We recently had the opportunity to facilitate the inaugural meeting of our Innovation Advisory Board in collaboration with Silicon Valley Forum. The session featured a group of insurer technology leaders and learned about innovation best practices from some of the most influential firms in The Valley.
We were joined by Jitendra Kavathekar from Salesforce, Rich Hua from AWS, Deborah Magid from IBM, and Ryan Kottenstette from Cape Analytics. Each shared perspectives on how their organizations enable innovation, and some common themes emerged.
A “Culture of Risk”
As Amazon’s Jeff Bezos said, “Failure and innovation are inseparable twins.” IBM’s Deborah Magid noted that innovation also “takes a culture of risk and a lot of trust.” All our panelists agreed that experimentation and tolerance of failure are key enablers of innovative culture. Ryan Kottenstette noted that Cape Analytics’ culture is built around experimentation and rewarding behavior. Rich Hua pointed to the example of the Fire Phone at Amazon: the phone itself failed spectacularly, but it gave way to Amazon Alexa, and the VP who oversaw the Fire Phone project was promoted.
Rich Hua noted the importance of identifying one-way versus two-way doors in decision-making. This process is especially important in an industry like insurance, where the fear of failure can inhibit the desire to go through any door. Many decisions at the executive level are one-way doors, i.e., decisions that require deliberation and investment and are difficult to reverse. Yet Rich noted that most decisions are two-way doors, i.e., reversible and high-velocity. Identifying two-way doors can help speed up decision-making and thus innovation. Two-way doors can facilitate learning, and these lessons can be far more valuable than the cost of admission.
Organizing for Innovation
A crucial thread in the organizational fabric of innovation is the role of leadership. As Jitendra Kavathekar from Salesforce noted, “Leaders themselves need to be innovative.” Executive leadership sets the tone for innovation, which permeates the enterprise.
Beyond the leadership level, organizational structure and enabling innovation throughout an enterprise is key. Amazon, for example, is well-known for its “two pizza” teams—teams small enough to be fed by two pizzas (ten to twelve people). The idea behind these teams is that they are small enough to innovate and operate autonomously. Jitendra also noted the importance of staff engagement and hiring passionate employees who have a sense of purpose in their roles.
De-Centering Innovation Clusters
Silicon Valley has been the center of technology and business model innovation in the United States for decades. It remains an important hub, but innovation is not confined to Silicon Valley alone. Deborah noted growing investment and innovation activity in the Midwest. Ryan also pointed out that venture capital firms are looking for companies with access to engineering talent inside and outside Silicon Valley.
The pandemic pushed the world into virtual interaction; this new reality is also an opportunity. For example, Jitendra noted that reduced travel and virtual meetings make it easier to do more business reviews in a shorter amount of time, at lower cost and risk.
Building versus Buying in Engineering
A common theme among insurers and panelists is that engineering teams tend to default to building everything in-house. A key conversation was how much organizations should build internally versus how much they should outsource purchases of a vended solution, which requires configuration. Ryan noted the importance of communicating clearly throughout the organization what will be built, what will be bought, and why. He also noted that, when it comes to vended platforms, it’s important to be collaborative with solution providers and articulate desired features and needs.
The pandemic has limited travel opportunities, but it’s clear that innovation transcends geography. Innovation and collaboration are very much possible in the virtual world, as this meeting of our Corporate Innovation Board proved.
Novarica is looking forward to getting back to Silicon Valley in 2022 for our guided “immersion experience” innovation tours. For more information on our next Innovation Advisory Board Meeting taking place May 6, feel free to reach out to me.
Add new comment