BLOG: Not another innovation hackathon, please…
Without the right structures, processes and focus on generating results, attempts at innovation can quickly become ‘innovation theatre.’ Let us help you build the behaviours and encourage the ’embrace the startup’ mind-shift required to make your innovation centres effective.
It seems that successful established companies often get trapped by their previous success in a manner that limits their capacity to innovate. We are living in an era where innovation is imperative and traditional businesses are being disrupted by people from outside the industry. It is undeniable that the world around us is changing. Technology is transforming business and will continue to do so in more dramatic ways. Adjacent industries whether they are the car manufacturers, the home security systems providers, the utilities or the telecoms companies are increasing looking at how they can utilise their substantial assets and relationships with their clients to deliver more relevant and compelling insurance based propositions that will change the face of the insurance industry
The sheer pace of change in social trends, economic factors, and emerging technologies is having a dramatic impact on the largest corporates. The average lifespan of companies is getting shorter and we are seeing the emergence of startups that quickly become billion dollar companies changing the business landscape at a pace never experienced before.
Large corporates often lack the sense of hunger and urgency to come up with new propositions or to challenge their existing processes due to their current success and focus – no team can defend only – pressures on executives to meet short-term market expectations for returns.
It is too simple to advise established companies to act like start ups. Large companies are not startups and nor should they strive to be, considering that their day to day remit is running an already successful business. The best way to innovate is for a large company to view itself as an innovation ecosystem with various products – the key issue is that most corporates lack the processes, knowledge, skills and capabilities to be effective innovation machines.
Ultimately innovation fails when a large company decides to use the same processes it uses to manage its core products to manage innovation projects – this approach also encourages managers to develop a tendency to invest in sure bet products for the current market.
For an insurer to transform itself into a next generation, innovative business able to deliver products and services that are relevant for tomorrow’s clients there are a number of elements that need to be considered
Before Innovation thesis
Innovation must be part of,and aligned with the overall goals of the business – an innovation thesis should clearly set out a company’s view of the future, and their strategic objectives of innovation. For instance, if the view is that driverless cars are the future of motor insurance, their strategy needs to be based on investing mostly in ideas that bet on that future – meaning creating products that will be required by car manufacturers to protect themselves against their in-car systems failing or against their cars being hacked.
In order to achieve the broader innovation goals, and to effectively deliver on the innovation strategy insurers need to create and manage an innovation portfolio, which contains projects that cover the whole spectrum of innovation across core, adjacent and transformational domain areas. The portfolio should ideally have early stage projects as well as mature and established propositions and a range of safe bets alongside disruptive propositions aimed at emerging markets.
In order to execute on your innovation strategy it is essential that you have a framework that you can use across the organisation to manage the way that ideas evolve into pilots or MVP’s, then onto projects and ultimately become core propositions. The clarity helps everyone understand what is required to move ideas or projects through each stage-gate.
If you want the business to focus on something then it has to be measured. Creating and implementing an appropriate Innovation KPI Framework is a powerful way to move from innovation theatre into innovation becoming core organisational capability
Most insurance companies have now created an innovation lab within their business – unless this and the associated programme is designed in the right way it can often work against the wider organization innovation.
Innovation Labs are generally best positioned as the centre of expertise rather than the place where innovation happens. Often, the HR department is responsible for ensuring that the company’s HR framework/policies are designed and implemented in the right way and to provide centralised services. The team is not there to manage the staff and any work that needs to be done.
Also, HR departments are staffed by qualified HR experts, not people who got promoted from other functional departments, such as the claims department. Equally, it is just as important that innovation departments are headed up by individuals that have the relevant experience and skills to support that function in the business.
Just in the same way that a large organisation would not dream of managing their HR function on Excel it is essential that the company-wide innovation programme is managed on a purpose designed innovation platform. This also makes it easier for the business to have greater visibility of innovation capability. The innovation KPIs can be managed more effectively and senior management can manage activities and focus across the organisation.
How can we help?
Our corporate innovation team can assist with undertaking a review of your existing innovation function and providing guidance on how to turn that into an enterprise capability. We can help create and implement innovation strategies, Innovation theses, an overview of how evolving consumer behaviours, emerging and disruptive technologies and next-generation business models could impact your business.
We can also provide the skills and tools to enable your whole organisation to become more entrepreneurial and deliver propositions that are more relevant and engaging to the next generation customers.