In the face of rapid, complex global change and shifting customer purchasing power and behaviors, large companies feel pressure to continuously adapt and innovate new products and services to remain competitive and relevant. However, in the face of this urgency, many companies rely on traditional innovation structures to ask themselves: “What products and services will differentiate ourselves from competitors and meet our customers’ needs?”
By jumping straight to the “what,” companies are missing a critical aspect of innovation – they are skipping over the “how” of innovation. Continuous and responsive innovations require a company to envision more fluid and decentralized team structures and a company culture that provides an enabling environment for creativity, intrapreneurship, and risk-taking. Essentially, companies need to be increasingly innovative in how they “do innovation.”
Vodafone is one example of a large, multinational telecommunications company that has turned a centralized and traditional innovation structure on its head through the introduction in 2011 of its Innovation Program. Instead of a rigid, top-down model, Vodafone developed a distributed and fluid process of innovation and experimentation led by what is now a network of 60 employees around the world. The cornerstone of this program are the “Innovation Champions.” These champions are Vodafone employees representing over 24 countries and a dozen different departments, from government affairs to sales and marketing. Their sole role – beyond their full-time positions that Vodafone hired them for – is to lead conversations face-to-face with Vodafone’s customers and to innovate with them.
One important ripple effect is organizational culture change – champions of innovation begin to infuse their direct teams and country offices with new behavior and ways of thinking and organizing. This type of bottom-up change becomes a fantastic complement to efforts led by senior leadership, which are often met with doubt and resistance.
Vodafone and Ashoka, a global network of 3,500 social entrepreneurs demonstrating new ways of organizing across silos for greater impact, conducted a series of interviews with Vodafone’s Innovation Champions to identify the key design principles involved in a distributed and fluid process of innovation. This process also identified the major benefits of such an approach, for both Vodafone the company, its customers, and its employees. The research also surfaced insight and knowledge for those corporate executives exasperated with the old way of doing innovation.
Everything is Centered Around the Customer
The Innovation Program in Vodafone’s Global Enterprise business (VGE) is based on the idea that by listening to customers, Vodafone can help them to transform their businesses.
Vodafone starts the journey with design-thinking inspired Innovation Workshops. These are day-long conversations with senior executives from Vodafone Enterprise that explore how they envision their business progressing in the next three years, and how mobile technology can help to realize that vision. Vodafone has embraced rapid prototyping, lean startup, and agile methodologies to enable fast responses to new opportunities.
It’s a shift that involves moving from traditional solutions-selling to being comfortable saying to a customer, “Tell me your problems — what keeps you awake at night, what are your fears?” It’s about changing the relationship with the customer, from one of service provider/client to one of partners, and from selling to listening.
Decentralized, but Integrated
As in most organizations, there were already positive troublemakers at Vodafone, and the idea was to use these change agents – from across diverse country offices and departments – to deliver the Innovation Program globally. Vodafone enables the success of these “Innovation Champions,” as they are called, by providing a globally-consistent methodology for speaking to customers, endorsed by senior leaders and supported by training, community, recognition and rewards for the group’s innovation work. While the approach is global, Vodafone recognizes the need to give these employees the flexibility and permission they need to operate. That creates a decentralized, but integrated structure.
An interview with an Innovation Champion from Government Affairs spoke about the siloed nature of the company’s departments, where teams are naturally focused on improving their direct KPIs [key performance indicators] through their respective product lines. Several Champions noted how the Innovation Program fosters better collaboration and integration across products, teams, functions, and KPIs.
The principle of “decentralized but integrated” is aided by the fact that Innovation Champions have full-time roles at Vodafone that may have nothing – or very little – to do with innovation or interacting directly with customers (while for others, the integration into their full-time role may be more natural.) This helps to embed innovation across the entire organization. Teams that normally have no relationship with innovation processes begin to associate innovation with new revenue streams.
Only the Most Passionate and Intrapreneurial Employees
Employees who raise their hands to be part of the Innovation Program generally have an internal spark to do things differently. They are the out-of-the-box thinkers. The role is largely in addition to an individual’s daily job, so it has to tap into a real personal passion. But for those natural, positive troublemakers, the Innovation Program at Vodafone acts as an excellent outlet for developing and encouraging intrapreneurial talent.
Furthermore, allowing employees to self-select to become Champions allows Vodafone to identify those employees who have a desire to innovate. Innovation Champions must be on target to achieve their day-to-day KPIs to take on the extra work load. This results in a natural selection process of high achievers.
Interviews conducted with Innovation Champions surfaced several common characteristics among these individuals:
- Comfort with ambiguity of process and outcome;
- Enjoyment of personal challenges;
- Systems thinkers (one Champion referred to the image of connecting Legos);
- High level of self-definition (comfortable holding a vision and pushing it forward);
- Cognitive empathy and good listening skills;
- Accountability/follow up;
- Ability to get buy-in and navigate the system;
- Willingness to embrace failure;
- Confidence to present to senior executives.
It is not uncommon for Innovation Champions to have intrapreneurial and diverse backgrounds, including one former chef who compared the two roles: “In a previous life I was a chef. I loved the adrenaline rush and high-paced environment, the ambiguity and agility, the not knowing what you’ll get out. You need to be on your game and think quick, and you need to be able to command the room.”
Several also described the benefits they received on a personal level, including the opportunity to expand one’s creativity and confidence, developing one’s career path, and being seen as a reference for innovation and market trends by one’s peers.
Sense of Purpose
Not all of Vodafone’s innovation projects are purely commercially-driven. For example, the digital voucher program developed in partnership with the World Food Program delivers cash electronically to 500,000 refugees (in phase 1), empowering people to buy fresh food in local markets. Being able to work on projects that drive social or environmental impact is often cited by Champions as one of the additional benefits they get from participating in the program. This leads to increased employee satisfaction and retention.
Benefits to Vodafone
Having demonstrable positive impact to the bottom line is table stakes for the innovation team’s continued growth. But there are other ways the Innovation Champion program provides additional value to the organization:
Retention and development of top talent: Throughout our interviews, we heard time and time again from Innovation Champions that the best part of their jobs is the role they play contributing to innovation. It feeds employees’ pride and satisfaction, especially for those employee change agents who might get frustrated if not given an opportunity to tap into their talents and passions. By providing a global “support community” as well as learning and development, Vodafone can increase their chances of success.
Vodafone also benefits from having individuals trained in 21st century leadership skills — facilitation, ideation, storytelling, executive engagement, active listening, lean startup, cognitive empathy, collaborative leadership, etc. The Champions are amplifiers of these new approaches, helping spread them around the company. (In fact, other Vodafone Operating companies have requested support in replicating the program, based on the fantastic work and evangelization of the Champions.)
New business models: Vodafone’s approach to co-innovation helps to drive the awareness and adoption of new business models, both for Vodafone and for its customers. For example, the shifting from traditional car insurance models to usage-based insurance, or empowering car manufacturers to participate in the sharing economy. They also include digital vouchers for refugees in eastern Africa, or digital solutions to empower smallholder farmers in partnership with Unilever.
One of the better-known examples is Novartis’s SMS for Life to improve access to malaria medicines and other essential drugs in rural areas of developing countries. These initiatives were born out of a decentralized innovation process at Vodafone.
Ecosystem development: Maintaining a global network of Champions also enables the cultivation of a strong innovation ecosystem. Each region develops its own relationships with potential partners — be they startups, established corporations, NGOs, or governmental organizations. The global community allows champions to connect their colleagues and ideas with the appropriate customers and partners to accelerate successful prototype development and scale. Startups are approached with vetted business needs identified by the world’s largest companies, which lets them quickly develop go-to-market solutions with Vodafone.
Impact to Date
Vodafone quickly recognized the value of the Innovation Program, and the impact that it was having on relationships with customers. The demand for workshops grew from 30 workshops during the first year to 150 the second year. Vodafone now delivers an average of 100 workshops per year.
Impact metrics include the number of new executive customer relationships established, feedback from workshop participants, and the number of new opportunities identified per workshop (five is the average), as well as changes in external perception of Vodafone as a global innovation leader. And finally, Vodafone tracks the impact that the program has on new customer relationships and increased revenue.
As more employees became interested in becoming Champions, and as the demand for innovation workshops grew, Vodafone needed to find simple, efficient ways to onboard, train and recognize the Champion network. This included opening the program to employees who had perhaps never run a workshop, facilitated an ideation session, or led a group of C-Level executives. Champions engaged in the program for several years now mentor new members to guide them through the onboarding process and train them on workshop methodologies.
With growing demand, it also became clear that there were two possible ways for intrapreneurs to become involved with the program: either as champions, whose main focus is delivering customer-facing workshops, or as agents, who are mainly focused on internal innovation, such as writing whitepapers and articles, developing collateral, and supporting the execution of innovation projects. In 2016, Vodafone officially launched the Innovation Agent program. Today, a network that started out with just eight Champions has grown to over 70 Champions and Agents.
Jerry Spann explains, “Our belief has always been to start small and iterate — very much a ‘build, measure, learn’ methodology — and that has been our approach to growing the Innovation Champion team. The times when we unintentionally allowed the desires of the organization to have us grow exponentially were the times of greatest stress for the entire innovation community. We have learned to set our growth targets with an appreciation of our ability to scale.”
Rewards and Recognition
Recognizing that incentives are an important element for success, in 2015 Vodafone introduced a gamified, self-driven platform that allows Champions and Agents to move from levels 0 to 5, with new skill acquisition and program delivery required at each level. Rewards and recognition are also built in.
The central innovation team also works hard to have each member recognized in their own way. One member each year is put forward as the “Innovator of the Year” from each region, and one individual receives the CEO award.
Five years of leveling-up the Champion program revealed some best practices for cultivating an intrapreneurial community.
1. Know your DNA.
The first and most important step in kicking off an innovation/intrapreneur program is to fully understand the DNA of the business; not just the corporate strategy, mission statement, or values, but how the organization really operates. And understanding the current pain points and possible threats can help to paint a picture of why change is inevitable, and how the response should be structured.
2. Be passion-driven.
Intrapreneurs cannot be created; they need to be discovered and empowered. Those intrapreneurs exist within all organizations, and it is their passion that makes them successful. By definition they will be pushing the organization in new directions and thus will encounter barriers; their passion will help them overcome obstacles and inspire customers and employees.
3. Have senior-level sponsorship.
Senior-level sponsorship must be the first step in the process. Without executive support, the program will not be truly successful. The innovation team should be taking the whole organization on a journey, with constant iteration, impact measurement, and buy-in. The more the executives understand the methodologies and value of the program, the more the team will receive investment and support. This is particularly important for maintaining the space and permission for the intrapreneurs to participate.
4. Grow organically.
Employing the lean startup philosophy can help to ensure success. You want to build, measure, learn — in small, incremental stages. Growing too fast may increase the expectations from the organization to deliver beyond the current capabilities. Developing a healthy innovation culture takes time.
5. Use organizational structures.
The best way to support intrapreneurs is to tie into official organizational support structures as quickly as possible. Leveraging programs like global top performer recognition programs has the two-way value of increasing the visibility and incentives for the intrapreneurs, but also helps to validate that the program is delivering on core key values. Expanding those programs to include a few select spaces for the top performing intrapreneurs is an excellent way to increase the likelihood of recognition for your team while garnering executive support and recognition.
6. Data, data, data.
Finally, as much as corporations may philosophically believe they need an innovation program, without data to show impact, those programs will not last long. The data can be incremental; the mechanisms for growing impact should become more robust year after year. Creating the space to explore disruptive innovation, which may take time to develop, needs to be delicately balanced with the need to show immediate impact to the bottom line.
However, while focusing on more traditional (short-term bottom line) impact is key, if an innovation program is tracked exclusively on in-year financial impact, it becomes a sales team rather than a long-term growth engine. Vodafone sought to track other metrics that were also important to the business, but less direct – like numbers of new senior-level executive relationships established, customer satisfaction metrics, thought leadership impact, number of Champions certified internally, and of course, number of projects successfully launched. The ability to collect “ripple effect” data is important to long-term viability of any innovation program. This “ripple effect” data paired with the shorter-term, bottom line impact, allows the innovation team to push the organization to explore new business models, including those that also incorporate social impact, with little risk to the continued sponsorship of the program.
The pace and complexity of change is accelerating, and companies need to be able to respond more quickly than ever to the shifting demands of their customers. Likewise, the workplace is rapidly changing. Large, established companies are vying for top talent against the hottest startups, which can offer excitement, new opportunities, empowerment, and potential riches. However, multinational businesses will always offer the ability to work at a global scale, backed by powerful brand recognition, operational infrastructure, and financial security.
The next big challenge for multinational corporations is to invest in the internal processes and teams, and to create the enabling environments that allow intrapreneurial spirit to flourish, and radical innovation to take place. This requires moving away from “command and control” management and embracing fluid, decentralized teams led by passionate and driven employees. Only then can multinationals compete with startups for new markets, and attract and retain top talent.