“Innovation” as a concept can be unnecessarily intimidating. To many, it suggests an uncomfortable sense of ambiguity and white space. In fact, nearly all great examples of innovation follow specific fact patterns and behaviors like discipline, thoughtfulness, designed failure, analytic rigor, and patience. The “big bang” innovation is extremely rare. As one simple example, Thomas Edison was fired from his first two jobs (!) and withstood roughly 1,000 unsuccessful attempts at creating the light bulb before he actually figured it out.

I think of innovation in terms of a great leadership lesson from “Culture of Discipline” in the iconic book, Good to Great, by Jim Collins.

Disciplined people who engage in disciplined thought and who take disciplined action are the cornerstone of a culture that creates greatness.

 

Other than my current role, the career experience that most profoundly shaped my views on innovation was when I led a business unit inside Capital One (COF) called the Invention Factory. COF is known as an analytically rigorous culture (true), but they should be equally known for a deep commitment to innovation through the Scientific Method that we all learned in high school. Translated... “test and learn”. As a massive demonstration of this cultural commitment, COF literally carved out and built an entire end-to-end instance of its business (Acquisitions, Product Management, Servicing, IT) into one independent unit called the Invention Factory, and by design carved the team off physically from the rest of the company. The goal was to create a rapid cycle end-to-end testing center without bureaucratic drag. Roughly 200 staff existed solely to enable analytically rigorous, in-market live experiments of product concepts. The goals were clear: enable constant innovation, in cycles measured in WEEKS, to allow many tangible ideas to incubate. One of our goals was fast failure!

We lived and breathed the end-to-end process of a) brainstorming concepts, b) designing implementation plans, c) execution of products to real cardmembers, d) monitoring and measurement (A/B cells, DoE), and e) exiting the customers out of failed concepts. And we were fortunate enough to nurture and build a culture of innovation.

My recollection is that the winning ideas were less than 20% of the total ideas tested, but you have probably seen a commercial over the years of a product idea advertised by COF that was originated in this rapid cycle testing center. COF invested in roughly eight failed ideas for every two winning concepts.

Two key lessons came out of this experience for me.

First, your first idea of a winner is almost always wrong (see Edison, Thomas). Having the discipline and patience to test-and-learn, rinse-and-repeat is a deeply profound behavioral and process commitment. Most teams lose focus or patience and fail badly.

Second, great innovation is usually a series of incremental lessons honed through relentless discipline in a rapid cycle environment where “speed to insight” or “speed to fail” is the most valuable objective. Disciplined people, disciplined thought, disciplined action; Identifying and discarding bad ideas on the road to winners is crucial. Shortening the timeline from initial idea to winner is a massively powerful concept that separates great innovators from the rest of the pack.

This brings me to a closely related best practice on software innovation: Minimum Viable Product (MVP).

As defined by software product guru Marty Cagan of Silicon Valley Product Group,

“minimum viable product is the smallest possible product that has three critical characteristics: people choose to use it or buy it; people can figure out how to use it; and we can deliver it when we need it with the resources available – also known as valuable, usable and feasible.”

The rigorous application of MVP requires disciplines and behaviors cross-functionally. Fighting scope creep, or adhering to “minimums,” is about process; it's not ambiguous notions of innovation.

At Katabat we struggle with this a lot as it is a ridiculously high standard. Having the discipline to focus solely on minimum features for viability is a constant challenge. The human brain tends to want to see the entire product. If/when we can operate at this level of discipline, the focus and the energy are awesome.

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Ray Peloso is CEO of Katabat, a technology company providing industry-leading debt collection software products, and an experienced financial services lending expert.