Banking on innovation

Tuesday 6 January 2015

Henry Chesbrough, one of the great innovation thinkers who coined the term open innovation, said:

a startup is a temporary organization in search of a repeatable, scalable business model.
a corporation is a permanent organization designed to execute a repeatable, scalable business model.

which neatly summarizes the huge differences between the two types of organizations.

I was reminded of this quote during the 2 Degrees Live Energy Performance Summit on 12th December when I was part of a panel talking about the RBS Innovation Gateway. The RBS Innovation Gateway seeks to identify innovative companies (or concepts) that offer ways of reducing energy, water or waste in buildings. Unlike other corporate sponsored innovation programmes the Gateway actually offers the possibility of trialing the innovations within the extensive RBS estate.

Thinking about the quote from Chesbrough, and about RBS, which is a bank which has gone through massive changes in the last decade, the ambition of the RBS Innovation Gateway is particularly impressive. Here we have a big corporate – and a bank at that – deliberately putting itself out there to interact with innovative startups and SMEs in a programme with a business and social purpose. Well done to the RBS team for taking such a risk. The Gateway has attracted the innovative companies, now the next steps (currently underway) are to trial the innovations in the RBS estate and measure the results – both in terms of individual projects but also at the programme level. From here the programme could go in several directions including being opened up to other corporates (which is already happening), and maybe into some kind of fund structure.

At the 2 Degrees Live event I said “you have to be crazy to innovate” (speaking as someone who has innovated and loves innovation!) and the comment was tweeted. Someone from the US responded “you have to be crazy NOT to innovate”. As I said in my response to that tweet, that is one of the paradoxes of innovation. We need to innovate, we have the desire to change things hardwired into our genes and yet innovation is really difficult and at some levels we dislike change.

At the event I also used a few of my favourite quotes related to innovation which I try to bear in mind when looking at innovative companies. Here are some more of them.

“For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled” Richard Feynman

“Electric lighting is a completely idiotic idea” Chief Engineer, Post Office, 1881

“The substitution of oil for coal is impossible, because oil does not exist in this world in sufficient quantities” Lord Selbourne, First Lord of the Admiralty, 1904

“We over-estimate what we can achieve in the short-term and under-estimate what we can achieve in the long-term” Arthur C. Clarke

“Success doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or a battle; the win comes from basic blocking and tackling.” Naveen Jain

“..as we know, there are known knowns; there are things we know that know that we know. There are known unknowns; that is to say, there are things that we now know we don’t know. But there are also unknown unknowns – there are things that we do not know we don’t know.” Donald Rumsfield, US Secretary of Defense

“the famous inventor considers his new storage battery the most valuable of all his inventions, and believes it will revolutionize the whole system of transportation”. Harper’s Magazine, 1901, writing about Thomas Edison’s battery factory – the “giga factory” of the age.

“Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” Peter F. Drucker

“If you want something new, you have to stop doing something old” Peter F. Drucker

“Innovation is hard. It really is. Because most people don’t get it. Remember, the automobile, the airplane, the telephone, these were all considered toys at their introduction because they had no constituency. They were too new.” Nolan Bushnell

“Remember the two benefits of failure. First, if you do fail, you learn what doesn’t work; and second, the failure gives you the opportunity to try a new approach.” Roger Von Oech

“It isn’t all over; everything has not been invented; the human adventure is just beginning.” Gene Roddenberry

“You have to take your own bold approach, and if you do you will be rewarded with success. Or calamitous failure. That can happen too.” Steven Moffatt

“To be successful, innovation is not just about value creation, but value capture.” Jay Samit

“Innovators are inevitably controversial.” Eva Le Galiienne

Have a healthy and successful 2015.

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Dr Steven Fawkes

Welcome to my blog on energy efficiency and energy efficiency financing. The first question people ask is why my blog is called 'only eleven percent' - the answer is here. I look forward to engaging with you!

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