Ideas are easy to harvest, sift, shape, and vote on. But when you actually want to make them real, you need cash. And often you need more than the $1000 that some innovation programs offer to participating employees.
Thomson Reuters is one company that has come to the realization that building proof-of-concepts and prototypes can require significant funding. The $13 billion media and information company, headquartered in New York, created an internal seed fund called the Catalyst Fund in January 2014, overseen by CEO Jim Smith and Katherine Manuel, right, the Senior Vice President for Innovation. It provides up to $350,000 in funding to build and test prototypes.
So far, the Catalyst Fund has supported more than 20 ideas that are either in market or poised for launch. Manuel explained how it works.
“Our history is growing through acquisition,” Manuel says, but now the company is looking at how to spur more internal innovation. “When you move from being an M&A led company, to an organic growth company, you have to rewire things. So we’ve put in place programs to get more of that [organic growth activity] stimulated.”
“In 2014, we focused on ideation: share your ideas, any idea is a good idea, let’s sift through what we get. Then we figured out how to create the structure and build the capability to rank ideas. But what we started realizing then was that the bottleneck was building fast proof-of-concepts, and testing things with customers — having the resources to validate the ideas.”
New ideas are initially sent to the company’s Innovators Council, a group of senior employees, for review and ranking. Based on the ranked results, the best ideas are selected to go in front of the Catalyst Fund panel. Feedback from the Innovators Council is aggregated and shared with the innovators, who can then work on addressing these comments and prepare their pitches for the Catalyst Fund panel. The actual time of the presentation to the Catalyst Fund panel is quite short — about 10 minutes, including the Q&A, so the pitch needs to be very focused.
“The Catalyst Fund is a seed fund that is supported and sponsored by our CEO, Jim Smith. Ideas come from all regions of the company, and all levels of employees, and we have a pretty good process to vet ideas. We meet monthly with Jim.” (Smith is pictured at right.) Among the criteria that Manuel and Smith use in vetting ideas are factors like organic growth potential; scale across the enterprise; and learning potential.
“Jim talks to every one of the innovators. He’s at every Catalyst Fund meeting. He gets to know the innovators, who are often very young. He wants to know what problem would this solve for the customer, or what is the market looking like around this idea. It really does drive that sense of commitment.”
“With the Catalyst Fund, the funding is to have budget to bring in contractors to help build out a proof-of-concept, and eventually create a prototype and go to market with a product. Or, you could use the funding to backfill your current role so you can work on the project full-time.”
“You can spend up to $100,000 for the first stage. You need to be clear on what the plan is, like to build a proof-of-concept. If that is [approved], then you need a business unit sponsor that supports it, and says it resonates with their customers. The idea doesn’t necessarily need to be product-driven; it can be related to the customer experience as well. At the next stage, we can split another $250,000 in funding between corporate budget and the business unit to build out a prototype. Then, at the final stage, you come back with your prototype and discuss plans for what happens next. Then it needs to be fully absorbed by the business unit.”
Below is an overview of the Catalyst Fund process. (IC stands for the Innovators Council. POC stands for “proof-of-concept. GTM stands for “Go To Market”)
Throughout the prototype stage (which lasts about 3-6 months), the team continues working with the fund through the regular monthly check-in meetings. When ready, the team presents again to the fund panel, discussing lessons learned and next steps, which are either to discontinue the project or proceed into “go to market.” Manuel says the company sees either one as an equally valid outcome. From that point on, the project becomes part of the “Business As Usual” processes at the company, and needs to be financed as part of the Thomson Reuters capital allocation process.
Manuel encourages teams to talk to customers early in the process. “We like for market research and customer discussions to happen as soon as possible,” she says. “Often, the best initial pitches have some customer voice included. If they don’t, it is often the first thing the teams commit to doing.”
“We’ve had 74 projects submitted, over 50 ideas funded, and 18 that are now in market or poised for launch.” (See below for examples of projects that have launched.)
“The most innovative people in the company are now playing with us. They’re the early adopters, and they’re getting on board. Everyone knows that the Catalyst Fund cannot just be a one or two year whim. The rhythm needs to continue; that beat needs to keep happening across the company. It shows continued support for this, that this is a new way of doing things at Thomson Reuters.”
What Manuel is focusing on in 2016: “How do we take strong prototypes and get them into the hands of our businesses to really scale and get those to market. We’re working to bring in business unit stakeholders earlier. When an idea comes up that seems like it could be something, they immediately will come up with a general architecture of what the idea could be, and bring in customers early, and contribute domain expertise from the business unit. The most basic thing is making everyone feel ownership — that their fingerprints are on something that we’re creating. And our CEO wants to figure out how to fast-track some of these ideas, in the spirit of innovation and solving customers’ problems, rather than waiting for next year’s plan.”
Project Examples
Healthcare Intelligence App
This Eikon app targets equity research analysts (buy-side and sell-side) and investment bankers that cover the biotech and pharmaceutical sector. It integrates detailed drug pipeline information from the company’s IP&S Cortellis offering into an intuitive, yet powerful app that has proven to be a clear point of differentiation for Eikon in the market.
The team came up with the idea after finding out that the day-to-day workflow of a healthcare research professional was significantly fragmented and inefficient. These users were spending an inordinate amount of time collecting and curating drug pipeline information from a number of different providers and, between F&R and IP&S, Thomson Reuters actually has almost all of the content that these users need. One client commented: “Your app achieves in seconds what currently takes me weeks.” (Press release about its launch.)
Satori
Satori allows any customer working with Pangea3 (a Thomson Reuters business) to request work and keep track of status of their work from one simple interface. Customers can tell what is happening with their work at a glance. This saves customers time, and gives Pangea3 better control over workflow.
FATCA Reporting
Thomson Reuters for FATCA is a joint venture between Tax & Accounting EMEA and the Risk segment of Thomson Reuters Financial & Risk business in response to the US FATCA regulations. The Foreign Account Tax Compliance Act (FATCA) is intended to reduce the levels of tax avoidance by U.S. citizens and entities. Compliance with FATCA can be an arduous process involving many departments including tax, IT, legal, front office, and compliance.
The FATCA Reporting software offers complete data collation, validation and submission for FATCA and IGA reporting as well as management information reporting, including tracking key data points and submission dates. In the first year, over 2500 filings have been made using the new Reporting software. These filings were made in over 35 jurisdictions across the globe. Clients include a number of global financial institutions and accounting firms.
