“ I want to be realistic about innovation within a large institution. I don’t want innovation to die on the vine. Start-ups can be disruptive because they are not encumbered by existing systems and business models. They can create the space to start from scratch and re-imagine what is.”
It is the start of 2018, and BIF’s Patient Experience Lab Manager and I are easing into a conversation with an innovation leader within a large health care system.
This conversation is familiar; it starts in similar territory as many others. “Tell me about your innovation agenda,” I ask. “What is the mix of incremental and transformational?”
Invariably the response, like the one above, skews incremental, and it is not without good reason. Incremental feels safer and more realistic; more manageable and more practical. It skews towards easy wins with stories of success that will light up leaders’ appetites for more. It favors solutions to known problems that can demonstrate an ROI that is consistent and valuable to the existing model. It leans into concepts that can scale using existing infrastructure; change management need not apply. It will often call for diluting the innovation imperative by building a culture of innovation.
Despite this approach being the “norm,” most executives are dissatisfied with their innovation portfolios. Few generate “breakthrough” innovations that are commercialized. Few prevent disruption from smaller and faster start-ups and may lead to organizational friction. The average tenure of an innovation leader is less than 24 months. One of BIF’s members once told me that the commonly used acronym for Chief Innovation Officers (CIO) could just as easily translate to Career Is Over.
The problem? Institutions need an innovation strategy that can both improve the way the model currently works, while exploring and testing new business models, but most institutional leaders are ill-prepared to envision, structure, and roll-out this type of portfolio, in part, because they don’t have visibility into the possibility of the “both/and.” Instead, they are lured into the safety and rationale of incremental change.
Which is why BIF’s work begins by dismantling the myths that ground incremental innovation as the only safe and practical approach:
Innovation Doesn’t Die BECAUSE It is Transformational
Innovation doesn’t die because it is transformational. Transformational innovation dies because it lacks support and resourcing from leadership. Leadership is the number one condition for enabling business model innovation. In our experience working with clients across health care, education, and public service, leaders intent on transformation will break down silos, challenge institutional norms, and mobilize the unusual (and necessary internal) stakeholders required for transformational work.
A Start UP Is Not the Only Space to Explore New Business Models
Start-ups are often lauded for their innovation capacity because they are encumbered by incumbent models (or the straight jacket of an existing business model). But a start-up is not the only space for the exploration of new business models. Start-ups are not the only space to be lean and agile in service of new models. The answer lies in creating an adjacent space, well resourced, and visible. This is significantly more than the IKEA furniture, whiteboards, and sticky notes of innovation theatre. This is more than “running fast, low, and dark” — the operating model of many “skunk works” innovation teams.
The adjacent space needs to be able to access the capabilities of the institution — such that it can access the raw ingredients that can be baked into new conceptual designs. The secret sauce here is gaining permission to “borrow” capabilities — without disrupting the flow and efficiency of existing operations, while simultaneously being able to free capabilities and deploy them into small-scale innovation experiments.
The adjacent space needs to be visible, with permeable walls such that the learnings can be in service of the new and the old models. It needs to have a clear agenda and mandate with the resources required to do the work.
Think BIG. Start Small. Scale Fast.
This is an often quoted philosophy here at BIF and for good reason. We need to think big. Patients, citizens, and students are all screaming for better models while existing models are collapsing under their own weight, as well as pressure from disrupters. Transformation is the imperative. We know that Rome wasn’t created in a day, and neither was transformational practices. This is how a generative approach to testing, refining, and testing again leads us safely into the future. Our labs focus on what the user needs, translates this into a future-facing customer experience, and defines the next practice that will underscore this customer experience with opportunities for both improving the way the models work today and bridging into the business model of the future.
This approach enables us to identify what the “it” is before we focus on how it will scale. Only once new models have been proven to work for a small N (the size of the N relative to the size of the test group), do we figure out how we would engineer it to serve the N of an alpha group, then the N of a beta group — so on and so forth.
I think often that the goal of early conversations with innovation leaders is simply to dismantle these myths, to widen the aperture of what is considered safe and practical when it comes to an innovation portfolio. A mix of incremental and transformational is important and within reach of most leaders, if they have the will and know-how.
Sometimes leaders are ready to jump into the exploration of transformational next practices and new business models, but more often than not, they need to see the path, understand the investment, and bring stakeholders (especially their Boards) along for the ride. At BIF, we created Membership as an easy way to help leaders do this and leaders have used in a variety of ways:
- To work with leadership teams to frame the innovation mandate and agenda within an institution
- To build meaningful demand amongst key stakeholders (most often Board of Directors) for transformational innovation
- To troubleshoot key strategy and organizational challenges while implementing innovation portfolios
Our methodology is a framework for creating Next Practice Labs and for running demonstration projects that will result in scaleable new business models. Applying this framework through sponsored projects within institutions and engaging in membership are not mutually exclusive, and my favorite partnerships are those that use the cross-ruff from membership to project to membership to ensure that leaders are able to maximize returns and benefits of their innovation portfolios and projects.
This is the big work; but like I said, first we need to start small. And a Membership provides the first small step towards shifting the conversation about what is safe, practical, and possible.
Think big, but start small. Join us in a Membership conversation today.