For an established and major international multi-site company like HomeServe though, with a Board in place, as well as regulation and governance, public company reporting, and with an absolute focus on running and growing our core successful business, this is much easier said than done.
Because if you believe the maxim to be wholly or partially true – and history tells us there are lots of businesses that didn't and paid the price – how does a big, complex business really embrace innovation with all of the potential constraints and distractions…like running the business?
I’m writing this blog sitting in a hotel lobby in Shenzhen, China, having spent three amazing days learning how we are going to manufacture at scale our very own ‘Internet of Things’ home assistance device, a product that we hadn't even thought about two years ago, being made by us, a company that’s never, ever built a product. And as I’m writing, I’m reflecting on our innovation journey which brought me here to China.
Back in 2014, we set out the strategy for HomeServe UK that contained a number of ‘How to Wins’, one of which was ‘Nurture an innovation culture’. In simple terms, this means we empower our People to be able to experiment and learn fast to help us make life easier for our Customers and grow our business.
Before we wrote the strategy, I and three of my senior team spent time at Harvard University and London Business School. We knew that innovation had be part of what we did going forward but we didn’t know how we would achieve it.
One of the key things we learned was that innovation is tough in a big business unless you are prepared to change the status quo; thinking that you can merely innovate as part of ‘business as usual’ is impossible, as ultimately, the day-to-day always takes precedence and innovative ideas always get drawn back into the core business.
For example, did you know that it was Kodak who created the first digital camera? And, that Nokia - and IBM! - had ‘smart’ touch screen phones before Apple? No? That’s because they were unable to bring their innovation to fruition for many reasons – such as being pre-occupied with the status quo, too focused on protecting existing profits and perhaps they did not anticipate how Customer behaviour would change in the future.
All of the advice, case studies and learnings on how to innovate successfully were clear – we needed to establish an innovation function that is separate; give it a lot of space and freedom to succeed AND fail. You also need to put in place a small team of People who think differently – who can challenge that status quo thinking.
So this is exactly what we did.
I asked one of our brightest and most dynamic people, Craig Foster, to set up an innovation ‘shed’ and gave him a budget to innovate. There was only one rule – we are a Home Assistance provider so anything he came up with needed to innovate within the boundaries of our strategy of making life easier for our Customers and providing an effortless experience.
What we are trying to achieve as an overall business is very clear and drives everything we do, but for this new innovation team, we specifically did not set any targets, and made sure, like any other start-up, that it was free of some of the complexities and red-tape a larger business is subject to.
While Craig quickly established an interdisciplinary team of innovators from within HomeServe, we also recognised that he needed to bring in some significant talent from outside, People who had knowledge, skill-sets and experience our business just didn’t have.
One of these People was Jon Larkin, an award-winning product development expert who joined us from a household name consumer goods manufacturer, and who had significant experience in taking products from ideas and sketches to mass production lines. Bringing someone of Jon’s calibre and reputation into the fold was a serious statement of intent and, as things have developed, he has made a critical impact.
The team – who became known as HomeServe Labs – came up with, tested and challenged many ideas quickly. Some failed and died, some limped along and a couple showed real potential.
Many of the ideas looked at digital technologies and the Internet of Things (IoT) areas that I knew a little about but was by no means an expert. I personally found the first six months of our innovation journey the hardest. Why? Because I’m an accountant by training which means I am very results focused. So seeing ideas (and cash) come and go at great speed was uncomfortable. But I kept my distance and encouraged the team to keep at it.
The IoT is going to take over the world…if you believe the hype! But what is true is that everything will be connected wirelessly in the future because we can and therefore, why wouldn’t we? The key question is, though, can you make an IoT device relevant to People’s everyday lives?
Well with one of our ideas, ‘LeakBot’, we think we might have done that. As I said, I’d asked Craig to stay within the boundaries of Home Assistance and, doing this, he has answered the question ‘can you connect the water pipes in a home to the internet?’
Why is this important? Because unidentified water leaks in homes are the single biggest cause of claims on home insurance policies – and more is paid out on this issue than for anything else. Also, as a nation, we waste millions of gallons of water with leaks in our homes – from dripping taps/overflows and hidden leaks. In fact, our latest research shows that 18 million people could currently be living with leaks at home. This is a real issue affecting people every day and we believe we have found a way to change it.
So back to Shenzhen where I’m with Jon Larkin, who has been here many times and together we’ve just seen the future for LeakBot and the exciting next steps on our innovation journey. Again, I am finding it difficult to keep my distance from the project, and not set targets, and not keep saying ‘go faster’! But myself and the core business need to let LeakBot flourish outside of business as usual.
To any other CEOs considering the future direction of their business and whether to invest in innovation, I’d really encourage you to do so but ensure you give your teams the means and the freedom to innovate and achieve their maximum potential.
LeakBot has the potential to disrupt the insurance industry and add real value to our Home Assistance business as well as make life easier for our Customers. But it was a strategic investment, and a leap of faith, that we took and I’m very glad that we did. And who knows what is to follow…