How To Make Innovation A Predictable Process
You say I'm going to test 10,000 ideas, I'm going to prototype 100 ideas, I'm going to launch 10 ideas, I'm going to take 5 ideas to market and look at those products. So you look at what the conversion rate looks like. You're committing to a volume of ideas through a pipeline as opposed to an amount of cash. That's quite an interesting change for these large businesses because they used just to put in money and see what happened. One of the biggest issues internally was that nobody believed anything would ever happen because they'd spent so long trying to do something and it'd never happened. They didn't believe that any amount of innovation effort was going to make their big Goliath business do anything. So it is as much about communication internally; to say we can launch something. Our full intention is to launch this many, this many, this many, and therefore people start to contribute and they start to create more of a culture of innovation because they can understand where things are going, what happens, how they get to market.
Dryburgh: The first thing I thought as you were speaking was that it was like, "you might like eating sausages but you don't want to visit the sausage factory." but it seems as if you are doing more. You aren't just putting the innovation process in a black box and saying "just look at what comes out." You're turning it into a more comprehensible, more controllable process.
Valman:What you're doing is risk management, in the same way that you do it in a supply chain and you work out how to reduce the risks. You're doing the same thing with the complete unknown of innovation. You're saying okay, how do we measure trends so we can understand what our cost is, what goes in, what comes out. That tends to be quite an important factor for anyone that's going to invest in innovation and see returns. The biggest problem that I'm seeing at the moment with particularly large corporates is their saying "well I've invested a lot of money into innovation in the last few years and I don't really have much to show".
They've managed to create enormous buckets of ideas, enormous buckets of PR campaigns, but now they're sitting there saying okay I need to measure my ROI, the return on the 100 million dollars that I've spent on innovation. Most of it went to market at such small volumes that it didn't make a dent, and now I need someone to come in, take that bucket of ideas, sort out what's going to work, get some of those into the market, and show me how I can actually make some money on this stuff.
Dryburgh:You've described your process, which is pretty controlled for an entirely uncontrollable process like innovation and it's a fairly transparent way of spending the money and seeing what exactly you're getting at each stage of the process. Could you contrast that now with what people have been trying to do on their own with the hundred million pound budget that hasn't been able to produce that much?
Valman:Now this varies, I don't want to be damning on the entire world, although I'm quite good at that. What's happened a lot is that people have invested in innovation as being this bright shiny thing. So they've invested a lot of money in front end innovation of new ideas, new conceptual stuff, new future thinking. There's been quite a bit of ignorance towards what's feasible because press releases are more interesting than anything else at that point. There's been a lot of shouting about it because, you know, it helps recruitment, it helps fundraising, it helps everything. What they've ended up with is a lot of ideas that have been lightly validated or are good for a £50,000 press campaign but actually weren't feasible as a long term product, part of a product range. A few things have gone through but either they've taken so long that they've missed the opportunity in the market or they've been done in a scrappy way.
https://www.forbes.com/sites/alastairdryburgh/2018/03/15/how-to-make-innovation-a-predictable-process/
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