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Thursday, 7 August 2014

Getting the most out of your Innovation Investments - "Tell me what you want, what you really, really want"

Despite what they might claim, Innovators and entrepreneurs love having a good structured problem to solve.   They just do.  Give them a well defined, specific business problem, public challenge or domestic conundrum and they are in heaven.  They’ll instantly spring into action to figure out how to creatively build or combine multiple bits of tech and process that can work together to provide a suitable solution.

However, if you ask the entrepreneurial show ponies to “invent” new solutions to a very loose, broad brief they can often struggle to come up with a useful, marketable solution.   Now this strange, slightly counter-intuitve reality can often be a source of frustration for those business moguls and public leaders who invest heavily to build up and employ groups of innovators with the intention of enjoying a stream of wonderful and exotic innovations that add value to their endeavours.    They know they can’t micro-manage the innovators so they leave them alone.  They give them time, space, resources and bags and bags of freedom – the proverbial blank sheet of paper.   Unfortunately this type of relationship all too often fails as the solutions that get delivered just don’t scratch the itch.

So as a leader it appears as though the recipe for having a productive relationship wth your innovation team is to provide them with a series of clearly defined problems or challenges that they can deploy their talents against.   This of course is easier said than done.   Why?  Because by and large most of us are just not trained or practiced in the reflective, analytical and articulatory skills required.  When asked the classic Spice Girls question,  “Tell me what you want, what you really, really want?”  most of us respond with a bland “I don’t really know.”

In short the art of being able to identify and articulate real business or organisational issues in a concise and effective manner is a rare one.   As a result many of the less transparent aspects of business and public life are lagging behind when it comes to experiencing the latest wave of innovative digital transformation.   This is not because these areas are particularly impervious to innovation, its actually because the problems and challenges associated with them are ill defined and opaque.   Compare and contrast the number of apps that have been designed to help you find and book a restaurant (a clearly defined and well known challenge) compared with the number of technology solutions devised to help your local council collect and manage household waste (an ill defined and opaque challenge).   N.B. You will be in the majority if you have just read the last sentence and asked yourself the question, “So what is the problem with collecting and managing household waste?”  Honestly, I don’t know either, but I’m pretty sure there are some they’re just not known to me.


Ok, so before I tie us all up in logical loops the point is this.   We need to understand that a key (and much undervalued) aspect of the Innovation process is the ability to spot, analyse and articulate a challenge so that the creative types can do their thing.   The recent advent of “themed” tech accelerators suggests that finally we are waking up to the fact that working with industry segments to clearly articulate problems and challenges is generating a better return on investment when it comes to Innovation.   In my work with innovators and businesses I am now very committed to putting the work in to spot and articulate the real challenges of an industry rather than to merely assemble a group of the bright and the brilliant and instruct them to “do their innovative thing”.   So, when it comes to Innovation, creating a counter intuitive sense of focus and structure is definitely a good thing.

Friday, 25 July 2014

Digital Transformation: The Trouble with Pay Day Lenders

Digital Transformation: The Trouble with Pay Day Lenders: This month the Church of England finally ended their much criticised financial involvement with Wonga, the UKs largest pay day lender.   Th...

The Trouble with Pay Day Lenders

This month the Church of England finally ended their much criticised financial involvement with Wonga, the UKs largest pay day lender.   The sound of bells and rejoicing erupted throughout middle England and across the pages of the Daily Mail as the Archbishop consciously decoupled the chuch from the forces of evil.  By putting his blessing to the idea of credit unions as a viable alterative to pay day lending the Archbishop has been seen to stand up to the vicious forces of Mammon and claimed the moral high ground for the church and the forces of good.   Surely this is a good thing?  So why am I not convinced?

Here’s the thing – in a perfect world there would be no need for pay day lending.   Debt would be non-existent because everyone would have learned to live within their means and budget effectively – always putting away some money for a rainy day so that they could cover most eventualities.   And even, on the very rare occasion, when something truly calamitous occurred, an event beyond even the reach of the rainy day fund, then the caring, smiling family and friends would rally round to help out, in the short term, while folks got back on their feet.  In a perfect world.

But we don’t live in a perfect world.   We live in a world where people don’t budget, where people don’t save and where people live from one crisis to the next.  We live in a world where people are encouraged to shop, encouraged to consume, spend and accumulate goods and experiences.   We live in a world where families can be at war with each other and community is non-existent for many.  We live in a world where debt and benefits are the gilded handcuffs that lock people into relative poverty.   We live in a pretty imperfect world.

Now no-one in their right mind does not want to aspire to and work towards the perfect world described above, but, we also need to realise that right now, today, there are lots of our fellow citizens who are struggling to make ends meet and they are pretty darn desperate.   And where that desperation manifests itself as a need for cash at speed then that creates a market.  Today, that market can either be served by the dodgy door step lenders with baseball bats or by the regulated pay day lenders – they both have the business models to make it work, the Banks and credit unions don’t.  So, whilst I might not like the idea of desperate people reaching out for high cost short term loans from the regulated pay day lenders, the current alternatives, in this imperfect world, seem to be a lot less attractive to the customers.

But why, I hear middle England cry, don’t these people get the money they need from the Banks or as suggested by the Archbishop of Canterbury, from the community based Credit Unions?  The answer is complex and yet simple.  Whilst those that need high cost, short term loans are often on low incomes and often have imperfect credit ratings (both of which make it difficult for the computers at the Banks to say anything but “no” to lending them money) more importantly, they are often actually a bit embarrased and a bit ashamed about being in this position of desperation.   Fronting up to the personally probing questions of the Banks and Credit Unions is quite simply something most of the customers of the online pay day lenders are keen to avoid.  

Answering questions at the Bank or Credit Union such as – “What are the circumstances that have led you to need to apply for High Cost Short Term Credit?” are as appealing to answer face to face as “Which sexually transmitted disease do you believe you may have contracted?” at the Doctor’s or “Can you explain how your actions have led your partner to file for divorce?” at the Solicitors.  These are hard to answer for all but the most thick skinned and avoiding answering these face to face would be welcomed by most.   Given too that the Daily Mail et al are all too happy to portray those taking out pay day loans as either tragic victims or feckless, work shy, idiots, unsurprisingly most people want to apply for a pay day loan in as private a way as possible.  Online wins hands down.

This year, in the UK, millions of people will take out pay day loans online.   They will take them out simply, quickly and without embarassment.   The cash will move from the lender to their bank accounts in 15 minutes.  They will use the cash to dig themselves out of the hole they are in.  The majority will pay them back on time.   The experience will be OK.  However, their voices are rarely heard in the media and when they are they are usually pilloried or patronised.

Now, when it comes to listening to the customer, it is clear that this is something most pay day lenders have also failed to do.  The pay day lender organisations have generally preferred to focus on technology innovation and maximising their VC backed equity.  As a result there have been a litany of shoddy customer practices and rip offs in an immature and poorly regulated industry, but this is changing.  The good news is that the FCA is going through the industry like a dose of salts.  They are issuing fines, winding up orders and ensuring the industry acts in an acceptable manner.  This must continue at speed until the remaining industry is operating at an acceptable standard.  

So, in the meantime, whilst we work to ensure that future generations are better at saving, managing their money, avoiding debt, helping each other out and generally being better human beings I’d also like to suggest that rather than automatically decrying the pay day lenders (and in the process further stigmatising their vast customer base) that we try a little harder to understand the role they play in our flawed society and in particular to understand why they are such a popular source of credit.  For the social commentators in the media, the church of England and for the pay day lenders surely now is the time to actually listen to the needs of the customers and to truly hear what they have to say on this challenging industry.  We may all learn something new.

Given the imperfections of the current world, my personal belief is, that whilst instinctively we may not like them, it will be better for us all, and particularly the pay day loan industry’s customers, if we can support the regulator’s drive to clean up and reconfigure the pay day lending marketplace rather than trying to obliterate the industry and build and develop alternative lending solutions that just don’t meet the needs of the customers.   Sorry Archbishop, I applaud the sentiment, I just don’t applaud the proposed solutions as they don’t appear to me to meet the perceived needs of the customers – particularly the needs for speed and discretion that are afforded by the online solutions of the pay day lenders.   May be we should ask them.

Of course, if the church is offering to give money, advice and support to all the struggling people in their communities who are saddled with poverty and debt, that would be a perfect world solution and would undoubtedly put the pay day lenders out of business.   Of course it isn’t a perfect world, yet. 

Monday, 23 June 2014

Accelerate this... The rise and rise of Tech Accelerators

Tech Accelerators are all the rage – so what’s the big idea

This month, Barclays Bank in the UK, launched its sponsorship of a new London based FinTech Accelerator.  Barclays has, according to its own PR machine, again proved itself a leader in innovation.   Barclays is in the vanguard of the major UK Banks who are looking to utilise a Tech Accelerator to help them build a meaningful relationship with those innovative creative types who have the big ideas required to revolutionise the Banking industry.  However, they are not alone, as according to Sally Davies of the FT, there are now at least 4 FinTech Accelerators based in London alone.  http://www.ft.com/cms/s/0/112c6932-bf37-11e3-a4af-00144feabdc0.html#axzz355VyuFLh

And it’s not just Finance organisations that have gone Accelerator crazy, there are also MedTech and CleanTech Accelerators.  So, is this love of the Tech Accelerator the start of a beautiful and productive partnership between Big Business and Tech Start Ups or is it as likely to succeed and be as shortlived as a Britney Spears Vegas wedding?   This blog attempts to get under the skin of the Tech Accelerator craze and get a sense for why they are the “must have” accesory for any self-respecting industry heavyweight in 2015.

What is a Tech Accelerator?

A Tech Accelerator is usually found in the following format.  A collection of small entrepreneurial start ups and/or entrepreneurs who are bought together (sometimes following a selection/competition process) in an environment where they are provided with some or all of the following in an effort to accelerate their business development: seed funding, premises, access to private networks, mentoring and exposure to new markets.  In return the start ups give up some or all of the following:  percentage of equity, sole rights to IP and preferential purchase rights to the Tech Accelerator’s sponsors in order to bring proprietry innovation to the sponsor’s business.

Why do Big Businesses want one?

Simple – they are desperate to find relevant digital innovations that they can incorporate into their businesses. They are convinced that they have neither the skills nor culture capable of generating enough innovation at the speed required.  In essence, the disruption that is being wrought by the digital revolution has scared the pants off most established businesses - even a passing glance at the turnover of businesses in the FTSE 100 or Dow Jones 100 is enough to make any vaguely competent CEO aware of the fragile and transitory nature of their business.  This maelstrom of digitally driven change and uncertainty creates a voracious demand for the type of rapid innovation required to ensure a big business keeps up with an ever changing marketplace.  Big businesses see start ups as a rich source of disruptive thinking and innovation and they want in.  There is also a nice additional pay off for the brand of the big business through their association with cool Start Ups.
                 
Why do Start ups want to participate?

Simple – cash flow, access to markets and a sense of kudos.  For Start Ups cash is like oxygen to fuel their creative fires.  It doesn’t take much but it does take some to keep them stoked and they are happy to take what’s on offer.   Access to markets is also hugely valuable as it can support more rapid customer acquisition and a sense of kudos is important as there aren’t many entrepreneurs known for their lack of ego.   What’s interesting is that the Start Ups are also bombarded with other goodies that they probably don’t realise the value of at first glance.  These extras such as business mentors and guides, access to Start Up networks etc are often what can make the difference for the Start Up but its not generally why they join a Tech Accelerator.

Why are Tech Accelerators the hot cool thing now?
What is fascinating is that Tech Accelerators are a relatively new phenomenon and its interesting to figure out why they are proliferating now.  Here’s my view.   Essentially big businesses have an insatiable demand for digital innovation that it can’t meet itself.   Big Demand.  On the supply side there are now more entrepreneurs and Start Ups than ever before.  It appears that the cool kids graduating from Uni no longer want to be consultants, bankers or lawyers.  Now according to the Wall Street Journal they all want to be entrepreneurs.   Consistent Supply.  http://blogs.wsj.com/atwork/2014/03/17/m-b-a-s-want-instant-entrepreneurship-gratification/
So pervasive is this love of the entrepreneur in modern culture that Barbie recently launched a new version of Barbie – specced out as an entrepreneur.  http://www.independent.co.uk/news/business/news/barbie-means-business-as-mattel-launches-entrepreneur-doll-9549148.html 

So there is both big demand and consistent supply.  However, the two elements (big business and entrepreneurs) do not make easy bed fellows.   So what has enabled this profusion of Tech Accelerators to spring up?   There seem to be a few key requirements:

Viable Brokers:  Big Business and Start Ups speak a very different language and have very different needs.  When left to their own devices the coupling just doesn’t work.  As a result a series of brokers have sprung up to facilitate the coming together.  Some are bespoke organisations (TechStars et al) others are the big consultancies (Accenture et al).    These brokers enable the two parties to cooperate effectively and create and manage the Tech Accelerator “Deal” that the two parties sign up for. 

Worthwhile Packages:  What the brokers have been able to do is to create a “Deal” that appeals to all parties.  This includes the necesities of funky location, decent funding, suitable share holding and excellent access to new markets as well as the non-tangibles such as maintaining control of decisions and creative direction and the provision of relevant and credible business mentors.

Credible Partners:  At the best of times entrepreneurs are generally allergic to big business so it is important that the sponsoring partners are credible and have at least some sense of innovation about their history. 

Focussed Accelerators:  Finally of major importance is that the Accelerator has a focus e.g. FinTech, MedTech etc.  This allows the Start Ups to feel relevant and the innovation to be meaningful to the sponsor.   Much as it would be amusing for Barclays to sponsor a Tech Accelerator that created another interesting digital way of booking a restaurant table it is highly unlikely to be of use to either party.  To facilitate the set up of a relevant Tech Accelerator it is of vital importance that the brokers can a) help the sponsors identify and articulate their key issues in a simple and meaningful way and b) help the sponsors select and recruit an appropriate cadre of suitable Start Ups to participate.

So what’s next for the Tech Accelerators?


I think we have only just seen the start of what is likely to be a profusion of Tech Accelerators.  As big business becomes more transparent and therefore more prone to disruption I think we are going to see the launch of more and more Tech Accelerators.  So as well as more FinTech, MedTech and Clean Tech Accelerators stand by for ProfTech Accelerators (focussed on professional services), EnergyTech Accelerators (focussed on the energy markets) and GovTech (focussed on innovation in government).   It should be a lot of fun.

Wednesday, 11 June 2014

Soccer Innovation - the best is yet to come - a world cup indulgence

On the eve of the World Cup I’ve succumbed to a massive piece of self-indulgence.  To celebrate the World Cup I’m writing a topical blog on two of my passions – innovation and soccer.  At first blush it would appear I have set myself a bit of a herculean task.   On the face of it soccer hasn’t changed much since it was first codified in 1863, in fact it hasn’t changed all that much since it was first mentioned on crinkly old pieces of parchment in the 12th and 13th centuries.  Today, it’s still ostensibly two teams kicking an inflated bladder around a pitch trying to embed it into a goal – all very jumpers for goalposts.  However, the more I thought about it, the more innovation I could see in the world of soccer – especially at the highest levels.  Given the amount of money that is generated from the world of soccer it is unsurprising that there is innovation in all aspects of the game.  After all, keeping the product fresh is key to growing and maintaining the global audiences and consumers.   What is surprising is that there isn’t more – particularly given the success of sports like cycling in applying innovation to improve performance.   It seems to me that soccer is lagging behind other sports and could do better.

So let’s have a look at the innovations of today before I get excited at the end of the blog about what we can expect to see in the near future.  Here’s 10 areas of soccer innovation areas for you to muse on.   I’ve handily given them an Innovation Rating out of 5 to indicate how much innovation has taken place in the area.  Please feel free to disagree or use the ratings as a means to start a cracking debate in your local pub or bar.

1. Stadium Design – At first glance stadia haven’t changed much since roman times, but look closely and you’ll see the masses of innovations now being built into our modern stadia.  From the towering innovative architecture that is capable of supporting a retractable roof, giving unrestricted views and drawing tourists to admire its curves and lines, our modern stadia are rippling with innovations.  Since the horrors of Hillsborough, Heysel and Bradford safety led innovation has rightly transformed the experience of football for the fans in the stadium.   Don’t say it too loudly as the die-hard fans will keel over at the thought, but its almost starting to feel as if, when it comes to stadium design, fans are being treated as valuable customers that clubs would like to have return again and again.  However, even at the best stadia, (Wembley, The Allianz Arena, The Camp Nou etc)  it still feels as though there is more to do to ensure that everyone who attends has the experience they are looking for – too often stadia are designed with seemingly only the needs of a physically mobile 20-30 year old, beer drinking, pie eating, male in mind.  Important though that demographic is, its time for stadia designers to do better.    Compared to other arenas of mass public gatherings e.g. airports, museums, theme parks etc the amount of innovation is still average and certainly not as “digital”. 
Innovation Rating – 3/5 not bad innovation but more to do to get on the cutting edge

2. Pitch Design – Soccer in the 1970’s was too often played out between two teams fighting their way through boggy quagmires where silky skills were easily overpowered by sheer strength and endeavour.  During the 1980’s football dabbled with using astro turf pitches as an all weather solution before giving them up as a bad idea (I still have the carpet burns).   Instead massive work has been undertaken to engineer and maintain better hardy grass surfaces.   Whether it is the use of industrial scale lighting rigs to encourage the grass to “grow” or the introduction of more “hardy” grass mixes, drainage technology, watering regimes, under-soil heating etc the focus has been very much on making the best possible grass surface.   Today the number of lumpy, bumpy, muddy pitches is much reduced.   Interestingly rugby union is now happilly experimenting with hybrid pitches and it may now be time for the soccer authorities to look again at the development of artifical pitches in order to be able to literally create a truly “level playing field”.  
Innovation Rating – 3/5 good efforts in a narrow focus, need to look more broadly for non-grass solutions

3. Kit Design – Teams are still wearing shirts, shorts, socks and boots,so on the face of it not much has changed here since the dawn of the game.  However, we are all well aware of the plethora of lightweight, breathable fabrics that are available on the market that are slowly making their way into the design of football kits – it just seems to be a lot slower than other sports, cycling, rugby, swimming etc where clothing design and innovation seems to have continued at a pace.   Much more effort appears to have gone into changing the colour of the kits than changing the capability of it.   When we look at the specifics of boot design, yes some good work has been done to make boots more comfortable, wearable and slightly less likely to cause a miss kick.  However, there are still big questions about the protection afforded by modern boots and there are seemingly a higher number of broken metatarsals and ligament injuries than ever before. 
Innovation Rating – 1/5 much more to do – especially on player safety

4. Ball Design – Whilst it’s hard to argue that the ball itself hasn’t changed since it was a heavy leather bag, I still can’t help thinking that a lot of the more recently heralded innovations are more about marketing and ball sales than they are about the actual capabilities of the ball.   Clearly the modern ball is a much more safe and reliable ball than those of the past so we have to give some credit.   There is also the question of whether there is actually more you can do with the ball that wouldn’t fundamentally alter the character of the game.
Innovation Rating – 2/5 but that’s probably enough

5. Player Conditioning – Well if there is an area of the game that has transformed itself it’s this one.  From happy amateurs to overpaid prima donnas in just a few decades.   In a post Bosman world of massive contracts, agent’s fees and advertising revenues players are transformed from the willing, gritty amateurs that downed a couple of pints before the match to cosseted professional athletes.  There is a massive amount of data driven technology and infrastructure available within the top clubs to help a player get to and maintain peak performance.  However, whilst the benefits for the players are clearly high so are the strictures.  Many players are constantly on rigorous exercise, physio and diet regimes whilst also being constantly watched by the press.  Whilst my heart is not bleeding this does limit their opportunities to party like their peers from school.  On the plus side they now have access to psychologists and coaches to help them with their angst.
Innovation Rating  - 4/5 major innovation in this backroom area, very data driven

6. Team Management – As an outsider this is a more difficult one to judge.   Certainly there’s a lot of airtime given to discussing this area but I’m not sure I see any great innovations.  Now whilst systems evolve, from Sir Alf Ramsey’s wingless wonders, through the joys of the Xmas tree formations and on they all seem like different tunes on the same piano to me, therefore qualifying as relatively minor innovations. Of further minor innovative note is the introduction of Directors of Football, new training methods and regimes and the array of extra backroom staff (physios, dieticians, psychologists, interpreters etc), but when all is said and done I can’t see much innovation in this area and man management is still, in my opinion, well, man management.
Innovation Rating 1/5 – I may be wrong but I can’t see much

7. Media Coverage – Here’s an area that is seeing more and more innovation.  Whilst the coverage of a game in the printed media has not seen much change the live coverage of the game via TV and online media has undergone an array of innovations.  From being able to watch games on your mobile phone to being able to choose specific player cams the coverage of the game continues to expand.   There is a lot more to be talked about here but the innovations being delivered in this area are really being driven by the media and broadcast companies rather than by the soccer industry itself.
Innovation Rating 3/5 – good so far and more to come

8. Game Control – Given what is now at stake in the professional game the role of the match officials and stewards has become increasingly important.  We now have professional referees, 4th officials, 5th officials and occassionally even 6th officials.  The game is slowly (too slowly) introducing technology to support the match officials – although it should be noted that soccer has been much slower to act than other sports and it feels as if it is constantly playing catch up with fan’s expectations in this area.  It’s also worth flagging that the whole area of stewarding and crowd control has seen a much greater level of development with the introduction of new stewarding techniques and technology to help identify and bar persistent trouble makers.  As a result football is a safer and better experience for all.
Innovation Rating 2/5 – slow so far and plenty more to do

9. Soccer Marketing & Sales – perhaps surprisingly this is one of the areas, that I contend, has seen the most innovation.  Clubs have left no stone unturned in the bid to extend their brands across the globe and even outside of soccer.  Whether it has been launching a vast array of branded products – everything from credit cards to branded cutlery sets the big clubs have tried it – although, to be fair, not everything has worked.  Promotional tours to far flung corners of the globe to drive up the fan base have become a staple part of the pre-season schedule.   Now the challenge is for the big clubs to extend their reach beyond soccer.  Many (especially the Spanish) have a history of this but with the advent of more and more interest from the US in soccer the concept of the globl sports club and brand is becoming a reality.
Innovation Rating 3/5Lots tried and some has worked – expecting to see more

10. Soccer Finance & Soccer Governance – Only in the last couple of years have we seen the first signs of the game getting its act together in this area with the introduction of financial fair play rules and fit and proper person’s reviews for owners.  However, mention illegal betting scandals, Blatter, ongoing racism, sexism, homophobia and vote rigging and we all know there is a massive amount more that could and should have been done in this area.
Innovation Rating 0.5/5 – too little, too late

So there you have it a whistle stop tour of the state of Innovation in the game of soccer today.   Some pretty good, some pretty bad.   So what about the future.  This is where I can get really excited as I can see a whole new set of innovation occuring that relate to the real-time performance of the players.   We already know that due to the sensors fitted in F1 cars that their management teams are able to extract and analyse vast amounts of data that they can use to improve the performance of their cars in real time – the future of soccer will be similar.


With the advent of wearable sensors, ingestible sensors and embedded sensors it will make it possible to extract massive amounts of data on each players performance in real time.  Imagine being able to monitor acurately a players gait after a heavy tackle – no more guessing about whether they are limping – it wil be clear in the data.  Imagine being able to tell whether a players energy or hydration levels are reaching a critical low point that could cause a possible lapse in concentration.   Imagine being able to tell whether a player is performing at their normal levels of performance or is perhaps suffering from a virus.   We already have the ability to track the distance run by a player, the passes made by a player and many more data packed stats.  I will be amazed if, that in the not too distant future, managers will be faced with an array of real time data on which they can make better real time decisions.  It should be fun – here’s to a fun and innovative future.