How do you avoid landing in the “danger zone” as an innovator inside a big company?
Mona Vernon, Senior Vice President and Head of Fidelity Labs at Boston-based Fidelity Investments, argues that if you’re focused on metrics that your CEO or CFO don’t care about, you may be unknowingly racing toward it.
Fidelity Labs is an internal incubator for financial services startups at the $21 billion, privately-held company. Vernon has run the group since January 2019, when she joined from Thomson Reuters. Vernon is also a venture partner at F-Prime Capital, a venture capital firm that is a subsidiary of Fidelity. She spoke with InnoLead recently as part of our interviews for the research report “Delivering Value Through Emerging Tech and Innovation.” Vernon is also among the moderators at our upcoming event, Impact Reconnected.
Avoiding the ‘danger zone.’ I think a danger zone is when you start an innovation function, and then after you hire 5, 10, or 20 people, you start trying to figure out how you’re going to define and measure what “good” looks like. The only success metrics that really matter are the financial metrics, if you work for a for-profit corporation. How do we improve the top line? Will this project help sell more of what we have to existing customers, sell more of what we have to new customers, sell something new to existing customers, and, for very brave corporate innovators, sell something new to new customers?
You want to be able to look back and say, “I built this new feature, product, or business. We had zero customers in this category, and now we have 10,000.” That’s measurable.
You need to figure out how you are going to tie yourself to the metrics that the CEO or CFO cares about.
You need to figure out how you are going to tie yourself to the metrics that the CEO or CFO cares about. What is the language of the CEO or the CFO? And how do I just tie myself up to creating value in a way that’s not inventing a new category (like innovation culture, or the number of hackathons), but is a category that already exists when you write an annual report?
Get clear on the problem statement. My favorite thing in assessing which emerging technologies to adopt is to be really clear on the hypothesis about possible applications upfront. That saves you a lot of time, headaches, and a lot of work.
When I was looking after the emerging technology research at a prior company, I used this really simple framework to help me organize the universe of exciting new technologies that come out, and figure out how to effectively scan, try, and potentially scale them in new applications.
It was a simple 2×2 matrix. On one axis, it was, “Do I research it, or do I start experimenting?” On the other axis, it was, “Is it core to our business, so I need to build it,” or, “Is this something where the research and experimentation is best done by a partner or vendor?”
My favorite thing in assessing which emerging technologies to adopt is to be really clear on the hypothesis about possible applications upfront. That saves you a lot of time, headaches, and a lot of work.
Key questions for startups. The first question I like to find out is, “Give me an example of how this has been used for another client.” I can’t be client number one. The other question I would like to know is, “What are technologies you’re displacing? What are things that exist today?” People often call me with an AI technology, saying, “This is 10 times better.” I’m like, “Okay, for what app? Give me an example of where you think this would be better than the thing that’s already happening.”
I recently started working with an early-stage startup based on some very cool new research around a new type of emotion-related AI technology.
The startup’s thesis was focused on the benefits of their new technology, and they had started with too broad a set of possible applications. My advice to them, and to early stage startups in general, is simple and super hard at the same time: Find a real pain point that you can solve better than anybody else. Understand the economic buyer for your product. Get people to pay for pilots with you, and find the champion that will advocate for you to get you from the pilot to next stage.
Featured image by Arie Wubben from Unsplash.