A few months ago I had the pleasure of speaking with Ted Graham about his experience leading innovation at PwC Canada. Although no longer at PwC, the insights he shared still ring true for organizations of all sizes looking to become more innovative.
During his time at PwC, Ted looked outside the company's walls to experience disruptive innovation in a much more personal way, leading him to become an UberX driver on the weekends. The 5 things I learned about disruptive innovation as an UberX driver is now something he speaks on regularly and there’s a book, The Uber of Everything. Here are Ted’s thoughts on how large organizations can be more innovative and why innovation is so important to a company's survival.
BIG COMPANIES CAN BE JUST AS INNOVATIVE AS STARTUPS
You typically associate disruptive innovation with startups. But this doesn’t have to be (and really isn’t, and shouldn’t be) the exclusive domain of startups. As Ted put it, 'I believe that every company and every industry can excel in being innovative. I like to consider myself an entrepreneur who just happens to work at a large organization.' PwC is a 167-year-old firm, and yet there is still a recognition that they need to push themselves to look at new ways of doing things, and bring new services to clients.
Startups find market opportunities by putting themselves out there and by being much more guerilla in their style — and it works. It’s what they have to do to survive and grow. PwC doesn’t have to do that, but according to Ted, they do. It helps them learn and makes things a lot more interesting.
From the mailroom to the corner office, intrapreneurs are working to piece together great ideas from inside and outside of their organizations, and implementing on a scale that can have a huge impact. This is Ted’s list of key learnings that he uncovered during his time at PwC and through his research into disruptive innovation.
MAKE SURE YOU CLEARLY UNDERSTAND THE CHALLENGES THAT NEED SOLVING
The first part of having a successful innovation program internally is spending the right effort and diligence on problem discovery. Don’t be too quick to jump to solutions.
'Often I see companies applying a copycat strategy when they see innovation: ‘We need something like that!’ Take a step back and first determine if the issue is real, and if so, ask yourself if you’re properly equipped with the right knowledge to solve the problem. In my experience, you can never spend too much time working on the problem itself. Bring things back to first principles and key fundamentals to make sure you’re focused on the right challenges and have a full understanding of the nuances and conditions that may be associated with solving that challenge at your organization.'
LOOK OUTSIDE YOUR ORGANIZATION FOR IDEAS
There are lots of ways to come up with ideas to solve problems. Your employees are a good source of ideas, but it’s hubris to think you have all the answers and IQ points within your own four walls. You can learn a lot from other industries or smaller organizations that are taking novel approaches to similar problems.
Here are some ways Ted looked for new ideas outside PwC:
- Check out business incubators across the country, like MARs, Communitech, DMZ, etc. Believe it or not, these incubators have been around since the 50’s. These days most incubators cater to mainly technology types, offering them expert mentorship, office space and legal counsel, and seed money. This is where some of the largest disruptive innovations get their start. They are flowing with inspiration and techniques that challenge the old ways of doing things. Drop into your neighborhood incubator and listen to what the future leaders have to say.
- Sit in on angel investor pitches to get ideas on what they look at. More and more events are popping up that offer startups an opportunity to present their ideas to angel investors. Think Dragon’s Den style pitching, but in front of an audience. SXSW, for example, offers several pitch competitions that cover various industries. Check out these competitions and pay attention to what is being presented and what the Angel investors are looking for in the presentations.
- Book one-on-one meetings with venture capitalists. What are forms of disruptive innovation that are most attractive to venture capitalists, or those investing in startups? If it interests them you can bet it will interest the market, as well. Set up meetings with them to identify innovation opportunities that you may have dismissed or never considered.
PILOT AN IDEA AT LEAST ONCE A YEAR
The third part of disruptive innovation is experimenting. You may not like that suit on the rack, but you never know, it might look great on you when you try it on — or it may open up your mind to another style. Too often people dismiss an idea too early. But sometimes there’s more to an idea that meets the eye. Sometimes an idea is a diamond in the rough and you need to work with it a bit before it turns into something valuable. Maybe you need to combine it with another idea before you can see its use. Whatever the case, Ted believes you need to roll up your sleeves and just try out some ideas. It’s the best way to learn.
At PwC, Ted actively conducted at least one pilot each year to help them grow businesses, not just for themselves but other emerging companies. Here are some of the questions Ted asked when determining which companies he wanted to pilot with:
- Is the startup solving a real problem, or can they solve a problem we see in the marketplace? Can our clients benefit from learning from this problem?
- How active are the founders at the startup? How involved are they in the day-to-day?
- What can this startup teach us that we can apply to our enterprise clients in similar industries?
'We’re always actively talking about how to engage with startups. We pay for the pilots, give feedback, and are as transparent as we can be. Some of the startups I worked with in the past involved idea software, workplace wellness software, companies who provide cognitive computing for professionals in law and accounting, etc. I enjoy working with startups with founders who are involved in the day-to-day operations at the startup, as I feel they provide invaluable lessons I can take back to the team. Access to founders or leadership helps with bringing fresh thinking to your challenge. And there are so many smart, talented people working at these places and I feel they often get dismissed because they don’t work at the Googles and Apples of the world.'
REDEFINE THE PARADIGM FOR RISK AND REWARD
Success can bring risk aversion with it. Protecting the user base and revenue streams and driving predictable results, because that’s what the markets like. Too often risk is looked at in a negative light. People only consider the downside of risk. That’s a problem. The default position of 'we don’t do things that way' doesn’t cut it anymore. You must have a greater tolerance for failure, otherwise, how are you going to reap the rewards? Framing risk in a positive way can help people become more tolerant of it.
When you’re as big as PwC, you don’t get double digit growth by playing it safe. PwC actually has a team that looks at enterprise risk and tells leaders when we’re not doing enough. It’s not always that they are rewarded in the marketplace, but there are other important benefits to consider. Helping the organization see these benefits can help increase the tolerance for taking smart risks. One benefit is that by taking risks you attract talent. Talent wants to work for organizations that are going to allow them to take some risks because it’s through pushing new boundaries that top performers get personal growth and development. That’s why people gravitate towards startups. They take risks. Talent sees them as an opportunity to grow and receive increased responsibilities. You need to provide that environment for big companies too.
Although the vast majority of us are not employed in hot startups, we can all make a difference and embrace innovation at some level. Don’t be afraid of innovation. Embrace it. Speak to the people who are leading the disruption. You never know what you’ll learn. And more importantly, incorporate innovation into your everyday business.