Key decisions on the path to innovation

One of the core attributes, both motivating and binding, team ITL is the shared and unquestionable belief that every insurer has the opportunity and capability to succeed during disruptive shifts by leveraging innovation best practices.  The purpose of this blog is to cover six key areas of decision-making senior executive teams face as they launch, then manage, a systematic approach to innovation.  Likewise, for Corporate Leaders unsure of the results coming from existing innovation efforts, the topics covered in this article represent a good starting place for an objective assessment.

One of the reasons so many incumbent companies struggle starting innovation systems is quite simply because they’re not quite sure how to start.  Invariably, they discover surprising bends in the road along the way. I cannot tell you how many executives have said to me,  “I wish I’d have known ahead of time that X was going to happen” ahead of time.  The real problem with some of these issues is the decision that seems intuitively correct is often not the best way to go.  However, this does not become evident for quite some time,  derailing innovation during the correction process.

Of course many more issues and questions require attention in the life of any systematic approach to inventing products, services, and markets. These six come from over a decade of experiences across numerous organizations. They tend to be nearly universal and will either enable success or prove to be abrupt roadblocks depending upon how they are handled.


Understand that all organizations want to innovate in the marketplace with new products and services.  However, stop for a moment and get clear about your definition of success. Innovators who start at $0.00 and grow revenues to $1,000,000 are arguably on a measurable road to success.  Will innovators within a company generating $10,000,000 of existing revenues that launch a product requiring 3 years to generate $1M be considered as successful?  Corporate innovation must scale new concepts that will move the needle on existing revenue streams.  At some point innovation leadership will have to disrupt the existing business model.  Corporate leaders must remain confident in knowing innovation is highly iterative, requires venturing into the unknown, will challenge deeply held assumptions, ultimately surfacing tough choices.  Innovation is only learned through action.

Reality Check:  You can create new products and services, invent new markets, even enable entirely new economic sectors.  Where organizations trip up is they don’t plan on the front end of innovation and then they don’t go to market differently on the back end of innovation. You want to lay the groundwork ahead of time.


Be clear about why you’re innovating. A frequently asked question is, “How do we foster a more innovative culture?” My response is, “Innovate for growth and let the requirements for success change the culture.” In order to achieve success, any dedicated innovation team must have permission to move fast and consider concepts ranging from the incremental to those challenging plausibility.  Furthermore, corporate innovators must be able to move faster than an organization’s ability to say “no”. 

This sounds good in theory, but how does this actually work? I’ll let you in on a little secret:  Innovation actually thrives on constraints. The key is not thinking “out of the box”, but actually operating within a box you design and build.  What do I mean?  Conceptually, a box is an empty space to be filled, contained by firm boundaries.  Before you start filling this box with new ideas and concepts, leadership must define those boundaries. 

Setting the first boundary comes from a question that all too often prevents innovation efforts from ever being launched. “There is a universe of opportunity and possibilities so how do we know where to begin?” Answering this question represents the actual launch into systematic innovation.  Success requires an anchor.  Identifying the technology, trend, or the demographic group that will be the primary focus for your innovation efforts is the tactical first step.  These areas of focus are known as strategic domains.

Many organizations already have a domain selected. For those without a clearly defined domain, put a team together and brainstorm a list of the most impacting exponential technologies and demographic trends. Select a couple for additional research, and have the team report back.  Don’t underestimate the power of enthusiasm when selecting what is often called your strategic domain.  A technological capability that ignites passions, speculation about future developments, sparks the all important “what if…..?” question is a powerful choice. 

Including representation from existing business units is important to early planning. A couple of the more important business areas may seem counter-intuitive.

HR:  Bringing on entrepreneurs or cultivating an entrepreneurial spirit within an organization is often atypical to long-term KPIs and incremental improvement. Having HR onboard early will provide them with clarity re what is going to be coming their way.

Corporate Law: I’ve had more than a few people say to me: “Corporate law becoming  one of the more innovative divisions in our company has to be one of the seven signs of the Apocalypse!” Actually they are a key enabler because the need to move quickly executing non-disclosure agreements, creating new hiring agreements, term sheets, forming alliances and taking different approaches to mitigating risk.

Corporate Communications:  Website(s) may need launching, internal transparency must be maintained, and certain essential correspondence should be automated. A communication plan that considers both internal and external solutions will be required.


With the selection of the initial domain and bringing key business areas into the planning, an organization has begun creating the foundation for success. Now what?  Remember, one result of building this framework, is early alignment among the entire corporate leadership team from the get-go. Take notice, once you start considering startups, investments, new ideas from within the company, and new ideas from customers, the perception of unleashing chaos comes quickly.  However, it’s only a perception, and these steps mitigate real chaos.

The next step results in the next set of needed constraints.

Giving an innovation team permission to move fast and test plausibility requires two sets of boundaries (and these aren’t in-bounds and out of bounds). Truthfully, not only does the innovation team need these boundaries, but more importantly, corporate leaders need them in order to believe the whole effort won’t spin out of control and/or put assets at risk.  One set of boundaries applies to the domain and the second set applies to the organizational business model. Establishing these boundaries requires a facilitated session lasting no more than a full day, often less. But going through this exercise one time will set your efforts on a path for a year or two before they have to be revisited.  The result is a set of operating rules absolutely needed so your innovation efforts can prioritize possibilities at the needed pace.

The most commonly used innovation structures fall into two models. One is where groups of people within each individual business unit are responsible for driving out innovation in that business unit. This requires an internal small team of innovation experts capable of coaching each unit.  This model is integrated but dispersed. The other model is the creation of a separate unit responsible for soliciting, vetting and developing ideas, concepts and vetting startup investment opportunities.

Either one will work starting out. I’ve seen organizations establish a separate business unit and then evolve to having a more distributed model. Getting used to the pace, ruthless culling of most ideas, and the cycles of continuous iteration and continuous improvement is typically much more difficult with a dispersed model early on.

Either way, the team populating the chosen structure must have the support and protection of the C-suite level. Routinely challenging the status quo within any organization is only possible when the C-suite is on board.


The next big bridge to cross is deciding how an innovation efforts will be resourced. Will a dedicated team be established? Will the efforts be assigned to “virtual resources” (which is code for: we’re going to leave people in their day job but they’re going to do this part-time)? And who do they report to?

The creation process is exciting, challenging and it’s hard enough that somebody has to lead.  One aspect of selecting the innovation leader is understanding that highly effective executives—even those considered entrepreneurial in the context of most mid-sized to large corporations—operate quite differently from highly effective entrepreneurs who are founders of a company. The day to day leadership must be very credible and effective maneuvering relationships within an organization.  However, such a leader must also be an executive who appreciates and respects true entrepreneurs who probably won’t have much respect for existing cultures and corporate norms.

Then we come to the topic of idea/concept management tools, platforms.  I always advocate for off-the-shelf innovation platforms. Some organizations choose to build their own which almost always proves to be the long road to town. Some organizations choose to go without, avoiding some upfront expense. I assure you that a good innovation platform, i.e., software product mitigates the need for three to five full-time employees.

Finally, under the heading of getting the basics down, be clear about expectations for internal existing business units. One of the more well-kept secrets is that innovation lives or dies in the middle of the organization. Very few incumbent organizations have any sort of incentives for middle managers to take risks.  Part of your communication strategy should be specifically around how leadership will manage the soft spots where participation may be slow in coming.

For example, I had one client company with one large and influential division that did not appear on any of the innovation tracking reports for the first four months of operation.  Under the quiet direction of the SVP for that division, word had spread that “this innovation thing will come and go so no need to worry about participation or support.”  Naturally, the first and most available expendable body near the CEO’s office was the Consultant, and so I was summoned.  Obviously, I was not spending the time needed with this SVP…. Right?  The following week included the 25th anniversary for this SVP.  Without any advanced communication the CEO delivered an anniversary cake and balloons to this SVP.  In his congratulatory remarks, made standing on a chair, with the entire division in attendance, he thanked the SVP for his support and participation of the new innovation team.  Opting out ended immediately. 

We all wish moving an organization into new directions merely required a C-suite executive saying “we shall do this moving forward.” As we all know, that’s not quite how human nature works in the context of well entrenched incentive and power structures.  


So far, we’ve covered executive commitment, deciding on some initial strategies, boundary setting, and some basics on structure and resources.  All both enable innovation, and are throttle levers that can be adjusted on the fly.  Now we’ll briefly hit the topic of tracking progress. 

Despite the importance of reporting and tracking, in this post, we simply want to focus on a single concept all activity should roll into: the innovation portfolio. Regardless of structure, tools, and resource selections, every organization needs a single view of innovation activities including ideas, concepts, startups and early-stage investment that are being considered. 

The axis vary from company to company, so for illustrative purposes, think in terms of complexity and time horizons.  On one scale the portfolio will range from “incremental” to “doesn’t exist today.” On the other axis the scale can range from immediate to three years. The context of such a time horizon should be “time to develop” or “time when market is established.” Ideas and concepts that can be executed immediately and represent incremental change to the company will be the most by volume, but require the fewest resources to deploy.  At the extreme other end of the spectrum will be ideas commonly referred to as “moon shots.”  These concepts will be fewest in number, but are the most resource intensive. 

The primary take-away from describing such an approach is to understand the purpose of the portfolio.  Creating a portfolio based dashboard enables an organization to manage the scope and number of ideas/concepts/investments in motion. 


Founders of a startup with a new idea will go to market with a single goal scaling and getting traction. Organizations who typically measure growth in single-digit percentages often underestimate what is required to scale a new concept in a marketplace to positively impact the bottom line.

So how do incumbent companies go to market with new ideas and concepts? The time to have this conversation is long before any concept or idea gets to this point. First of all, make sure the idea strongly reconciles three broad constituencies:

  • A clearly defined consumer segment with a job to be done;
  • Your solution meets or exceeds fulfilling that job;
  • The organization has the business acumen to push that solution out into the marketplace, be compliant and be ready to continuously iterate the solution.

When these three constituencies are aligned by the solution being launched, an organization probability has a solution that can go viral. The best new concepts and ideas are also platforms for their own continuous innovation.

New concepts may not be distributed in the marketplace through established distribution methods or channels. In short, very often a new idea or concept should come out of a company like a start-up or as a start-up.

Think in terms of a dedicated small team pounding the streets and using all available resources to market, capture feedback and recommend changes. This may require an alliance, an investment with an existing startup, or require an acquisition. The best path to scale may be hiring what is essentially a team of founders. Be assured, hiring small teams of entrepreneurs for the equivalent of a startup venture is very counterintuitive for most large organizations. This is when laying the groundwork with HR and Corporate Law early really yields returns. 

Getting it right means moving the needle for the overall organization with a new product or service within five years. Design methods exist, specific steps can be taken, to get feedback on a product or service that is essentially live without putting company assets at risk. Develop a comfort level around the idea of launching imperfectly and iterating based on feedback. Create a roadmap for ongoing development. Leverage the methodologies of agile development. Ideas should also be kicked out to market with a funding mindset similar to an early stage investment.


The goal of this article is to highlight the key issues requiring action by those launching and leading innovation systems.  Considering them early in the life of innovation efforts prevents these issues from becoming institutional landmines. One of the core strengths of the Innovators Edge platform is the organization and delivery of information specifically for the purpose of vastly accelerate results for organizations who choose to grow and lead the next generation of insurance.  Leverage the opportunity to diver deeper into IE’s expertise about innovation best practices and align your organizations efforts with this best in class platform.

Please feel free to provide feedback, share experiences, and certainly check-in if you would like additional details.

—Guy Fraker

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