Recently, Novarica had the opportunity to lead a delegation of senior leaders from North American insurance carriers on an Innovation Tour through Silicon Valley. These visits provide an immersive experience into the inner workings of one of the world’s preeminent centers for innovation. We explored incubators, accelerators, venture capital firms, early stage startups, later stage companies that are poised for breakout, and mature companies that have managed to retain innovation as a central tenet of their corporate DNA.
Key themes that emerged from our discussions with AWS, Kespry, Hippo, Salesforce, Andreessen-Horowitz, Cisco, Quid, and others are captured here:
Culture forms the organizational foundation from which all future, meaningful, innovation can flourish. From companies large and small in the Valley, the notion of getting the culture “right” came through loud and clear. Salesforce provided a fascinating discussion on how they maintain and enhance the culture of their organization, which is now the number one item on their corporate priority list. This work on culture is enabled and supported by Salesforce’s own technology: as they put it, if culture eats strategy, then technology eats culture. As many carriers would agree, the race to provide a peerless customer experience can bypass a company’s own internal users, leading to alienation and disengagement.
Innovation must be driven as a mandate from the most senior level of an organization, period and without exception. One of the most enduring insights we experienced is that the drive for real, strategic innovation must come from the very top of the organization. While CIOs and other technology leaders can help to enable innovation in real and meaningful ways, it falls to the senior-most leaders to create an environment where it can succeed and the expectation that it will be pursued.
Innovation almost by definition calls into question the status quo, something that can establish very deep and resilient roots. Frequently, an organizational immune system will kick in to eradicate things which are seen as threatening to the existing ways of doing things. These corporate immune systems are especially strong at punishing failure, without which innovation cannot advance.
Talent acquisition and management are key considerations everywhere, and Silicon Valley is no exception. While compensation and benefit costs in the Valley are high, smart companies recognize that this is only part of the equation. Salesforce talked at great length about why they don’t attempt to compete in “benefits-mania” with other companies, but instead focus attention on what makes theirs a great place to work. Creating a sense for having a stake in the outcome of the organization is part of it. Another key element they described is taking all the technological “fire power” they use to create great customer experiences and training that on their employees and internal process to make it a better place to work.
Innovation is fueled by passion with the best and brightest talent wanting to be inspired by a great mission. While it is tempting to say that salaries and benefits are what drive talent acquisition strategies in a place like Silicon Valley, it would also be wrong. However, there’s something else that drives the passions of people who truly want to be part of a great team doing fascinating work. They want the mission to be big and bold. They want their efforts to be part of something that can “make a difference,” and not just in the sense of bringing something to a financial statement bottom line. We saw that at small companies getting started with some remarkably experienced leaders, at big companies where there seems to be a joy at working on BHAG’s, and with investors looking for the passion that will keep the innovation mantra moving forward.
Collaboration is a key ingredient to innovation, which may not be consistent with virtualization. One of the interesting themes we hear from many insurance carriers now is the importance being placed on virtualization which, among other things, allows for expanded use of remote work forces. Interestingly enough, however, when the discussion turned to innovation and the approach that startups take, there was a clear message that innovation is critically tied to collaboration, and that virtualization has a dampening effect on both. Tools and technologies that support collaboration are terrific, but they do not replace the need for face time as an expected way in which great work is accomplished.
Silicon Valley has a remarkably complex and deep ecosystem that has grown up over the 80 years since Bill and Dave opened their iconic business in the shadow of Stanford University’s bell tower. It is an area that defies understanding from a remote “read” and clearly requires getting well off the highways in order to appreciate the “how” behind what emerges from the area.
Return trips to the region continue to expose new and fascinating understandings of the chemistry that makes it all possible. Novarica is already planning
This blog entry has been reprinted with permission
