs that exist today in an organization in terms of value creation and in terms of cultural change? So we're going to zoom into that in a bit. And then at the end, the last thing we're going to look at is the innovation culture. What kind of structures are in place today in an organization to really kind of let innovation emerge and thrive? The different types of enablers and blockers. And I'll do a quick intro later on before we look at our case study. And with that, over to you, Tenday, to discuss with our guests what you have been working on.

All right, great. If I can take over the screen, maybe, and then I can run the session. Okay, cool. Thank you, Alex.

So, hi, Nigel and I. Hi, how are you doing?

Good to see you again. And it's been a real pleasure working with you. Now, I'd like you to set a little bit of context for the audience, Right. A little bit of history. Like how does a utility company like this end up in private hands? What actually happened?

Well, I guess that goes back to 1999, when the UK government at the time decided that they felt that the water industry and others would be best run in private hands. We are privately owned but heavily regulated. Monopoly. You'll see as we go through these slides. Evidence of some of that regulation, I think.

Right, but you kind of describe yourself as a monopoly because there's no other company that can do what you do within your region.

That's exactly right, yeah. I mean, we serve all of the customers within our region. So we operate in the northeast of England and then we provide water and wastewater services in the northeast, in Essex and Suffolk, which are in the sort of further south in England. And we provide clean water services. So we've about four and a half million customers, 3200 employees, and just a little less than a billion pounds in revenue.

Exactly. And there's something you said to me that was really interesting when we're talking about your context. You said your revenue is guaranteed and capped.

That's right, yeah. So it's a weird process if you're from outside the water industry, and I'm only five years in myself, but every five years we turn in a business plan to our economic regulator, who are called ofwat. And we explain, look, these are the things that we need to do to run our business, to enhance our business. And then there's a process which lasts probably 18 months, nearly two years back and forth. And at the end of that, they basically say, this is how much money you've got to run your business for the next five years.

Wow.

And it's guaranteed, as you said, and capped.

Right? Guaranteed and capped. So then the question becomes a company that's a monopoly with revenue, that's guaranteed. What is the value of innovation? What would cause a company like yours to reach out to a company like ours to do some collaboration? Why would you want to work with strategizing?

Yeah. So I guess the regulator has tried over a period of time and is getting closer and closer to emulating market forces by using incentives and penalties. So if we achieve over a certain level, we get some additional reward. And if we underachieve our targets, then we are penalized. And that provides an incentive to us to innovate. I think, as well, there's a lot of forces upon us now, probably more than ever, of change. And, you know, that is causing us to have to do things differently.

Right. And you're obviously working in a sort of highly regulated environment. Right. You're a highly regulated monopoly, which puts a lot of constraints in terms of what you can do. I remember Angela saying, we're not allowed to make a different flavor of water or something like that. We only have to do the real water.

That's exactly right. I mean, people might take some comfort from that, indeed, that we can't be playing around with the quality of the water or changing the color of it, for that matter, much as Angela would obviously like to. You can tell from her hair.

Yeah.

That'S fantastic. And the truth about this, Right, Alex, and we recognize this every time we're working with large organizations, is that every company is kind of working with some sort of constraint. Right. And so what we'd like from the audience is, I think, and Alex is again going to take over the screen here, if you can go on mentee.com and Gab is also putting a link into Zoom Chat there. So you can go onto mentee.com and then use the code 619-0542, or you can use the QR code that I've just put up here. And we just want you to describe in one word the main constraint that limits your organization from becoming much more innovative or doing innovation. So I'll stop sharing my screen. Alex, you can show us the word cloud.

Here. We go. Okay.

Let'S see what comes up.

The big one already was politics. Right?

Politics.

Not a surprise. Money. Okay, that's surprising. Politics makes it back up again like a competition. Which word?

Right, Interesting. Culture. Oh, look at that, that's popping up. Culture.

Big one. Budget is there. Mindset. Mindset, Management.

Culture, Money, Politics. It sounds like the title of a magazine. The Culture Money Politics show.

Yeah, those are definitely the big ones. Right. And some of the research shows that politics and culture are actually. So what's showing up here is what some of the research of Innovation Leader also shows is that culture and politics are the two big preventers of innovation. So seems that that is confirmed.

Yes, absolutely. And we can see the world, you know, the puzzles are bubbling up there and showing those.

So maybe Nigel and Angela, is any of that resonate there that you see?

I'd say it does resonate. I mean, we've been on a journey of being deliberate, of having some machinery and some governance with innovation for the last five years. It reminds me a bit of earlier in my career when I did Six Sigma at GE Capital. And when we first did it, we had some black belts and they felt a little bit out of an adjunct to the business. And then gradually it became the way we did everything. And I think we're starting to see signs in our business now where innovation is becoming part of bau, but we've definitely got a bit further to go.

Yeah, excellent.

Agree with that. And I'm also resonating with quite a few of the comments in there.

Cool, thank you, Angela. So now let's talk a little bit about, like, you know, the constraints, your big constraint, which is the regulations, because you say that your regulator is trying to create almost like a free market system where you have all these incentives and targets that you have to hit and people just have no sense of how many of those metrics you actually have. And you sent me this spreadsheet of all the metrics you have to hit. So I'm just going to show that to people so they really see what that looks like, the number of targets that you have to hit. Just talk a little bit about what this is about.

Yeah, this is our monthly scorecard. And obviously I won't take you through every measure, but you can see readily that there's a lot. I think my first reaction when I joined the business was we need to have less measures. But the reality is every single one of these is a regulatory measure. And starting at the top, there are measures of customer service and then there are measures of how well we are doing at supplying the clean water service, how well we are doing at supplying wastewater. And then there's some other things, like greenhouse gases. So water companies use a lot of energy.

Exactly. So the interesting thing about your situation is most of the companies that we work with. Right. Can actually choose what metrics they want to focus on around innovation. But your balanced scorecard is those metrics are regulatory. There's no option if you don't hit these. Right. There are financial rewards for the performance, and then you get financial penalties if these targets are not met.

That's right. I mean, we have to update. I mean, we look at these things every month, but we report them back to the regulator every year. And there's a whole audit process that goes around to ensure the accuracy of the numbers. So it's not something you can play with.

Right, Exactly. So. And you'll be sort of, you know, some of the stuff just to sort of, you know, help people understand. So you have to keep metrics on leakages, on flooding, on sewer blockages, on pollution incidents and greenhouse gases. And this is just to name a few of the things that you have to track and report back to the regulators.

Just to name a few. Yeah. And I guess, though, and we tried to look at these things, and I guess it's true of any constraint is if you. Can you flip it around, can you make that into a gift? Can you make that into an enabler for innovation? Right. And so what has really helped us in our language and our purpose of innovation within the business is to say we're doing innovation to improve our performance on leakage. We're doing innovation to improve our performance on pollution and sewerage. And everybody recognizes that we're constrained. So if you look at the money that the regulator gives us to run our business, we can't hit the targets quite often using the methods that we've used in the past. So that tells you very clearly we have to do some things differently. Hence innovation.

Exactly. And we were having this conversation right, about like, you know, what is the number one disruptive threat for you, for your business, or what would be a disruptive threat for a utility company? And while we have that conversation, folks can be typing in Zoom Chat what they think would be the disruptive threats for a utility company. But in our conversation together, right. We would think you were like, communicating that these are some of your disruptive threats. So climate change, population growth and aging assets. Can you just say a little bit about that before we move on?

Yeah. So I guess if you look at external forces, the regulator as well. They're changing all the time, our employees and our customers expectations are changing. I think that's probably common across all industries. Climate change is a really big one for us, though, so we see that in big, dramatic ways. So believe it or not, in the uk, prolonged dry spells. So where we operate in the south of England, it has a lower rainfall per head than Palestine. That's a pretty shocking statistic. And, you know, we're a little wasteful of our resources. So that's. That's something that we definitely, you'll see in our scorecard. We have a per capita consumption target, which is to persuade people to use less of our product. There's not many people have a target like that to chase. And then we have. We see after those long dry spells, sudden downpours, and that can lead to flooding. We're one actor in that scene. There are many people involved in flooding and flood mitigation, but we are certainly one of them. And so, yeah, climate change hits us like that in big ways. We're also seeing it in, I guess, some more creeping ways, like algae blooms that only used to happen in July and August and now happen all year long. So, you know, it affects the way we treat the water and we'll find ourselves in the way that we treat wastewater just because the temperature is, I don't know, one degree more than it was 10 years ago. The chemical treatment is different.

Right. And so, like, in terms of your innovation goals, it's really to respond to these challenges. And though that's why we ended up collaborating together. So. Yeah. So thank you so much for having that conversation. What I'd like to do now is to transition to the actual work that we did together and kind of try and bring in. Bring Angela into the conversation a little bit. So one of the first pieces of assessments that we did was focusing on your innovation portfolio. And in terms of innovation portfolio, what we really care about when we're working with organizations such as yours is what is the balance in your portfolio? So how many things do you have that are exploring new opportunities versus how many things you have as an organization or how many innovations you have that are about exploiting your. Your current success? And across that spectrum of explore and exploit, there's really, like three types of innovation that, you know, organizations can kind of engage in. So one is efficiency, innovation. Kind of like what Amazon did with these robots that increased the efficiencies in their. In their warehouses, but didn't really change their business model. That Much. And then, you know, we can have sustaining innovations which are when an organization can take some of its current capabilities, maybe build a technology around it and then maybe into new markets and maybe create new business models around that. And. And then we can have transformative innovation where a company goes and creates a completely new business model different from anything that they've actually ever worked on, like Amazon did with Amazon Web Services here. And that's a really interesting formula to assess your business. And I remember when I showed you this, Angela, you had significant queries about whether this really applies to you. Can you just explain a little bit about that? Oh, I think Angela took over later.

Yeah, absolutely. Having come from a corporate background, I could. Having come from a corporate background, I could totally relate to the examples that you've got with Amazon. However, when I applied the lens from our water business, the same just didn't translate. What we would consider transformative for our business would probably go into a much more sustained or efficiency bucket using your lens. So actually it was a really useful tool for us to use, just to see how it would work, but also then how we could get it to work for ourselves, given that we are a little bit of a different business.

Exactly. And in that first meeting, I remember that you had used your own lens and sort of distributed your different innovation projects across the board. And I remember pushing you back and making you have to do it this way. But you only have like 70% of your stuff efficiency innovations, and 33% is sustaining innovation. They're like zero under transformative. And I remember that was like, no, that's not fair.

Yeah, no, absolutely. Because you were used to applying it perhaps in a more corporate business where the rules of the game are different, whereas when you're used to working with the monopoly regulated scene that we're working in, the rules of the game are totally different. So you need to apply a different lens in order to make sense of this tool, right?

Oh yeah, I got my math wrong. It's 110%. I went 77 and 23. That's a typo. Thank you for noticing that, Ralph. Well, you know, you guys are a super company. So we have a poll question.

For.

The audience right before we show you how we then did the reclassification work. So, Gabby, if you could launch that for us, so what percentage within your company would you consider transformative innovation? So we just want to see what folks think is happening in their world. And just to bring in, Alex, in your experience, what are you seeing out there in terms of the percentages of transformative information.

I would say transformative is usually at zero, but only after I ask a couple of questions. So people would always put things there. And then I ask, well, okay, so you built something like Amazon Web Services and. And then they say, oh, it's just an idea. Well, then it shouldn't be there yet. That's great that you have the aspiration, but those are results, right? So usually very weak on the left hand side. And to a certain extent, if you do that deliberately, it's okay. Like if you are at the top of your game and you just have to scale, that's okay. But in general, it's not deliberate. It's not a deliberate choice. And that's where it gets problematic.

Thank you, Gab. So if we can see the results. And again, Alex, you're right. Right. So 0 to 10% is like the higher size of the number of respondents that are saying they do transformative innovation. And I wonder how many of those 0 to 10% are really like 0. Right, or to the 10%. So yeah, so let's keep on moving with this so that we can keep the conversation going. So what we decided to do then was to have a conversation about how we can maybe actually categorize your innovation projects in a way that's much more meaningful for your business. So rather than explore and exploit, we thought about maybe doing it and calling it pioneering versus maintaining your current infrastructure. Right. And so here we focused on more like a change perspective, right? You know, stuff that's more focused on societal and environmental impacts. So, you know, and the more you go towards societal and environmental impacts, the more we call those kinds of innovations transformative innovations versus innovations that are just focused on maintaining your current infrastructure or just hitting those targets that you currently have. So this seemed to make more sense. And when we did that, then the data started changing. So we had 28% in efficiency, 48% in sustaining, and 24% in transformative. I hope this adds up to 100, by the way. I'm nervous about that. So I just want people to understand, Angela, like those projects there that are in transformative, like what makes them transformative?

Okay. So I think that one of the good examples that we've got here is on there as Newar, which is the national underground asset register. And this has been really transformational, just not only for ourselves, but also for other utilities and for the country at large in that usually under the ground there is a whole host of pipes and cables that are not just ours. And unfortunately, when you go and do any amount of street works, you will unfortunately come across a utility strike. So you will either strike somebody else's cable or somebody will strike your pipes. And this causes just a terrible mess. And disruption for the businesses involved can also be incredibly, have a huge health and safety impact to the individual, but also to our customers. Roads and disruption is left amok and there's a total value of this on the UK as a whole, about £1.6 billion worth of disruption and meth. So therefore, you can see that by coming up with a solution for that, you can significantly reduce that figure and also reduce disruption to our customers. So what we did from our Innovation Festival, this idea was mooted as a great idea, but just felt a little bit out of reach because it was spread across a number of different stakeholders. And as we all know, pulling people together and pulling in the same direction can often be quite difficult. So what we did is, as we've coined now, is something called a year's worth of work in a week, where we put together the right people for one week in a tent in Newcastle with the explicit goal of being able to create what would this look like? And one of the key blockers was actually a data sharing agreement. So we actually put the lawyers at one end of the tent with a piece of paper and a pen and said, right, you're not leaving here until we have that. And you know what? Miraculously, that actually happened in a week, which can imagine how many emails and meetings and time that that would cost doing it in other methods. In addition, they actually mapped as a demonstrator Sunderland during that week. And this then whet the appetite of the government who then have sponsored this project to the tune of about 4 million with the idea that this will be rolled out across the country. So that, for me, that is transformative. I know using your initial lens, you wanted to put us into the efficiency bucket, but I have to say, had to put my foot down there.

Exactly. And you can imagine that conversation, right? Because I'm like, okay, so you're still in the water business even after you do this. So this goes over here, like. No, it's transformative because it's got this other massive impact, right, in terms of what's happening in the industry and what's happening across the, you know, like, all the environmental and societal impacts around that. So I'll give you a chance to explain one more of these before we have to move on because of time. Could you talk? You can choose Digital Twin or Downpipe.

I'll take Downpipe. If you like, because it's probably the easiest one for people to relate to. So imagine you've got an Iot connected radiator on the outside of your house, effectively something that looks like a radiator. So the idea of this is we could increase the storage of water and attenuate flooding, right? So when there's a big storm coming in, we can connect to the people who have these smart downpipes and we can release capacity. So that will clean, that will have the effect of cleaning the sewers and making sure that there are any fatbergs or anything like that in there. They can also use that water in there to water their gardens, wash their cars and things like that. But the big benefit is when that storm comes in and those downpipes are empty, we can hold that water back and that will, we believe, make a significant impact to flooding in those in the areas that are prone to flooding, I guess. And that's really the key to this is not just the device, but the analytics that goes around determining where to place those in the people's houses. Which houses?

Right. No, that's fantastic. And what's interesting about this, right, is that like the innovations that you're working on, they're not just about improving your business. I mean, in one sense they do that, but they go beyond improving your business and even go beyond those, you know, those targets that you've been set and to really think about, like, you know, your overall place in the environmental ecosystem in the uk.

That's our gift, I think, and that's what makes water and attractive platform. And you'll come on and talk about our festival in a bit. I mean, we've had 900 other organizations join us to create new ideas and to innovate. And I think what attracts them is a few things. And one of them is we can't do anything with the ip, right? So people can come with us and develop ideas and then go away and commercialize them. But the main thing, I think, is really our purpose and that sort of societal and environmental impact and water is so important all of our lives that I think securing a resilient supply, making sure that, you know, flooding is flood risk is mitigated. When we've got this massive challenge of the climate emergency, people are really interested in fixing those ideas with us.

Yeah, fantastic. And so the reason we do this, by the way, before I move on, is that we believe that every organization should have a balanced portfolio, right? You should have innovations that cover the spectrum from efficiency, sustaining and transformative, right? So when we do this assessment with companies, when we reveal to them the balance in their portfolio, sometimes some leaders, it's the first time they're actually seeing it make this visual, and that allows them to make better and more informed decisions. Right, Alex?

Yeah.

One thing I just add is that it needs to be a deliberate choice. And in many cases, it just happens. And then companies don't realize, oh, there's so much going on in efficiency. And because they're using crazy new technologies, they think they're reinventing the world. But while their business model is dying, you know, they haven't invented anything new. So basically, it's almost dying more efficiently with a dying business model. That is not always a deliberate choice, because nobody really looks at the entire portfolio very systematically.

Exactly. That's part of becoming innovation ready, is making sure you have a balanced portfolio. Then the next conversation we had was all those innovation projects that you're working on within Northumbrian, right? They're driven by the program. They emerge. You just described the Innovation Festival just now. They emerge from the programs that you're kind of running within your company. And again, a strategizer. We believe that when you're running those innovation programs, you don't just pick any random innovation program. Let's do a hackathon, right? You don't just pick any little random innovation program and just do it. You have to be deliberate about the choices that you're making. Are you creating value in terms of either increasing revenue or hitting some really significant metrics that your organization, or are you, like, really focused on changing the culture to make innovation a much more repeatable process within. Within your. Within your business? So these are the two dimensions that we use to classify some of your innovation programs. So I want to run a quiz, right? So, Nigel, you got to help me with this. And you too, Angelo. So we're going to show these three innovation programs that you run. And then the goal of the audience is to type in Zoom Chat the correct classification, A, B, C, or D of where those three programs sit. But they can only do that if you tell them what they are. So just give a brief description of what each one of those is, and then people can start to type in Zoom Chat where they would put that, the letter number sequence there.

Okay, so I'll start with the Innovation Festival, which I just touched on, which is an annual event for us. It's normally. We did it virtually this year for reasons which are fairly obvious, I guess we normally run this as literally as a festival. So it's I described this to my boss as Glastonbury, but without the sex and the mud. Right. So it's got the feel of a British summer festival, which is very intentional because it attracts people. We want to have fun, we want to have a creative and inspiring environment. But in the middle of that, we'll run hacks, sprints, and the thing that Angela described as a year's worth of work in a week, and in the one that we did this year, albeit virtually, we ran 40 of those 40 sprints, hacks, years worth of works in a week. So it's mainly our idea generation engine.

Cool. All right, and then InvestQuest. What is that, Angela?

So InvestQuest is a program open to our employees where they can suggest meaningful improvements to the business that will give a good rate of return over a three year period. Period. So it's much more focused on incremental improvements. Transformative, we'd love. But we've been running this for a few years now, so the basket of those is diminishing somewhat.

Right, okay.

It's a way of employees having an idea and jumping the queue, really.

Okay, fantastic. And then finally, innovation ambassadors. Right, well, what are those?

Yeah, the innovation ambassadors are employees from across all different functions and across all different levels in the business. And they are really the engine room of how we're doing innovation within Northumbrian water, in that we have a hub and spoke mechanism. So they are in with myself and Nigel in the hub, where we have an opportunity to share innovative practices and what's going on around the business, and then they take that out to their function and then they bring their challenges back into the hub for solution.

Right, right. Okay, fantastic. So I can see people already typing in 3D, 3B. I can see a lot of scores coming in there. 1D, 2C. So let's see where Nigel and Angela actually placed these when we were doing the analysis together. I think the innovation ambassador one will be kind of disappointing. It's probably more this way. Right, so that was a chick question. It wasn't like a proper solution. Even Alex in his mouth open, like, what? Why would you ask such a question? But yeah, this is how they were kind of laid out on the map. And in addition to that, we also mapped out the rest of the other programs that were being run within the business with the sense that we wanted to see where all of these programs sat. So now I have two questions for you. The first one is, could you just talk me through how these things interconnect? So is there like a relationship between any of these or are they independent? So let's start with say somebody pops an idea in InvestQuest, like how does that connect to the rest of the ecosystem here?

So I guess principally, right, two main engines, that's our machinery. So creation of ideas and then getting from idea to value. So these things are linked. Right? So if you were to take InvestQuest, for example, somebody comes in with an idea, they can get up to £250,000 worth of investment. First off, to fund that idea, that InvestQuest thing happens within the Innovation Festival, for a start, they will typically be supported by the Innovation Ambassadors. So the people who are coming forward with these ideas are quite often not used to preparing a business case, so they will be supported in that process. We use Amplify to get the ideas in. And drop zones is basically an idea of testing. It's very hard to test in live environments. So we need particular places where we can go and test out ideas. And so it's entirely possible, but not always the case, that the idea that comes out of InvestQuest needs to be an experiment and will need some kind of testing facility to make it prove that it's technical or economic feasibility.

Exactly. And so the reason why we asked this question, by the way, so that the audience can really understand is people are always asking me and Alex, is a hackathon, Innovation theater. And what they're expecting us to do is to take that extreme position that goes, yeah, never do a hackathon. A hackathon is always Innovation theater. And the answer to that question is actually no. A hackathon is not innovation Theater. A festival is not innovation Theater. It only becomes Innovation Theater to the extent that it's disconnected from everything else. So if it's just a standalone thing, it happens and then nothing happens after that. Then it becomes, it becomes a form of Innovation Theater. And so drawing, if I may just.

Come in on that point, Tenday, because I completely agree, but we've had a few goes at this now because we've run our Innovation Festival for four years and it's like, how do you create that handoff of the ideas out of the festival which will generate. Our first year, I think it was 34 ideas. Second year, 56. How many in this year was it, Andrew? 100? Yeah, 100 ideas. So as you say, they're no use to us unless they get picked up and progressed. So we took our festival, which is normally a five day event, this year made it four days and on the fifth day we brought in our senior leadership group and we said Right. Your job here is to go around, find an idea that you want to sponsor. So we're, I guess, constantly working on making that handoff better.

Right? Yeah. Fantastic. Right, Cool. So, Angela, I just want to ask you just another question, which is one of the questions that we always put companies under pressure, which is how do you end up with a program that's low on value and low on culture change?

Well, Amplify is an idea management platform and I guess whenever there is something new, it takes time for the organization to want to embrace what you're doing. It also needs an awful amount of noise to get the external supply chain to engage with a new tool. So I think that there are a number of things at play that perhaps we could do better to elevate and move the impact of Amplify. So I wouldn't just blame Amplify.

Right. So go ahead.

Just a good point by Angela, because, you know, wherever programs are, it might also be a result of the organizational kind of setup and what you have done or what you haven't done. So the same type of program, a hackathon, could very well be down there on the left or could be on top on the right, depending how you embedded it. So the effort of actually changing that, or if you can't, sometimes you can't get things off ground. It's like a startup, you can't make it work, you got to kill it. Sometimes we experiment with these programs and if we can't move them either up or to the right, then they have to go. I think it's, it's the evolution of this kind of thing that we have to visualize it so we can even understand.

Exactly. And the visualization then formed the basis of generating those ideas about how we can either add other programs to this mix to make the ecosystem stronger, or we can come up with tactics. And that's the other conversation we had when we're doing this assessment. And these were some of the ideas that you came up with, like setting up an innovation board to make investment decisions, creating a system for portfolio management, something that you're working on that's directly related to Amplify, the Center of Excellence, and also building the skills building and innovation coaches piece, which wasn't really part of the ecosystem at the moment. So if you could just explain at least the center of Excellence and how that becomes a net improvement on Amplify.

Yeah, so the center of Excellence is an industry wide thing. So it's the whole of the UK water industry coming together. So we feel that that will be stronger than us just going out as a company on our own and seeking new inputs.

Right. And that can make things a little better in terms of making sure those ideas attraction bigger ecosystem.

Right. And so it should generate a lot more feedback. Cool.

Anything else to add, Angela, about any of these improvements before we move on to the last piece of this?

I think skills building is a key one because we need to strengthen the innovation skills that certainly the ambassadors have because then they're the role models going out into the business and really demonstrating and flexing those skills. I also think that because we have a hub and spoke mechanism within Northumbrian water, we genuinely want everybody in the organization being part of innovation in some shape or form. And that doesn't happen overnight. So we definitely need to make sure that we skill build in the right way and enable people and make people want to come and be part of the innovation work that we're doing.

Okay, fantastic. All right, so let's move on quickly to another poll question. And now this poll question is about Innovation Theater at your company. So at your organization, how much Innovation Theater are you seeing or how much Innovation Theater do you have? And the scoring is here. None of our innovation programs are aligned or integrated. Some of our innovation programs are aligned and integrated or all of our programs are aligned and integrated and we don't have any Innovation Theater at all. So it'd be interesting to see.

And one of the things I'll add to this is so sometimes we think when we've got beyond Innovation Theater, that the innovation engine is established in a company. We've actually unfortunately seen companies doing innovation pretty well or at least parts of the company. And then the things like the success was dismantled for reorg reasons or because innovation didn't have enough power, it wasn't institutionalized. So unfortunately, even when you get beyond Innovation Theater and sometimes in organizations, it doesn't mean you have long term survival. So very surprising. Right. So you have Innovation Theater, you have success. But then I would put the top level institutionalization where just like R and D, R and D doesn't just get dismantled overnight, unfortunately, even successful programs get killed.

Yeah, absolutely. And people are just asking, what is innovation Theater? It's basically loads of innovation programs and projects that look like innovation but are ultimately creating no value.

Right.

In terms of value creation or transformation. So what are the results there? I can't see the poll.

Gap. Can you show the results?

Can you show the results? There we go. So sum. Okay, great. And you can see like only 6%. Alex are saying all the innovation programs are aligned and integrated, right? The vast majority, like some are integrated and some are saying none. So it's really interesting because that's the challenge, right? It's a problem that I call little fires everywhere. Someone starts a digital hub here, somebody starts the hackathon thing here, somebody starts a design sprint thing there. And before you know it, you put all of these things, all sometimes claiming to do the same thing, overlapping with each other, and nothing is really coordinated. And then a company doesn't get real value from the investments that they're making.

The intentions are never bad, right? The intentions are always good and the people are usually pretty smart. But when it's not integrated, even the smartest people won't be able to have an impact. And that's a pity because that's wasted energy.

Yeah, exactly. All right, cool. So, Alex, we're going to move over to you to introduce to us the concept of innovation culture onto our last 15 quick sprint.

So very briefly, many of you have heard me talk about innovation culture, but we started working on innovation culture when we really saw that, that, that with all the tools, with all the processes, all the smart people, we're still not getting the results. So we really try to understand how can we get companies to move. And innovation culture is something that leaders can influence heavily. And that means not picking the ideas or creating the growth themselves, but it's creating the conditions for growth, giving innovation power, putting in place the right metrics, et cetera, et cetera. And number one, maybe just killing the things that are in the way of innovation. So what we used in our last book, the Invincible Company, was the Culture Map by Dave Gray. So we co developed this tool together with Dave Gray, where you have three things to look at when you look at an innovation culture. First, the visible part of culture. How do people behave? How do people behave? What are those patterns of behavior that you see in teams or in the entire organization? And those behaviors will lead to positive or negative outcomes? At the end of the day, you can't directly change outcomes or behaviors, but what you can change, and this is the space where leaders really need to focus on, is you can work on the enablers and blockers. In one of the conversations with our colleague from Innisight, Scott Anthony, he said, look, Alex, if you take away the blockers, you've already gone pretty far. The number one thing to do is just to take away those biggest blockers that exist in most organizations for innovation to emerge. We look at three things when we talk about innovation culture. The first one is the leadership support. Now that might sound trivial, but it goes all the way from giving innovation guidance, managing portfolio resources, etc. Then second one, I think this is the most difficult one. Most organizations we see, they really fail on this one organizational design. How did you change your organization to really embrace innovation? Some leaders will say, oh, everybody needs to be an innovator. Well, if you say that, probably you're not going to have innovation anywhere because then you didn't give innovation real weight. Nobody says everybody now needs to be an accountant. That doesn't make sense. And then the last one, innovation practice, that's down to the tools and practices and processes and to assess an organization. And I'll hand it back over to Tendai, he'll show how you did the assessment. Altogether we look at just scoring an organization neutrally asking, well, how do we score from 1 to 5 on these different dimensions? So Tendai, what, what happened when you started scoring?

Yeah, so let me share my screen there and then I can, and then I can show you. So we working together with Angela and Nigel, we set up a survey with Innovation Readiness Assessment in it and we sent it to 47 people across the organization in various divisions. I'm just going to put this up here just to show you the makeup. So different departments all the way from Asset management to Regulatory Assurance, Human resources, finance, et cetera. Also different in terms of like years at Navambria, although you do have a lot of like high retention, the vast majority of your people have been working there for over 10 years. So I have to say that must be a good place to work.

That's why we have to go out and innovate though.

Exactly. And then different reporting levels all the way from Director, which is a very senior role, and then all the way down to people who report to Director. So what did we find? So let's talk about leadership support first. So you can see that as people were scoring, the thing that we noticed was that some people were scoring it high and some people were scoring it low. So when you averaged it, you would get to the sort of middle sort of range, which shows that some innovation work has started happening around leadership support. But there's also a lot of work that needs to happen there. And when people were identifying blockers, they were saying a whole bunch of things around lack of resources and getting buy in from directors. And then when they were talking about enablers, they were talking about there's a lot of support and a lot of investment and there's a flat structure and Also, management has sort of set up innovation as the desire to innovate as a big store. The thing that really stood out to me was this finding time in a sort of busy day job. This is something that's really, really hard to do within established organizations. And you see this over and over again. That's why you need to build almost like a support mechanism for this. Any observation on this, Nigel?

Yeah, I mean, I think that one is really genuine.

Right.

I mean, I've worked in businesses that are, let's say 50% set up to deliver change and 50% set up to keep the lights on our business by regulation and how it's financed is more like 90% set up to keep the lights on, 10% is for change. And you know when you've got to keep the water supply going and someone says, can you fit this new sensor? It's going to be down somewhere in the network, it's going to be down on the list of things that you do. So I think it's genuine. I guess the message we keep on repeating and the cultural bit of this is just go, if we keep doing what we're doing, we're going to keep getting the results that we. How do you change it unless you can find the time? And I think the great thing about Innovation Ambassadors and the festival is it does draw a lot of discretionary effort and it leverages that what is available in terms of capacity in the ecosystem around us.

Fantastic. So let's just move on quickly again to sort of org design here. And again, this is about legitimacy, power and building a bridge to the core. Again, this core again was sort of somewhere around the middle. Again you can see the sort of balance of work that's already happening there. Right. So again, you can see there the scoring was also going straight down the middle. And in terms of blockers, people were talking about bureaucracy and lack of recognition. And then in terms of enablers, the Innovation Ambassadors were mentioned so often and celebrated so much as one of the bigger enablers. And an interesting comment for us, just from a strategizer perspective, was this one around innovation agents being too detached or living in their own bubble. Because what we often encourage is that organizations built this bridge between the main business and then and the core business. So it's just an interesting observation that people were making there. And then finally in terms of innovation practice, Right, you'll see again that your scoring was really straight down. It was really interesting because you would see this tension with people that are really exposed to innovation and those that are not. And then you see, like, you know, that kind of balance coming out there. And some of the comments that people were making there were, you know, you know, stuff like, we need new skills development, we need to focus on. Somebody said we need to focus on innovation theater rather than impact. And then the Innovation Festival was really pointed out. Right. That's another thing that came out over and over again, your Innovation Festival, in terms of innovation practice, partner days, hack days, and just having great people with really great ideas. And Angela, you already mentioned this notion of skills development is something important as you were mentioning the programs that you wanted to develop, right?

Yeah, absolutely. I think that this is a key thing. In order for people to get payback for giving their time and energy to innovation, then we need to build this skills and build their capability for themselves, but also to take back to the organisation. And I think we're starting to reap some of the benefits of the work we're putting in, but it is definitely a marathon and not a sprint. So we are working on this journey and also working with the individuals to understand what they would like to develop, because there are a lot of tools and a lot of capabilities out there and we need to make sure that we're bringing in the ones that are going to make the biggest impact in our organization.

Great. Fantastic. So this is the overall scoring that you kind of got going, right? And so then the question becomes, and that's why we do the assessment is how then might you improve the innovation culture within the organization? And so the last poll question we're going to put out to the world today is, if you were Nigel and Angela, which one of these four things would you focus on? Get more leadership support, train more innovation team work to align with legal and compliance or host more innovation events. Let's see what people recommend for you in terms of the work that you do.

Pointing out that one of the things we've seen in past webinars and in our work is that legal and compliance are big blockers. Not because they're mean people, because they're doing their job. So they actually are trying to do their job well. So that is a. Is a big one.

And I love the story you told Angela about putting the legal person in the tent.

Right.

Sit right there, come up with the process of how we're going to do this. Yeah, that's going to be a fantastic story. All right, cool gab, if you can show the results so we can kind of bring this show to a close, get more leadership support and train more innovation Teams are the two recommended, which is really interesting because those are actually the choices you made. So, Gav, if you can close the sharing. When we were in conversation together, right, you chose getting more leadership support in terms of making sure that we have clear strategic guidance from leadership as one of your areas of focus. And then you also chose bridge to the core, like building a bridge between the innovation teams and the core business. And then you chose building innovation skills. So the audience is recommending 1 and 3, and that's exactly kind of the choices you make. So I just want to talk through, like, a couple of your ideas around this. Right. Just in the interest of time, but just a couple of your ideas. So in terms of like leadership support, you were talking about like a leading innovation toolbox, you know, innovation mentoring coach for leaders and embedding and sort of embedding how we measure performance, embedding innovation and how we measure leadership performance. So I'd like you to speak about this one, right, this embedding, innovation measure.

I think having the leadership fully engaged and on board with innovation is the only way that innovation is going to succeed because they're role modeling for the rest of the organization. So if they're walking the talk, then you have a chance of succeeding because innovation is hard enough as it is without feeling like you're pushing it and doing it to the organization rather than having the pull for it. So I think that having measurement, by which we have a specific metric so we can see how well the leaders are performing in this space will encourage them to up their game, which I think would be really, really beneficial.

Fantastic. And then in terms of organizational design, right, you were talking about getting IAG members up, skilled, getting an IAG lead for the south and get them more engaged, and then publish a clear process and give visibility and access to all. I don't know which one of these, Nigel, you want to speak to, but if you could just maybe briefly describe one of these and then we can move on.

Yeah. So the Innovation Ambassadors group is what's meant there. And like I said, These are the 40 people who are virtually. So Angela heads a team, which is pretty small. Five, six people. Just replying to a question I saw earlier on. But the Innovation Ambassadors group is how we spread innovation across the business. And I think giving them kind of the confidence, the confidence to lead on innovation, the resilience as well, for when they fail, because we only expect three or four ideas out of ten to succeed. So giving them those kind of tools and techniques I think is really key.

All Right, Fantastic. And then finally, of course, you're going to really focus on building innovation skills by introducing, training and working with HR and just creating more experience to get that best practice. So we're kind of slowly running out of time here. So I just want to thank you for joining us and having this conversation with us and really showing us the work that you did in terms of, like, you know, building this, sort of building this assessment and also sharing with us your journey and all the plans that you're making to improve your innovation ecosystem. I just want to also say that Alex and I and the team of Strategize are actually writing a white paper about how companies can sort of improve their innovation readiness, and that's coming soon. So you can sign up for that by just signing up to our newsletter and we'll tell you when that's coming out. And we're going to be sharing tools and best practices and stories from the various companies that we work with within that white paper. You can also learn how to do that yourself. I don't know, Alex, if you want to add anything to that, I just.

Want to say thank you to Nigel and Angela for sharing because the best way to learn is seeing how others have done it and also sharing some of those challenges because it's not success from the beginning. We have to learn ourselves into the right way of working. So thank you from my side as well.

Yeah, thank you so much for spending time with us. And then finally, don't forget to sign up for testing business ideas with Dave Bland and Alex Oslota. That's going to be a lot of fun. And of course, I'm still going to have to win this competition.

Buy the books, that's the top thing.

But thank you, everyone and thank you to the audience for the great conversation that was happening on chat as well. Loads of comments there. So thank you so much and see you soon again as we carry on doing this work with you. Cheers.

Bye, everybody.

Okay.