The recent SWIFT Operational Forum Europe (SOFE) ran an Innotribe stream on this – difficult – topic. Innovation in startup companies is a given, it is their nature. So how do we recreate this second nature in established companies?
The central idea that emerged is one we called the “Castle and the Sandbox”.
Consider the core business of your well established company as “the Castle”.
The castle is solid, with thick walls, long lived. As is your core business. But the castle is not very agile. The goal of the people in the castle is to make sure the castle serves its purpose – they are focused on optimizing, not innovating.
What do you think happens to this person when she talks to the people in the castle?
Usually, the castle people will not be very friendly to this person. IN fact – the more unfriendly the more her idea is disruptive. They might pour burning oil on her!!
“Large, well established companies face a number of inherent structural disadvantages when trying to pursue blue sky business ideas” – said Anthemis Group‘s Sean Park and Udayan Goyal. Anthemis Group is a specialist investment and holding company, focusing on joint ventures at the intersection of markets, finance and technology. One of the recent and notable investments of the group is Bank Simple (recently renamed to just Simple).
This is true of established companies, but also of larger communities such as financial services. Of course Innotribe knows that. The UK Government as well: Dr. Chris Sear, of the Financial Services Knowledge Transfer Network, explained how this organization, sponsored by UK Government’s Technology Strategy Board, uses the open innovation approach to foster innovation in the entire sector. We in Innotribe are ourselves absolute believers in open innovation as our key principle. But Chris also explained that when ideas are there, it is not granted that anybody will do anything with them! There’s a castle in the industry as well!
So: if the castle is not the most suitable place for innovation, where should it be? If you go back to when you where a child, where was it that you could play, experiment and do all sorts of crazy things?
The sandbox of course!
I introduced the idea of the “incubator” – a protected place where people with ideas can “play”, or to try out their ideas, without impacting the castle. Very much like the sandboxes of our childhoods. The incubator is the place where you can try, experiment, fail, try again, fail again, and eventually learn and succeed. The key ingredients for innovation.
Innotribe runs an incubator – for SWIFT and also for the financial community. I explained this program, which is funded, located in a particular place, supported by specialists and experimented people available to coach intra-preneurs from SWIFT and entrepreneurs from the financial industry. If you are interested by the Innotribe incubator or you think you have an idea that could be a candidate for incubation, please see this link.
Udi and Sean presented as well their approach to incubation, called “strategic venture acceleration” – the idea is to create a “Newco”, a venture between and established company and Anthemis Group, and drive this venture through a 3 step process extending over about a year, with a view of a clear “go/no go” outcome. They said this approach provides a way to incubate blue sky and disruptive ideas with a minimal financial risk to the investors.
As is usual in Innotribe sessions, something new emerged, when the panel was answering questions from the audience – the “3 Ps” of innovation. I’ve illustrated it below.
Preparing for this session, the Innotribe team was thinking on how to illustrate an incubator for the audience – how to make it real for them? That’s where I thought about the Innovation Warehouse in London (www.theiw.org). Our friend Tony Fish, a big supporter of Innotribe, invited me earlier this year to see this place, where young (and less young :-) ) entrepreneurs can come for office space, advice, fellow startup support. A no frills place with very little hierarchy and administration, and full of people with sparks in their eyes and passion. So we took some 45 of SOFE participants in a bus and went to the Innovation Warehouse. I could see some were kind of overwhelmed, some were impressed, and some were … getting down to business!
I’m a big admirer of Tony – a very very successful entrepreneur. But on top of that, he impressed me so much when he explained how being a co-founder of this place was his way of “giving back”. #respect
We also ran a number of workshops with SOFE participants, including the big finale one where we asked them to build their own incubator. Here is the result – and I can certainly say we learned a lot but also had fun!!!
(cross-posted on Innotribe blog. Drawings by @copernicc)
This work by Kosta Peric is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.