One of the newest additions to the long-running innovation effort at $9.7 billion MasterCard is IdeaBox, which launched earlier this year. It was inspired by Adobe’s Kickbox ideation and pilot-testing kit, but adapted to fit MasterCard’s culture.
“Our intention with our innovation management programs is to try different angles to shake things out of the tree,” says John Sheldon, Global Senior-VP of Innovation Management at MasterCard. “We have some programs that are long and reductive in nature, with high-fidelity outputs,” he says. By contrast, IdeaBox is more focused on innovating at the individual level, and trying to surface and cultivate new innovators within the company. It’s also designed to solicit the kind of employee ideas that could potentially grow into a startup venture within MasterCard.
Individuals or teams (almost all participants partner up because the time commitment is so big) with promising ideas are awarded an Orange Box containing a $1,000 pre-paid card and tools to help them explore their idea and hone a pitch in 60 days. If the pitch is approved, the team receives a Red Box, which contains $25,000 and 90 days to develop their project further, with the intent to ultimately present the concept to the MasterCard Innovation Council. Finally, the projects that win the council’s approval receive the ultimate prize: a Green Box, which means their idea has been accepted for incubation, with MasterCard committing to adopt the idea and put appropriate resources and funding behind it.
Sheldon points out that they made several tweaks to Adobe’s Kickbox to make it more “MasterCardy” in nature. So, in addition to the standard things found in Adobe’s Kickbox (which we’ve covered previously), such as scorecards for assessing ideas, accompanying each Orange Box is a:
Mentor: Inside a packet emblazoned with the warning “In case of emergency, break seal” is the name of a mentor assigned to the participant. Coaches are assigned to teams to actively guide them through the first 60 days with the box, Sheldon explains, noting that his team holds the mentors accountable for the quality of the output. “There’s an element of ownership that … is really intended to ensure a high-quality output,” he says. “And I don’t just mean the presentation. The production of the prototype, the commercial model diligence, as well as ultimately how the concept is presented when people are going for a Red Box.”
Timer: A countdown timer is set to when the presentation is going to be in front of Sheldon and Gary Lyons, MasterCard’s Chief Innovation Officer.
60-Day Guide: The box contains several booklets with titles like, “Bad is Good: Go on, get the bad ideas out of your system.” Another booklet outlines what makes a good idea. For instance, Sheldon says, contestants need to make sure their concepts are unique, or that they can scale.
Check-ins: Even though each team has a mentor, they still have mandatory check-ins with Sheldon’s team. “The intention is to ultimately make sure we have something tangible at the end of the 60-days to react to, so we can decide if we’re going to give them a Red Box, which has 25 times the money in it. It’s stepping them toward the idea of an incubation.”
Sheldon recalls that several decades ago, IBM Corp. proved that at each step in the software cycle, fixing mistakes cost you 10 times more. “Something similar occurs in the innovation world, where as you advance ideas through the process from prototyping to piloting to incubation, the costs go up somewhere in the neighborhood of 25 times, so we fund boxes accordingly,” he says.
So far, a dozen Orange Boxes have been issued, and while no Red Boxes have been handed out, two or three could be this spring, Sheldon says, and if all goes as planned, at least one Green Box could be awarded by the end of the year.
While Sheldon was reluctant to go into details of all the contestants’ concepts, he says that one team had a promising idea involving the gamification of corporate spending, which his team sent back with questions to resolve before the team presents again for a Red Box.
Getting More Focused
While the first distribution of Orange IdeaBoxes sought general submissions of interest to MasterCard’s business, Sheldon says, his crew is now issuing monthly requests for ideas focused on niche topics, such as travel, big data, and retail, as well as how to appeal to the Millennial audience in retail banking. Compared to Baby Boomers, who are “more likely to get divorced than change their bank,” Sheldon says about one-third of Millennials “don’t understand why banks have to exist. They would rather go into a dentist than go to a bank. Using that brief, what innovations can be created that would allow for a perception of value in the banking system with Millennials?”
It’s also natural for teams competing for the Red Box to grow. “The teams get to a point where they realize that completing and delivering their ideas require additional skillsets or talent,” adds Paulo Molina, VP of Innovation Management at MasterCard Labs. “In most cases, they expand their team and find other partners themselves. But in some cases they approach us, asking for help in finding those skillsets, and adding them to their existing team.”
But perhaps the greatest lesson to be learned is that even when teams don’t advance to the Red Box stage, that “doesn’t mean everybody drops it and goes home,” says Sheldon, pictured at left talking with colleagues. “Getting the Red Box is significant. It means the next presentation you’re giving is to Ajaypal Singh Banga [MasterCard’s CEO] and the innovation council, which is made up of the top 10 product people in the company. It has to be something that can be meaningful to the business—substantively meaningful to the business. That’s a really high bar. In the course of the year, I might expect to give out one or two Red Boxes, maybe three or four.”
Finding Other Homes for Ideas
Individuals and teams that don’t clear the bar also have the option to bring their idea into another MasterCard division. For instance, one team that didn’t make it past the Orange Box phase had an idea to analyze restaurant data and tips collected in a way that could be used to help quick-serve restaurants better understand what drives success.
While the scale of the idea was a little bit limited, and there are some other very tactical challenges, Sheldon says, “We saw there was enough there to get over to the business unit where it could be used.”
So the idea was passed along to MasterCard Advisors, the consulting arm of MasterCard, and that unit is finding ways to use the data to drive merchant success.
Sheldon says people can be rewarded within MasterCard in many different ways, including getting their names on patents, which they’re urged to pursue when they accept their Orange Box. (So far, two patent applications have been filed related to the program). There’s even a new MasterCard Patent Portal, an internal resource site, to help them understand the patent process.
Rolling out IdeaBox has not been without challenges. One stems from the time commitment involved. “Whenever you ask people to work above and beyond their day job, you run into some conflicts there,” Sheldon says. “We had two teams where their managers came to us and said, ‘I love this person working on the box, but I need them to work on something first. Can we put them on pause for 30 days?’ We accommodated them. These are people who are taking their own personal time to advance ideas that they believe in for the company, and it’s something we support and reward and value.”
