Without progress you can’t succeed. And progress comes from innovation.
Although we’re in the midst of a wobbling economy, with significant layoffs and uncertainty, you can’t cut your way to winning. In the short term, you will make many tough decisions to stabilize your company and improve its financial performance, but no amount of cost cutting will make a difference without progress and innovation.
Innovation is both a mindset and a practice. Everyone in your organization needs to problem solve their way through the challenging times ahead. Problem solving is innovation. Every employee will face an increasing number of constraints and be asked to do more, with less. It will take an innovation mindset, with creativity and tenacity to get through.
While most of your focus should be on your core business, you know that you need to simultaneously keep an eye on future growth. Today the pendulum has swung to optimizing and ensuring survivability of your core, but down the road, the pendulum will swing back the other way, and your customers, investors, and partners will ask, “What’s next? Where are the new products or services that will drive growth?”
Everyone in your organization needs to problem solve their way through the challenging times ahead. Problem solving is innovation.
Unfortunately, the pendulum often swings too aggressively. We’ve seen many companies go “all-in on growth at all costs” and get burned. We’ve seen other companies drastically under-invest in growth innovation, only to be left behind. Now is not the time to turtle.
At the same time, the speed of change is accelerating. Generative AI looked like a toy for several years (and most people weren’t paying any attention) before ChatGPT launched and suddenly, everything changed. Trends seem to burn hotter and dissipate faster than ever before. Is anyone talking about crypto anymore? What about the metaverse? Some people are, and perhaps as the hype dies down, you can finally figure out what’s real and where the meaningful implications are for your business. Generative AI is exploding. Without question there are people in your company discussing the implications of Generative AI and ChatGPT right now. Good. This is your chance to use a hot trend to explore growth innovation possibilities without disrupting your shorter term goals and priorities.
Here’s how I would recommend approaching building and supporting an innovation system that focuses on driving impact from trends like Generative AI (which isn’t going away and may have significant impact on your business):
- Set up a small, central team to deep dive into generative AI and its possibilities. This central team will do research and become familiar with how generative AI works, experiment with ChatGPT and new tools that are emerging daily, and become internal “domain experts.” This team needs to be able to build and test things; it can’t be focused on making fancy corporate pitch decks. It needs to be able to prototype, hack things together, and get “dirt under their fingernails.” Whenever we work with corporate partners on new innovation challenges we always encourage the creation of cross-functional teams of doers. And your job as CEO is to ensure they have the air cover to explore and experiment.
- The innovation squad should put together basic educational material on generative AI and what it can do, and then you, as the CEO, should help them disseminate that information to the entire company. That way, its importance is recognized — this isn’t just a side hustle for your company; the exploration effort is a strategic priority. The key is that you’re not telling everyone, “You must implement generative AI.” Instead, you’re saying, “We need to understand generative AI and its potential implications. Quickly. Maybe it doesn’t lead anywhere, but we don’t want to be flat-footed.”
- Mandate the small team to engage business units and understand where they’re struggling with their core priorities. As those business units are working to do more with less, increasing efficiency, and stabilizing their operations, your new innovation squad can work closely with them to identify potential opportunities to help (with their newfound knowledge & experience with generative AI.)
The innovation squad should conduct brainstorming and ideation sessions with each business unit to explore the potential for generative AI. Do this in a structured and repeatable way (so it becomes a “best practice” within the organization.)
The innovation squad, along with the business units, may need to engage customers and other external subject matter experts as well. This is a great opportunity to innovate differently, leveraging new skill sets and capabilities that may not be fully baked into how your business units operate daily.
- Now the innovation squad needs to prioritize opportunities to pursue. Which business unit(s) is the most engaged? Which one has identified the biggest impact that generative AI could have? What evidence do they have? What conviction do they have? There’s no time for long, complex corporate pitch decks. Think and act like a startup. Speed matters. (Startups use pitch decks, too, but they’re not hundreds of slides long.)
You should be involved in this process. It shows top-down commitment to the effort, but also provides you with an excellent opportunity to assess how your innovation squad is working, and which business units are showing the level of creativity, grit, and boldness to move forward. This will help you identify the innovation heroes within your organization.
- Pick at least two or three initiatives and have the innovation squad (who are the generative AI experts) work daily with the business units to execute. No project should take longer than three months to at least get a pilot executed. Challenge teams to move faster and iterate (as opposed to building “mega projects that never launch.”)
You’re picking at least two to three projects because you know some will fail. They won’t get off the ground, or they won’t deliver on the expected results. That’s to be expected, and you need to take a portfolio approach. Two projects doesn’t make a portfolio, but it increases the odds that at least something is successful.
Pick a project (or projects) that is closer to the core (improving internal processes), and another project (or projects) that is further from the core. Identify the lower-hanging fruit projects that seem easier to implement and can have immediate benefit, but don’t ignore those longer term bets that could drive meaningful growth in the future.
Measure success, at least initially, by how quickly the innovation squad and business units get things done. While focusing on outputs isn’t our end goal, you’re trying to ensure momentum and positivity in the face of all the challenges your business is dealing with. Over time, shift the focus to outcomes — what has tangibly improved within the business units through the projects they kicked off? Again, we can leverage what works for startups: measuring progress through key stages of engagement, growth, revenue, and scale. Here’s a simple dashboard that walks through this in more detail.
- If things go well, rinse and repeat. Even if they don’t go as expected, try again. Most things don’t work perfectly the first time. This process is meant to solve real problems, engage lots of people within your organization, begin to build innovation capabilities and muscles within the company, and drive innovation–all at the same time. It’s not easy, but it’s absolutely achievable. This is not a process you should aim to over-engineer. You can’t turn this into a checklist. Keep it simple and focused, iterate along the way and learn.
While I used generative AI as the example above, you can take this approach with any starting point. Perhaps there’s a different trend you want to explore, or an under-utilized asset, or a growth mandate. The key is finding balance between an innovation squad that works outside of the normal, daily operations of your business and the business units that make up the company. Instead of reacting to the whims of a pendulum swinging away from or towards growth and innovation, you’re running smaller, faster experiments to find balance and be ambidextrous in your efforts to keep your company stabilized, focused and growing.
Ben Yoskovitz is an entrepreneur, investor, product expert, and author. He is a Founding Partner at Highline Beta, a hybrid, corporate venture studio and VC firm that works with global enterprises including RBC, Intuit, and AB InBev, and invests in startups that pilot with corporations to drive growth innovation. Ben is also the co-author of Lean Analytics: Use Data to Build a Better Startup Faster, published by O’Reilly and translated into multiple languages.