winter 2020
israel’s corporate innovation magazine
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Winter 2020 2020
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10 HYBRID INNOVATION ECOSYSTEMS A HOLISTIC APPROACH THAT WILL TAKE YOU TO THE NEXT LEVEL 20 THE SECRET KILLER OF CORPORATE INNOVATION LACK OF OPERATIONAL FIT 24 MUNICIPAL INNOVATION THE STORY OF A MUNICIPALITY’S SYSTEMATIC APPROACH TO INNOVATION IN TEL-AVIV
CONTENTS 06 10
12
SUCCESSFUL OPEN INNOVATION
IN THE CONSERVATIVE INSURANCE INDUSTRY
16 INNOVATION IN CONSERVATIVE ORGANIZATIONS NYPD
HYBRID INNOVATION ECOSYSTEMS -
A HOLISTIC APPROACH THAT WILL TAKE YOU TO THE NEXT LEVEL
THREE QUESTIONS
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EACH STARTUP CEO SHOULD ASK HERSELF BEFORE PARTNERING WITH A LARGE CORPORATION
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24
THE SECRET KILLER OF CORPORATE INNOVATION
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32
ISO INNOVATION STANDARD
LACK OF OPERATIONAL FIT
INNOVATION IN RECRUITMENT MUNICIPAL INNOVATION
THE STORY OF A MUNICIPALITY’S SYSTEMATIC APPROACH TO INNOVATION IN TEL-AVIV
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EDITOR’S NOTES Dear reader, We are rapidly approaching the end of 2020, which has been a punch in the stomach to many businesses around the world. Times like these is when leadership is truly tested and legacies are born. We can definitely see a contrast between certain companies that immediately go into distress mode, sending innovation teams home and directing their full attention to the job of surviving the crisis. On the other hand, we see leadership teams realizing that every crisis like the one we are living through right now is also a time when immense changes are happening and, with them, new opportunities appear. If acted upon, these opportunities contain the future growth of their business. Innovation systems have a lot to do with rapid cycles of identifying such opportunities, evaluating them responsibly and sustainably, and investing in the most promising ones while knowing if and when to cull the underachieving ones. This magazine is about innovation management so naturally, we aren’t the most objective source when it comes to recommending a course of action. What we do know is that data clearly shows that the companies that invested in innovation during the 2007 crisis were the ones to come out swinging and outperforming their competition by a significant margin. In this issue, we cover the various ways in which conservative organizations such as municipalities, law enforcement, and an international insurance company find methods to innovate while not requiring any structural changes. We introduce you to the ISO innovation, the new concept of the Hybrid Innovation Ecosystem and much more. Wishing you a happy new year, and may 2021 be a year of fresh beginnings, growth, and thriving for all of us. Regards Ahi Gvirtsman
Chief Editor & Spyre Global Partner
AN INTERVIEW WITH ORNA KARNI, VP OF INNOVATION AT AIG ISRAEL
SUCCESSFUL OPEN INNOVATION
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IN THE CONSERVATIVE INSURANCE INDUSTRY
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WHAT SORT OF OPEN INNOVATION ACTIVITIES ARE TAKING PLACE AT AIG ISRAEL? We do quite a lot with regards to working with startups. For us innovation isn’t just about technology. It can be based on technology but it may also be an idea for doing something differently or delivering something new altogether. At AIG Israel we have a clear process of how such external ideas should be handled. Firstly, we create opportunities to get exposed to new ideas by startups. We meet the people and make an initial evaluation. Sometimes the startups are simply a slide deck and at other times we meet more mature startups that have a product which only requires fine tuning and adaptation to AIG’s infrastructure and customers. Then we perform a business feasibility analysis i.e. the cost of developing a solution vs. the potential revenues it will generate. Naturally it wouldn’t make sense to take on risk over a project that doesn’t have a potentially high ROI in case of success. We then perform a technical feasibility and check the various aspects of connecting it to our IT, issues of data security regulatory matters and so on. If this checks out then we plan and execute a PoC. The great thing for startups working with us is that regardless of the outcome of our evaluation for AIG Israel, we may realize that they are a good fit for someone else at AIG as a group and in addition we have delegations from abroad where we invite relevant startups. That way, both sides have something to gain from the interaction beyond the outcome of a local PoC and a possible implementation later on.
CAN YOU SHARE A COUPLE OF SUCCESSFUL OUTCOMES OF YOUR OPEN INNOVATION ACTIVITIES THAT ARE PUBLIC? We recently came out with a couple of new offerings that are based on startup technologies:
AIG SAFE LIFE, which is health insurance that offers personalized rates based on the customer’s lifestyle. A mobile app measures the customer’s level of mobility and since people who move more are usually less prone to medical risk, it is possible to offer reduced rates to those people as a result. In addition, the application which came from a startup called Shapa actually employs various techniques to positively affect the behavior of the customer in that regard. AIG SAFE HOME, which offers a significant reduction
in the cost of home insurance to customers who install a technology in their home that identifies pipe leaks early and alerts home-owners to their existence.
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In both cases, these startups contacted us because of our reputation as a startup-friendly company and their technologies fit our needs. At other times we may encounter startups whose technology can be applied to AIG in ways that are different from what the startups themselves initially thought.
The first thing is to setup a clear and transparent process. Then the innovation manager should expose decision makers to this process as part of an internal “roadshow”, recruit their support and ask about the business goals and challenges they have that open innovation may resolve. You might get some resistance initially as you get feedback that a unit may “have everything it needs” or that the unit “builds all of its own solutions” and that is fine. Once you start generating value and demonstrate it clearly, engagement will build. Another important thing is build real cooperation with the units. This shouldn’t be about you pushing something to them and expecting them to take it. It should be about working with business owners from within the units who are highly engaged with the various opportunities in the pipeline. This is in reference to the business units but also other involved teams such as legal, regulatory, data security, etc’ Finally, there’s no way around that the creation of strong working relationships with the various partners in the organization on a personal level is key for this cooperation to thrive long term.
WHAT DO YOU HAVE TO OFFER STARTUPS THAT IS VALUABLE AND THAT OTHER CORPORATIONS MAY FIND HARDER TO MATCH? AIG has been in Israel for 22 years. We work with our customers and agents directly and so we have massive amounts of data accumulated over this entire period of time. This data is very valuable to startups. Another significant advantage is that we are part of a global company including the rules, regulations and procedures of a massive, global corporation. If a startup can successfully implement its technology in AIG Israel, it means that it now can go to most global corporations and work with them. Culturally, I’d say that people at AIG are very open and receptive to new ideas and technologies. This isn’t just new technologies and products but also new processes and procedures.
AIG is considered to be the most digital insurance company in Israel and as it constantly seeks to improve and adapt, open innovation is something it is very open to investing in.
STARTUPS MOVE AT A DIFFERENT PACE AND SPEAK IN A DIFFERENT LANGUAGE THAN CORPORATIONS. HOW DO YOU MITIGATE THE CULTURAL DIFFERENCES BETWEEN STARTUPS AND THE CORPORATION? We have standard agreements with startups based on the work we have done with a partner from the legal department. Also, we actually have an innovation partner within the legal department at the AIG global level. What that means is that startups get the benefit of being a certified provider at an AIG global level once they go through the process at a local level with AIG Israel. In terms of keeping up with the startup’s fast pace, we have internal SLA’s we try to adhere to since we know that the startup lifecycle is much shorter than that of the corporate projects. We have to respond to startups much faster than we do to other projects since if we wait for six months to offer an answer then the startup might not be there anymore. For this to happen, we have inserted open innovation into common practices such as a regular management review of the startup related projects and defining the project involving a startup as part of the official work goals of the business unit partner assigned to this project.
WHAT ARE THE MAIN THINGS TO KNOW WHEN STARTING AN OPEN INNOVATION ACTIVITY LIKE THE ONE AT AIG ISRAEL? Understand who your customers are and what their needs are - just like you would with customers at every domain. You mustn’t act in a bubble. Your activity is like a product and management is your customer and you should act accordingly. Engage the people - This is about everyone and not just managers. Many people get very excited about innovation and it is your job to harness this passion for the benefit of innovation activities. Innovation cannot be dictated to employees and the activities must be designed to draw people to act. If you do these two properly then you are taking your first steps in the right direction.
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IT SEEMS LIKE YOU HAVE ESTABLISHED A STRONG COOPERATION WITH THE BUSINESS UNITS WHICH IN TURN ALLOWS FOR STARTUPS TO GET ADOPTED AS PART OF THE AIG OFFERING. WHAT SHOULD INNOVATION MANAGERS DO ON DAY ONE IN ORDER TO ACHIEVE SIMILAR RESULTS?
ELENA DONETS IS A LEADING MEMBER OF THE ENTREPRENEURIAL COMMUNITY IN ISRAEL AND PART OF THE G7 WOMEN’S FORUM, LED BY ANGELA MERKEL. ELENA IS ONE OF THE FOUNDERS OF THE INNOVATION CENTER OF TEL-AVIV UNIVERSITY (ONE OF THE LARGEST IN ISRAEL) AND SERVED AS THE CENTER’S CEO FOR 7 YEARS. AS PART OF ITS ACTIVITIES, IT HAS ESTABLISHED AND MANAGED HUNDREDS OF INNOVATION PROGRAMS, ACCOMPANIED THOUSANDS OF SUCCESSFUL VENTURES, SET UP CONFERENCES, HACKATHONS, AND OTHER INNOVATION EVENTS. IN ADDITION, ELENA IS THE CO-FOUNDER OF START-ISRAEL - ISRAEL’S ENTREPRENEURSHIP PORTAL, AND THE TAU INNOVATION CONFERENCE, THE LARGEST ENTREPRENEURSHIP CONFERENCE IN THE COUNTRY.
HYBRID INNOVATION ECOSYSTEMS -
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A HOLISTIC APPROACH THAT WILL TAKE YOU TO THE NEXT LEVEL
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HAVE YOU NOTICED THAT ORGANIZATIONS TEND TO HAVE A STRONG BIAS EITHER TOWARDS ORGANIC INNOVATION OR OPEN INNOVATION? IT SEEMS LIKE EXECUTIVES BELIEVE THEY HAVE TO CHOOSE EITHER ONE APPROACH OR THE OTHER AS THEIR MAIN FOCUS FOR ACHIEVING VARIOUS TYPES OF BUSINESS BREAKTHROUGHS. THIS ALSO MANIFESTS AS COMPLETELY SEPARATE TEAMS RUNNING OPEN INNOVATION AND ORGANIC INNOVATION FOR ORGANIZATIONS THAT DO HAPPEN TO MAINTAIN BOTH IN PARALLEL. THIS ARTICLE PUTS FORWARD AN APPROACH CALLED THE HYBRID INNOVATION ECOSYSTEM THAT ALLOWS ORGANIZATIONS TO EFFECTIVELY DO BOTH.
Our observation at Spyre is that investment in the right infrastructure can serve both types of innovation while as a result increase innovation success ratio, get senior management enthusiastic sponsorship, and leverage your brightest and most driven employees in an empowering manner that benefits both them and the organization. At the core of our key observation lies the simple fact that when an external technology is deployed by a corporation in order to impact its business outcomes, it usually serves as the solution component of what is essentially an internal venture.
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Let’s take as an example a startup that developed a technology for printing electrical circuits on thin sheets of material. This technology can be leveraged in various ways. An auto manufacturer can use this technology to apply to the hood of a car and use it to generate heat and defrost frozen engines in cold climate locations. A manufacturer of wallpaper can use this technology to create new types of glowing wallpaper. Clothing manufacturers can use this to apply to garments that generate heat using this electric circuitry. The list is endless. In order for such a startup to have even a slim chance of becoming part of the production line of a global auto manufacturer, this cannot be left to a dedicated scouter that identifies the opportunity, has a “great idea” for “fantastic synergies” and executives have to do much more than to state at the demo day that “this is very exciting!”.
What must actually happen is that an internal champion has to be appointed and that champion has to evaluate the business opportunity that this technology opens up for the corporation under the following conditions:
1.AN ASSUMPTION THAT THE TECHNOLOGY WORKS AS ADVERTISED.
Too often we see open innovation managers, especially, those with a technical background spending much of their time evaluating the startup technology and testing first if it actually works as promised. Unfortunately, this also means that the focus of PoC’s and Pilots with such corporations that run any startup programs are structured to do just that - test whether the technology works. As for the business value, potential roadblocks, organizational fit and so on, that is left as a secondary topic to focus on once the PoC is successful. In entrepreneurship, validation should come before building.
2. THEY HAVE TO REALIZE THAT THE STARTUP IS JUST THE SOLUTION.
Corporate innovation ventures are startup-like projects taking place inside established organizations. When such an opportunity takes place it is an internal corporate project for which the startup technology is nothing more than an enabler. A critical enabler in case no alternatives exist but an enabler nevertheless. If we consider the lean canvas and its variants, a popular tool for startups that is becoming more prevalent in corporate settings, there are a couple of elements out of the total of nine that are directly related to the involved startup. The solution is heavily based on the startup and the customer acquisition cost which probably includes a component of the startup technology cost. The remaining seven components of the canvas have to do with a broader context which is the opportunity to make a significant impact on the organization’s business outcomes.
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In most organizations we encounter that haven’t made this realization yet, the following pattern is quite common:
Oddly enough, we meet quite a lot of organizations with organic innovation processes that are run relatively effectively. What characterizes such organizations is:
A lot of effort is placed on the scouting part where they get to meet cool startups with exciting technologies.
- They usually have clear methods applied for this purpose such as lean startup or design thinking.
There’s a focus on visible events such as demo days which are great opportunities to develop the organization’s brand and reputation. However, once the most promising technologies are identified they put the startups in contact with the relevant executives or contact persons who have a lot of goodwill but not a lot of spare time or clear guidance on what to do next. This is a recipe for disaster and a lack of outcomes.
TOOLS
PROCESS
- A certain process defined with clear stages and conditions for being promoted through the process.
LEADERSHIP
- Decision-makers are usually identified in advance and serve as great proponents of innovation ventures within the process.
COMMUNITY
- Those with advanced ecosystems even train innovation champions that support the process and empower employees to own innovative opportunities and to be the force that drives them forward.
As we looked at organizations struggling to get consistent outcomes with their open innovation activities it became clear to us that the same characteristics of successful organic innovation ecosystems will have a great effect on open innovation activities. Moreover, once organizations invest in the right innovation infrastructure, it can serve both purposes of organic and open innovation. If we consider the key observation above, an innovative opportunity to generate new business by applying a thin sheet of material embedded with electrical circuitry to the hood of an automobile is something that requires the same approach as any other entrepreneurial project running inside a corporate innovation ecosystem. This is how the concept of the Hybrid Innovation Ecosystem came to be. What we see working very well is having a solid innovation infrastructure internally and using the same rules and the same contributors to promote both organic and open innovation opportunities internally. What’s very interesting is that this approach relieves a lot of the burden that was placed on the shoulders of startups to somehow crack the corporate code. Instead, it is now on the corporate ecosystem to find the right way to introduce startup technology to its business operations. This is not just a much more robust method that generates a high success ratio, it is also, we believe, an approach that is much fairer towards startups that are very young and often struggling companies.
IN SUMMARY, IT APPEARS YOU CAN HAVE YOUR CAKE AND EAT IT AFTER ALL BY LEVERAGING THE SAME INNOVATION INFRASTRUCTURE, WHEN DONE CORRECTLY, FOR BOTH ORGANIC AND OPEN INNOVATION. A HYBRID INNOVATION ECOSYSTEM IS THE ANSWER FOR ORGANIZATIONS THAT WOULD LIKE TO HAVE THE FLEXIBILITY OF APPLYING BOTH ORGANIC AND OPEN INNOVATION APPROACHES.
Shai Albaranes is Vice President of Innovation and Ventures at Orbia, a global corporation that generated $7B in revenues in 2019.
Three
questions 14 THE FUNNEL
each startup CEO should ask herself before partnering with a large corporation
A few weeks ago, I was invited by SOSA to speak with a group of startup CEOs in the water industry. After talking about innovation in general, and innovation in the water sector in particular, our discussion focused on startup–corporation relationships. On the one hand, we have many large organizations today repeating the mantra that says, “We would like to partner with startups”. On the other hand, many startups are looking for partnership opportunities with large corporations that can boost their global reach and significantly increase their sales. On the face of it, potential synergy is promising. However, the reality is much gloomier, and not many
organizations can actually demonstrate that they have successfully partnered with start-up companies. In most cases, the reason lies in the fact that the large corporation didn’t really know how to partner with a startup and didn’t build the required processes to do so. Thinking about this issue, I came up with the following three tests that can help every startup decide whether the partnership it is seeking has high chances of becoming fruitful. If the answer to one or more of the below questions is no, I strongly recommend that you consider whether the risk you are taking is worth it.
1 2 3 Bonus questions:
Does the corporation you seek to partner with have a designated/official startup partnership program? If it’s an adhoc activity, is there a reliable entity providing expert support to the process itself?
4
Is there a designated person/team whose title/role contains “startup partnership”, “open innovation”, “start-up success”, or something similar?
If the corporation is comprised of several distinct business units, has there been a successful startup partnership with the specific business unit you wish to partner with?
If you wish to engage with the corporation, mention any of the above potential partnership models and find out if there is at least one success story of another startup they partnered with using the same model. What do you think? Are there more questions you would add? Have you had a successful interaction with a large corporation? With whom?
5
Is there at least one success story of a fruitful partnership between this corporation and another startup?
There are many types of possible partnerships. To name a few: • Joint R&D • Improving corporate operations – mainly through increased efficiency and cost reductions • Adding the startup product/service to the corporation portfolio
Balancing the pressing need to find a reliable partner with the various warning signs described above is important for you in order to manage your limited resources wisely. Partnering with corporations has great potential benefits. Remember to pause and evaluate the situation before committing.
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Yael Bar Tur served as the Director of Social Media and Digital Strategy for NYPD (New York Police Department) between 2016 and 2020 so she had a chance to get a front-row view of what it’s like introducing new methods to conservative organizations. Such methods naturally make many people in organizations like these feel uncomfortable especially considering the inherent lack of control they represent to those unfamiliar with them. Yael was in charge of rolling out a new social media strategy that sought to expand and decentralize NYPD’s social media presence. Yael is currently a digital consultant. https://www.yaelbartur.com/ @yaelbt
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Innovation in conservative organizations
NYPD
From top-down to bottom-up communications: Instead of official communications coming from headquarters only in a top-down manner, every police station started managing its own Facebook page and Twitter account. Naturally, clear instructions were put in place as to how these new tools should be used and the idea was to allow the residents of an area to get information on what was taking place in their neighborhoods. This empowered individual members of the force to represent NYPD on social media and raised morale due to their ability to have this ongoing conversation with the local population they were serving.
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Generating brand credibility: When information comes from lower-level members of the organization that have a reasonable boundary within which they can work that generates a strong sense of empowerment on one hand and a very genuine and authentic face on the other. The consumers of this information are inhabitants that care about local matters very much and appreciate putting a face to the identity of policing in their area that makes the relationship between police and communities much more positive.
Yael’s main recommendations for dealing with internal resistance: Get the sponsorship of top management In this case, the chief of police was on board and not only supported this in words but also in action i.e. published to social media himself and had his direct commands do so as well.
Create positive feedback loops Regular emails were sent from the central social media team to the various stations. At the end of each such message, there was a positive mention of a station that did something remarkable the week before. This weekly mention of a station’s social media activity on a broadly visible email is a sort of reward via internal positive exposure.
Make it simple Whatever you ask from the workforce should be made as simple as possible. In this case, part of the weekly email contained instructions, ideas, and content that could be used by the stations as part of their social media activity.
Start small and later scale Initially there was a Twitter account only and later a Facebook page was added. In addition, this was an informal added role for someone from the station initially whereas later it became an official dedicated role.
Make room for failure When applying new things it is only natural to expect failure from time to time. It’s important to stay the course even when such mistakes happen. In this case, photos were uploaded by local residents that were not well received by the community. It would have been easy to just shut everything down at that point due to the perceived public embarrassment but since leadership was committed - that did not occur. It also communicated to the various stakeholders that this was important enough to continue the activities despite what had happened and that management had their backs.
AHI GVIRTSMAN IS THE FORMER VICE PRESIDENT AND GLOBAL HEAD OF INNOVATION OF HP’S SOFTWARE DIVISION, THE AUTHOR OF THE BOOK “THE PEAK INNOVATION PRINCIPLES” AND CHIEF KNOWLEDGE OFFICER AT SPYRE. HE IS CONSIDERED A GURU OF ORGANIZATIONAL INNOVATION AND HIS METHODS ARE BEING APPLIED IN VARIOUS ORGANIZATIONS INCLUDING VODAFONE GERMANY, ORBIA, AND THE MUNICIPALITIES OF TEL-AVIV AND JERUSALEM
The secret killer of corporate innovation
Lack of operational fit
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THROUGHOUT MY CAREER I HAVE SEEN SEVERAL VENTURES THAT WERE MUCH NEEDED; CUSTOMERS EXPECTED THEM, MANAGEMENTS LONGED FOR THEM, AND YET THEY PERISHED AND DISAPPEARED. THE REASON? A LACK OF OPERATIONAL FIT OF THE VENTURE TO THE ORGANIZATION AND FAILURE TO TAKE STEPS TO MAKE IT WORK.
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Remember that once upon a time, actually about a year ago (even less) we used to fly to other countries? Many of us used to pack a universal power adapter so that no matter what country we arrived in, our appliances would work. The adapter was required in order to make the appliance work in an environment which wasn’t natural for it. Innovative ventures, by definition, have a high risk of failure. Even if successful, their impact on the organization’s KPIs (e.g. revenues, profitability, and customer satisfaction) is not clear in advance. Additionally, such ventures usually demand that certain key functions in the organization start doing things differently in order for the venture to be implemented. Similar to our universal adapter analogy, such ventures are foreign entities in established organizations. This means that regardless of how enthusiastic management is about them and the positive impact they could have on business outcomes, they will eventually perish. The reason is a silent killer that lurks within every organization and, without too much noise and fanfare, suffocates such maladapted ventures.
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AN EXAMPLE OF THIS IS A SOFTWARE PRODUCT BUILT FOR SALE IN THE CLOUD, IN AN ORGANIZATION THAT UNTIL THAT TIME WAS USED FOR SELLING SOFTWARE PRODUCTS INSTALLED ON THE CUSTOMER’S PHYSICAL SERVERS AS PART OF THE DATA CENTER. THE SALESPEOPLE IN THE ORGANIZATION KNEW HOW TO CLOSE LARGE DEALS IN A PROCESS THAT WOULD TAKE MONTHS, AND THEIR COMPENSATION MODEL WAS BASED ON A CERTAIN FLOW AND SIZE OF DEALS. WHEN THE SAME COMPANY RELEASED A SOFTWARE PRODUCT DEPLOYED IN THE CLOUD, NOT ONLY DID THE TECHNOLOGY CHANGE - BUT ALSO THE BUSINESS MODEL. INSTEAD OF DEAL SIZES FROM HUNDREDS OF THOUSANDS OF DOLLARS TO MILLIONS AND SALES CYCLES THAT COULD TAKE UP TO A YEAR, THE SALESPEOPLE NOW HAD TO CLOSE A LARGE NUMBER OF SMALL DEALS, WHICH REQUIRED THEM TO HAVE SKILLS THEY DID NOT NECESSARILY HAVE. ADDITIONALLY,, THE BILLING MODEL WAS NOW SUBSCRIPTION-BASED INSTEAD OF A ONE-TIME PAYMENT. TO MAKE MATTERS WORSE, INTERNAL SALESPEOPLE WERE MEASURED BASED ON THE OLD MODEL AND NOT MAKING NUMBERS AS A SALESPERSON MEANT YOU’D HAVE TO FIND A NEW PLACE OF EMPLOYMENT. THIS MEANT THAT SOLVING THE COMPENSATION ISSUE ALONE WAS NOT SUFFICIENT. BOTH THE COMPENSATION MODEL AND THE PERFORMANCE MODEL OF SALESPEOPLE WERE NOT SUITABLE FOR THE INNOVATIVE NEW PRODUCT.
In fact, the organization found itself trying to bring a new product into the world that was supposed to be strategic for it, while at the same time using a compensation model that suppressed any motivation for salespeople to sell it. The result was that they continued to encourage sales of legacy products instead of the new ones. How should you deal with this? The answer is by using a tool called “operational fit”. The purpose of this tool is to identify in advance the points at which there is a mismatch between the organization and the new innovative venture that it is working on. When I accompany organizations in promoting innovative ventures, I ask them what organizational function’s behavior will need to change in order for the venture to be implemented and reach customers. Think of a new technology that an insurance company would like to incorporate into its customer service. The technology is expected to increase the success rate of the customer service retention team. However, the average call time is expected to lengthen due to this technology being applied, and in addition, it is a tool that requires training. Let’s take two organizational functions, for example: Customer Service Team: Naturally, this team will be the one to make use of the new technology. IT department: The department staff will need to know how to install and maintain the technology. They may
also be responsible for explaining to customer service personnel how to use it. Let’s see whether each of these functions has the skill and motivation to work in line with the venture needs. In the case I presented, the customer service team does not have the necessary skill and the organization will need to provide appropriate training. What about motivation? If we examine what the team’s goals are and how they are measured today, then we will know if there is a contradiction between the current way of measuring and what the team will be required to do when the new technology is assimilated into the organization. If we identify a contradiction, it means that we have within the organization a factor that without malicious intent will still harm the success of the venture. This is because people behave based on how they’re measured. How do you deal with such a contradiction? Suppose we find that customer service is currently measured, among other things, on the average length of calls that should remain within a certain range. The technology, as mentioned, will extend the average call duration, but will also increase the success rate in customer retention. If so, we will need to coordinate this with the team managers and lengthen the range of the call duration that the team members will have to maintain in order not to be harmed in their evaluation as a result of the standards of the new technology.
WE USE THE “OPERATIONAL FIT” TOOL AS A KIND OF A UNIVERSAL ADAPTER THAT ALLOWS A CONNECTION BETWEEN AN INNOVATIVE VENTURE AND THE ORGANIZATION IN WHICH WE WANT TO IMPLEMENT IT. USING THIS TOOL AT A RELATIVELY EARLY STAGE OF THE VENTURE CAN SAVE A LOT OF HEARTACHE DOWN THE ROAD. THE STRENGTH LIES IN THE FACT THAT IT DOES NOT DEAL WITH VISIBLE ORGANIZATIONAL BARRIERS, WHICH ARE RELATIVELY EASY TO IDENTIFY, BUT WITH QUIET BARRIERS THAT, IF LEFT UNADDRESSED, WILL CAUSE THE VENTURE TO SLOWLY PERISH WHILE THE REASON STAYS DIFFICULT TO DETECT.
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Rinat Guy is Chief Innovation Officer at the Tel Aviv-Yafo municipality. We asked Rinat to tell us about the innovation program she runs and the fascinating story of how it came to be.
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Municipal innovation
The story of a municipality’s systematic approach to innovation in Tel-Aviv
In recent years, the management of the Tel Aviv-Yafo Municipality, Israel’s cultural, business and nightlife center and 2nd most populated city, headed by Mayor Ron Huldai, has been leading a move to assimilate innovative thinking into daily work at the municipality. We are not talking about innovation to make a nice impression, nor is it innovation created in conference rooms in Tel-Aviv’s magnificent towers nor from Silicon Valley laboratories. It’s innovation born out of real needs, real challenges and mostly from listening to what’s happening on the ground, created from employees, from people and for people. We have become an organization that asks questions about how one can innovate and what can be done differently to get better. This isn’t about technology because innovation is not just technology. It is a different form of thinking and looking at problems, thinking about the existing out of a desire to improve it.
Six years ago I was working for the municipality as a cross-organizational project manager. When I suggested to the city administration that we set up an innovation program for employees the reactions were very doubtful such as: “We love innovation, it’s just a pity there is no budget”, “We are doing so well, so why change?”, or “This will be a waste of time” .
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Finally when the mayor realized I would not give up he told me “You now have a new project. Build a plan for innovation, but without a budget, without dedicated manpower and without tools and do not forget your current work since this is in addition to your current role. So it took me almost a year, and I studied the subject in Israel and abroad, in academia, in business and public bodies. The one person who believed in me, was Ahi Gvirtsman, an innovation expert who was at the time, VP of innovation at HP and is currently the co-founder and CKO of Spyre. He was always happy to advise me,
help me and kept telling me not to give up because when innovation is introduced there will be cynicism, disregard, ridicule and that it is part of the process and this dream I have must not be given up. Another thing that he helped me with was the methodology that he devised which I was able to use as the basis for my work. After a year, I came to the conclusion that innovation is not a project that begins and ends. Innovation is not a slogan, innovation is a way of life. The way to change and improve the lives of all of us, our community, the way we see reality. So how do we do that? How do you innovate in a complex bureaucratic organization with 15,000 employees? The Tel Aviv Municipality encourages innovation in various ways. We harness the resources around us to improve the quality of life in the city. We started with our human capital - the workers. We believe that innovation starts with people and that employees are a source of inspiration for innovation. The innovation unit has developed the ITAY (Innovation Tel Aviv Yafo) model which is a groundbreaking urban model. A diverse human cluster (employees, teachers, students, researchers, residents) collaborates around joint initiatives that address the challenges of the city and community with a focus on strategic innovation, internal organizational innovation, educational innovation and open innovation. We started with the employees. I believe that every employee has the ability to innovate, change and create added value. Employees get a firsthand experience of the problems and the needs and they are the ones who can also invent great innovative solutions. We just need to create the conditions to allow that to happen. We just need to offer them a platform. The goal was to reach out to all city employees and encourage them to come up with creative ideas for the benefit of city residents. But how do we reach 1,000 employees? We have trained innovation ambassadors. We selected 30-40 creative and motivated employees who were suitable to be agents of change. We conducted the same course of 8 sessions in which they were exposed to a wide range of approaches / techniques for dealing with urban challenges. Content such as Design Thinking, Lean Canvas, Systematic Inventive Thinking (SIT), Presentation skills and standing in front of an audience and much more. Today we have 194 innovation ambassadors whose job it is to be agents of change in their units and encourage their colleagues to think of creative solutions for the well-being of the city’s residents.
The change in perception of this model is that the municipal management presents the challenges and the employees themselves bring the solutions. Once a year we hold an innovation competition. Employees take the stage and present their TED-style ideas in the presence of the mayor, city council and 500 guests. Good ideas get a budget for pilot implementation. If successful the pilot will expand the venture and replicate it to more places in the city. So far 22 ideas have been fully implemented and 5 more are in advanced stages of implementation. The process is systematic and not one-time. It is a radical act that we have only benefited from and it is an organizational culture that every organization can and must in my opinion adopt. A particularly exciting example was the “John 4 On” project - the integration of students with complex disabilities in the world of employment, which won second place at our Urban Innovation Conference in November 2019. The project was conceived by an art teacher, who participated in an innovation coaching course, from the On School, which is a rehabilitative social educational framework for students with cerebral palsy (C.P) and complex disabilities. The project for the senior class (18-21) has been successfully implemented and takes place in a variety of unique workshops, with 15 students participating, some of whom are approaching adulthood. The purpose of the project is to prepare students for professions in the market as well as to help prepare work portfolios that will assist in finding a suitable job after graduation. The workshops are held with the help of volunteers from various fields - product design, fashion design, architecture, building computer games, etc’. Some of the volunteers themselves have disabilities or are parents
of children with disabilities and beyond practical learning, there are also lectures on how to handle clients in the various professions and how to manage and work in an office so that students can integrate into the labor market as easily as possible. We started with the employees and we continued with residents, with primary school teachers, special education, with kindergarten teachers and we have a partnership with Tel Aviv University. The “Tel Vekach” project - a community object library allows you to borrow practical, space consuming items such as a drill, a cage for cats, a baby seat and return it when you finish using it. This saves our city’s inhabitants money and also precious storage space in the apartment. We are in a constant process of encouraging creativity and different ways of thinking among employees, teachers and residents. The projects come from completely different content worlds, yet they all try to solve urban problems or community challenges in new and fresh ways. We cultivate a supportive atmosphere for startups. In the city of Tel Aviv-Yafo, there is the highest concentration of startups in the world per capita. At any given moment, there are about 1,700 companies operating in the city. City management is promoting policies to help startups and reduce taxation. We have established 7 urban workspaces in one of which we are also located called “Cityzone”. Here we host startups that can apply their technology to urban challenges as a Beta site and test it for up to a year. There is a large field of experiments here on urban issues in collaboration with Tel Aviv University and the municipal Atidim company.
What Tel-aviv’s innovation program has produced in recent years demonstrates that only those who are deeply familiar with the needs and challenges - can come up with excellent answers. The freshness of the city of Tel Aviv - Jaffa is not only in its streets. It actually seeps into the corridors of the city’s municipality and “infects” everyone there with great enthusiasm. Tel-Aviv’s nickname is “A city that never stops”. It has now become a city that never stops renewing itself.
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Over 3000 employees have actively participated in the program. Over 100 ideas are submitted every year. Annually, about 10 workshops are held, dedicated to the needs of various units. 3 courses of innovation ambassadors a year
An interview with Leopoldo Colombo, a consultant and trainer who is also a convener ISO/TC279/WG1 as part of ISO - The international organization for standardization.
ISO innovation standard 28 THE FUNNEL
The ISO organization is very well known historically for standards like ISO9000 which was about documenting the work that you do and then being able to turn whatever you document into a standard practice in the organization. Where did the need for an innovation standard come from?
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Organizations worldwide are having difficulty innovating in a sustainable manner. Organizations that expect to innovate haphazardly or perhaps once every few years may not care about this that much but an ever increasing number of organizations, especially medium sized ones are having difficulty with generating sustainable innovation practices. In 2013, ISO (International Organization for Standardization), felt there was a maturity in the marketplace to discuss standardization of innovation practices. The result is, ISO 56002 is a type B standard i.e. a management system standard providing guidance. It was created using ISO High Level Structure in order to facilitate integration with other management standards that are currently prevalent such as ISO 9001, ISO 14001 and so on. Thus, the best practices of innovation presented as a management system may be integrated into management systems organizations already have in place. Innovation is an outcome that organizations seek to achieve and what the standard contains are the best practices that we recommend for organizations that wish to generate such outcomes in a sustainable way.Â
When you ask the CEO of most companies today how they hire a new manager, that CEO will be able to immediately describe that process to you. However, if you ask about what they do with an innovative idea, most CEO’s won’t be able to give you a succinct answer. Why would you consider managing innovative ideas any different from hiring a new manager? The long term impact of both processes on your organization is substantial and the cost of failure as well. If you are currently using best practices for hiring top management personnel you should also use best practices to manage innovation activities. That is why a standard for innovation management is so important. Another reason why this standard is so important is that innovation is by definition a risky endeavor and it inherently involves failure. If on top of that you are not using high quality management processes then your chances to be successful become even lower. You cannot afford to innovate without robust best practices in place. It is your responsibility to seek the most effective tools and practices that are available to you for this purpose. Can you walk us through the steps by which such a standard is created? An ISO Technical committee was established in December 2013 which then divided itself into three working groups:
• Innovation management systems • Terminology • Tools and methods
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Each country is invited to propose experts that these committees may consist of. In the beginning, the committee was established of 14 countries, 12 European countries plus Canada and Argentina. Currently, we have 46 countries participating in the activities. We would have 2-3 meetings per year where each meeting lasted for five days. The experts came from various international corporations, national organizations with experience in innovation activities, government’s officials, academia and consultants. Those represented a large quantity of accumulated knowledge. It is a very meticulous process that is aimed at seeking consensus. The discussions involve people with a lot of experience and so they were in fact a rich learning experience for participants.
Since we are relatively early in the process we are now looking to see how fast the adoption is going to be. More importantly, we are waiting to receive feedback from organizations that adopted the standard or some of it with regards to the level of value it generates for them. What would you say are the parts of the standard that organizations taking their first steps in systematic innovation should adopt first? Firstly leadership. It is very important to have an innovation vision and an innovation strategy. Innovation has to be aligned with the strategy of the organization and so this must be established before you begin innovating in an organization. Management should also make sure that your innovation project portfolio is balanced in terms of long, medium and short term projects and in addition, the risk levels should be balanced across the portfolio. Secondly, organizations must develop a culture that promotes creativity and this has to coexist with the organisation’s existing operational culture that generates products of the best quality in the most efficient manner. For that incumbent culture, innovation is sometimes regarded a mess consisting of “crazy ideas that will never work”. The operational culture is like the “Pacman” trying to eat all innovation projects that for it are wasteful and messy. That is why leadership has a critical role ensuring the two cultures coexist and take care of the existing business efficiently while thinking and nurturing the future business with a long-term vision Finally, organizations must develop a collaborative environment that drives innovation through collaboration, internally within different departments and externally with the existing innovation ecosystem . This is especially valid for medium sized organizations that cannot afford to have teams totally dedicated to innovation or bring external expertise into the organization. When speaking to corporate executives I often get a response that innovation is already happening in the organizations and that they don’t need further guidance while in fact what they’re doing is the standard product development or business development waterfall-style practices. When interacting with organizations, what
functions, in your experience realize that they’re not really innovating and that best practices are truly necessary? In every case I was contacted by organizations to implement innovation best practices in their organizations it was done by the CEO. Middle management actually resists this sort of activity because from their position it is more difficult for them to see the value. The CEO is in the position that can realize the value of having a formal innovation process since only when a formal process is in place is it possible to measure and control it. People think that innovation is all about happy and ludic activities, rainbows and unicorns and that standardized processes are bureaucratic and constrictive. However, innovation must be guided by some sort of a structured process just like anything else we wish to run consistently, effectively and efficiently. Just like when you bake a chocolate cake, there are basic elements in the recipe that are mandatory like the ratio between flower, oil and liquid in order for the cake to rise and then you have more freedom with the flavoring and the amount of chocolate. The standard’s purpose isn’t to dictate the entire practice. It is to offer certain basic practices that are highly recommended and then leave high degrees of freedom for the rest. You also created ISO 56003 Tools and methods for innovation partnership. Why did you choose to dedicate an entire innovation standard to innovation partnerships? This is because by partnering with other entities like customers, competitors, government and academia, you can get access to knowledge and capabilities that you wouldn’t be able to get any other way. For example, partnering with Academia opens up opportunities to run experiments and prototypes that an organization may not be able to afford internally. There’s knowledge that has been accumulated regarding IP ownership, terms of cooperation etc’ most companies do not have currently and so this standard offers them some of this information. Do you see this standard turning into something that organizations can get certification for? Quite recently a request from 12 different countries was presented to ISO to create an innovation management system standard Type A, meaning for certification purposes. We believe we have accumulated enough knowledge in order to set a basic set of mandatory practices organizations will be required to follow in order to consider themselves as innovating in a sustainable way.
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What was the reception to such standardization of innovation practices in the marketplace? I know from my dealings with managers throughout my career that the order and structure of innovation practices may be off putting due to a concern about innovation bureaucracies or that it would slow down the activities.
Dana Bash Shelach is the CEO of iTalent, a company that uses unique methods to find and hire the right talent for startups and the high tech industry
Innovation in recruitment The world is advancing at a dizzying pace, and many industries have undergone radical change thanks to disruptive innovation that has led companies and products to view reality differently and challenge the status quo. Technology companies engaged in innovation always push the boundaries of creativity, but this depends entirely on the quality of their human assets. As innovators in recruitment, this is where we come in.
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We are iTalent, nice to meet you.
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Our diverse set of clients, who we prefer to call partners, represent the full scope of the technology industry, from startups at the beginning of their very first expansion to global organizations that require precision in finding candidates with just the right, unique talents. Besides being technology companies and our partners, the one factor they all share is growth and expansion. Understanding that old recruitment processes simply aren’t good enough anymore, we’ve innovated new methods to meet the needs of companies in these stages of growth.
Why recruitment needs innovation Finding the big stars in an industry and successfully recruiting them is always a difficult process regardless of market conditions, and the necessary investment increases dramatically for organizations experiencing ongoing growth. In 2017, research conducted by Glassdoor’s chief economist Dr. Andrew Chamberlain in 25 different countries found that the length of recruitment processes for programming engineers had gone up. On average, it now takes 41 days to recruit program development engineers, making it the sixth-longest recruitment process by position. According to Brian Schreier of venture capital fund Sequoia, a startup needs more than 19 hours per-week for an entire year in order to recruit and employ 12 engineers, adding up to almost 1,000 hours!
These figures make it clear: recruitment is strategic, and short-term tactical solutions should be avoided. As we set out to increase our partners’ ROIs, it was important for use to to take into consideration two points:
1. LinkedIn Most recruiters have a love-hate relationship with this must-have tool. LinkedIn is a partial solution, as it comes with many limits and restrictions like high subscription rates. Spurred on to overcome these difficulties, we practiced, specialized and invested in getting to know it and getting creative with it. While LinkedIn remains an imperfect tool, the way we’ve learned to use it has given us a huge advantage as recruiters.
2. The success-based model We innovated the entire recruiting business model by charging regular monthly sums rather than selling prepared packages for a set price, focused only on the outcome. We faced our fair share of opposition to this new model, but it has proved to be superior in every way. Remember how we talked about having partners rather than clients? This model supports a healthy partnership, allows us to focus on long-term strategy and guarantees recruitment while avoiding damage to the brand. Our last decade working with this model speaks for itself.
After saying that, lets glimpse into 4 points which we decided to focus on of how we created innovation for our partners:
Transparency with our partners The entire recruitment process often seems vague, and some organizations struggle to figure out where they and their candidates stand at certain stages. This confusion can lead them to simplify recruitment into a blackand-white process. Either someone was hired, or no one was - success or failure.
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True, the ultimate goal of recruitment is, well... recruitment, but much value can be gained from the process itself and learning from the details of every step. The information acquired during recruitment leads to new conclusions about future recruitment and even the nature of the company itself. That’s why we built the Applicant Tracking System (ATS), so our partners can see the status and details regarding each candidate for each open position we are working on. This includes their contact details, social media links and the ability to rate each one. This system has saved us time in organizing the data we gather on candidates, getting to know our partners and building a good relationship with them.
Technology
The success we’ve had with developing tools like ATS is a large part of the reason we are continuously investing in technology - new ways to accomplish old goals better. Another reason is that without our technological innovations in recruitment, there might not be anyone else to do it. Recruitment is often seen as a “soft” area of operations and doesn’t get the attention it deserves from within the organization. But with the proper investment in technology and innovations in how to use it, recruitment proves itself to be anything but soft. We’ve used technology to innovate in recruitment by developing the ATS system, which is based on the wellknown CRM system; part of innovation is using existing tools in new ways. We’ve also built AI tools that help us reach candidates and information we wouldn’t have found otherwise. And then, some technological solutions arise out of practical need. For example, one of our cyber partners was happy with the transparency of our processes but wanted to filter through candidates comfortably for different parameters at the push of a button. We listened, and built them the option to rate each candidate and filter accordingly.
Candidate experience
People #1 - Everyone knows it, but few put it into practice, so it’s worth repeating: your people are your most valuable resource! All the tools we’ve discussed wouldn’t be worth anything if we didn’t recruit intelligent, curious people. This may not sound very innovative, but the development of a proven and dedicated recruitment method allows us to serve our partners and candidates in an innovative, pleasant and respectful way. We are even proud to say that this year we received an award of excellence from the National Association for Human Resources in Israel. In addition, all these tools allow us to gather and share critical information between our people and save you and us valuable time. People #2 - An essential part of the tools in our arsenal were born out of openness and curiosity, including the ongoing collection of information and receiving feedback from our partners. Is there anything more exact than that? Putting the customer first isn’t a slogan for us as much as a way of working. Our preparedness to continue learning makes the organization thirst, curious and entrepreneurial in character. We take all feedback and requests seriously and collect everything into a unique system that ensures service and a product that are continuously developing. Many companies feel they know what the customers want and need. Sometimes that’s true, but sometimes not... Our partners help us be better than the competition. True partners.
The term “employer branding” is familiar to most people, but the complexity behind this concept is exceptional, and this topic has seen much development in recent years. A key part of employer branding is candidate experience, a tricky element that often leads organizations to missing out on great candidates. The candidate experience begins from the very first time contact is made with a potential candidate and is eventually composed of all their interactions with the organization, from the wording of advertisements to how they are treated personally at every stage of the recruitment process. Focusing on this important factor, giving candidates a positive impression of an organization and building within them a great desire to work there has led many of our partners to significant success in finding and hiring the right talent. Going back to the importance of people, candidate experience makes them the focal point, led particularly by how an organization chooses to communicate with them. It’s important to use the right language and give candidates a secure feeling of respect. Consistent messaging and behavior across platforms and time is also crucial to inspire potential candidates to put their trust in an organization. Our work with one partner included sending a detailed email with information about the company, the various advertisements the company had appeared in, a little about the team and a detailed explanation of how to conduct a recruitment process in the future. All this leaves the exact impression the company wanted. Candidates felt like they were being seen and that we really wanted to get to know them and create a friendly and transparent process for them. Giving them this feeling is also a great way to create ambassadors for your company.
We are currently working on and considering implementing a number of systems that will help us gather more input from candidates about the recruitment process. We hope this will help us strengthen our branding efforts for our partners further and give us that much more of an advantage in recruiting in-demand talent. The will and ability to challenge the status quo are essential for any innovation to take place, technological or otherwise. Sometimes something small like slightly better service can create a big advantage. The recruiting industry continues to develop at an incredible rate and the effort of organizations to recruit the best talent will only increase from here. It’s time to start adopting an outside-in perspective on your organization, as if you were the candidate. Ask questions, and you’ll be amazed to discover many wonderful things you can easily put into practice.
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