PwC's Tech While You Trek: Business-Led Innovation

Tune into another episode of Tech While You Trek to hear PwC Emerging Technology Lab Director Tom Foth discuss the importance of business-led innovation and by using design thinking and systems thinking how to bring valuable ideas to the marketplace. 

Transcript

PwC's Tech While You Trek: Business-Led Innovation
Guest: Tom Foth


Adam (00:08):
Hello everyone and welcome to another episode of PwC's Tech While You Trek. I'm your host, Adam. And today I have with me, Tom Foth to talk about business led innovation. How are you doing, Tom?

Tom Foth (00:18):
Good to be with you, Adam.

Adam (00:19):
So Tom, tell us a little bit about yourself and the experience you've had with innovation.

Tom Foth (00:23):
My first innovation came when I was 10 years old and I actually invented an easy open envelope. I was just playing around as a kid. Didn't realize what I had done. And my father worked for a paper company and said, "Make me a bunch of those, and I want to take them to work." All the way from age 10, I've been doing innovation. I've been gainfully employed doing innovation since 1974, which means I've been doing this for 46 years. I've gone on to have 46 patents with four more pending. I'm trying to get to an even 50 patents. And it's been across a really wide variety of topics. Everything from the laser printers to postal systems, to conversational intelligence.

Adam (01:04):
When in your career did you start thinking about relating business in your innovation process?

Tom Foth (01:13):
It became really apparent to me, even at age 10, that innovation had to matter. And it's really starting with business problems that mattered. So, for example, out of college, I worked with a large computer company that developed the world's first commercial laser printer. They had found out that they had a problem in that their computers were too slow to actually create enough output for that laser printer. And so, they came to me, and I was working on a mainframe computer system at the time, and they said, "Can you hook up this computer system, which we had intended to be hooked up to our smaller computers to your main frame?" And I said, "Sure, of course I can do that." And got it working. It wasn't just as an experiment to show how fast laser printer was. I figured if I'm going to do it, it has to create value. And then, that company later went and produced that commercially, and actually created a very successful line of laser printers that hooked up the main frames and that.

But it's always been saying like, "How can someone get value from this," because a lot of people get really enamored with what they can do with technology. And the real question they should ask is what should you do with technology? Because if you're not bringing value with technology, all you're doing is creating noise. And I want to say that really, really clearly.

When I was working for my last employer, my boss, at that time, when he was hiring me, asked me this question, he said, "How do you feel about only two of your 10 best ideas getting into the market," because that was pretty much their ratio at the time. And what he was really challenging me with was look, are you going to be able to create enough value with your ideas that there's a reason to take them to the marketplace? And with challenges, like these, it's always been really forefront in my mind to really say, "How am I going to create something that's new, that's novel, that's something no one's done before, that creates so much value that people are willing to change a little bit of the way they do things, and use my idea to do things better?" So, that's always been my challenge and my kind of purpose in doing business led innovation.

Adam (03:19):
So, what are some of the skills you need to drive business value in innovation?

Tom Foth (03:24):
I think it really starts with being curious about everything. Even as a child, I was interested in just everything. It wasn't just to say, "Okay, I understand how that technology works," but I always wondered, "Well, how do they make money with that technology? How does that technology make a difference?" And that really gets to the second point, it's all about systems thinking. It's understanding how the underlying systems of the things that we do, how they work. And that means not only the technical systems, but then how do the commercial systems work around that as well?

And then, of course, we go next to ethnography. So, ethnography is really the study of how people do their things, and actually watching people do their things. And so, what that means is, is I can go and observe people doing the things that they do, and having dialogues with them, and understanding the complexities of what they do. And sometimes even understanding them at a level they're not familiar with. They never thought to think that they could do it better.

And then, we bring on design thinking. And design thinking is where we bring together systems thinking and ethnography to really say, "How am I going to create a solution that's going to create value, business value, and it's also going to create value for the people that are going to use this solution?" It's really those four skills all coming together as one that really allows me to understand how to create business value and innovation.

Adam (04:51):
Well, so then talk, please, if you would a little bit about how business led innovation applied in PwC Em Tech Lab.

Tom Foth (04:58):
I should be able to say, "If I bring out this solution to the marketplace, to a business client, then that business client should see one of two benefits. Either they should see an ability to make more money. Or we should be able to say, they will save this amount of money. And we should be able to estimate how much money they'll save. It's really about coming up with that value proposition.

And, now, the next thing that we get to is a business hypothesis. And the purpose for doing a business hypothesis is to be able to really test in a quantifiable way whether or not the core things that must be true are true to create the value for the client. So, for example, let's say that we know that we can create value for the client by shortening a business process for them. We should be able to say that, "We believe that we can create a business value for this client." And we will know that because our prototype, or our proof of concept will have shortened the time of that business process from two days to one day. So, that's quantifiable and testable. And, now, what happens is we take a scaled agile approach to actually creating that proof of concept, or prototype. That scaled agile approach is time limited to 12 weeks.

Adam (06:15):
Just out of curiosity, was there a method behind how you got to the 12 week time limit?

Tom Foth (06:19):
Yes, actually, that's a really good question. And the reason we're down at 12 weeks is because we generally work in teams of one or two on these projects, or at maximum three. And, basically, we're saying, "Look, that's enough risk from a standpoint of utilization of staff and that, that we're saying, we'd be okay with failing if one, two or three people spent 12 weeks on something and it didn't work out. We'd be really okay with that."

Adam (06:45):
So, there's cost analysis behind that?

Tom Foth (06:46):
It's not so much cost analysis as it is risk analysis. And innovation is really, really risky, two have your 10 best ideas getting to the marketplace. So, what we really want to do is we want to minimize the risk, but maximize the reward. And the way you minimize the risk is, again, by making sure that things don't drift and go on forever. And the way that you maximize the reward is by trying as many things as possible with the staff you have, which is what exactly happens when you limit these experiments to, basically, 90 days.

We do the prototyping based on a set of technology called the golden stack. The golden stack is a set of software technology that's been adopted by PwC Labs, by PwC Digital and by the PwC Em Tech Lab. And it's a common set of tools that allow us to build technology, even in the early innovation process, where then if that thing becomes successful, it can be taken to PwC Labs, or PwC Digital, and very simply, and easily commercialized. It's by maintaining our allegiance and alliance to that golden stack that we maximize getting something from the lab into commercial delivery.

We're really fortunate in the three years that we've been running our labs this way we've been very, very successful with the number of solutions and that. And we've created so much success that our clients are actually starting to ask us, "Well, how do you do that?" So, recently, we've created a new service that we are selling to our clients called Innovation at Scale. And that's exciting when you're actually innovating in the innovation space, and creating value by simply the process of innovation. So, we've been lucky that way.

Adam (08:37):
So, before I let you go, I've got a fun, rapid fire things, are you ready for that?

Tom Foth (08:41):
Yes.

Adam (08:42):
All right so, the you of 20 years ago, what's the one piece of technology the you of 20 years ago would never believe that you of today is using?

Tom Foth (08:49):
There is nothing.

Adam (08:52):
You're clearly a forward thinker. This is probably a bad question for someone like you.

Tom Foth (08:56):
Yeah. So, I have to say, that back in 1973 I already had a handheld cell phone. I've been a lifelong amateur radio operator. And already, back in 1973, we had hooked up our handheld radios to the telephone network, and I was able to place and receive phone calls. Early adopter of microcomputers and computer technology. I haven't been surprised by anything where we are right now. It's more looking ahead that I think there's some surprises on the horizon.

Adam:  (09:25):
Tom Foth, thank you so much for being with us today.

Tom Foth (09:28):
Thank you. It was a lot of fun.

Adam (09:30):
This has been another episode of Tech While You Trek. Thank you all so much for listening. I've been your host, Adam, and we will talk to you again next time.

Announcer (09:41):
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