• Jonathan Bertfield

3 Tools and 1 Word to Keep Your Innovation Growth Board Humming

Updated: Nov 4, 2020

Innovation Growth Boards are not that complicated really. A group of business leaders gathers to make investment decisions regarding a portfolio of emerging business opportunities. All pretty standard fare so far. The tricky part is that they are set up primarily to manage business opportunities in innovation portfolios and because of that many of the inputs the board needs to consider are wrapped in high levels of uncertainty. That uncertainty means that the status quo approach they have been trained in, essentially the evaluation of static long-term business plans (all of which, amazingly enough, show strong margins and positive cash flow!) is simply irrelevant.

We need a new set of tools and norms to support investing in innovation opportunities.

Over the last few years, I have helped stand up and coach growth boards in a variety of corporate settings. What has become clear is that the Growth board dynamic puts leaders and the startup teams presenting to them, far outside their comfort zone, at least until they get their confidence. Here are three of the tools and one important word I have seen to be successful in building that confidence and enabling Growth boards to be successful at managing an innovation portfolio.

Tool #1: Documented Decision Criteria

When growth boards meet they operate with one goal in mind: Evaluate whether the internal startup team presenting their case has done enough to justify continued support in the context of the portfolio the board is managing. The challenge is that as startup teams develop traction, the goalposts get moved. The appropriate questions and level of evidence for a nascent team emerging with an early idea of the problem they want to attack, are very different from a team making the case that they have found product-market fit and are ready for scale level investment.

This is a challenge for both players in the Growth Board setting. Leaders have a hard time keeping all the key questions relevant for each stage in their heads. Many of these questions are substantially different from the questions they have been trained to ask. Similarly, teams have enough to worry about in tracking customers and experiment outcomes that they need support in knowing which key questions to focus on at which phase of their development. I was part of a team at Pearson that developed a series of questions tuned for each stage of the product lifecycle. Those questions were documented in the Lean Product Lifecycle and referenced in the Corporate Startup. I’ve since found that while the starting point is common, the criteria that emerge are very much dependent on a negotiation between the existing culture and the product development dynamics in each organization. Embracing the ideals of experimentation, these criteria also evolve as each company begins to understand the balance between rigor and speed. Too many questions and teams and leaders get sucked into a bureaucratic muddle. Too few questions and teams and leaders lose alignment.

Action: Find a starting point for your decision criteria, try them out with teams and growth boards, and be ready to iterate once you have some strong learnings in hand.

Tool #2: Pitch Templates

Too often, teams making their case for funding rely heavily on the power of their user story as the essence of their pitch. Don't get me wrong, having a strong message about who your user is and how they get value from your solution is relevant. It's just not the whole enchilada. What the growth board needs to see is that story wrapped in evidence and concrete assessments of risk with a definitive plan of how the team intends to build down that risk and get to the next hurdle in the lifecycle. The reason why they need to see that goes back to tool #1 and the need to document your decision criteria. Leaders are attempting to absorb presentations, often from multiple teams, using criteria that are often new to them. Startup Teams looking for funding make it substantially harder for those leaders to come to a crisp decision when the structure of their presentation bears no relationship to the way leaders are being trained to operate. What has emerged as a hugely valuable tool is a simple set of slide templates to guide startup teams. What was our initial hypothesis in this phase of work? What did we learn about the problem, our customers, our solution? How does this translate to traction? What are we looking to learn next? Locking down a flow as simple as that gives startup teams a structure to work with, and it also ensures that as they make their pitch, the flow becomes more familiar to the executives they are trying to impress.

Action: Create a simple template for each phase of the lifecycle you are operating with. The template style doesn't have to be copied mechanically, but the flow should be used by teams consistently.

Tool #3: Investment Guides

In most corporate environments there simply isn't enough time to give decisions the full attention they deserve. Leaders are overwhelmed with new material, data, and insights on an almost daily basis. This is doubly the case with Growth board materials. As already discussed, growth boards are set up to consume detail about opportunity areas they aren't necessarily familiar with within the context of a new set of questions they aren’t yet well versed in asking. We often see as many as three teams presenting back to back in a single sitting and many of those teams are presenting to the board for the first time. So a new context and new content. Whenever possible we try and get the leadership team participating in a growth board a pre-read of the slides they will be shown at the upcoming meeting. That helps but often leaves the growth board members cold since there is still so much more context to emerge with the voice-over from the startup team itself. Over the last year, I have been experimenting with a new artifact that attempts to give leaders just enough information to arm them ahead of an upcoming presentation and connects that back to their new role. The investment memo is modeled on content written by a junior analyst provided to VC’s when reviewing their potential investments. Think of this as a summary of the data the team has been generating, plus a set of probing questions the analyst believes has yet to be fully explained by the startup themselves. The goal here is that the board members have a cheat sheet, reminding them not to forget to ask these questions during the Growth Board Q&A.

Action: Identify someone in the innovation ecosystem who can review the upcoming presentation material and document the questions they see as key for the growth board to focus on. This could be an innovation coach or a designated member of the growth board itself.

1 Word: Transparency

There is a strong tendency on the part of growth board members to see their role as the equivalent of a made-for-TV Shark Tank episode. It's all gotcha questions and highly paid opinions. That couldn't be further from the dynamic we want to see established in a growth board. One Growth board I recently worked with insisted that the startup team leave the room when the deliberation began. When I later reviewed that decision with the growth board members it was clear that the choice was driven by a desire not to expose the team to the criticism about their pitch. My pushback here is that we don't need to protect the startup teams from strong feedback. Denying them the opportunity to learn simply slowed down the entire organization's learning momentum. Whether it's the decision criteria discussed above or the deliberation the leaders engage in after presentations, clear communication between the Growth board and the startup teams is critical to building the skills both need. Startup teams get a strong sense of what the board will care about. When they hear a group of leaders deliberating about what they just heard and hear very clearly why their presentation did or did not land, they learn how to focus their evidence better next time around.

Action: Encourage open and honest communication to foster a culture of continuous learning.

To hear more about Growth Boards and how they work, join me at the upcoming Innov8ors online event on Strategy, Leadership & Governance and Funding, Accounting & Metrics, happening the week of November 16th. We have discounted tickets for the event so drop me a note if you would like to attend.

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