Alexis Rolloff is the Chief Innovation & Strategy Office at GEHA, the Government Employees Health Association, which offers medical and dental benefits to more than two million federal employees, retirees, and their families. We invited her to share her advice on linking innovation activities with the goal most companies care deeply about: profitable growth.
Rolloff will be among the speakers at Impact 2024 in Boston this month.
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Why So Few Leaders Successfully Connect Innovation to Growth
There are three common failure points to making this connection:
1. Failure of Translation. In establishing the innovation program, growth is not explicitly addressed as a criteria or expectation – or there is misalignment. The focus becomes injecting innovation into the organization for its own sake, turning into innovation theater absent the gravitational pull of the customer or market.
2. Focus on Output not Outcomes. While funnels are fundamental, their strength comes not in their volume but in the velocity with which they can advance ideas that win to market. Programs should also look for opportunities to harvest value along this journey – for example, collaborating with their internal sales teams to engage external brokers in curated Innovation Workshops where beta releases are previewed as a mechanism to gain feedback and deepen channel relationships.
Just as culture kills strategy, it can kill innovation once an idea inevitably moves beyond the confines of your program.
3. Ignoring the Ecosystem. Many consider outcome measures alone in their design, and not the culture and surrounding conditions needed for R&D and innovation programs to be successful. Just as culture kills strategy, it can kill innovation once an idea inevitably moves beyond the confines of your program.
Developing KPIs and Metrics
When considering KPIs, it’s more the exercise of considering the right set of metrics for your specific mandate and organization. For organizational capacity, this could involve working with your people and culture team to benchmark your employee survey questions on innovation. Internal process measures may include metrics such as deals sourced, external investor connections, ideas investigated, internal innovation consulting growth engagements. Customer measures may extend to metrics such as companies introduced internally by ventures, members impacted by pilots, external brand impressions from program media/awards, NPS from channel partner events.
Financial measures again vary by program. This can include pilots approved and related target measures established working with the business sponsor. Each new capability and business generated has its own performance metrics attributed to it typically. Internal innovation consulting engagements have targets set in collaboration with the business leader at the start of the engagement for cost saving opportunities or revenue generated. Historically, our program measured these values in aggregate over time, with value-based costing for each of the services we provided.
I believe that’s the other insight here – measuring your performance but also the cost for delivering those services and outcomes to the organization. You need to have the discipline to adjust your approach and find more effective avenues if some prove less optimal.
Start with a simple model that take these perspectives into consideration for your organization and mandate and translate them into the performance language of your company – whether OKRs, balanced scorecard, or otherwise.
It’s a Collaboration
Find willing partners to join you in the journey. Collaborate with your analytics and reporting team, and be thoughtful in how you set up your foundational reporting data. Consider reaching out to universities conducting research in this space for opportunities to collaborate.
As much as an infrastructure of KPIs and instrumentation is needed, is can also give you a false sense of security – especially in a remote environment. Innovation is still a craft. You can’t optimize a value proposition through fine tuning a funnel alone. Continue to engage your customers and teams.
Innovation is the Flywheel
Especially in legacy organizations, I believe it’s important to recognize that you’re not alone in this journey. There is innovation occurring elsewhere within the business units – find those leaders and elevate them. Enable the leaders of your pilots and champion them.
Innovation and R&D is the flywheel, not the hero of the story.
Innovation and R&D is the flywheel, not the hero of the story. The art form is to activate both activities and leaders to drive growth. My mentor Mohan Nair once described it as being the Nile Rodgers from Le Chic of innovation. You have to demonstrate you’re capable of producing hits, but you really want to be the one sustainably producing stars over time.
Getting Senior Leaders to Invest for the Long-Term
Some of this can be embedded in program design. In my prior role, at Cambia Health Solutions, the innovation team’s charter included both internal innovation accelerations and designing new businesses. We delivered near-term value to the business through the 8-12 week internal innovation consulting accelerations, affording us the longer tail required to successfully design and launch a new businesses.
In my current role, my charter includes both strategy and innovation, so we’re intentional in collaborating with senior leaders in crafting our strategic roadmap and collectively drawing a three-year horizon, and determining what areas we’re going to accelerate.
They’re different models, pointing to the need to find an approach that fits the organizational design and culture of your business.
It also goes without saying that part of getting leaders to invest is making the potential tangible, so taking a long-term opportunity and translating it into a proof of concept they can hold in their hand and experience. As innovators, that’s our job – to make the future actionable.
