Q&A: Corporate Innovation – Tips for Success from G-Force Innovation
Rev1 Ventures works with leaders in corporate innovation to connect corporates with promising startups and entrepreneurs. G-Force Innovations, powered by Grange Enterprise, has been a leader in these initiatives, determined to revolutionize the insurance industry in the most productive way to achieve success.
Brent Hammer, Innovation Officer at Grange Insurance, leads the charge. Learn from an innovator who is committed to achieving excellence in insurance by doing things differently.
Rev1: Philosophically, corporate innovation happens on a spectrum. We see companies diving in at different points. Some succeed and some don’t. I’ve heard you say that the process of corporate innovation has to start at square one. Can you expound on that?
BH: On the journey, we initially took in observations and best practices that internally helped Grange get ahead, as well as external observations from other corporate innovation labs that came before us. We learned that corporate innovation must begin with incremental innovation. Companies that jump into the deep end immediately will fail almost every time. Our approach has been to define success as shifting the gradient of comfort level with new technology and risk tolerance of new business models, from the associates we interact with to the corporate executives leading the business. Be granular, explain the “why,” and gain confidence across all levels. You have to warm the culture gradually to encourage incrementally greater risk-taking.
Rev1: So patience is a virtue in corporate innovation?
BH: Yes. It is always good to show that you are being deliberate and continuously measuring how you are investing resources and dollars in innovation. Don’t tinker just to tinker nor start with a cool new tech solution that is still seeking out a problem to solve. Establish the innovation practice as a trusted enabler to the core business first. Gradually, we gain enough support and validation to move from a trusted enabler to a trusted disruptor. We are starting to enter that phase at Grange now; it has taken us three or four years to get here.
Rev1: How can companies increase the pace of innovation?
BH: At Grange, we augment our thinking by working with external entrepreneurs, from rapid prototyping to solve known pain points to blue-ocean innovation and ideation to where we believe the puck is going.
Rev1: What advice do you have for a CEO or COO who wants to elevate a disruptor/innovator? How would an operating executive identify someone like you.
BH: Well, I am not a technician nor an innovator by trade. I am a CPA, an inquisitive accountant. My financial background allows me to be measured and deliberate in taking risk. A high level of inquisitiveness and desire to collaborate across diverse perspectives has also served me well. I am passionate about innovation and change, but also doing so in a pragmatic and collaborative way. Finally, I have good tenure with the company, now going on 15 years, which provided me the opportunity to accumulate some level of trust and political capital before setting out to drive change. When the CEO asked me to take on a role that was new to the company, I went from accounting–which is black and white–to creating a corporate innovation practice from the ground up. It has been a very rewarding phase of personal development. I have become way more comfortable with ambiguity than in the past.
Rev1: What tips can you offer other corporations about creating an innovation practice?
BH: Look for internal candidates, people who might be doing the job they want before it even exists. I was very aware of the insuretech movement while in Finance, which was coming on the heels of the massive fintech movement. I saw the amount of capital being invested and the new ways these companies were thinking about doing things. It was all very intriguing. Back in 2017, I asked my boss at the time if I could have a personal objective to educate senior level executives on insuretech, to help sort out the theater and the reality. She agreed. I started reading every publication I could get my hands on and talking to entrepreneurs. That provided the necessary fodder, so that when the spark finally occurred—that Grange needed a dedicated innovation team—I was one associate that was top-of-mind.
If a company goes outside to hire a person, it will take another two to three years to gain the confidence of associates to enable them to identify the proper internal stakeholders to partner and execute with. I had been in finance with Grange for twelve years. This provided an added level of accountability and trust with stakeholders. As we all know, trust isn’t given, it must be earned. The innovation leader role must be organic and gradual.
REV1: When we started working together, It was you and one associate. Now the innovation team is up to five full-time equivalent people. Tell us about the Team’s growth.
BH: The executives at Grange recognized that the insurance industry is changing and that a dedicated innovation practice would help us accelerate our own strategic initiatives. The innovation team is viewed as a guide upon a journey. When we become aware of a problem that a department or functional area is having trouble finding a solution for, we are available to help guide the decision-makers down a different and potential better path. We do that from the inside. We are empowered to fund prototypes and pilots, which are intended to de-risk how the core business engages with entrepreneurs and emerging technologies.
REV1: Give us more details of how it works.
BH: The bottom line is networking and building an internal network of subject matter experts who are not afraid to try something new. These are stakeholders who are not afraid to tell you where it hurts, or where they see an opportunity but don’t have the resources to execute. “If you could snap your fingers and make something happen, what would that be,” we ask.
Then we synthesize that into an innovation hunt list. We check our traps in the ocean of insuretech to find alignment between a known business problem and solutions that entrepreneurs are trying to position in the market. Essentially, we play matchmaker between the internal needs and the newest external solutions.
Rev1: What if you can’t find a viable solution?
BH: That triggers a whole new path. We know there is a use case or a business model. If a solution does not exist or isn’t known in the market, it might be that we have to develop it ourselves. An option could be a rapid internal prototype. Our focus wouldn’t be on building the solution, but on building a prototype to then socialize and validate with the internal stakeholder’s identified a need. That’s one of the ways we work with Rev1, on that validation, then we explore finding a startup and building a business. If we find an entrepreneur that is thinking the same way, we look into deepening a partnership, signing a statement or work, or if they‘re looking to grow, maybe taking a strategic interest in enabling them as well.
Rev1: Have you worked with a startup that way yet?
BH: We have. We engaged with a company that had an amazing ability to hear what we were saying and developed a product that added value. Once we helped them to validate the solution, they wanted to grow it into a business. We invested in their seed round and Series A. That project proved to us that innovation creating synthesis between key internal stakeholders and like-minded entrepreneur to favorably impact both businesses.
Rev1 has provided a sense of peace of mind in what was a new journey for us. They have acted very well as a guide. Also, because Rev1 is a venture studio, they helped through our evolution, first starting with culture-building and then across the spectrum with subject matter expertise and the ability to understand and integrate corporate goals to provide the right people and practices to give us confidence.
Rev1: Are there limits on what internal innovation can accomplish?
BH: I don’t know that there are limits, but there are guardrails. Every corporation has its crown jewels, the most protected and highest priority aspects of the company. In insurance, it is the lines of business. There is a temptation with innovation to immediately say, let’s generate something totally new–for example, how cool would it be if we could totally automate the underwriting process. That would be exciting for sure. However, crown jewels are also often the big sources of profit and the most resistant to change. Better to start on the periphery and grow wins until they reach a critical mass. Then you’re beginning with some momentum in your approach to the crown jewels.
Rev1: And a final word of wisdom?
BH: Innovation is actually one of four different agents of change in our business. We have an emerging tech group, a dedicated digital team, and a business intelligence and data science team as well. We are learning how to join forces to create synthesis and bring an even more unified approach to business transformation.
Start small. Scale fast. Integrating innovation into the business occurs on a spectrum and requires continuously building momentum to truly be successful and permeate the business.