How do you push a large organization like MasterCard WorldWide to innovate rapidly and embrace potentially disruptive technologies? To start you need the full support of the CEO and all of the business unit presidents, says chief innovation officer and Computerworld Premier 100 IT Leader Garry Lyons.
But that's not nearly enough.
"Most companies talk the talk but they don't walk the walk," Lyons says. In a market where barriers to entry are falling and innovations such as Square are coming at a fast and furious pace, speed to market is critical. "We want to be known as the premier innovator in the payments space," he says.
But large companies often can't keep up with innovative, more nimble startups. Lyons knows this firsthand, having come to MasterCard with the acquisition of startup Orbus.com, where he served as CEO. Lyons accepted the position of chief innovation officer two years ago with a mandate to build MasterCard Labs from the ground up and deliver results -- but not necessarily profits. "If you're trying to be disruptive you must have an acceptance that you're not going to generate short-term revenue," he says.
Initially, Lyons says, "The challenges came from trying to make sure we were sufficiently engaged with the core organization to get them to stake sponsorship and ownership of projects and move them forward." Each business already has budgets and objectives for the year that can take the focus away from innovative new ideas, leading to a sense of inertia.
"A team can come up with a good idea and the product team might put it on the roadmap...and not get it out for a few years. I had to make sure I was aligned with our product and technology objectives, and integrated with my colleagues. This was a fantastic challenge."
Here's how he rose to it.
Use enterprise social to drive innovation
Innovation doesn't bear fruit unless you can create a culture of innovation throughout the organization, Lyons says.
One way Lyons has attempted to achieve that is through a Web-based idea management program called Aspire, where anyone can post ideas, comment on them and vote them up or down. Such efforts often languish, but Lyons' team incorporated single sign-on and a user friendly interface to make the site as easy to use as possible, and then presented specific challenges to the organization -- and publicized them. Within three months 47% of employees had signed in and 11% had participated.
Low participation rates aren't the only hurdle. Broadly defined innovation initiatives tend to have a low signal to noise ratio - you get more rubbish than credible innovations. On the other hand, Lyons says, "If you ask people to solve a particular problem you get good ideas." The takeaway: "Make it familiar, make the challenge specific and relevant, and promote it using the technology you have within your organization."
Use ad-hoc innovation teams
Lyons also established Innovation Express, an initiative that pulls together people in the organization from a range of disciplines, locks them in a hotel room for 48 hours, presents them with a challenge, and tells them not to come out until they have a prototype, a go-to-market plan and a video demonstration of their creation.
The approach is a deliberate attempt to break down barriers between people that often crop up in large organizations, he says. "There's a frustration between business and technology people, where the people who understand the problem statement and market never engage directly with the engineers who write the solution because there are so many layers in between." Locking them all in a room together is a direct, if a bit extreme, way to address that.
"What comes out is amazing. If you give direction to smart people, give them the tools they need and get the hell out of the way its amazing what they can do," he says.
Get to incubation quickly, fail fast
Promoters of projects that rise to the top of the list create an incubation proposal, a business plan with specific success metrics that goes before an innovation council of business leaders for possible funding.
Most large organizations take a more cumbersome approach. "The get an interesting idea and spend a lot of money looking at the size of the market, potential business models and creating a business case. But at such an early stage you're almost certain to get it wrong," Lyons says. So at MasterCard, the council follows a streamlined, 28-point decision making process."You can score an idea within 15 minute to determine if it's worth prototyping," he says.
Good metrics are vital, Lyons says. "There have been situations where we haven't had a guiding principal or metric. You do need to put that marker down."
Approved projects are assigned an "incubation officer, or CEO, who leads the virtual startup within MasterCard. If a project is a phenomenal success it may move on the fast track toward roll-out; others may be spun off as separate businesses. But most projects come back for one or two additional rounds of funding after achieving the initial goals.
Failure is also an option, and Lyons' goals is to get to do so quickly and move on. "We want to fail fast, fail cheap, and learn from the failure. The learnings will be applicable to something else in the future," he says.
But failing can be more difficult in a large business, especially when pilots are involved, says Lyons. "It's a blessing and a curse being in a large organization. We have a fantastic brand. But it's hard to fail publicly. You can't take the same level of risks that you can in a startup. And if you go to a customer with something you may kill after six months you need to be comfortable telling that to them."
Nonetheless, Lyon's group has been working with the rest of the organization to crank out ideas, generating 125 prototypes over the past 20 months. These include a youth-oriented coupon and offers platform called KOY and QKR, a location-aware mobile payment application that lets the user trigger a purchase remotely by scanning a QR code, typing in data from a label, or using NFC or GPS. "You can apply it to taxi payments, donations to charity or ordering in a restaurant," he says.
"From a standing start we've created some very interesting payment solutions. I'm going to leave MasterCard Labs as a very credible, functional part of MasterCard that delivers on our goal of getting solutions to market faster and cheaper than ever before," he says.