Innovation can cost a pretty penny. U.S. businesses in 2012 spent $317 billion on research and development, according to the National Science Foundation.
Some of that is essential, of course, but how much of that R&D cash turns into a sunk cost? Instead of building out lengthy processes behind closed doors, what if there was a way to engage employees in cross-department problem solving, while saving money in the process?
That's the aim of a new consulting organization that runs events focused on what it calls "hypothesis-based innovation" inside large corporations. Co-founded by Shane Reiser, former Startup Weekend COO, and Carie Davis, former Global Director of Innovation and Entrepreneurship at Coca-Cola, the firm helps Fortune 500 companies orchestrate internal events that empower employees to identify and act on ideas for new products and services they think the company should explore.
Justin Krist, director of emerging technology at First National Bank, tapped Reiser to help with their innovation event.
"Employees who participated felt more empowered to influence changes within our company," Krist says. "Top teams from our first three-day innovation event are currently working through our follow-up incubation series."
As Reiser explains it, a company is ripe for this type of event when both the problem and solution are unknown. "You know that you need to innovate, but don't know what problems to solve for customers," he says. "You don't know what the product is either."
So what exactly goes on at one of these innovations events, and why have they been a success? To get the full story, we spoke with Reiser and a few of his and Davis' past clients about everything from how to structure an event to what food to serve for dinner.
Starting with Startup Weekend
Before diving into the consulting firm's method, let's take a look at the inspiration for the approach: Startup Weekend. As COO of Startup Weekend from 2010-2011, Reiser helped to codify and scale the methodology used at the organization's events all around the world.
For the uninitiated, Startup Weekend is a two-and-half-day event—from Friday evening to Sunday evening—that builds up to an intense pitch competition at the end of the weekend. Each follows a consistent basic structure, overseen today by Startup Weekend parent company UP Global.
Friday evening - Attendees pitch ideas to create a product or company either for a broad or focused need; teams are formed around those ideas
Friday evening - Sunday afternoon - Teams build out the products and business pitch, with mentorship from local coaches
Sunday evening - Teams pitch their presentations to judges and the rest of the attendees
More than 45,000 individuals have participated in Startup Weekends. Some form companies that get accepted into Y Combinator, such as Zapier and EquipmentShare; others raise significant funding, like Zaarly; and some even get acquired, like Foodspotting.
The Value of an Innovation Event
Reiser says companies invest in this type activity for five main reasons.
Drive innovation - At big companies, creating major change means leaping hurdles and bulldozing barracades—in traditional settings, that can take years. Innovation events bring an entrepreneurial approach into the company, focusing on fast action and fast results.
Fill an innovation pipeline - Companies often need to hit a quota of new projects and ideas to build out. During an innovation event, a company can rapidly produce ideas and suss out which ideas they should explore further and which should be killed.
Approach innovation from a new angle - Brainstorming sessions for larger teams may seem good at first, but they generally yield few results. "They're just ideas that get talked about, with no action," Reiser says. Innovation events produce results that can be implemented immediately or soon after.
Change culture around innovation - Employees come away from an innovation event thinking differently not only about their daily work, but also the company as a whole.
Build a reputation as an innovative company - An old-guard reputation can start to change when potential talent and the general public see it experimenting and opening its doors to new ideas.
How to Run an Innovation Event
If your company sees value in one of those outcomes, an innovation event could be right for your workplace. What's most important is creating an open and inviting atmosphere for collaboration, experimentation and learning.
Here are some tactical things you can do to create the conditions for a successful event.
1. Pull Together the Ingredients
There are a number of items to check off before you even kick off the event, but it's best to start with a participant goal. Reiser recommends inviting 75-125 individuals, because smaller groups often don't offer diverse skill sets.
Depending on the objective of your innovation event—like coming away with new product ideas, or spurring collaboration across departments—you might consider employing a theme. "Wide open events are great, but focused events can be just as great," Reiser says. "At a focused event, people seem to bring deeper domain expertise and more enthusiasm."
Themes Reiser has executed include launching new products for a specific customer type, exploring a new technology, and increasing internal efficiency.
Reiser highly recommends appointing a facilitator who can keep energy high throughout the two-and-a-half days while coaching teams on lean startup principles.
Judges & Coaches
Be picky about who you invite to be present as judges and coaches. They're the lifeline for your participants and can make a big difference in your event.
You'll want three to five judges: a mix of two or three executives from within the company and one or two entrepreneurs and investors from outside the walls.
Bring in a handful of coaches who can devote at least three hours at a time. It's important that they aren't just shoving advice onto teams' plates or talking at them, but instead asking questions that challenge teams assumptions to make their solutions better.
"I'd rather have five really good coaches than 10 average ones," Reiser says.
Not everyone has a beautiful campus with big, open spaces to work. But if your company does, work there. Reiser says it's best to be on campus, and here's why:
More people will come without the extra driving or questions about parking
Teams can utilize the venue for as long and as late as they want
Nearby co-workers who aren't in attendance may come in handy for questions
Those who don't attend may walk by, see the energy within the event and get excited for the next iteration of the event
You'll cut down expenses
Wherever your big, open space ends up, here are characteristics that should be offered by the venue—and please, don't use a conference room.
Open floor plan
Lots of natural light
A bevy of electrical plugs
Great (not just good) WiFi
Projector and speakers
Plenty of tables and chairs
Food and Drink
Reiser has a philosophy when it comes to food, and you may want to incorporate it yourself: Always spend a little more on food than you think is necessary.
"You would be surprised with how people judge the quality of an event by the quality of the food, no matter how the rest of the event goes," he says. "It's worth spending just a bit more to have good food."
His second secret is to skip on serving lunch for day two. Not doing so encourages teams to get out of the building to conduct customer empathy interviews and bond as a team.
A few more nuggets of food knowledge from the seasoned facilitator:
Have pizza for no more than one meal, and only do it the first night.
Stock plenty of beer and wine for the opening, but don't leave it around for the next couple of nights. Too much of a good thing can derail teams' progress.
Don't rely on bagels. Serve a hot breakfast with eggs, bacon, etc.
Always have bottled water. Always.
Be sensitive to food allergies and dietary restrictions. Devote 25 percent of each meal to vegetarian options. "People who eat meat also can eat vegetables. It doesn't work the other way around," Reiser says.
2. Announce the Innovation Event
Give yourself at least 2-3 months to plan. Before you announce an event, Reiser says, reach out to leadership in various departments and teams.
"Get support from others and have messaging go through close peers instead of everyone getting it from one person," he says.
When you and others are spreading the word, don't make attendance mandatory—ideally, people will want to attend this event. This factor makes the messaging of the event especially important: It needs to be clear that this isn't going to be a typical seminar, brainstorm session or meeting. Instead, communicate that the event will be a risk-free environment to share ideas and potentially have those ideas implemented. And make sure to recruit people from in the field or other office locations—diversity of backgrounds and expertise, Reiser says, is paramount to a successful event.
Although they're optional events, it's better to set a reasonable price for employees—either out of their own pocket or through their department—for better attendance. Free events typically have an attrition rate of 30 to 50 percent, Reiser says.
"When you charge, they have skin in the game," he says. "They assign more value to it. They'll show up."
3. Hold the Event
Once you manage to get buy-in from leadership, entice enough employees to attend, and order some delicious food, you're in good shape. But you still need to know how to bring it all together.
Picture it: everyone's there, ready to get down to the business of creating. Where do you start? Here's your step-by-step guide:
Facilitator kicks it off with energy - Remember that facilitator you picked? It's her or his time to shine and set the stage for what's to come. Hit the same message you had when we told everyone about the event: this is a risk-free, casual environment where the only way you can lose is to not pitch and actively participate. Crack a few jokes, go over the schedule and explain why everyone is there: to take ideas from Post-it note to a concept validated by real customers, and to have a fun. Reiser also suggests starting with an easy exercise to loosen up attendees. He typically incorporates one called "half baked," which asks participants to come up with fake companies using random words. "It's fun, short and doesn't feel like an icebreaker."
Attendees give initial pitches - Depending on the theme or focus (it's OK to not have one), everyone has free reign to pitch an idea they want to work on during the event. Keep these to 60 seconds, then have the attendees that pitched write their idea on a big whiteboard or post on a wall for everyone else to vote on.
Attendees vote on initial pitches - Give everyone three Post-it notes to place by the names of the ideas they like the most. After 15 minutes of voting, tally up the Post-it notes and call those who received a relatively good amount of votes back up on stage. The goal is to end up with teams of about five individuals each, so have enough presenters that there are a few extra. They'll then make a 10- to 15-second pitch for everyone to get a refresher on who is leading what idea.
Break for education - Reiser likes to take some time to do a customer interview workshop on the first day and an experiment workshop at the start of the second day. This helps hammer home the intent of the event: actionable results.
Attendees self-select teams and get to work - Those brought back up to pitch a second time create a circle and wait for everyone else to pick which team they want to be a part of.
Attendees execute, execute, iterate, execute - The majority of the event will be unstructured; let the teams go to work, but have coaches ready to help them navigate any roadblocks. During this period, it's best to provide some level of assistance in preparing and refining each team's pitch. Reiser does a short pitch workshop on the final day, but this can be accomplished in your own way, too.
Judges judge quickly - On the final afternoon or evening, each team is given 3 minutes to pitch to the panel of judges, with 3-4 minutes of Q&A led by the judges. Reiser recommends these three criteria for judging: validation (Did you validate this? Is the problem real? Is this worth doing?), execution (Did you build the prototype? Does it work? Is it designed well?) and value to the business (What revenue or savings will it bring?).
Facilitator award prizes - Reward the winner(s) however you can. They're providing remarkable value and input for your company, so put some thought into what you can afford or create—cash, high-end headphones, and custom creations are common offerings. Some places go much bigger and offer 20% work time to pursue the project.
4. Encourage Follow Up
Make a lasting impression with your innovation events by knocking follow-up out of the park. At the end of the event, after the winners have been named, Reiser suggests facilitators instruct participants to turn to their teammates and schedule a meeting to get together and talk about the project.
Some projects won't carry on, but many will, and at the very least attendees will take the experience with them.
5. Provide Next Steps
Moreover, consider offering attendees future opportunities to feed their desire for entrepreneurial education. Reiser suggests five follow-up ideas for innovation event organizers.
Education and workshops - Provide opportunities to take classes, go to lectures and meet with entrepreneurial leaders.
Experiment sprint - Fresh off an innovation event, bottle that energy and provide guidance over the course of a month to interested teams. Focus on iterating in weekly cycles with plenty of customer validation and experimentation in between.
Hackathon - Present your employees with a clear challenge or problem that calls for prototypes to be built, with a structure very similar to an innovation event.
Funding - This can be wide ranging, but providing financial support for teams to develop a project and carry it forward will show that you're serious about investing in their ideas.
Internal accelerator - If you want to go big, set up a space and resources for employees to truly run with projects that may be spun out into their own small companies, apps or otherwise.
Try It Out
You may have read through this entire article only to realize that what you need most is a hackathon or an internal accelerator, or maybe you're ready to start calling leadership to get their buy-in for an event. Either way, these are cost-conscious methods to bring innovation into not only your products but your offices.
Have you tried or thought about holding an innovation event inside your company? If so, please share your experience in a comment below.
Credits: Coca-Cola photo via Coca-Cola on YouTube. Pitch photo courtesy Startup Weekend Annaba. Enviroment photo courtesy Erica Kawamoto Hsu. Voting photo courtesy SETUP Utrecht. Final pitch photo courtesy Phelan Riessen. DayBreaker photo courtesy Phelan Riessen.