In our Innovation Interview series, each month we talk to thought leaders, inspirers, and innovators to pick their brains about the state of innovation, trends, and what’s in store for the future. This week we caught up FEI: Front End of Innovation speaker Aaron Proietti, former Chief Innovation Officer, Transamerica.
What is the key to transforming ideas into market winning strategies?
Proietti: It's recognition that the ideas are easy, the execution is hard and requires a talented team with multiple roles to be played. Idea generation of solutions, features, benefits, etc. is just one small element. There must also be rich data collected on the environment. There must be people who know how to drive teams through prototype to launch. You must have expertise to explore what's possible, and what's not. And, there must be someone willing to champion, challenge, and coach the entire effort both within and outside of the team.
How does design thinking improve innovation?
Proietti: Most importantly, design allows you to meet the market, environment, consumer, or technology not only where it is, but where it is going to be. This has been called "skating to the puck" and requires strong discipline in the convergent thinking phases of design approaches.
Why are customers key driving factors in the market success or failure of new products and services?
Proietti: It's not the customers, themselves, that are driving factors. It's their behavior that's important. Much can go wrong when we assume that the customer is right in focus groups or other research efforts. Customer vetting is not a "check the box" exercise. It's an iterative, immersive, and often humbling exercise. We must be able to accurately measure & interpret customer behavior with respect to new products and services to understand what's working, what's not, what to exploit, what to discard, etc.
How can innovators learn how to work alongside the technologies that will shape their product/service/experience innovations of the future?
Proietti: I've always found this is the hardest part of innovation for a corporate innovator. Spending the majority of one's time in the same four walls, with the same firewalls, the same habits, and the same opinions tends to significantly limit the worldview of teams and individuals. Innovators must employ multiple strategies for understanding how the technology landscape is evolving and how it will impact their innovation agenda. They must appeal to experts outside their walls, they must attend conferences and trade shows both inside and adjacent to their industry, they must be willing to have the hypothesis: "What I think is true is wrong," and always be on the lookout for the evidence supporting that hypothesis.
How does leadership, teams, and the environment help empower and accelerate innovation?
Proietti: Leaders and teams must possess the skill set required to deal with volatility, uncertainty, complexity, and ambiguity (VUCA). They must recognize and expect VUCA anywhere and everywhere, and must have the IQ, EQ, and AQ (Adaptability Quotient) to overcome the challenges associated with it. The working environment must be designed to achieve the expected outcomes. Leadership must be practiced, for if you're not thinking about leading in a VUCA environment, you're not leading. And, the team must know how to work within these challenging environments to create the space necessary for creativity, collaboration, and risk taking. Those things do not happen on their own.
Why is business model innovation a powerful way to breakthrough?
Proietti: Innovators inside of corporations must have a strong, intimate understanding of their current business model. I spent most of my years in a business model designed for operational excellence, which has many antibodies which kill innovation. When considering a competing business model, one must understand the specific aspects of that business model which will compete for resources in the current business model. For instance, a business model designed for operational excellence tends to have just as many support staff as is required to run the business, if not fewer.
Innovation demands will stress these groups such as legal, operations, actuaries, etc. The temporary excitement for innovation may help in short spurts, but over the long haul the operational business model will not be able to support the resources required for the competing, innovative business model. If a company is able to overcome those challenges, they should seek to build new business models to full scale as a stand-alone business before trying to integrate them back into the old business, otherwise the incumbent business model will likely continue to kill the new one.
How can open innovation leaders de-risk external collaborations and usher in more efficient pathways into their organization?
Proietti: In Exponential Organizations, Salim Ismail describes 11 potential traits of an exponential organization. Several of these traits deal with open innovation from crowdsourcing to staff on demand. These create new challenges for older, traditionally internally-focused organizations. Ismail also asserts that "Any company built to succeed in the 20th century is doomed to fail in the 21st."
Leaders must understand the new playing field and anticipate that new entrants are likely to arise from companies that leverage more open innovation sources. The question of de-risking then can be laddered up one rung from "How do we limit the risk of such-and-such a tactic" to "How do we mitigate the risk of being overtaken by new entrants who play by different rules?" When framed that way it shifts from a question of "Why not?" to a question of "How can we?".