When our internal Innovation Team gave me demo of a prototype that could make stock trades using Alexa, I was VERY impressed. A true innovation, trading by voice would delight customers and put us ahead of the competition. There was one problem though, the prototype wasn’t compatible with the company’s legacy trading platform. After that demo, many meetings ensued between the Innovation Team and the teams responsible for the trading platform. There were also meetings with Amazon’s Alexa team. Finally, the legacy platform team insisted it was too much work to make Alexa security compatible with internal systems, so trading via Alexa gutted. In the end the only Alexa functionality was providing ticker prices. This was not impressive, and customers never got the chance to be delighted by voice-activated trades. What happened?
According to research, 95% of innovations fail. We often assume these failures “don’t solve a real problem for customers and users.” This is a bad assumption. Innovations often fail because they aren’t compatible with existing systems, there is little understanding of what it will take to scale for production, or the relationships to overcome obstacles don’t exist. In short, Innovations fail on FEASIBLITY. In the case of trading via Alexa, the Innovation Team had no incentive to build relationships or test legacy system limitations until it was too late for discovery, and too late gain buy-in to solve for security issues.
Outsourcing (and insourcing) innovation is popular. Whether by creating a special team inside the company itself, or by using an “innovation provider,” this approach can remove organizational, systemic, and cultural constraints to allow for experimentation, failure, pivots, and rapid prototypes. However, if your goal is to commercialize, any innovation must be tested early for feasibility and overall organizational impact - this is where using an outsider team fails.
The incentive to build relationships, understand technology challenges, and assure feasibility for scale simply doesn’t exist in most outsourced/insourced models. The alternative? Understand Value, Usability, Viability, and Feasibility all to be tested in the innovations cycle and leverage internal networks. More on internal networks in this 2017 article from MIT Sloan Management Review.
In short, when it comes to Innovation, solving for feasibility is just as important as whether you are solving a real problem for customers and users.