Elijah Eilert is talking to Peter LePiane about innovation within large organizations. Part 2 of the podcast explores various aspects of innovation related decision-making. Peter opens up about his background in science and computer science, his Startup journey and how he nearly founded Airbnb and Shopify. He introduces Estimatic, his latest venture, software designed to model uncertain projects and ideas.

The episode addresses the concept of innovation accounting, common misconceptions in business case analysis, and the value of information by connecting learning to financial outcomes. The episode challenges traditional practices in organizations and focuses on the importance of understanding human behaviour to achieve success for new products and organisational change management.

Throughout this episode, the duo explores a myriad of topics central to innovation-related decision-making and highlights the value of information, connecting it to financial outcomes. Unravelling the concept of innovation accounting, Peter debunks the common misconceptions prevalent in business case analysis. The episode challenges traditional practices and underscores the pivotal role of comprehending human behaviour in achieving success, whether for new products or the intricacies of change management within organizations.

[01:43] Understanding Human Behavior in Change Management

• Products succeed or fail based on human behavior, as do organizational changes. Understanding human behavior is therefore crucial.
• Peter recommends checking out Lean Change Management and gives a shoutout to Jason Little!

[05:23] Peter’s Background

• Peter’s background as a software engineer.
• How he transitioned from science to computer science at the University of Waterloo.
• His journey into the startup world.
• How Peter launched Airbnb and Shopify (kinda).
• Peter’s experience working on web development and e-commerce projects.

[16:15] Estimatic

• Peter explains his startup, Estimatic, a Monte Carlo tool for modelling uncertainties.
• The importance of accurately depicting uncertainty in business models.
• Critique of the misleading hockey stick growth projections in startup presentations.
• The need to provide a range with a probability of future outcomes instead of point predictions.

[25:51] Challenges in Corporate Innovation Decision-Making

• Addressing the challenges of making decisions in large corporations.
• Mentioning the lack of recognition for risk management in decision-making.
• Highlighting the absence of structures rewarding risk management.

[26:53] The Concept of Innovation Accounting

• Elijah and Peter delve into the concept of innovation accounting and its evolution.
• Explain how innovation accounting combines the uncertain nature of innovation with concrete numerical measurements.
• Emphasize the importance of connecting learning to financial outcomes.
• Discussing the use of Monte Carlo simulations in innovation accounting.

Quantifying Learning and Progress...

Elijah Eilert is talking to Peter LePiane about innovation within large organizations. Part one of the podcast, explores the core principles of innovation, the challenges associated with measuring its impact, and the formidable obstacles faced in corporate landscapes.

Starting with the question of “What is Innovation?” Peter offers his perspective, emphasizing the fusion of novelty and impact in the concept of innovation. According to him, innovation involves the introduction of genuinely new ideas or solutions to the world, with a keen focus on how these innovations are received within the market. The episode underscores that innovation is not limited to grandiose endeavours like space exploration; it can manifest subtly yet profoundly in various aspects of a business. Transitioning to the topic of “Measuring Innovation,” the podcast shines a spotlight on this often-overlooked aspect that is crucial for evaluating the effectiveness of innovation efforts. Finally, the conversation confronts the significant hurdles that hinder innovation within large organizations. From challenges rooted in organizational design and financial models to the complexities of incentive structures and cultural mindsets, the barriers that can impede progress are dissected. The episode aims to provide practical insights into overcoming these challenges and fostering a culture that actively promotes and sustains innovation.

[02:28] What is Innovation?

Peter’s perspective on innovation combines novelty and impact. For him, innovation is about introducing something new and meaningful to the world, with a focus on both the idea itself and its reception in the market.

• Innovation is a complex concept, often meaning different things to different people.
• Key element: Newness – something genuinely new or groundbreaking.
• Example: Even improving efficiency in a manufacturing plant could be considered innovative if it introduces a new approach.
• Not necessarily about launching rockets or exploring Mars, but introducing something novel to a market.
• Novelty is essential, but it’s not enough on its own
• The Importance of Impact
• Innovation must have a tangible impact or value.
• People must care about it for it to truly matter.
• Requires a practical business model or a container to bring it to market effectively.
• The market should demand it, making it an essential ingredient of innovation.
• The “Tree Falling in the Forest” Analogy
• Innovation that goes unnoticed or unappreciated might not truly qualify as innovation.
• It’s like the philosophical question of whether a tree falling in the forest makes a sound if nobody hears it.

[08:28] How Should Innovation be Measured?

• Interrogating the Notion of Measurement
• The podcast delves into the intriguing question of how to quantify innovation effectively.
• The focus is on whether measurement means seeking signs of success and discerning the impact of innovation.

• Benchmarking Against Initial Expectations
• The discussion emphasizes that assessing innovation often involves gauging whether it lived up to the expectations initially set for it.
• Innovation frequently demands substantial investments in terms of time, resources, and capital.
• These expectations can be both internal, rooted in what the innovator believes the market will desire, and external, influenced by competitors or industry...

Elijah Eilert is talking to Kumuda Suppayah an Innovation strategist, and business transformation expert in the Oil and Gas sector. 

The second part of this episode delves into the fascinating world of corporate venturing and organizational adaptability with insights from a research paper that Kumuda co-authored titled, "Enhancing Organizational Adaptability through Corporate Venturing." The paper's primary focus is to understand the culture and processes that enable successful corporate venturing, a critical strategy for organizations looking to thrive in a rapidly changing business landscape. 

Explore the significance of corporate venturing, distinguish it from strategic entrepreneurship, and unveil the key ingredients for corporate venturing success in this episode. We'll also uncover the secrets to sustaining funding, managing corporate venturing portfolios, and fostering an agile ecosystem. 

The opinions expressed in this podcast and research are those of the author/guest and are based on her personal research.

Elijah Eilert is talking to Kumuda Suppayah an Innovation strategist, and business transformation expert in the Oil and Gas sector. 

Part 1 of the episode is designed around three main questions:

• What is innovation?
• How should innovation be measured?
• What are the biggest blockers to innovation in large organisations? 

This podcast episode explores the broad concept of innovation and its various facets. It begins by defining innovation as a departure from the norm and highlights the importance of tying innovation to specific outcomes. The discussion then delves into different types of innovation, including incremental, sustaining, and disruptive, with real-world examples illustrating their significance. Measuring innovation becomes a key focus, with an emphasis on balancing leadership's need for certainty with employees' concerns about potential consequences. The episode also addresses common challenges in fostering innovation within large organizations, such as miscommunication, misaligned expectations, and resistance to measurement. Overall, it provides valuable insights into the nuances of innovation in organizational settings and offers strategies for overcoming common barriers.

[02:28] What is Innovation?

Kumuda defines innovation as doing something differently from how it is currently done.

She shares her approach to explaining innovation to her own children, emphasizing change as a fundamental aspect. She discusses the importance of tying innovation to specific outcomes or goals to facilitate acceptance and adaptation.

[04:03] Different Types of Innovation:

• Elijah and Kumuda explore the idea that innovation can encompass both large and small changes.
• Kumuda introduces three specific types of innovation:

[04:28] Incremental Innovation

• Something that often involves process improvements. Examples of time-saving changes that enhance performance and employee experience are shared.

[05:40] Sustaining Innovation:

• An effort to maintain market position. Product innovation and its role in adapting to customer needs are discussed. Digital transformation is highlighted as a key component of sustaining innovation, enabling real-time customer interaction and response.

[07:11] Disruptive Innovation:

• Kumuda introduces disruptive innovation as a form of innovation that disrupts traditional business models. The focus is on offering customers new and improved experiences while addressing pain points. The competitive advantages of disruptive innovation, including market expansion, are emphasized

[08:28] How Should Innovation be Measured?

Follow insights on two contrasting perspectives on measuring innovation: leadership's desire for certainty and employees' concerns about potential repercussions. She emphasizes the importance of implementing measurements that serve the needs of top management while also motivating employees with achievable targets.

• Kumuda suggests dividing measurement into categories such as input metrics output metrics or leading and lagging indicators.
• Lagging indicators are described as definitive measures that showcase the results of effort, such as revenue targets. For incremental innovation, examples of lagging indicators include time saved and increased revenue.
• The discussion briefly touches upon leading indicators for sustaining and disruptive innovation.
• The challenges in defining leading indicators for disruptive innovation are highlighted.
• Leading indicators are viewed as essential for employees to feel safe and ensure they are making daily efforts toward achieving future...

Episode 15 - Psychological Safety, Cognitive Diversity, Trust & Fear in Innovation 

Elijah Eilert is talking to Susie Braam and Ed Essey, two seasoned innovators. The episode takes you on a corporate innovation journey, covering how to define innovation and tips and tricks on how to measure it. The discussion sheds light on both innovation blockers and enablers, exploring concepts like psychological safety, cognitive diversity, trust, and fear. Furthermore, the conversation addresses the challenges and opportunities of innovation amidst an economic downturn and the transformative impact of cutting-edge technologies like artificial intelligence. The second part of the episode explores the defining traits of a genuine catalyst, driving impactful change within large organisations. A “cathartic and energising episode”. 

[00:00] Teaser & Innovation Metrics Podcast Intro

[01:35] Introducing the Guests, Susie Braam & Ed Essey 

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• Susie and Ed have known each other and worked together for a while. 
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• Both have also been quests on the show before. 
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[03:22] What is Innovation?

Different definitions for innovation are offered Susie defines innovation as something new that improves our lives, a combination of novelty and impact. The importance of a shared language within organizations for understanding innovation is emphasized. Innovation under the current economic climate and technological shifts is discussed. 

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• Susie defines innovation as something new that makes our lives better in some way, a combination of novelty and impact. Ed presents a metaphor where innovation can be viewed as fruit, trees, or soil, depending on the focus of innovation efforts. 
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• Everybody emphasizes the importance of speaking the same language within an organization to align on the understanding of innovation.
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• The challenges faced by innovation leaders are discussed, especially when innovation is narrowly defined as focusing solely on generating new products and services (the fruit) without considering the importance of culture and processes (trees and soil). Ed notes that such roles often face challenges due to the pressure for immediate high returns, making it difficult for them to stay in the position for long. 
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• The conversation shifts to the current economic climate, with Susie noting that many organizations are more cautious and focused on optimization and efficiencies due to a possible recession. Ed adds that it's an interesting time for technology as there's a generational shift with language models like GPT becoming more accessible, which offer new opportunities for innovation. They agree that companies that embrace the potential of new technologies and continue to invest in exploration are likely to succeed in the long run.
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[19:22] How do you think innovation should be measured?

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• The questions are divided into measuring innovation outcome vs process.
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• The challenges of measuring progress in the innovation process are discussed. Susie emphasizes the importance of

Elijah Eilert is talking to Ed Essey Director of Business Value at the Microsoft Garage. In this episode, Ed introduces an analogy of an fruit tree to explain innovation. The tree represents the innovation system that delivers fruit or innovation projects. The soil is the nourishing culture for the tree to produce. Unsuccessful fruits fall down and become fertilisers for the tree. Ed emphasizes the importance of creating organisational ambidexterity to execute known businesses while creating entirely new ones. The discussion on measuring innovation explores innovation accounting and dives into storyboarding, hypothesis-driven financial modelling, ‘Stakeholder Development’, modelling and what metrics to focus on. Further the three factors in decision-making: merit, alignment, and executive judgment. This episode covers lots of ground in an authentic chat with a great human being.

Ed Essey helps intrapreneurs have, test, and grow brilliant ideas in the Microsoft Garage. He is an MIT grad, serial founder, and veteran product leader who is passionate about technology, creating great culture, and innovating through experimentation.

During his engineering career, Ed has researched AI, worked on Microsoft Office, and democratized parallel computing. He has led company-wide change management programs in innovation, design-thinking, and agile methodologies that have helped over 25,000 employees earn raving fans for their products. He is the founder of the Garage experimental outlet that has delivered over 150 new and exciting projects to market.

Ed practices mindfulness to bring his most courageous and caring self to every connection. He champions wise technology, because the best products cannot stop at intelligence, they need wisdom. Ed lives in Seattle with his two children. To find out more about Ed, please visit edessey.com to read his articles on innovation, incubation, and growth.

LinkedIn / Twitter / Website / Medium

[00:02:00] Defining Innovation – Discussing the difference between invention and innovation and how innovation is taking something new or a new approach to something and following it through until a problem is solved.

[00:02:46] Innovation as an Fruit Tree – Ed introduces the analogy of an fruit tree to explain innovation. The tree is the system or program that delivers fruit i.e. innovation projects. The soil is the nourishing culture for the tree. If an innovation doesn’t work out and the metaphorical fruit falls to the ground, it is not seen as a failure but the gained insights or learnings become fertiliser for the soil.

[00:06:16] Organizational Ambidexterity – Ed talks about the importance of creating organisational ambidexterity, which is to be able to relentlessly execute unknown businesses on the one hand and then on the other hand to be able to create entirely new businesses.

[00:09:52] Measuring Innovation – How to measure innovation/how should innovation be measured?

•  How the concept of innovation accounting coined by Eric Ries was a bit hard to figure out
•  How Tristan Kromer worked on it and created a clear answer for Ed with the Innovation Accounting Program
•  David Binetties concept of Innovation Options
•  Ed covers how he has modelled his internal innovation program using innovation accounting
•   How to model from a manager’s perspective
•   How to use the results to influence and drive outcome
•      On...

Elijah Eilert is talking to Matt Clancy about what makes people become entrepreneurs and how the accessibility of information fosters innovation. The episode is guided by some of Matt's publications that he summarizes for us before discussing the findings further.

The first main topic of discussion is about the "idea" of being an entrepreneur and how entrepreneurship is contagious. The findings from various studies show that people are more likely to start a business if they have been around entrepreneurs or have entrepreneurial role models close to them. However, being around former entrepreneurs doesn't necessarily make it more likely to start a successful business. The second main topic is about the effect of access to knowledge on innovation. The discussion is based on three different papers that explore the relationship between knowledge access and innovation. The findings suggest that access to knowledge boosts innovation.

Elijah Eilert is talking to Joseph Brookes about the Innovation Metrics Review, a report that assesses the way Australia is currently measuring innovation, and then makes recommendations on how it can be improved. The Australian Government commissioned the review discussed in this episode due to a recommendation from Innovation and Science Australia in 2017. The review was finally released by the new government on September 30th 2022.