Matching ambitions to constraints
Choosing right from right was a phrase my CEO at Virgin Media, Neil Berkett, would use to explain the tough choices you have to make as you set about matching an organisation’s ambitions to its constraints. The mission of Innovate UK is to accelerate economic growth and productivity through business-led innovation; that is something, which can be achieved in so many different ways, in so many different sectors of our economy. How do you choose between them?
Choosing right from wrong
Not all innovation will lead to UK economic growth and in an earlier blog, I reflected on the 4 tests which Innovate UK uses to determine the priority areas and programmes which we will work on: how big is the global market; what are the strengths which will allow the UK to lead; why now, is the timing right; and why does it require public sector investment?
This framework ensures Innovate UK is choosing the “right” economic opportunities for its focus as opposed to the “wrong” ones (not attractive or appropriate for our public sector investment). However, it doesn’t help you prioritise when you have to choose right from right.
Comparing apples and oranges
Our technology teams are focused on a dozen or so priority areas and each one is full of exciting opportunities to accelerate the UK economy from Health to High Value Manufacturing, from Energy to Enabling Technologies and from Space to Synthetic Biology. When I worked for Virgin Media, like most organisations, we found our selves “comparing apples and oranges” as we set about making these difficult prioritisation calls but we could at least analyse them as a set of business cases, about which we had a reasonably high level of confidence.
What do you do though if you are working on enough different types of “fruit” to open a grocer’s shop? A problem compounded when your role is to actually work in high-risk areas well ahead of private sector investment and build up the very confidence, which is needed to make priority calls using traditional business case processes?
Working with uncertainty
Whilst the breadth of Innovate UK’s activities create some real challenges when we think about the prioritisation of choices, the associated diversity gives us a real advantage when investing at such an early stage and therefore managing the variation in outcomes of such high uncertainty.
The objective in choosing right from right at Innovate UK is therefore to create a robust overall portfolio, with sufficient diversity to ensure that the individual investment risks are not closely correlated whilst at the same time leveraging the full breadth of our mission.
This is an important conclusion because when you are looking to match ambition to constraints you often narrow your focus sharply. This makes sense when you are working with high levels of certainty but for Innovate UK, working with a high-risk portfolio, it is important to retain investment diversity.
A framework for prioritisation
Following wide consultation we established the framework shown in the diagram below as the basis for the management of our investment portfolio. The journey from concept to commercialisation is a very varied one but we can consider it in three broad stages: find, grow and scale.
In the "find" stage we are often working with the research community on commercialising emerging technologies or with industry and government, seeking novel solutions to the challenges they are facing.
In the "growth" stage we are looking to build economic momentum behind programmes with a route-to-application, typically created by “push” opportunities as well as programmes with a route-to-market in response to “pull” opportunities e.g. drawn from industry needs. Bringing UK’s strengths together in new combinations to address future markets is an important aspect of accelerating growth and one where the extensive breadth of Innovate UK puts us in a unique position to lead. So the "growth" stage also includes a focus on the level of cross cutting activities in the portfolio.
In the "scale" stage of the journey we are looking for those opportunities where we can invest in order to provide the confidence to accelerate volume deployment.
Across all three stages we have the opportunities brought to us through open competitions, which complement our targeted competitions in specific areas.
Neutral to sectors and technologies
The framework isn’t based on industry sectors or specific types of technologies. Our focus has always been first and foremost on the significant global markets of the future where the UK has the strengths to lead.
We therefore use the 4 tests to identify those opportunities, which are right for Innovate UK investment and now with this framework we can ensure we maintain a robust portfolio, whilst matching the scale of our ambition to the constraints of our resources.
Choosing right from right, one of the hardest decisions for any organisation.
Follow me on Twitter: @KevinBaughan
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