Innovation at the Economist – 10 Lessons For Teams

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In April 2006, when its Internet Strategy Group met to discuss ways of improving the company's presence on the Internet, The Economist was doing very nicely, thank you. Global circulation had just passed one million; Roll Call , a sister magazine, had become the most widely read publication in the US Congress; and new titles had been successfully launched in China and India.

All in all, it was a time when most companies might have been happy to build on what they'd got. Instead, The Economist approved a proposal from their CIO, Mike Seery, to recruit a team of five people plus himself from within the Group, remove them from their current jobs, and give them £ 100,000 and six months to launch an innovative web-based product, service or business model.

The enthusiastic young team encountered all kinds of problems and challenges. Many would be immediately recognized by any innovation team. The solutions they found were often ingenious and the lessons that they learned could be applied in thousands of businesses around the world.

In a rare move, The Economist team invited me into their offices to observe them at work over the next six months. Here's the condensed version of what I saw and learnt – for teamworkers, innovators and other readers in a hurry.

Team selection

Mike Seery recruited his colleague team members from across The Economist Group. He set out to attract people from editorial, sales, marketing and IT. He also managed to bring team members from around the world to the London-based project.

But gathering team members from such different backgrounds meant they had a lot of catching up to do before they were able to work together efficiently. For a long time, the techies' knowledge of emerging technologies left some of the others floundering. And a lot of team-building needed to be done before the business of team-working could get under way.

The Economist also kept open each team member's job for the six months that they were on Project Red Stripe, and team members were enrolled on the understanding that this was not an opportunity for people who were bored with their jobs or wanting to leave.

Lesson 1: Consider carefully if it's better to bring together a team who already knows each other, share a common professional language and have skills in common – and then buy-in extra skills as needed. Or do you prefer a broad knowledge-base but allow extra time for team members to get used to each other?

Lesson 2: Recruiting team members who want to return to their old jobs at the end of the project ensures that you do not just get people who are bored with their work. But loyal employees are not necessarily the most creative. The angry and disaffected may have some of the best ideas.

Crowdsourcing

Although team members bought their own ideas about what The Economist should do next, they began by asking readers and other interested parties. In so doing, they put their faith in 'The Wisdom of Crowds'. In fact, 'the crowd' did not come up with anything the team had not already thought of. So you could argue that the time they spent crowdsourcing was time wasted. But what if they had come up with something spectacular that way? How would you ever know without asking?

Lesson 3: Think very carefully about who is best placed to identify the best innovation for your organization. Is it you and your team? Your customers? Experts? Or the world at large?

Freedom

The team had intense freedom. There were no guidelines on what sort of innovation that should look for and they were free to launch the idea without first getting approval from the directors. In practice this caused a lot of heads and the team were not willing to jeopardize the business by launching an idea that they believed in without first getting approval from the top. And, when they asked for approval, they did not get it.

Too much freedom can also cause problems with creativity. The Project Red Stripe team could do anything. At one point, they were working with top NGOs and their advisers to develop a business that would help the UN achieve one of its millennium goals. When world peace is within your grasp, why would you consider a humdrum, commercial web venture?

Lesson 4: Be realistic about how much freedom you can give an innovation team. It may turn into a millstone.

Lesson 5: 'Thinking big' is necessary for a major innovation project, especially as it's notoriously difficult to get people to think outside the box. But giving people the freedom to try and change the world may leave them dazed by the strength of what they might achieve.

Risk

Big companies are large because they're successful and success is a barrier to innovation. Why try something new and risky when what you're doing now works? If it is not broken, why fix it?

This was true at The Economist , which did not need a new business and did not need the two key ideas developed by Project Red Stripe.

Lesson 6: Do a risk assessment. Is the sponsor organization under sufficient pressure to want to run with whatever idea the team comes up with?

Teambuilding

Early on, Mike Seery organized a number of teambuilding exercises. They worked well and were seen as significant moments in the team's history and in the stories that it told about itself. But they also served to establish a particular mindset: 'we're good at this and this, but less good at that'.

Lesson 7: The moments in a team's trajectory when you most need to run team-building exercises (late on, when the team's under extreme pressure) are, almost by definition, the moments when you have not got time to run them.

Drifting

From the outside, the Red Stripe team sometimes 'wandered around' without a clear sense of what was going to happen next and without clear rules about how it might be going to happen.

Instinctively, drifting looks like an appropriate thing for an innovation team to do; but it's also an uncomfortable and anxiety-inducing thing to do. Some say that safety is a prerequisite of creativity. Certainly there were some members of the Red Stripe team who worked hardest and fastest when they knew where they were going.

Lesson 8: Drifting aimlessly can be creative, but it's also scary. Participants (and Finance Directors) may want something more regimented. Rules and guidelines can offer direction or serve as blinkers. It may be important to have some clear guidelines in place before the innovation project begins.

Consensus

Most teams are likely to want to act democratically and move forward with general agreement that they're on the right lines. In Project Red Stripe, different team members grown committed to different projects. That made getting a consensus for just one idea difficult.

Lesson 9: Consider whether you should opt for ideas that excite everyone or simply for ones that command a majority. If you can not find an idea that excites everyone, for how long should you keep looking?

Markets

An obvious question for any innovation team is whether to start by thinking about the problems faced by a particular group of people, or whether to think about improving existing products, services and skills. Theorists tend to prefer the former, but plenty of great innovations come out of companies finding new applications for existing technologies. (Think of classic innovations like 3M and Post-It Notes or NASA and Teflon).

While the Project Red Stripe team actively solicited ideas about what they should do, they did not solicit ideas about the group (s) for which they should implement those ideas. Should they have invited an archbishop, an aid worker, a genetic researcher and others to pitch for a particular target market?

Lesson 10: A describing market may be motivational, even inspirational. But it does not necessarily make for good business. The team may need guidelines for how to value a commercial priority against an ethical one in business.

The Economist 's Project Red Stripe succeeded in that it came up with a number of radical and innovative business proposals. It failed in that the company chose not to commercialize any of them at the time. It also succeeded in that it offered the business strong knowledge about its culture and about future innovation projects – just a few of which are shared here and may provide food for thought for other innovation teams around the globe.

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Citystudio Bucuresti

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