Innovation accelerator for corporates - Board of Innovation

Hey, I'm Nick from Board of Innovation. Today I'll be guiding you through our webinar on innovation accelerators, focusing on why you should potentially organize one what are the most commonly asked questions during scoping an innovation accelerator, and some key challenges during the design of an innovation accelerator. Let's dive in. For those of you who don't know us, Board of Innovation is an international innovation agency based in Europe and the US working mainly for Fortune 500 organizations. In this webinar, I want to focus on why you should be accelerating innovation within your organization and how an innovation accelerator can help you do that. Scoping what are the key questions you need to answer before you start designing an innovation accelerator and the actual accelerator design? How do you set up your teams for success? What are the most common challenges and ways to overcome those? You can find a lot more information about this topic on our website, boardofinnovation.com and about other innovation initiatives. So feel free to have a look around or contact us and we're always happy to talk. Let's start with the why. Why should you accelerate innovation within your organization? If we look at the market, we see that the pace of change is increasing when it comes to technology, human centered design and business models. These changes and the nexus of these changes are increasingly disrupting established industries. Let's have a look at some examples. The automotive industry, for example, is being disrupted by rapid changes or exponential changes in technology. Google Wimos, for example, is driving more than 1 million autonomous miles a month at this point in time. This is drastically going to change the outlook for the automotive industry. Looking at business models, we can see that commercial Looking at business models, we can see that the commercial real estate industry is being challenged by new entrants like WeWork who completely changed the business model of the commercial real estate industry. And we have grown from having one location in SoHo, New York in 2010 to becoming the biggest tenant in New York by the end of 2018. Innovations driven by changes in technology or new business models only tend to work if they're actually solving a real user's problem. Companies that are leveraging human centric design like Amazon, that is completely redesigning the retail experience by putting their customers first, looking at what their pain points are, for example waiting in line and then leveraging technology to take those pain points away are quickly taking over established markets like in this case the retail industry. So what can we learn from those changes in technology, changes in business models, and changes in the way we design our products and solutions? Looking at the market Today you can see that those innovations make sense, but it's really crucial to be able to go to market fast. So speed is becoming the dominant metric. You leverage technology to solve real users problems and you come up with a business model that can support the innovation. But you will only have a real impact if you are able to go to market fast enough. Bert is a great example there. They expanded in a period of 14 months to cover 120 cities and go to a market cap of over US$2 billion. So moving forward and applying that towards your industry, how can corporate accelerators help you to respond to these changes in the market and what are they? So let's start with the latter and let's look at the definition of a corporate accelerator. At Board of Innovation we define a corporate accelerator as a program developed to test and grow new business ideas in a short period of time outside of the normal way of working. Typically, accelerators have a sort of standard format that starts with scoping. So scoping an innovation challenge, gathering the right team to tackle that challenge is a crucial first step. Once the team has been formed and a clear opportunity area has been defined, team typically gets started with problem exploration. So emphasizing with end users, defining what the unmet needs are, checking what the market opportunity looks like. So does it make sense to even be exploring this space and developing an innovation thesis and running experience to validate all those findings? Once the problem is clearly understood, teams move onwards towards solution development, where they're going to ideate around relevant triggers to come up with new non obvious ideas. They will develop multiple concepts, prototype a couple of those, and then run experiments to validate if that solution is actually solving the user's problem. Once you have found a solution that makes sense, you start thinking about what is a business model that can support it. What are potential business models? What are additional revenue streams that we should support? What does that mean in terms of high level ballpark figures, in terms of revenue? And how can we go out and validate all those assumptions that we have about our business model? At the end of this journey, it's really important to get the buy in from senior stakeholders. So it's really crucial to put a lot of effort into designing a concise storyline with a visual presentation and presenting very clear next steps on the suggested way forward. So really the accelerator journey is all about going from problem exploration, solution development, defining the right business model, towards designing a concise story that's going to allow key decision makers to make a decision. The decision should be evidence based and that's why? It's crucial that throughout problem exploration, solution development and business model definition, we continuously run experiments to validate the desirability of a concept, the feasibility and the viability. Now, looking at at innovation initiatives in a broader sense, it's important to note that innovation accelerators aren't the only solution out there. There's actually a lot of different formats that organizations use and the more mature organizations that we work with are actually using most of these. And innovation accelerators are just a part of that solution. So it's really important to also sort of think does this make sense for us as an organization? So when we define an innovation accelerator, we typically position it as an internal initiative where you are going to work on novel ideas outside of the normal way of working. There are different sort of investments level in terms of time, of how much time people actually spend on such a program. If it's one or two days a week, we typically talk about an internal incubator. If it becomes more of a full time initiative, but for a specific period of time we talk about internal accelerators. And when it's really a dedicated team that's working full time non stop on radical new ideas, we typically talk about internal innovation lab. Now these are really semantics. Different companies call accelerators incubators and vice versa. So just important to know that for the purpose of this webinar, we are talking about all those. All the lessons learned here are applicable to internal incubators, accelerators and labs. Although we'll be focusing more on the incubators and the accelerators. So what's typically the outcome of an internal or an innovation accelerator? There are three outputs that you can sort of look at or that you can expect from running such a program. The first one is quite clear. Innovation projects. This is a perfect format to accelerator or kill strategic projects. With a side note there that killing those projects or deciding not to move forward can actually be a very positive decision. I've seen it quite a lot of times that management is very pleased that they finally got sufficient evidence to make a decision to reprioritize and kill a project in which they already invested a lot of money. So there's quite a lot of sunk cost. Other aspect is capability building. So using these programs to build internal capabilities to run innovation projects, people who are part of those teams learn a new methodology, a new way of working by actually working on a project. So it's sort of a win win. And then a third outcome that's often overlooked, but that's in our opinion one of the most important One is retaining talent. We strongly believe that entrepreneurial talent is going to be a key driver of success moving forward. And giving your entrepreneurial employees space and the time to work in a new way and to explore their entrepreneurial drive is going to help you to retain and develop that talent moving forward. So if you decide or if you start thinking about running an innovation accelerator and these outcomes make sense to you, it's really important not just jump right in, but to carefully consider a couple of questions during the scoping phase. Those questions range from what kind of outcome are we expecting? What will the governance look like? How will decisions be made? And most importantly, how do we ensure that there is a sufficient follow up after the accelerator? To making sure that those projects that run through the accelerator actually lead to business results, that new products or services are launched, or that existing products or services are improved upon. So let's look at those one by one, starting with the scope. It's really answering question what kind of projects do you want to accelerate? First question we typically ask in scope is related to the horizons of innovation. What kind of horizon are you looking to develop new projects in? To explain the horizons of innovation, it's easiest to look at an example. So let's say we are working together with a financial institution and we want to working the opportunity space of buying real estate or buying a house. Horizon 1 is defined as innovation focused on existing markets and existing offers. For example, a challenge here might be how might we make the process of applying for a mortgage for young couples more frictionless? So you're already doing this, but how can you improve that process and make it more frictionless for that specific customer segment? Horizon 2 is defined as adjacent markets or offers. For example, if we take the same offering, applying a mortgage, applying for a mortgage, but we take a new customer segment that we don't know that much about. For example expats, how can we make it more frictionless for people coming into the country and who are new to the way of working? If that's a new customer segment for you as a financial institution, that would be horizon to innovation. If we look at Horizon 3, we're talking about radically new markets or offerings. For example, how might we offer a flexible house ownership solution to young professionals? So not just looking at the classical way of getting a mortgage and buying one property, but can we offer an ownership solution where people are flexible of changing between apartments and houses, for example, or changing between locations without always going through a buy and sell process that would be considered a Horizon 3 innovation? Now why Is this important? Applying the principles of human centered design, it's really critical that your accelerator is designed with the participant in mind. You will design a completely different program if you focus on a Horizon 1 accelerator versus an Horizon 3 accelerator. Another way to think about this is think about what is already known about the project in Horizon 1 accelerator. Typically we consider 80% as known. So there is an existing market, there is an existing product, we already know who the customer is, we have existing research about the problem. You have a team that has prior knowledge about this. So these are sort of the checklists that you have to go through if you say we're actually going to work on Horizon 1 accelerator. On the other hand, if you're focusing on Horizon two or Horizon three, you're focusing on adjacent or new markets. But there is a new product or offering. It's really crucial there that you have seen your buy in because there's a lot of unknown. So you need the space and the time and the freedom to explore different options. And you need to be able to form a multidisciplinary team that's entrepreneurial enough and that's comfortable in that ambiguity. Having decided what the focus of your accelerator will be, the next step is deciding how will we make decisions. Typically we see four different operating models answering the question like, where are you going to position your accelerator? You have the disconnected model. BPost, the Belgian post office, has set up a FutureLab, which is really a standalone initiative. It's a sandbox environment that's really aimed at disrupting their own business, where in terms of governance, the Accelerate is independent and has its own budget. A risk here is that whatever they come up with in terms of solutions, it's quite challenging to spin it back into the mothership, so to speak. If we look at the opposite internal operating model, where that's defined as an accelerator that sits within one business unit, where the budget and the governance is owned by that business unit. The strength there is that it's really well suited for incremental innovation. So improving using that new way of working and coming up with innovations on an existing product or service for an existing market. The risk there is that it's really dependent on your sponsor relationship, on the senior management of that business unit. The separated operating model is quite similar to the disconnected one. The main difference here is that there's that the Accelerate needs to pitch for budget continuation. So a strength there is that it's easier to stay connected with the organization and to work on strategic objectives. A risk is that you have less Time to come up with results. Adf, French energy conglomerate is using this quite successfully. But you need to show results on a sort of a yearly basis. And then finally the integrated operating model there in terms of governance, you have a joint venture between a central innovation team and sponsors within the different business units. And you're running out accelerators in different business units at scale. And that's the strength of this sort of operating model. It's really well suited for building innovation capability at scale. The risk is that you need to align sponsors across different business units. You have to make sure that you are applying the same methodology. So it's really necessary to sort of have a central innovation team working on this. So taking this final example of an integrated operating model, let's dive a bit deeper and have a look at what that ecosystem looks like, typically of different players. So we have an innovation leadership team that sits at a central level. We have a sponsorship team on the right that sits at the business unit level. And together they form the accelerator leadership, running the accelerator with the accelerator teams and the coaches. So let's have a look at the responsibilities of all those parties one by one. Innovation leadership is typically they own the budget, they make the large decisions about the accelerator, they ensure that there is proper program design, that there is innovation expertise, and they are responsible for organizing sponsorship trainings, which we'll talk about a bit later on in this webinar. The sponsor team is responsible for identifying the challenges. They understand their business unit, they are the experts, they identify the challenges. They are also the decision makers at key stage gates and they ensure follow follow up of selected initiatives. So they are responsible of making sure that projects that come out of the accelerator are actually resulting in an impact on business results and they should mobilize resources in that capacity. The accelerator leadership is typically made up of representative of the innovation leadership and the sponsorship team. It's their job to run the accelerator day to day, to manage the portfolio of startups or teams that are within their accelerator, measuring the impact to make sure that you get sufficient senior buy in making sure teams are formed and connecting teams to relevant resources outside of the accelerator, actual work within the accelerator. So the coaching of the teams happens by innovation coaches. There's three elements to their role. They should be experts on different innovation topics, growth, hacking, design, thinking, lean startup, experimentation design. And they should really support the teams with that expertise. Secondly, they should facilitate so design workshops and run workshops other periodically facilitate use of specialized tools and so forth. And finally they are the coaches. So they should coach teams on team dynamics, but also on an individual level, making sure that you actually build a capability and that participants of an accelerator are learning the right lessons so that they can apply that later on in their day to day. Finally, and most importantly, you have the accelerator teams. It's their job to really focus on their project basically running like an internal startup. They should periodically align with key sponsors and pitch at different stage gates. Setting up your governance system is really crucial and it really depends on your organizational structure and your organizational culture. So finally, you have the accelerator teams. It's their job to really focus on their challenge, run like an internal startup and periodically align with key sponsors or pitch at different stage gates. Setting up this governance structure is going to be very dependent on your organizational structure and and your organizational culture. That's why it's quite important to do this well in advance during scoping and validate with the people who will be involved in that governance structure. Now imagine you have your governance structure set up. How do you ensure that there is follow up? How do you ensure that there is follow up? There have been great pitches, but now what? Typically after a pitch there are three different options. You can kill a project. You make evidence based decision to save resources. Oftentimes teams actually pitch to kill. So they share that they've looked into the problem and they identified that there is no opportunity there. And this should really be encouraged or celebrated because it's a great way to save resources that would otherwise have been spent in developing a solution or a product that would have failed. A second option is persevering, so identifying that there is an opportunity there, but you haven't found the right solution to solve the problem there. It's important that teams are allowed to go back and to revisit their solution and to build on their lessons learned. If a team has identified there is a solution fit, so their solution is actually solving the problem and there's a business model to support it. They should move ahead and scale as quickly as possible and launch their products. So let's focus on the latter two scenarios where we persevere or we scale. There are typically three main challenges when this happens. The first one, there are no resources to persevere or scale. If those resources are there, then there is a challenge in redesigning the team to scale. And if you actually manage to scale to redesign your team and you start scaling, then you face what we like to call the corporate immune system, where your attention gets drawn away by the traditional processes and you face death by a thousand cuts. So let's look at all of those three in detail. The first one, no resources to persevere or scale. There can be a lack of budget or the right people to stop that project. In the short run, a slow decision making process can take away the momentum. If you pitch and then it takes you two or three months to put the right people together and give them the budget to support, all momentum has been lost. Another problem that we see is that leadership teams use traditional metrics like return on investment to assess and prioritize projects that are actually happening in environments of complete uncertainty where it doesn't make sense to use those metrics. So how do you avoid this challenge? You should run what if scenarios during the planning with key stakeholders. So what do we do if we have a brilliant project? How do we make sure that they can basically get the right budget and the staffing as quickly as possible? Set up a government structure that has clear and transparent decision making criteria. Think in advance about what metrics are we going to use, what will we evaluate teams on and at a program level. Earmark some resources in terms of budget. So if you have 10 teams running through an accelerator, assume anywhere between three and five teams are going to continue and set aside a dedicated budget that they can use to further experiment or potentially scale. Second challenge, redesigning your team to scale. If you have found solution fit and you want to really scale, then you will have to hire people, the right people, fast, because you won't have the necessary skills or capabilities within your organization. Traditional internal recruiting processes are not geared towards working at startup speed, so that's really a challenge. Also, incentive structures are not in line with such a fast changing environment. So you have to ensure that your people stay motivated here. It's really key to involve HR early on and work together with them and really see them as a partner. Don't just throw things over the fence. In the short run, it helps to develop a network of experts that can come in on the fly and assist your teams and to set up recruiting support for the teams so that you can actually help them find the right profiles to scale. If you are scaling, we often see that organizations think in maximum risk versus minimum liability, which means that if you, for example, if you want to run an experiment, you have to run it through risk department and it's their job to sort of maximize the potential outcome and then to say no. Again, really important here is to get them on board early to make sure that they think in terms of minimum liability. Where you can run an experiment as long as it's isolated and you only showing a prototype, for example, to 10 customers with a low customer lifetime value. So in worst case scenario you lose those 10 customers, but that's not going to kill the business. Other problems we see sort of compliance with HR legal marketing here. Again, it's important to have either set up a sandbox environment so you can operate outside of those structures, or to involve people early on. And then unfortunately, internal politics often tend to drive decision making and not experimentation. Here it's really crucial to organize sponsorship trainings to involve those key decision makers to make sure that they understand the process and that they understand sort of the metrics that should be used to evaluate and make decisions. After scoping, if you answer those questions, it start to start looking at how we're actually going to design our accelerator. Three key elements here. First one, the preparation. What needs to happen before the accelerator actually starts? Secondly, what does that accelerator look like? What are the different formats that are out there? What are the pros and cons of each format? And thirdly, probably the most frequently asked question, how do you make sure that you have the right teams in your accelerator? Let's start with the first one, preparing the fields. If we look at a timeline and we say we will start our accelerator in three months, then you should really start working today. You should get a go ahead of your sponsors, which is your first validation that you can actually ensure there will be a follow up. You need to give your sponsors a sponsorship training. You need to form your teams, do an intake with the team at least a month before they start in their accelerator so they can clear their agenda, start arranging customer interviews and so forth. So let's dive into those in detail first, getting a go ahead of a sponsor. An example we use at one of our clients is to set up a landing page that we can show two key sponsors outlining what's the support we are giving you as an innovation team? Why is this helping you achieve your strategic mission and what will it look like? Basically that's sort of a conversation starter. And then it really comes down to sitting together with them and convincing them of the needs of this accelerator and getting their buy in. If you have their buy in, it's important to also give them the necessary support in the form of a sponsor training. Why? Because sponsors tend to ask the wrong questions. For example, if a team pitches an offering in a radically new market, they might ask what's going to be the ROI on this project? The team won't be able to answer there because it's really new. There's no historical data, so that's not the right question to ask. Second question would be, if a team demonstrates a prototype that looks fancy, you often get a response like, all right, let's build this. How much money do you need? That's also, again, not the right question to ask. You should sort of ask, what are the assumptions you have about your solution? Which ones were validated? We transfer not validated. How can you run another cheap experiment to refine your solution further before investing large resources into actually building the solution? The third one would be if a team pitches a solution has been tried before and that failed, is just shutting them down, saying, we tried this, it won't work. You're not empowering your team if that's your response. Alternatively, you should actually ask questions like, we've tried this before. Have you talked to those people? What have you learned? Why will it be different this time? And so forth. So what does that typically look like? It's really, it's a short training because the sponsors or senior decision makers are typically quite busy. So in a pace of, say, two hours, you inspire participants, impress sort of the need to innovate by sharing inspiring examples about the pace of change. You explain them through a simulation exercise. What are the key principles of innovation, Explaining things like prototyping, assumption validation and business model innovation. Then you help them spot and identify cognitive biases that everyone has, and you let those key decision makers reflect and react to those biases. And then finally, most importantly, you really get tactical, focusing on what is their role as a sponsor, how can they ask the right questions and how can they sort of steer their teams to success. Finally, a month before the accelerator starts, you should do a team intake. We like to start with a webinar where we sort of outline the strategic reasoning for the accelerator, we outline the whole program, we explain very clearly what's in it for you as participants, but also what's expected from you in terms of workloads, kind of tasks that you'll be asked to do. And then we ask you to fill in a scoping canvas. Scoping canvas is a tool that we designed specifically to facilitate these discussions and you can download it here. That scoping canvas is the basis of your team intake, which is an in person or remote via video call conversation between the innovation coach and the team, where you review the scoping canvas, you check the team composition, you allow time for questions. You really do a deep dive into practical matters like scheduling, interviews, confirming dates and so forth. So after preparation, it's time to start the Accelerator. But what does the accelerator format look like? We organized, or we have organized hundreds of accelerators. They never look the same, they're always different. But there are some standard formats that we see coming back and that are quite successful. So let's have a look at two examples. The first one is accelerator focus on horizon one. 12 weeks focusing on incremental innovation, where you would start on the first week with a two day workshop on problem exploration. Then teams get four weeks where they work one day a week and they get remote coaching to go out and validate those assumptions about the problem, to talk to their customers, to talk to experts. After four weeks or week six, you bring the teams back together and they spend two full days on developing a solution, thinking about different options and prototyping it, and a third day on defining a business model, thinking about additional revenue streams and coming up with high level ballpark figures. Out of those three days, there will be a lot of assumptions about the solution, about the business model. So teams get another four weeks where they work one day a week and they should go out and they should show their prototype to the actual customers and get their feedback. At the end of this entire journey. In week 11, you bring all teams together and you sort of stitch together all those insights into a concise story, into a concise pitch that eventually at the end of the three month program, teams pitch to senior decision makers. Another example is from Accelerator that's more focused on radical innovation, where you don't organize periodical workshops, but teams actually work full time for a period of three months on their projects where they get expert coaching for one to two days a week, and they have periodical sponsor meetings every three weeks to make sure that the sponsor and the team remain aligned. And the sponsor isn't surprised if the team comes up with a solution after month three that's completely different than they imagined. Throughout this process, regardless of the design of the accelerator, it's important to give structure and guidance to your teams. You can do that by remote coaching, but also by providing them with sort of a visual overview of the accelerator. So we typically like to design accelerator playbooks that explain the specific journey they are going through, that have an overview of all the different tools they are using, and step by step guides on how to use them. And we found that this really helps to give teams the necessary guidance and structure and to avoid them getting lost in the process. On top of that, it's important to provide the support outside of those workshops when your teams are working on the field. We typically do that through Remote coaching. So supporting them through validation experiments, making sure they are asking the right questions when they're showing their prototype to someone. It also really helps to keep momentum. And if teams are working from different locations, this is a great way to sort of enable remote collaboration. There are different ways to do this, and one of the tools we use there is, for example, mural, but that's really dependent on you as an organization, how you want to support your teams. So let's dive into the final question and probably the biggest so let's dive into the final question and probably the biggest driver of success for your accelerator. How do you select and recruit the right people? It's important to realize here that people are really at the heart of innovation. It's going to come down to who's in your teams on how successful your accelerator will be. If you look at the innovation journey, there are different phases going from problem exploration or problem feed to solution developments and so forth. And you need people who can take on different roles throughout that process. Typically we say multidisciplinary teams where people can take on multiple roles. We identified four archetypes and eight different roles that we found to be crucial during this innovation process. So, for example, during Problem Fit, you need somebody who can take on the role of an anthropologist, somebody who really likes to observe human needs and behavior and translate these into insights. On the other hand, you also need somebody who has a more analytical mindset and who can really prioritize the most valuable problems to solve. If we are going to the go to markets, we go more towards a scaling phase. You need people who have more of a marketeer or marketing background, and people are more builders or very entrepreneurial in getting things done. So we typically use this tool to facilitate those discussions with the team and to make sure that within the team there is no variety to fill out all these different roles. We have quite some experience in building those teams because we are trying to build a team like that ourselves. So as Board of Innovation, we are constantly hiring people. And one of our big missions is to build a team with superpowers. And what we found throughout the years is that it's really important to hire on characteristics and all on functions. And that's also what we advise towards. Excel innovation teams, when they are setting up teams for their accelerator, don't hire on a function, so don't look for one person for marketing or one person from finance, but rather identify what are characteristics that you think are important for your accelerator and try to come up with ways to test those and to Put the right people towards those characteristics. For example, at Board of Innovation we are looking for people who are fast learning, who really like to process a lot of information quickly, who can see the bigger picture. So you should be able to connect the dots, who are passionate, you want people that you get energy from and that are in draining energy. As a startup team within accelerator, you'll be working very closely together. So those team dynamics are quite important. People are mature and credible. And I think most importantly, people have a bias towards action, who are entrepreneurial, very hands on, who if given the choice, would rather go outside of the building and talk to a customer than doing disk research on their computer. And finally, more on a personal scale, I personally like to work with people who are ambitious, but also who don't have an ego and are humble enough to let other people shine. So that sounds easy, but it's actually quite hard. In our own recruiting process, we get about 200 applications for every person that we hire and we've designed a process that really tests for those characteristics. Now that's a very labor intensive process that's not extremely suitable for an accelerator. But we've applied this and we've changed this to fit more towards an accelerator context. So I just want to give you one example of how we did this at a client of ours where we chose the inbound versus the outbound approach. So typically sponsors appoint team leads and they form teams and it's often based on who is available and not, not necessarily on who is the most suitable for the role. So for one program that we ran at one of our clients, we started with a poster campaign. So we created a lot of awareness and buzz. There was a message from the CEO that fearless employees were wanted for a hazardous journey, sort of referring to the age of exploration when they were looking for people to go on the first trip to Antarctica. That created some awareness and buzzing people who are interested. So that's already a selection tool. People are interested and curious. Found the link on the poster and went to a landing page that really explains basically what's in it for you and what are we expecting from people that participate. So sort of a job description from there people could apply. And then we designed a variety of online and offline tests to test for those attributes, resulting in a small section of people that we were confident would work well together and had the right attributes to fulfill that entrepreneurial role. We can do a separate webinar about all those tests and so forth. But I think the key lesson here is consider using an inbound approach where you don't appoint entrepreneurial talent, you get them or you facilitate them finding you. There's a lot more information on this in a specific case study on this approach online in general. I hope you enjoyed this webinar and that you gained some valuable insights from it. I would love to hear from you and from your experiences. We are basically writing a book about this and turning this into a step by step guide on how to design and scope accelerators. So Please connect on LinkedIn or reach out via email and always happy to pay it forward and to have a chat with you about running accelerators and about your experience. I hope you enjoyed this webinar on innovation accelerators. For more information, you can Visit our website boardofinnovation.com and look for Innovation Accelerator or just browse around and have a look at our other tools and resources to structure your innovation programs.