Blog 5: Don’t Be Late To Scale

In this blog, I reflect on the importance of timing in innovation. Last month, I shared that one thing I have learned is that there is no good time to innovate, just as there is no good time not to innovate. I want to delve a little deeper into this subject now and talk about the importance of timing your innovations.

I’m coming a bit late to writing my blog for May. Part of that is due to share of mind, with the evolving COVID-19 crisis being a constant drumbeat. Part of that is also due to a lot going in my own small part of the world, with some major ups as well as downs. However, what all has this served to reinforce is the essential insight that time and our perception of it, is relative, not absolute - and so how we shape and use that time is a vital and important question.

In the FinTech world, timing has been a hot topic over the last few weeks. For example, the timing of Monzo’s new capital raise and Tom Blomfield’s decision to step away from being CEO and become President of the company has prompted much discussion. This connected with me because it reminded me of the situation two years ago when my ex-colleague George Bevis decided to step down as CEO from Tide, the UK small business banking startup – at what seemed like an early stage, three years after founding and one year after launch. As stated at the time, George recognised that he was a person who enjoys starting up businesses, and at that point he wanted to hand over leadership to someone with experience in scaling businesses. I’ve always respected that decision because it spoke volumes about knowing your value as a leader and when that value is best deployed - and when others could bring a different kind of value (Tide has since continued to grow under CEO Oliver Prill, whilst George has gone on to found social venture incubator CanDo and launched Pop To The Shop).

Timing is equally important in the innovation space. Innovation literature includes much debate about when companies should be fast followers, leading edge or even ‘bleeding edge’. And of course there is the critical importance of achieving ‘product-market fit’.

However, what I think is under-discussed is that it is possible to be both early and late, at different stages at the innovation process. 

Let’s take early first. Whether in contactless, wearables or other forms of payments, there are plenty of examples in our industry where innovations have been seen to be ‘before their time’. Because all companies have many people with ideas, a company somewhat effective at innovation should be able to harvest those ideas and bring some of them through to at least a proof of concept stage. The risk at that point is that the company then over-invests to develop too fast a product for which the client or customer is simply not ready. This is particularly a risk when the product involves the user making a behavioural change which they may or may not be willing to take.

On balance, though, I think having too many ideas is a good problem to have. With a well-defined innovation agenda, a robust innovation process, solid testing of product-market fit, together with empathetic management of the colleagues who have developed the idea, innovations can be appropriately paced and staged, and the risk of being too early can be effectively managed – whilst acknowledging this is an art that requires judgement as much as a science.

A much bigger risk, in my view, is when a company has a moderately developed innovation and is late to scale it up - missing the opportunity, with others getting the benefits. Kodak famously developed the technology for digital cameras but decided not to take it into product because it would erode its existing photographic film business. Similarly in financial services, when a competitor has launched a new product, I’ve often heard colleagues say “but we had that / could do that three years ago” – which was usually a true statement. Talking with these colleagues typically reveals that they had an idea, developed it, and tested it - but then struggled to take it further to a scaled product launch. Exploring the issue further usually reveals root causes around level of stakeholder support, competing product priorities, people and financial resources, and timing of innovation stages vs. annual planning and budgeting cycles.

How not to fall into this trap? By getting the whole system of innovation working in the company. Scaling is the point at which the organisation has to truly commit as a whole to an innovation and often make a material investment in it, so at this point those leading the innovation obviously need to over-index on getting the buy-in from decision-makers to move forward. Their efforts are unlikely to be successful though if they are only starting to get buy-in at that point i.e. late in the process. As with securing any major investment, those being asked to sign off need to aware of it at a much earlier stage and brought on the journey. More fundamentally, the context, structure and operating model for innovation in the organisation need to be in place and performing: starting with clear alignment of the innovation agenda with the corporate purpose and strategy, with commitment from the ExCo and/or Board to that agenda, all the way through to the necessary stages with development milestones and KPIs to assure and demonstrate the innovation will be achievable, deliverable and viable at scale. As Adam Steltzner brings brilliantly to life in his book ‘The Right Kind of Crazy’, getting the buy-in from NASA Administrator Mike Griffin for his team’s revolutionary Sky Crane solution to land the Curiosity rover on Mars was the culmination of years of effort and the result of the combination of right people, management, structures and process. The central message is that getting the organisation to agree to go big on an innovation should be the culmination of all your innovation efforts to date.

Obviously getting all of this right is a big ask and does not happen overnight: it takes intelligent design and excellent execution, and can be a winding road. However, the scaling stage is where the business can truly reap its rewards of the mental energy, time and effort invested in innovation. So when it comes to scaling, I urge all innovators out there: unlike this blog, don’t be late!