How Thomson Reuters is creating a culture of innovation
Friday 3 October 2014
Innovation is now one of the hottest topics in Thomson Reuters says senior vice president Cary Burch (photo), who describes the innovation network as the most visited site on the company's intranet.
More than 250 ideas were submitted by employees for consideration at an enterprise innovation workshop, some of which are already being implemented.
Several projects helped by the company’s Catalyst Fund are now being prototyped and piloted with customers and most of the businesses have a robust portfolio of innovative ideas that are moving through the pipeline.
“So although there is still much to be done, and the jury is still out, clearly the momentum for innovation is building,” Burch, an innovation specialist, wrote in a joint article with management consultant Ron Ashkenas in the Harvard Business Review.
It’s not easy for big companies to innovate, they said. “…once firms reach a certain size, most of their resources (and investment dollars) are rightly devoted to executing and defending their existing business model. Moreover, the skills that are cherished and rewarded for achieving current results differ from those that aid in discovery and experimentation, both of which are needed to drive innovation. As a result, fostering a true culture of innovation in big companies is often an aspiration rather than a reality.”
Thomson Reuters’ strategy of fueling growth through acquisitions served it well for many years, they said, but this approach also reduced the focus on innovation. While many managers were developing new products and services for their own businesses they were not leveraging innovation across the enterprise, and some were relying too much on acquisitions to drive both innovation and growth.
“To reverse this, senior leadership took a number of steps. First they agreed to shift funding from small, incremental acquisitions to innovation. In early 2014, they established a ‘catalyst fund’ - a pool of money that internal innovation teams could use for doing rapid proof of concept on new ideas. The fund was announced on the company’s internal website and teams from anywhere in the businesses were invited to submit their suggestions.
“To access the fund, teams had to complete a simple two-page application about their idea, the potential market, and the value to the customer (what problem was being solved). The teams with the most compelling ideas were given an opportunity to present and defend their idea to the innovation investment committee, which included the CEO, CFO, and a few other senior executives. In the first month, five ‘winners’ were announced and then immediately publicized on the Thomson Reuters internal web site. This triggered a great deal of interest, and a steady flow of applications.”
The company also took a number of other steps, driven by a newly appointed executive sponsor and a full-time innovation leader, to make innovation a priority. They were initiated as experiments to focus on learning, adjusting, and figuring out what would work. All of them were carried out with as much transparency as possible, so that all employees would not only know what was happening but could contribute to the effort as well.
“The results of all this work have been impressive,” Burch and Ashkenas said. “Innovation is now one of the hottest topics in the company.” They added:
“There is no magic formula for how big companies can reinvent themselves. The innovators’ dilemma is still alive and well and is not easy to overcome. But the experience of Thomson Reuters shows that progress is possible - particularly if leaders use the lessons of innovation to build the innovation culture.” ■
- Harvard Business Review