Tour Podcast Episode 1
We sat down with Natalie to do a quick debrief on what she and Clay have heard so far.
Natalie and Clay - our listening tour guides - just got back from a week of conversations with innovation leaders in San Francisco. Natalie shares anecdotes from folks about their successes and failures in moving innovation projects forward - in particular, the role leadership plays in safeguarding and promoting breakthrough innovation.
Aren't able to listen? Check out the transcript below.
Kathi: Hi everyone, Kathi here. I'm a Director at Peer Insight Ventures and today I'm sitting down with Natalie Foley, our CEO, to talk about the latest happenings on our listening tour. For those of you who have just jumped in, Peer Insight Ventures is an innovation consultancy. We have offices in D.C. and San Francisco and work with large organizations to investigate and test new growth opportunities through design, business and entrepreneurship. We're on a listening tour to deep dive into what's happening inside corporate innovation groups and what we can learn from their successes and failures.
We kicked off the tour last week in San Francisco. We've only had a few conversations, so it's still a bit too early to draw formal insights or conclusions but we're eager to start drawing connections and share what we're hearing with everyone who's following along. Today you can think of me as your tour guide. I'm sitting down with Natalie of do a quick debrief on what she and Clay have heard so far. Let's dive right in.
Natalie, you traveled out to San Francisco last week and met with a number of folks. Can you tell us about the types of people you sat down with and how you're approaching those conversations?
Natalie: Yeah, it was really fun. Clay and I had a great week out there and as probably many of you have experienced, more and more folks that you know are moving out to the Bay Area so we got to see a really wide swath of folks, from people who had been in innovation and design thinking firms and now are working on a start up. We had folks who had been in big financial institutions for decades on the East Coast and then moved to be a technical outpost on the West Coast. It was really good to get a swath of folks and really listen to what's on their mind in terms of corporate innovation and new possibilities was wonderful.
What was great ... What I'm really enjoying as part of this listening tour is ... here at Peer Insight Ventures, we've been working the space for almost 14 years now and you start to think that you know a thing or two. You see some patterns, at least from clients you work with or conversations you've had throughout almost two decades, and what's great is a listening tour really is a way for you to approach it with a beginner's mindset and to say, "Gosh, I don't ever want to think that I'm right." We're always prototyping the way that we think and so we want to create our thinking like we think it's right and then test it like we think we're wrong. And a listening tour's a great way to sort of go and say, "Gosh, we're seeing these signals. We have these assumptions. What's confirming and disconfirming," and listen in the right way for that.
I don't know when exactly we attributed the term listening tour, but we had a client of our from the National Journal - Kevin Turpin who is the President of that organization has really pivoted their business model and a big piece of that was going - went on a listening tour with the folks that they serve and the community that they're in. It was really inspiring. Even just that simple framing was a good way to inspire that beginner's mindset that obviously worked well for them as they pivoted very successfully to new services. And so I wanted to stop and give a shout out to him for that terminology. It's probably more widely used now, but we've really identified with it on this particular journey that we're on.
Kathi: And can you tell me a little bit more about ... are the conversations just purely conversational? What do those look like? Do you have to disarm people? Because obviously we're talking abut successes and things that aren't going so well.
Natalie: It's true. For real, practical, logistical reasons we give people the chance to be anonymous, which always helps you tell stories that are in the works right now. A lot of the places that we're talking to might be new innovation teams and so they're coming right in the middle of things. And so it makes it possible for them to able to talk about it in a way that other people can completely identify but they don't have to give away any secrets or anything that they're working on that's new to the world or new to them.
And we've also used our methods on ourselves to give people to stimulus to play with. We find that often evokes conversations that are different then if I were just to say, "Hey Kathi, you're running this team. What have you found?" but instead to say, "Gosh, here's some cards with different elements that we've heard. Can you sort them and write them?" A basic card sort is where we start and then we have some other stimulus in our back pockets if people want to take the conversation in a different place (they can). We're using RealtimeBoard, which is kind of our new tool of choice. We love it and it's been really helpful just to do this in real time for any of the interviews that are virtual.
Kathi: Very cool. One question I'm super curious to dive into is San Francisco and Silicon Valley: they're obviously known for their innovation-ness, if you will. What are you seeing specific to that geography? Is there anything about the approach out there that's remarkably different than everywhere else?
Natalie: It's true. I hadn't actually been out there in a while. You read about it and you know it's sort of this hub of entrepreneurship and all the big VCs are out there - Venture Capitalists - and that is just overpowering in terms of the conversation and the ecosystem in a good way. It drives an incredible amount of possibility and a broad mindset of thinking. I think what was interesting to me is that people didn't bring up corporations as real models of innovation even though we talked to a lot of folks who were inside big companies. But what it made me think a little bit more about was that there's a lot of talk around intrapreneurship and this sort of sense that intrapreneurs are a change maker inside an organization - kind of labeling themselves with this term that clearly is a parallel to entrepreneur.
What we find sometimes missing in the conversations, at least some we've heard recently, is this sense of an analogy between leadership and a VC. That's not as much in the lexicon or the stories today. You hear a lot about that person on the ground really wrestling with a challenge and going out in the field and doing the research. And you hear less about the decision-maker and how they might be attempting to stretch their thinking into, "Gosh, how do I fund this project on a milestone basis? This MVP looks good, but how am I supposed to as a leader and a decision-maker assess the next level of funding for this?" It's hard. And so I find that that was something that definitely came up with some of our first interviews and listening tours. The mindset and the decision-making tools that leadership has, versus the team on the ground who identifies more with that entrepreneur. Taking that Silicon Valley, Bay Area, entrepreneur and VC combo and then how do you ... I feel like we've gotten one piece of that in the corporation, but we're talking less about the top piece of the decision-maker, the budget holder, and how to really emulate VCs inside a corporation.
Kathi: Maybe that segues us into, what are some of the other more notable takeaways from those first few conversations and how is that changing your thinking in moving forward?
Natalie: Yeah, I think just sticking on this leadership piece for a second, that was interesting. One of the conversations we had last week that we'll reference in our conversation today was with somebody at a big financial institution with a retail arm. And one of the things that struck me in this conversation with him was almost this tension between different types of leadership. You say leadership broadly and that is everybody above you depending on where you're at, except for one person.
And so what he mentioned was a CEO ... He told this great story about the CEO in a big all hands meeting got asked a question about, "Hey, what are you doing on X, Y, Z new technology? How should we tackle it?" His thing was, "I actually have no idea so why don't we run a test and figure it out. That's what you all should be doing every day." What a great story and what an inspiring thing to hear in an all hands meeting that sets a tone of how you should behave in any part of the firm. That's a CEO and that's one piece of the leadership pie. But then he also told this story, and I think every corporate innovation team has one, of the one that got away or just the heartbreaking story.
In this case it was, the project was nicknamed Fred. And so he was saying that the leadership mindset was the one thing that really held that project back and the broader innovation team. And it wasn't the CEO because clearly he was on board, but all the other pieces of management that come in between. In that particular case, there was a Senior Vice President with the Fred project that the person we talked to on the innovation team really learned some lessons from - how that SVP interacted and how different that mindset was than the CEOs...understanding that "leadership" has lots of different layers to it and not to assume that just at the top it's happening. And clearly that was one of the big reasons that this team was funded, but you're dealing with leaders of all sorts in a big organization on a daily basis too.
Kathi: That's really interesting. What about anything that really surprised you or any reframes based on those conversations?
Natalie: You know one thing that I really liked and we've heard across different innovation teams is nomenclature and what words to use, or lose. What's hot, what's not. And obviously this customization to your organization. But one of the big ones was this reframe from, "Oh, this is about design thinking or innovation or bringing that," and more to say, "We're literally just trying to change the way our institution works so that everything everybody makes, a customer wants." At the end of the day, that's where you should start.
Most businesses will layer on the business model naturally to that. Now we can talk about that separately because it's easier said than done, but just starting with that as a core of it. I was just listening to a podcast with Jeanne Liedtka and she was talking about this notion of being customer-centered - it's what companies talk about for decades - but this real shift to that sentence is so practical. Like, "I'm going to make something that someone wants," is a more tangible way to say, "I'm going to be customer centered." That reframe was really interesting of sort of how colloquially that came to be known as sort of the what the innovation and design thinking team was doing inside the organization. I really liked that.
One of the things that was surprising that I'm curious to hear on the rest of the listening tour was a sense of sort of ... You know that old adage of do it and then ask for forgiveness later. We heard a story about how they'd went through I think a whole year and they kept spending money. The head of the innovation team was a great air cover just in general. She sounded like she just really provided a lot of structure. But they're like, "Wow, we're spending a lot of money on this," and she's like, "Oh, don't worry. They'll see the value and then they'll get the bill later and it'll all be okay."
I think that there's ... He didn't really give the total punch line of that story, what ended up happening, but I guess it was okay enough. But I thought that was an interesting ... That was a good data point. I don't know how others are going to approach that too, if that's something that can happen early in the life cycle of an innovation team, or if that's the privilege you get later, or you almost have to do it early to sneak in your value and then say, "Oh, see, wasn't it worth this price tag," rather than saying, "Oh, I need two hundred thousand dollars to do X, Y, Z." Do it, it was great, and later like a waiter - you're bringing your bill at the end.
I think the other thing, the second thing that was interesting, was their innovation team itself. Sort of a side symptom of it was it became an incredible way to attract talent to the organization. Folks were drawn to it. Particularly younger folks right out of college or grad school were really drawn to this way of thinking and this type of team. And that was really interesting to see - to hear that as being not something anybody intended to happen but something that certainly came out for that particular financial institution. That was intriguing to me as well as we were reflecting back on the conversation.
Kathi: When I was reading through some of the notes and takeaways from the interviews one of the quotes that really stood out to me was someone who said, "Sure, we're using design thinking. We're iterating. We've changed a lot. But at the end of the day they're P&L owners. They're just not shifting that way. When it's time to get buy in on their projects they say, 'Whoa, this is too much. We don't know how to deal with that level of risk.'" I think this whole idea of right sizing risk is one of the hunches we came into the tour with so I'm curious, what is the latest thinking based on these first few conversations that you have around how companies can actually manage risk levels so that these innovation projects survive?
Natalie: That's a great question. I'm laughing because I think risk is this word that has all of these connotations to it. You really think like an auditor and insurance, and certainly with a financial institution, that's a huge part of it. And normally it's an undertone of any conversation about innovation. So what was interesting is in the broader context of innovation being more about possibilities than about risk, and I think in many cases and what I heard from the conversation from my interviewee was you go in with this notion of creating new possibilities. No one builds an innovation team to say, "I'm putting this in place for risk management purposes."
You wouldn't market it that way. That's not inspiring necessarily. But at the end of the day, they evolved much more to that type of thinking to gosh, our value is really to help us de-risk the future. And honestly, help this organization survive. What I heard them say specifically was that they weren't able to de-risk as well in two realms. One was around the business model. We heard, "We kind of learned our lesson the hard way to say it is one thing to get a customer want." To that quote earlier of, "Hey, everybody build something a customer wants." That's all well and good, but if you can't deliver against that need in a way that's affordable or creates value for a company then it will never happen and so no one's winning.
I think that was also interesting to say, "Gosh, our job was to de-risk and we did from a desirability standpoint but did we de-risk it from a sense of, is this good for the business?" to, "How can we deliver it in a way that's successful?" He's like, "Oh, we could have de-risked it better by prototyping the business model early on," and as I mentioned, this was project Fred that he talked about so much. Bringing that SVP along much earlier in the journey so that the de-risking really happens in the learning. The de-risking is like, "Gosh, if we hadn't learned that we would have gone off, and off we go, and we're just going to build this thing," and we'd learn later, after much more time and money has passed, that that was a bad idea. You sort of win in that way.
If that SVP had been along on seeing all the different iterations of that learning that's where it feels de-risky because he or she could have seen, "Oh my goodness, I thought this in the beginning then this changed and this changed and here I am." But hearing the end of the story where you're left with this great idea that's very new, it was a really new product for them, there was no context for him to think about that risk within. And to think about it in terms of opportunity cost too, which is hard. Sorry, I clearly rambled on about that but risk I think is something we're really listening for in this tour. This loaded term. But also one that can be really powerful in terms of leadership and creating change in that way within that organization.
Kathi: Yeah. It certainly seems like one to really continue to unpack with people. On that note, what's next? Where are you going on the next leg of the listening tour?
Natalie: Yeah. I think what's fun is that we started off with the private sector and so this week we've got a few more folks from different sectors. It'll be fun to see how the nomenclature changes over time. This leadership notion will be really interesting too. And to kind of test where are the similarities, where are the differences, as well. We're excited to hear more. And thank you for following along on the journey for those who are listening still.
Kathi: Natalie thank you for sitting down and letting me and the rest of the community in on what's been happening since we kicked off. I personally am, and I hope everyone listening is also, pretty excited to hear about what's coming up. For those of you who are listening, we'll drop in again soon with some new reflections. In the meantime, just drop us a line on our website, www.peerinsight.com/whatsnext. Talk to you soon!
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