David Crean Q&A: Launching Innovation in a Large Organization
Innovation. Innovation. Innovation.
You see the word everywhere. Ads on LinkedIn, TV commercials, billboards and even on construction sites--”Please excuse us. Innovation in progress” reads a sign from an airport parking deck. This article (including the title) will even use the word 47 times.
David Crean, Innovation Leader at Anthem
The term innovation is seemingly omnipresent.
Is it because a synonym is conspicuously unaccounted for? Or maybe it is just a trendy buzzword used to help brands position themselves within the ‘in’ crowd?
According to David Crean, Innovation Leader at Anthem, Inc., the term may be watered down because it is used to describe so many different things. It is without a unified definition. Innovation means different things to different people.
David, a proven innovator, leads a world-class innovation function that keeps Anthem as one of the leading health benefits companies in the US.
Innovation is more than his day job; it is his passion. As David said, “To a lot of people, innovation is a nice idea until it’s time for them to change or execute.”
He said business innovation is seen as necessary to compete in 21st-century enterprise. “While most large companies want to be innovative, it’s difficult because the status quo is particularly strong, change is uncomfortable and difficult, and near-term financial performance is how the game is scored. We need to look no further than examples like Blockbuster and Kodak when it comes to seeing how these realities can play out.”
David was hired specifically to establish, build and grow a world-class corporate innovation function about three years ago.
Since then, he and his team have helped this leading health benefits company transform by establishing the people, place and process for innovation to take place. They generate groundbreaking ideas from inside and outside the company, delivering solutions to market.
Our Bridge Innovate team sat down to talk with David to find out his thoughts on the state of innovation--in definition and practice--and learn from him how large corporations can build out a culture of innovation.
David, do you think the word ‘innovation’ is watered down? Or overused?
Yes and no.
In one sense, yes, it is watered down. I mean, every other TV commercial, every other billboard and every company’s mission statement now includes the word ‘innovation.’ It is everywhere. So, in some sense, the word carries less power because of how frequently it is used.
However, I actually don’t think that is as big of an issue as the fact that ‘innovation’ means so many different things to different people. It takes on many meanings, particularly in large corporations where every executive in the C-Suite may have different ideas of what ‘innovation’ means to them. So in this sense, no, it is not watered down—but it is important to know what someone means when they use the word.
In any C-Suite of a large organization today, you are likely to get many different ideas of what innovation is and what constitutes success. For example, an HR leader might say it is about culture change and having all associates think more creatively in their daily jobs. A Chief Information Officer might say it’s about exploring and experimenting with emerging technologies like blockchain or artificial intelligence. A chief strategy officer might say it is about disrupting our current business from the inside so that it does not get disrupted from the outside. To a chief operating officer, they might say it is about accelerating new ideas to market to drive value in the current business model.
You get the idea. It is all in the eye of the beholder.
None of these definitions are wrong. They are all under the umbrella of innovation. I call these different definitions the flavors of innovation. Like with ice cream flavors, vanilla is no more right or wrong than chocolate or strawberry. Someone has a taste for each or multiple flavors. Each one of the flavors of innovation has a purpose and each also has a metric for how success can be measured.
When multiple definitions abound, how do you define success? How do you measure ROI—especially in such a large organization?
Well, again, it depends on which flavor of innovation we are talking about. If we are talking about fostering a culture of innovation, we might use metrics like percentage of associates submitting new ideas or the number of new ideas generated. If we are talking about accelerating new ideas to market, we might use a metric like number of solutions launched or the ROI of the new solutions. If we are talking about exploration and experimentation with emerging technologies, we might use metrics like the number of use-cases identified or prototypes developed.
There is also a time element to finding the right success metric. What I mean is: you can’t measure ROI when you are just getting started. At first, building a pipeline of innovative ideas might be the only thing that can be measured. After that it might be more about the throughput of those ideas to market. And then down the road, it can be about the ROI that those innovative solutions are delivering.
The one thing that every flavor of innovation has in common is the need to be quantifiably measured. Without a way to measure success, innovation initiatives can flounder or be defunded in a hurry by corporations focused on the quarterly metrics by which they are measured.
In a large organization, in addition to having success metrics that align with the flavor of innovation, it is also important that the output of the innovation team be connected to the downstream success of the business. In order to do this, it is important to have business leaders and critical execution stakeholders involved from the outset.
Any tips on increasing the likelihood of the prototype making it to market?
I use a track & field analogy. Think of a relay race. When one runner passes the baton to the other, it is not done at a single spot at a stand-still. There is an exchange zone. When one runner passes a baton to the next, it has to be done right. This is within a 20-meter zone in full stride. To do this they have to know whom they’re passing it to, what hand it will be passed from and if the person prefers palm up or palm down.
They discuss it, they practice it, and then they execute it. Our transition model is similar. We have to understand who is receiving the output of our work (usually a prototype) to take it to execution and operation.
Do they operate in a waterfall or agile model? Do they want product requirements or epics and user stories? Do they want a detailed technical architecture and complete user interface developed? In the end, it needs to be whatever is needed to ensure the end success. So, just like the victory in a track relay race is at the finish line of the fourth leg, our success is when the solution makes it to market and delivers an ROI even though the innovation team ran the first leg of the race.
What do you recommend for others who are just launching an internal innovation capability? What’s required regarding culture, leadership, and resource commitment?
From my experience, there are three significant aspects of launching a corporate innovation capability successfully.
The first thing to understand: What is your innovation mission? What is the purpose of innovation at your organization? What do you want to accomplish? If you don’t understand which flavors you’ll focus on then, it can be challenging to support and sustain. Knowing what it is you want to accomplish helps you decide what kind of space to build, what kind of people to hire and what kind of ideas to pursue. This is a prerequisite to an innovation function.
The second is to understand: What is your organizational risk tolerance? The flavors of innovation that your leaders choose is a great indication of risk tolerance. For instance, disrupting your current business model is more risky than incremental innovation to sustain your current business model.
The third is to understand: What is your company willing to invest and spend? Will the funding come from existing operating budgets or will a separate fund be set aside for innovation? Will innovation initiatives be prioritized amongst all the other initiatives or considered independently? Will there be a dedicated team of innovators and a separate facility designed for innovation? These are all good indicators of a corporation’s commitment to innovation.
Mission, risk and funding are essential to keep in mind as you embark on a corporate innovation effort.
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