Use this process to reconcile the dual need for new ideas that break ground and new ideas that create value.
I’ve written before about the false promise of innovation theatre— getting caught up in activities that look like innovation, but don’t really add value.
I have said that the antithesis of and antidote to innovation theatre is to define innovation as implementing new ideas that create value. This does create a bit of a paradox, though. If we only work on new ideas that we can implement, and we only implement ideas that are sure to create value, how innovative are we really?
As Oren Harari said, “The electric light did not come from the continuous improvement of candles.”
If we are going to do more than a few minor feature tweaks or product extensions, we are clearly going to have to break some new ground. Breaking new ground means trying some things that might not work and, in fact, some of those things might never see the light of day with customers.
How do we reconcile these seemingly opposed ideas?
What we need is an empirical approach to value creation, one that lets us try new things and break new ground, but doesn’t let us get mired in the unproductive muck, something that allows us to test new ideas and cut our losses quickly with those that things that are not panning out, and double down quickly on those that look promising.
Welcome to FIRE
FIRE™ stands for fast, iterative, responsive experiments.
- Fast–because we want to shorten the gap between idea and results
- Iterative–because we want a process of continuous improvement
- Responsive–because data, not internal opinions, should drive our iteration
- Experiments–because we want the process structured to maximize learning
We think of FIRE as an “innovation operating system” for teams. Once you install it in your organization, you can use it to create value quickly from everything from small incremental feature improvements to more disruptive or transformative approaches to new products, new markets, and new business models.
Manufacturers have Lean production methods and Six Sigma programs to improve quality and reduce costs. Software developers have Agile and Scrum programs to reduce waste and improve client responsiveness. Startups use Lean Startup and programs like Startup Weekend to build and test ideas quickly. Google Ventures uses its own Sprint process to vet concepts quickly for the companies in which they invest. Design thinking has revolutionized everything from app design to consumer goods to industrial products.
These are all proven processes and methodologies that offer dramatic improvements in effectiveness and efficiency within their appropriate context (and you can click through the links above to learn more about each if you are not familiar with them), but none of them alone is a perfect fit for financial services companies trying to innovate in a highly regulated environment. The FIRE process is an empirical approach to value creation that combines the best parts of all of those modern agile business methods into an effective and repeatable process that is custom tailored to work in the highly regulated environment of financial services.
JP Nicols is a trusted advisor to companies from startups to the Fortune 500, a popular writer, a top-rated speaker. His groundbreaking work on innovation has been featured in Forbes and other publications. He is also cohost of Breaking Banks, the world’s No. 1 global fintech radio show and podcast created by fintech futurist and bestselling author Brett King.