Aug 24, 2010
Get Fired: A New Framework for Change, Part 3 of 4
From the inside: Steelcase
From its 1937 creation of a Frank Lloyd Wright-inspired desk to its 1996 investment in product design juggernaut IDEO, Furniture-company-turned-workspace-consultant Steelcase has a long history of not only investing in new ideas but successfully bringing them to market.
The latest in this long tradition is a newly formed group called Growth Initiatives, anascent project that focuses on creating, testing, and bringing new innovations to market. The group’s objective is to capture and systematically fund potential revenue streams as they look 5 and 10 years into the future. To accomplish this Growth Initiatives uses a rigorous venture capital-style investing process that grants progressively larger amounts of resources as an idea proves its value. This method mitigates Steelcase’s investment risk and ensures that only the most viable ideas move forward.
We asked Growth Initiatives program lead John Malnor how his team pushes the boundaries of what’s possible to help Steelcase achieve long-term design andfinancial success. His first response focused on the definition of failure; before an organization is able to fully embrace the opportunities provided by new ideas, it’s mandatory to change the definition of “failure” from “not successful” to “not learning.” He explained that everyone inside the organization must understand that it is acceptable for an unproven idea to not make it to market; and the only true failure is not learning from the process.
“You might have 20 different ideas, and only a couple of those might be viable for the long term. Instead of saying, ‘That failed because it didn’t get second-tier investment,’ you archive that idea, because maybe its time hasn’t come. Or you capture what you learn from that first idea and then look for somewhere else to apply it.” Or perhaps the idea just needs some tweaking. Malnor makes the point that even the best concepts go through at least two or three iterations before they’re ready for market testing.
One idea alone has little chance of success, so Malnor and his team try to gather several. “You want to be able to pick through a portfolio of ideas. If you have just one…people get invested and can’t let it go because there are no alternatives.” They become blind to objective evaluation.
Where do all the ideas come from? Customers, investors, trends, the market, the competition—everyone. “We’re always working on building our skill capturing new ideas,” says Malnor. He adds that Steelcase also cultivates employee participation in the process: “We make it easy for them to contribute.” The company intranet features a form developed to encourage anyone to jot down an idea.
What to do with an inbox of ideas? Design a decision-making gauntlet to determine which ones make the cut, says Malnor: “We’ve developed a set of frameworks that we filter concepts through.” The frameworks he’s referring to are questions that weed out weak ideas and reinforce the strong. Examples include: Is the idea a viable business opportunity; and Does the new business concept align with the company’s overarching purpose? “Some ideas have great potential,” Malnor explains, “but if it doesn’t build the long-term value of the brand, we pass.”
Perhaps the most critical framework is whether the new idea aligns with Steelcase’s current focus, which is determined by macro trends like economic environments and technology developments. In the past opportunities have ranged from geographic and product category trends to competitors’ new developments.
If an idea successfully answers these questions it’s promoted to prototyping and receives an initial round of funding to explore its real potential.
The first rule of prototyping: How fast can you learn, how little can you put at risk? When a concept is ready for in-market prototyping, “you need to invest the smallest possible amount to prove the concept,” explains Malnor. If you can figure out how to do rapid in-market prototyping for low cost and quick learning, then you’ll already have those metrics in hand to help prove the business case when you start looking for additional resources.
Malnor offers a few key recommendations for companies that want to emulate this type of methodical innovation. “Trust the talent within your company,” he explains. “Understand what your purpose is, and then build the skills and thick skin it takes to rapidly prototype ideas. You have to be willing to stop investing in many of those ideas—most of them, in fact. The only failures come from not trying new things—or, even worse, not learning from each new concept or venture.”
One early success to come out of Growth Initiatives is Workspring Venture (www.workspring.com), a collaborative business space designed to “inspire and support creative process, productive workshops, and transformative exchange.” An inspiring alternative to hotel conference rooms, workspring is intended to better address a growing trend in business—creative off-sites. No longer within the Steelcase primary offering of furniture, Workspring may have seemed risky to some. But it satisfied all the frameworks Mr. Malnor and team subjected it to, and brought it to market.
