When a downturn hits most companies mothball their innovation projects. Conscious that only impact counts in this industry, Rob Chapman, chief executive and cofounder of Founders Intelligence, is very picky about who he works with. He only wants clients where innovation is part of the core strategy and the chief executive is serious about scaling. His advice on how to get a hit in corporate innovation? Have a big enough budget so you can have a wide range of projects.
How do you define ‘innovation’ and how do you best describe your job?
Innovation is not an aim in itself. Most companies looking for innovation actually want to create growth through new propositions, business models and technologies. We define this as “Creative Growth”. It is the counterpoint to “Investment Growth”, where organisations scale and optimise existing propositions and processes.
Innovation is not an aim in itself. Most companies actually want to create growth.
Creative Growth is exceptionally difficult in corporations, but large companies that are good at it demonstrate a much higher shareholder return on average.
We help clients understand where new value will be created in their industry and help them to participate in it. We are a team of entrepreneurs but also work closely with the founders of the best startups relevant to the project. This entrepreneur power makes our projects insightful, but also grounded in what people are actually delivering in market. It’s practical because for most opportunities there is a delivery partner or investment with whom to drive results quickly.
What do you think will be the biggest threat for Founders Intelligence in the next five to 10 years?
A major upset in the macroeconomic environment. Client investment horizons will immediately reduce and only service providers with the highest impact will survive. This makes us very focused on working with clients where the chief executive has genuine ambition to invest in scaling new propositions and where innovation is part of the core strategy.
Of course, we saw during the last recession that a tough macro environment actually accelerates changes in customer behaviour and increases start-up activity. A lot of innovation theatre will disappear but chief executives who really believe in transforming their industries will create even more value.
How do you think innovation and design companies will differentiate themselves in the next five to 10 years?
We differentiate by hiring and nurturing a rare type of person. We need people who are natural entrepreneurs, but also have the structure and rigour to make ideas stick in a corporate board room. The “nurturing” part is particularly important. We work hard to make our culture and values part of everyday conversation in the business. We’ve seen a lot of large consultancies and corporates hire entrepreneurs, but without the right support and environment it’s rare they thrive.
We’ve seen a lot of corporates hire entrepreneurs, but without the right support and environment it’s rare they thrive.
Ultimately it’s demonstrable impact that will differentiate consultancies. In seven years we’ve done no marketing as our results with the likes of Sky, BP, Unilever, Fannie Mae, ITV and Facebook have let us grow through recommendation.
The consultancies which worry about their marketing differentiation rather than client impact will not survive the coming bonfire of innovation theatre.
How do you challenge yourself and your team to ‘think outside the box’?
No matter how many creative ideas we and our clients have, there will always be more elsewhere. All our work involves talking to the founders, investors, academics and pioneers trying to reinvent industries about how they would work with our clients and what they believe will be true about the future that’s not true today.
The creative bit we do is making sense of that highly unstructured data set, making connections and forming a clear strategy and narrative from it.
What is currently not working in corporate innovation?
The problem is rarely how to find good opportunities. It is how to scale them in a corporate environment.
The problem is rarely how to find good opportunities. The nut that few crack is how to scale them in a corporate environment. The issue is often seeded in the early days of an innovation team if they’ve not linked innovation activities with their corporate strategy. Teams who rush straight into the “how” of innovation without answering clearly the “why” and “what” end up struggling to articulate how their projects add up to a strategic change. This makes gaining support and major funding extremely difficult, even when the commercial case looks compelling.
Moving quickly and learning is vital when validating specific growth opportunities, but a lot of lessons about how to set-up innovation teams have already been learned and can be baked in from the start.
What advice would you give to a new head of innovation — what do they need to get right from day one?
Ensure that your budget allows a big enough portfolio of projects.
- Invest time upfront in finding the set of beliefs that your executive team share about how the industry will change and focus your activities on gaining exposure to them.
- Make sure that your team is set-up to access the assets and advantages that the existing company has to offer. Otherwise, you will only have the disadvantages!
- Invest in setting up the culture and capabilities for innovation, beyond the individual projects. Your beliefs will evolve but the business will get better and better at capitalising on the opportunities it uncovers
- Ensure that your budget allows a big enough portfolio of projects that there is a realistic chance of finding high-scale successes, but not so big that the team loses focus and efficiency
What book has been most helpful to you in thinking about corporate innovation?
The books I’ve found most helpful are about creating culture and understanding motivations.
Creating the right conditions for big new revenue opportunities to get to market is partly about the structure, teams and processes, but so much of it is about creating the right culture within the team and influence in the wider organisation. With that in mind, the books I’ve found most helpful are actually about creating culture and understanding motivations.
I’d particularly recommend The Culture Code by Daniel Coyle and Why We Fight by Mike Martin. The second is an unconventional recommendation, but it’s full of analysis of the deepest layers of human motivations and behaviour based on the latest evolutionary psychology.