 Hello everyone and welcome to today's Strategy at Work webinar on how to transform your organization into an innovation engine. Strategy at Work webinars are supported by Brightline, a PMI initiative which helps executives bridge the gap between strategy design and delivery. I'd now like to introduce our guest speaker, Tandai Vicky. He's an author and a corporate innovation expert. As associate partner at Strategizer, he helps companies innovate for the future while managing their core business. Tandai previously served as director of product lifecycle at Pearson. A regular contributor to Forbes, he's also written three books. His latest book, Pirates in the Navy is about how entrepreneurs can drive transformation to turn their companies into innovation engines. Welcome and over to you, Tandai. Thank you for having me. Thank you so much. It's a great honor to be here. And it's really wonderful to contribute to this sort of wonderful strategy at Work webinar series. I've been looking forward to doing this for the last couple of weeks now. And today I'm going to be talking about how entrepreneurs can help their companies create an innovation engine and how we can transform our companies into innovation engines. And when I say an innovation engine, I mean companies having a repeatable process, right? Where innovation happens on an ongoing basis rather than as one of projects that always have to sort of fight for their right to survive, always have to fight for resources and support. So in order to sort of build innovation engines, we have to engage in transformation and transformation really matters within organizations that want to innovate continuously. And this is a concept that I sometimes call Pirates in the Navy, which is also the title of my latest book. But before I dive into the Pirates theme, I'd like to ask everyone who sort of attended this webinar a question. And the question is, who do you think has contributed the most impactful innovations to society? So do you think it's entrepreneurs who like startup founders who have actually contributed the most innovations to society? Or do you think it's entrepreneurs? All right, so we can stop the poll. And I can see the result coming out there is that 67% of you think that entrepreneurs have contributed the most impactful innovations to society versus 33% for entrepreneurs. And this is not surprising, right? Because entrepreneurs get a lot of press and we celebrate them all the time. But it's actually the wrong answer. The right answer is that entrepreneurs have contributed the most impactful innovations to society. Over 70% of the most impactful innovations society have been contributed by entrepreneurs. Only 30% of the most impactful innovations to society have been contributed by entrepreneurs. Now, where do we get this from, right? Well, we get this from research that's been published in a great book by Kaihan Krippendorf, where the book is called Driving Innovation from within. It's something that you might want to look into. And he describes this survey that was done by PBS, the public broadcasting service in the US. And what they did was they asked for people to vote for what they think are the top 30 innovations that have impacted society in the last 30 years. And they got over 1,200 entrants. And through like, you know, you know, analysis, and they were working in collaboration with the Water and Business School through analysis and panels that were able to whittle down these 1,200 innovations down to the top 30. And you can Google this, right? Top 30 innovations, you'll find it online. And examples of this include things like the internet, email, mobile phones, fiber optics, PCs, microprocessors, laser surgery, all the really impactful innovations. And from this list of innovations, right, what Krippendorf did was that he analyzed these innovations and he discovered that 70% of these were actually developed and commercialized by entrepreneurs working in large companies rather than entrepreneurs. And this is interesting, right? Because what it does that, it's kind of starts to ask the question about why we celebrate entrepreneurs and startup founders so much. Why have they become rock stars? I think this is a problem, right? Because the first thing is, they don't make as big a contribution as we think. That's the first problem. But then secondly, if we start sort of celebrating them so much, we can start to train entrepreneurs, entrepreneurial skills. So, you know, you might need some of that stuff like lean startup and design thinking which have been great. But you know, beyond this like adventurous attitude and ability to create cool new products, the entrepreneur needs more, right? The entrepreneur needs much more than just an entrepreneur. And since that developing the most impactful innovations to begin with, we need to at least focus on making sure that our entrepreneurs have the right skills. And one thing that an entrepreneur definitely needs is the ability to navigate corporate politics, right? And they need to be able to build a bridge between innovation and the core business, right? Successful entrepreneurs really enjoy this sort of navigation of corporate politics. They enjoy this and they understand this as part of their job. Well, this is what brings then brings me back to this pirate thing because it was Steve Jobs who said it's better to be a pirate than to join the Navy, right? And he planted this flag for the Mac team. And what he was trying to do was trying to make this distinction between the scrappy mentality of startups, you know, versus large companies which kind of can sometimes move slow. But I believe that this mantra can sometimes be taken too far by creating a context in which innovators and the core business view each other in an antagonistic fashion, you start to do a disservice to what entrepreneurs are trying to actually achieve. In fact, Steve Jobs himself as we know good fire from his own company for being too much of a pirate, right? In a large company, you just can't move fast and break things. It does not mean that you cannot innovate. And that's a really important point to make. So, since companies have to innovate anyway, this distinction between pirates and the Navy is not really useful. If you're working in a large company, you have to become a pirate in the Navy. Sure, there's a distinction, of course, you know, when you're working on new ideas you have to explore, you have to search for new business models and if you're exploiting an existing business model you have to grow it and exploit it. It doesn't mean that these two worlds have to be in conflict with each other. As Alex also all the notes in his new book The Invincible Company, you know, these two worlds have to live together, they have to live with each other and collaborate. And this is the way that you build an invincible company. And so that's what the focus of this talk is about. And the way that you want to do this, as I figured out, is to actually reframe the meaning of pirate. And not all pirates are the same comes from, because we tend to conflate terms like pirates and buccaneers and kind of use them interchangeably. There's another phrase for pirates as well called privateers. And it is actually the distinction between pirates and privateers that really matters for the conversation that we're having here. A pirate is traditionally just a criminal. A person who's roaming the seas if, you know, they're unattached to any institution, and if they're caught they're going to be killed. A privateer, on the other hand, is also a pirate, but the difference is that this, the privateer is commissioned by a specific government to go out into the world and kind of raid the ships of enemy states. And so famous pirates include folks like the Francis Drake and Walter Raleigh who were famous as sort of Queen Elizabeth the first pirate. Now you can see the distinction here, right? If you're a pirate, you do not have institutional support. If you're a privateer, you have institutional support. And that really matters when we start talking about entrepreneurship because we can then use this as a framework for sense making. And so think about it in terms of your relationship with leaders. If you're a pirate, leaders don't care about your work, but if you're a privateer, leaders are fully invested in your success and that's what we want to build. Think about your status within the organization. If you simply describe yourself as a pirate, you're very low success and your success is not ever widely celebrated, but if you're a privateer, you're very high status and your success can be widely celebrated. Think about your access to resources, right? You know, if you're a pirate, your resources are likely to be inconsistent and to be cut. Whereas if you're a privateer, you're probably got consistent resources that are likely to be increased over time. I mean, if you really think about it, if you think about the privateers from historical period, some of them were even knighted, you know, Sir Francis Drake, Sir Walter Raleigh. Once you see that, once you have a connection to some institution, you're more likely to increase your chances of sustainable success. So in terms of the project that you're working on, if you're just a pirate, nobody cares what you're working on. If it's discovered, the project could be killed, even if it's viable. Whereas if you're a privateer, if your project is viable, it's much more likely to be taken to scale. So these things really matter when we're trying to transform our organizations. I think it's a nice lens that we can use. One of the things that's been said a lot historically is that large companies need to act like startups. But with this distinction, actually, large companies don't need to act like startups. Large companies can just be large companies and they can manage portfolios of innovation that have core products and also new products that they're developing and exploring. So what kind of institution then do we need to build? So before we start talking about how we can build it, we also need to know what a really great innovation engine looks like. And there's three elements to this. The first one is leadership support, which I'm going to be talking to you about now. It's really hard to build a repeatable innovation process without leadership support, right? Large companies need leaders that really understand that they themselves can't pick the winning idea on day one. They understand that innovation is an iterative process and that what they need to do is to build a context for innovation where the right, the best ideas can emerge. This is really important. In such companies, leaders really know that they need to provide clear strategic guidance. They need to provide really great resources and they need to gauge in portfolio management where they're managing both explore and exploit business models. Now, if you're going to be a really great leader in trying to run an innovation process, what you need is a really clear framework for how you manage ideas. How do ideas move from idea to successful business model? How do you take them from discovery where they're sort of looking for customer needs through validation where they're testing their business model all the way to acceleration where they're getting ready to take their products to scale. And leaders need to create this framework. We need to create this framework as we're building this engine so that our entrepreneurs can do the work that they're supposed to do knowing what the steps are towards success. So a great example of this is Bosch, which is a company that we've been working with a strategizer. And they also featured in the book The Invincible Company and they built this corporate accelerator program where they first started off by investing in 200 teams, knowing that they can't pick the winning idea on day one. They make small bets in 200 teams and then over time, only 60 of those succeed to move into validation. The rest kind of fail and the projects are stopped. The projects are stopped, not the people. So the projects are stopped and then over time, 15 ideas are able to actually move and go to scale. And I think this is the powerful way for really choosing winning ideas and making sure that winning ideas emerge. Now, another thing that's also important if you're an entrepreneur is to make sure that you have alignment with finance. Finance really matter, right? The way we invest the budgets that we get are really, really important. To make this work, we need an investment framework that where leaders make incremental bets. They start by making small bets that then grow over time, but only for those teams that are showing traction. For teams that are not showing traction, those teams don't get the further funding to move forward. And when I was working at Pearson, we were able to develop a framework we called the Lean Product Lifecycle, where we kind of engaged in loads of conversations with finance and the CFO. And we managed to get to a point where we agreed that in the early stages, teams only get $50,000 to work on their ideas when they're testing and searching for customer needs. And then they move a little further, they get to $250,000, and then only when they're really showing that they found something that could potentially work, they didn't get the larger investments of $1 million plus. But you need this to be institutionalized, you see. You need this to be an institutional framework signed off by the CFO and endorsed by all the executives within the organization. And that's the best way to sort of start having an innovation engine that works really, really well. The second element that matters in terms of the innovation engine that we're building is something that we call organizational design. An organizational design matters because what we really want to do is to give innovation legitimacy and power within our companies. Because a lot of innovators right now are always fighting for the right to survive. They exist somewhere at the bottom of the structure. A person might even have a title like, you know, head of innovation, but really they report to the deputy chief strategy officer who reports to the strategy officer who then reports to the CFO. So they're like six layers down, and they don't have power to institute much change. And what we really want is to make sure that our teams don't, you know, don't don't struggle with that. We need to sort of start tackling some of the organizational design challenges. And I have a really great story that I heard when I was working with TD Ameritrade, kind of helping them build their innovation function there. And I was talking to one of the innovation leaders there, who had just been working on an innovation lab project that they were kind of trying to get off the ground. And he said to me something really interesting he said, when we first started our lab, we used to call ourselves the home for homeless ideas. It's more of a private statement like if nobody in the company wants your idea, come and work with us. Right. And then you say something really interesting, which was, but what they learned is that if the idea was homeless when it came to the lab, it would be homeless when it left. So that's a really important distinction between a private and a private ear. When a private ear comes to the lab, they're not homeless, they're institutionalized. When they come to the lab, they have leaders out there who are waiting for their ideas to succeed or at least interested in what they're working on. So we need to build legitimacy and power for innovators within within organizations. We need a bridge to the core and we need to create the right rewards and incentives. So there's this poll that I've been running online for a little while. And this poll I've been asking people, when you think of the innovation teams within your organization. How easy would it be for leaders to disband this innovation team right so and cats is going to put it up just for you for you right now but I just want to explain to you that the four options. So is it as easy to disband is a key function like finance. Is it almost as easy to just like almost a key function. Is it as easy to disband is external consultants, or is it exactly like external consultants like just easy to sort of disband in that to that level. Cool. And so you can see the results coming in there that, you know, 45% of people are like, you know, the innovation function is that our company is almost like external consultants with 21% saying external consultants, and then only 24 and 9% sort of related to the key function and this is similar to what we've been learning. We've been running the polls online ourselves right, you know, in the polls that we ran online, 38% of people say that they're almost external consultants that's how much legitimacy they have inside the organization for innovation right, which we which was then followed by you know key function which is 19%, almost key function which is 18%, and then external consultants which is 25%. And you can see that the combined score for the external consultants part of the survey is 63%. So you can see that it's really difficult for you to drive change if you're not considered part of the institution if you're easy to get rid of as a consultant, you really want innovation to have legitimacy within the organization. And why does matters right it really matters to have a bridge to the core because there is no innovation that ever succeeds on its own. It takes a village to make innovation successful. Innovators have to align with key functions you have to align with sales you have to align with branding you have to align with technology you have to align with all these people because all these functions eventually touch your innovation is it goes out to market. So that's why it's important for entrepreneurs to learn how to build relationships and build bridges to the core, because if we teach them just entrepreneurial behaviors of breaking of moving fast and and and and and breaking things. We're actually doing them a disservice. So, one of the things that Steve blank says which I which I really like is that he says companies can only do what is legal. Right, we thought I can do anything but established companies can only do what is legal. So that really matters when you're trying to build a bridge to the core. A really great example of this is our colleagues at Bayer, a strategize that we've been working with them through their catalyst fund. It's a it's an innovation accelerator program where several teams come in to get investment, and then they and then they also test their ideas. And one of the things they did to try and streamline the process was they they thought you know what a really important function to align with is legal and compliance so they've got their legal colleagues in and the data privacy colleagues in and they work together to develop a framework to support innovation. And after they agreed this framework now every every innovation team knew exactly what things they could do what things they couldn't do in the early stage we were just testing our ideas here the legal hurdles that we have to get over. And then later on they those hurdles get larger. So by just removing all these hurdles. It meant that every innovation team did not have to negotiate with legal on his own every time as if it's a new thing right it was now a built in process and they could move quicker. So you can see that this is part of the institutionalization of innovation that happens when you're trying to operate as a as a as a pirate in the Navy, and you can do this with any other functions sales and marketing matter as well. You know, HR, all of those things, all of those functions matter in terms of kind of build a bridge to the core in terms of organizational design. The final piece that I that is really important for building a really great innovation engine is what we call innovation practice. Now, this is something that people have been focused on for for for quite a while, making sure teams have the right innovation tools, making sure teams you know have the right process management and we're kind of developing skills. When I was working a person we and when we develop the lean product lifecycle, we also wrote a playbook that teams could use to guide their innovation work, went to run experiments what experiments to run how to test ideas, we're going to build that sort of toolbox for them. And of course that matters because it also makes innovation a repeatable process at Adobe their kickbox and there's other organizations that are building similar things. The only thing I want to say is, the reason we talk about innovation practice last is actually deliberate. We deliberately put innovation at the bottom innovation practice, the practice of just like the techniques and skills of doing innovation at the bottom of the framework, precisely because we've been engaged in loads of business model design training, you know, running agile training, but then none of the people that we train can ever go back and actually do what they've been trained within their organization, because the rest of the structure does not allow them to do that and so they just they just pirates then right and what we want them to do is to become pirates in the Navy so or you know leadership support matters, organizational design matters and then only then can your innovation practice really take hold within your your your organization. So what I'm going to do now is I'm going to move to the final part of my talk and just talk about Okay, if that's the innovation engine you want to build. Well, how do you put that in place within your within your organization. Now, some of you might be lucky. You might work in an organization where innovation is broad leadership support, like what happened at Ping An, right where the CEO and founder Peter Ma actually appointed a co CEO, Jessica Tan, and her role and her mandate was to drive innovation. That's, that's really fortunate if you're in a situation like that. The majority of the majority of people that I talked to are working in organizations where innovators are almost external consultants. But regardless of the situation you're in right, you have to be thoughtful about how you roll out innovation within the organization. Michael beer and colleagues really warn transformation leaders to not focus so much on what they call programmatic change right they argue that even with leadership support real change begins in small pockets right and so you want to start working with early adopters build that support build movement show early wins and then allow that to be the momentum that allows you to scale. And so I often advise companies to really start with discovery spend time before you launch any program any innovation program just spend time assessing where your company is in terms of innovation readiness right. We've already got an understanding of what a good innovation engine looks like from the three concepts that I presented to you. So you can actually go out and discover where the company at what level of innovation readiness are they operating it at right now. And the strategize that we developed a tool here for assessing company innovation readiness, and you can see the three categories their leadership support organizational design and innovation practice. And beyond just using this tool, you want to have conversations with people inside your company that have tried to innovate and failed and find where all the barriers are. And so, as you're doing this kind of discovery work, it allows you to discover a really important group for a transformation program. And this group that I'm that it's really important for you to find as you do discovery is a group we call the early adopters. Right. Right. Because when you're doing a transformation program, especially when you're trying to write change in terms of of innovation. I find that it's always wise to start with early adopters and start small by working with them, get a group of allies, you know, allies and and and powerful leaders that are early adopters that can really sponsor the program. So, um, Ren Makazi in a in a in a really interesting HBR article talks about how the innovation team at Samsung really started by getting an early win helping, you know, leaders could have lead as a win with low risk innovation projects, and then they can leverage that leverage that legitimacy to then drive the bigger innovation program that they want to that they want to drive. And who are these early adopters by the way like where do you find them what are their characteristics. And who are these early adopters are those leaders who understand that the world is changing, right. So that's the first characteristic that they need to have and then they're also aware that there's an innovation deficit within their company. They sort of been actively looking for solutions to this problem, this innovation deficit, they may be even sponsored some innovation activities like hackathons or design jams right, and they also have resources and time to invest. There's sort of core group of leaders, you know, business units that are really early adopters and work with them to drive the transformational change that you want to drive in the early stages, so you can build momentum and legitimacy. And the goal of working with early adopters is to get an early win or to get early wins that you can use to start driving you know the momentum in your in your transformation program. In Scaling Excellence, a really great book by Robert Sutton and Huggy Rao, they described the case of PNG, where Claudia Kochka, who was trying to spread innovation best practices within PNG, decided that she wasn't going to go big bang, but she was going to stop by getting an early win by working with the Mr. Clean brand inside PNG, using these innovation techniques to revive this stalled stale brand, right, and then with that success, she was able to then entice other PNG businesses to test the innovation practices that she was trying to actually drive. Now, that really matters when we're trying to sort of drive innovation, we don't want to start by going, you know, too large, too early, we're going to build this sort of transformation in an incremental fashion. And I often share this because I noticed that a lot of innovators walk around with PowerPoint presentations, trying to sort of convince their leaders to allow them to do the work, rather than finding the opportunity to just get an early win and then use that as your jumping off point for influencing to change. Now the thing to remember, if you are successful in getting an early win is to not get complacent, right, don't get complacent. A really great book by John Cotter called Leading Change, in that book he described that one of the things that one of the mistakes that leaders make when they're trying to drive transformation is they declare victory too early. So they get the early win, they get celebrated, and then they're like, cool, the company has changed. But actually, when you get an early win, the company hasn't changed. The early win has brought to legitimacy to drive change. But what the early win has also done is, it has raised the attention of all your detractors. Now they're like, oh, this thing is real. And then they'll start to fight it even harder. So you really now want to start focusing on building a repeatable process for your innovation engine. You really want to focus on making sure that you sort of put that in place. And so the question becomes, well, how do you scale the movement, right? How do you scale the movement by not becoming complacent? Now, when we're driving change management, we should be focused on two things and that really matters. And again, Michael Beer and Nitin Noria call these theory E and theory O these sort of distinction between these two things. The first one is growth. You want to be really focused on this innovation program that we're running, is it really creating new growth or economic benefits for our company? Are we saving money for the company? Are we creating new business models? Are we able to drive new revenue and new profits? It's really important when we're making choices about how to scale our movement. And of course, the way to drive sustainable growth is to transform the company. So how do you actually transform the company and change it to be a repeatable engine? Now, here's what I've noticed. When I'm out there in the world, I've noticed a phenomenon that I call little fires everywhere, which is the proliferation of disconnected innovation programs that are having very little impact within the organization. So maybe you start with an innovation lab, and then somebody else starts a skills and learning program around innovation. And then another person starts a corporate venture capital thing so they can invest in startups. And then another person opens an innovation outpost in Silicon Valley, so we're going to learn from startups. And before you know it, you've got innovation team, R&D labs, entrepreneur, startup co-creation, corporate incubator, little fires everywhere. And none of these things are connected in terms of really driving and transforming the organization to become an innovation engine. And so you don't want to use the legitimacy you get from the early win to just start little fires everywhere. You want to be deliberate about the choices that you're making. You want to map some of these innovation options that you're exploring and really check to say, okay, is this innovation program going to drive new growth? Is it going to create transformation? What is the power or the role of this particular innovation program that I'm running within my organization? And so I'd like you to think about that yourselves, the folks that are on the call right now, right? When you think about the innovation program that you're currently running within your company, and that's another poll that's about to come up now. Kat, so when you think about the innovation programs you're currently running in your company, what is their role? Are they there to create new growth? Right? Or are they there to transform the company? Or do they do both? Or do they do neither? So that's interesting, right? 32% creating new growth, 18% transforming the company, 34% doing both, and then the really concerning 16% that do neither. And so, you know, those are the kind of innovation programs that should not be running at all because they don't have any sustaining impact on the organization. And we've sort of done this work with several companies, and we kind of work with leaders and teams and we say bring all the innovation programs you're running, and let's map them against this sort of, you know, this two by two where we have growth versus transformation. And what's interesting is the people that started these programs never really even thought about the innovation programs that were starting through this lens, right? They never thought about how this innovation program was going to drive sustainable change. They just wanted to have a lab so they can get away from the MBAs and work on innovation because the MBAs stifle innovation and they want to do it by themselves. But in the end they find that they can't take their, any of the innovation projects to scale, because in the end you have to come back to the MBAs to ask for further resources. And so it's really important to be deliberate about the choices we make when we're trying to transform our organization. The ultimate goal is to grow a coalition of support and build the community within our company. We build a really great practice, a really great innovation engine so that as we scale, right, the destination, the mountaintop is that innovation becomes the way things are done around here with great leadership support. It's just that's just the way things are done here. We search for new opportunities while we run our core business. That's just the way things are done here. We don't make large bets in new innovations. We make small bets that grow over time. That's just the way things are done here. That's just the way things are done here that we have a career path where people can get promoted all the way to the top where they can become chief entrepreneur. This is just the way things are done here. And until we get to that point where innovation is just the way things are done here, we'll continue to have this struggle of legitimacy for innovators within our organization. And so thank you very much for listening to my talk here. We're going to open for questions. I just want to close by saying that everything that Athena out in the world leads me to believe even more and more that entrepreneurs can really help build more resilient companies. But we have to be intentional about building the innovation engines that can support the, you know, our entrepreneurs to become successful. And if we do that well, if we transform our organizations well, we will have proven Steve Jobs wrong, right? It won't be better to be a pirate than to join the Navy. It would much better to be a pirate in the Navy. And of course, you know, proving Steve Jobs wrong is something probably cool to do. Thank you very much. Thank you so much, Tandai. That was a very informative presentation. As a reminder, you can submit your questions to the questions pane of today's go to webinar control panel. I believe your webinar presentation was so thorough that I don't have any questions at this time. Yeah, that's interesting. There we go. The things popping up. There we go. All right, hi, great talk. Next, Darity, just an initial stage of the transformation process. Is that just an initial stage? So I think it all depends on when we say ambidextrous, ambidexterity, right? Well, what do we mean? Do we mean that the organization is truly ambidextrous, which means they have a really great practice for running their core business, finance, HR, and sales for running their currently successful business, and then they have a similar function, a similar practice, a similar function, similar processes for driving innovation. Then you have an ambidextrous organization. But if you don't have similar sort of, you know, world class practices on both arms of the organization, then you haven't really built an ambidextrous organization and that's why you then need to engage in this transformation so you can build the other arm, the left side or the right arm to have a really balanced ambidextrous organization. Okay, here's another question. Do pirates have to be internal or could external experts, excuse me, provide that pirate disruption? Yeah, so pirates don't have to be internal. External experts can also provide the pirate disruption. There's loads of companies that are collaborating with startup founders or creating an environment where external startups can come in and kind of help them succeed. So, you know, a lot of innovation, open innovation programs that are happening. And when I work with startup founders, I often try and sort of explain to them that when you're working with a large organization, you really need to understand that you won't succeed unless you build a really close relationship with the leaders in the core business. It's really important to still have a bridge to the core. So the practice is the same. The reason why large companies are places where startups go to die is because the large companies themselves haven't built innovation engines that can absorb these external pirates. So that's why it's still important, even as an external pirate, to kind of help build the transformation. Wonderful. Now, can you elaborate on the skills that drive innovation? You mean like the individual skills? Like a person's skills? Yes, I imagine. That was just the extent of the question. Okay, great. So I mean, if you're an innovator, right, you need a couple of things. The first thing you need to do is to, you need to be able to deal with ambiguity. You need to going to start working without knowing whether the thing you're working on is going to be successful or not, understanding that you can't plan your way towards success, you have to navigate towards it through searching. And so you need two skills, really. You need really great design skills that allow you to be able to design breakthrough business models, right? Breakthrough value proposition. And then you need the second skill, which is the ability to test your, you know, make your assumptions explicit, test those assumptions, use the lessons you've learned to redesign your business model until you find something that's sustainably profitable, right? It's really important that we don't just focus on the creative part, and we say we need creative people to drive innovation. Sure, we need that. But we also need people that are really good at then building and creating businesses, right? Creating value for organizations. Okay, what is the fear of top management when they don't invest enough on innovation for exploring new products or business? What is their fear? So what's interesting is that if you're a top leader and you're accountable to a board or maybe even to the market, what the market wants to know is you've invested this much in this particular thing, how much return are you going to get from that, right? Because they're being judged all the time in terms of how much returns they're going to get. If you're a middle manager, your bonus is probably attached to the level of profits that you've helped the company accomplish. But also that matters, so there's always questions around that. So the thing that leaders fear so much is pouring money into something that never comes back, because that just then gets judged on the PNL as a cost, right? And so what we need to do is to build a practice where we separate, you know, that sort of investment thinking and we create a sense of comfort to say the innovation is managed as a portfolio where we make incremental and small bets. And the success of that is not measured by a single innovation project, but we measure the success at the portfolio level. And then that practice is separate from how we run our core business. Once we're able to make that distinction, I think leaders will start to get much more comfortable because they know that they don't have to make large bets. And every investment decision is based on evidence that the team is making progress, and so they can really track and make informed investment decisions going forward. Fantastic, these questions are really rolling in. So is the amongst the new roles of the PMO to be the pirate team inside the organization, or do we need to outsource on this on this when we transform? So that's interesting. I'm, I'm, I am quite hesitant for. For innovation transformation work to be outsourced. I often find that it's better that it's sort of driven by internal teams and we build internal functions to drive innovation. Now that's not necessarily the PMO role, right, it doesn't have to be the PMO role, although it is useful when you were to the project management, you know, involved in trying to sort of roll this out because some of it is really project management, making sure that we're making progress and we're building the right institutions and putting the right solutions in place. So there's a tendency for people that work in large organizations to try and reach always reach out for external external external because they find it difficult to have internal conversation. But I actually think that when something is built by internal teams, maybe with support from external consultants or advisors, but really it's an internal team driving it. Those things are much more likely to stick and have much more success. A quick comment and a question, very informative. How do you deal with two pirates to be with different ideas on the same Navy ship. Two pirates that have different ideas on the same Navy ship. I'm hoping that these are ideas for projects right. We say okay. Listen pirate one and pirates to what we're going to do is we're not going to give you the large amount of money that you want three million each. 50 K each and you're going to go out into the world and prove to us that there's actually value in the ideas that you've come up with. And whichever one of you brings back the most value. That's the one we're going to double down investment in. Right. And that's the way you start to make it almost an investment meritocracy, where you don't invest in ideas just because they sound good to you. You invest in ideas because they've been validated, and they have evidence that shows that they're much more likely to scale. Alright agile leadership is often mired by talk of scrum or lean, and that's the way it or those guys do things. How can you simply promote it and get a buy in among top leadership. Yeah, so for me agile lean startup design thinking scrum. Those are all tools that can be used to drive successful innovation projects or successful product development or successful business model. But what they are is just tools and best practice tools and best practice have to be pointed at something that creates value. So when you're having conversations with leaders, it's not about selling them to the in selling them the philosophy of agile or selling them the philosophy of lean. It's about illustrating to them how these processes create value for the organization. Right. And so it's really important for us to not to not focus so much on the words agile or the pro or the practice of scrum, but right rather on how those processes and practices create value. I find that that's what leaders really, really care about they don't want to get into the details of our daily standups and all these things, because those are just practices we use to actually to actually create value so always focus on the value being created I think that will really help in those conversation. All right, very nicely done any ideas or examples of how investment in innovation can compete for support during a time of constrained cash flow and market calls. That's going to be really interesting. I think, you know, coming out of the coronavirus crisis, whether or not we're going to be able to get, you know, sustainable investments in innovation companies are going to be tightening their belts. So I think one of the things that we can do to sort of help our leaders get really comfortable with investing in innovation is to really say listen, we're not asking for you to make large bets right we're asking for you to make multiple small bets, and only increase those ideas that are showing traction and so that can give them a sense of comfort to say okay, we won't be pouring money down a hole, and any of the losses we make or any of the innovation projects are going to be small. So we can really, you know, double down investments on those things that are showing success. And as we double down those investments at least we know that our returns are sort of slightly guaranteed every time we move an innovation project to the next stage moving innovation project to the next date. The next innovation project only move to the next stage to the extent that is showing that it's going to create value for the company, but I suspect that things are going to be tough and tight. And those are conversations that, you know, we're going to have to have internally to see, you know, how much of that small budget, we're going to get to apply to innovation project. What is the role of the digital function in the process of innovation. It's kind of a general question too because I've never seen two digital functions that are like. So it all depends on how the digital functions that operates within within the organization. It's hard to sort of, you know, say exactly like it's I'm finding it hard to answer that question in a way that that's really meaningful and powerful the thing that we care about the most is that whatever function is involved in innovation. They're involved in such a way that allows innovation to flourish so if it's if it's if the digital function is creating platforms and send boxes for teams to run experiments right. If the digital function is helping the company, you know, do a digital transformation that allows it to move to much more, you know, useful business models that are much more powerful and much more scalable. Again, all of those things are contributions that you know that the digital function can make to helping in innovation succeed, but we must always close these things and sort of surround these things with the goal of making sure that we're creating value, and just engaging in innovation theater, that's what Steve Blank calls it right innovation theater, loads and loads of things happening, but none of the things creating any real value for the organization. Where do we need to start to change the organization design to adopt the innovation mindset. Again, that depends on where the hurdles are within your organization. Sometimes the hurdles are in terms of time, maybe you know, you know teams are not getting sufficient time. So maybe there's a conversation to have with HR and other leaders to make sure that you know teams are allocated sufficient time. Sometimes the hurdle is simply that leaders just don't support it, they don't want to sort of give it resource. Maybe that's the, that's the place to sort of start and that's why I always say to people, always start with discovery. Start with discovery discovery allows you to learn where the barriers are, and then start working on removing some of those blockers and and and and building the enablers that allow you to run to run great innovation program. So what might be a perfect entry to start a discussion on the start to become innovation when talking with the CEO CEO. Yeah, so I like that question and also don't like that question in, in, in, in one sense so if you end up in a, in a, in a company where the CEO doesn't get it yet. I wouldn't just like start trying to talk to the CEO. So what we're trying to do here is we're trying to create a movement that's based off of gravity so if you're in a situation where you you don't have leadership support yet. What you want to do is you want to start working with early adopters like I say before, find those leaders that get it that are willing to allow you to experiment. And then when you have a success, when you have a success. And that's the thing that you used to open the door to the CEO you say look at this program we ran, we helped Mr clean, like what Claudia Costa did, we helped Mr clean increase sales. Yes, the process we used to do that, maybe some other teams inside the company might want to do that and we need your support to scale this right. And so that's really, really important. And the reason why I say this is because I have direct experience with this I've worked with innovation teams to spend all their time doing powerful and presentations to leaders showing frameworks, giving examples from other companies that are not the companies they're working for. And it's always, they're always climbing uphill, because leaders are always saying well, you know we're not like Amazon, we're not like Facebook, we're not like any of these companies were a farmer company or we're manufacturing companies this this will never work here. Whereas if you come from an early success and an early win, you're much more likely to be able to influence CEOs and other leaders. All right, energetic clear and informative talk. Do you have any ideas on building great relationships with leaders. Yes, the first, the first thing I would say to innovative and I say this all the time. You're not Ellen musk, and you don't work in a company full of idiots. Right, I can always tell which entrepreneurs are going to flame out by how often they, they're walking around being brash and talking about disruption and how they're going to save the company and all these things right doing innovation inside large companies, it's not already. So you don't want to build enemies and people rooting for you. So I think a lot of humility is really important in terms of having conversations with with leaders. And then you need to be authentic right you need to be authentically interested in doing things that create value. The more you're authentically interested in things that create value rather than engaging in innovation theater, the more likely leaders are also to start developing a respect for you right. So I think that's really important. Alright, it looks like we have time for one more question. Is there or is there a or some rule of thumb around the effort in a ratio of total that you should invest in explore versus exploit initiatives. I add so that's interesting I mean there's a really great article by. And Jeff, yeah, not he and tough. That's the name right now she and tough and it was published in in HBR, and they make this distinction between three types of innovation right core adjacent and and and transformational, and they provide this formula that say 70 2010, but then they also go through different industries and say if you're working like fast moving consumer goods maybe can be 4545 10 so they kind of go through these barriers like like ratios. I think that, you know, and the in the in the pink and case that I showed you earlier, they committed 10% of profits or 1% of revenue to to to innovation. So that was the commitment they made in terms of the investments they wanted to make in innovation. I think for me, the ratio matters far less than the commitment. So if we say innovation gets 5% of the resources, then it's 5% 5% 5% year on year on year, we don't say oh no we're going through a hard time now will only give you 1% because by doing that then we start to sort of star innovation of the resources it needs. So the consistency of funding and having protected funding so we always know our runway, I think matters, even more. All right, fantastic. So before I jump into my conclusion, do you want to say a few words. No, thank you very much. It was a very interesting conversation really really really great questions. Again, the only thing I often say to people is we need to make sure that the work we're doing creates value for companies but I say that over and over. We don't want to engage in innovation theater innovation theater is problematic because it's not only does it not work. But what it does is it also makes leaders much more resistant to innovation in the future right they'll say well we tried this pirates in the Navy thing and it didn't work so just leave us alone so we can continue to run our core business and so we really need to become authentic innovators and change our companies to become you know much more sustainable innovation engines. Thank you very much.