The road to innovation

"It absolutely blew me away. So many light bulbs came on that week."

Craig Foster

CEO, HomeServe Labs
Participant on the Market Driving Strategies Programme

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Challenge your thinking

"If someone had told me that we - a home insurance company - would manage to invent a hardware product, I would not have believed them."

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How we set up an innovation lab

"I went on the Market Driving Strategies programme in 2013 with Martin Bennett, who was taking over as HomeServe’s UK CEO at the time. That week was the starting point of a journey that has seen us set up an innovation lab and launch a product in the shape of the LeakBot leak detector, which is now on sale in the UK and the US. My HomeServe Labs team has won a bunch of awards and I also won the Insurance Times “Technology Champion of the Year” in 2017.

There were some key questions from Professor Rajesh Chandy on the programme that really triggered this whole process.

First he asked us why we think companies are innovative. Was it because they spend loads of money on R&D? Well, he disproved that. And he kept disproving our ideas. Then he told us it was about future focus: the degree to which an organisation is focused on the future, right from the very top. Not just in the sense of a five-year plan, but in really understanding what business you are in and how technology and other winds of change will change the marketplace and the value you deliver to your end customer.

Martin and I started out thinking we were in the home insurance business but after sitting up late after class and scribbling on the back of napkins in our hotel restaurant we realised we were in the home assistance business. That mindset shift started to make new things possible.

When we thought about how technology will change home assistance in a few years, it was obvious that the internet of things will transform how people access our services. If a boiler is connected to the internet then someone can see the faults on the system before the homeowner even knows they’ve got a problem, which will change the way people access a boiler service or a repair.

Then Rajesh asked what percentage of our resources were focused on building that future business rather than running the day-to-day. And that was a sucker punch. We knew 100% of our resources were focused on running our day-to-day business; there wasn’t even one person whose job it was to work on the future business.

I remember that in one of the coffee breaks at London Business School I searched on my phone and found a German technology company, tado°, that makes smart thermostats which were just coming in back then, and I showed it to Martin, and we thought, ‘Let’s do this!’

Within six months we had set up the Lab – although it was initially called The Shed. It was just a small office on the far side of the car park but we brought in technical people like hardware engineers and designers and started reviewing ideas.

We knew there was interest in smart thermostats but our core business is plumbing – we fix hundreds of thousands of leaks – so the obvious question was: will plumbing get connected too? So we started with an engineering brief: is it possible to clip something onto a pipe that can detect a leak anywhere on the mains water?

With the help of a serial inventor we cracked it. He built a prototype test kit from a Raspberry Pi, a SIM Card and some temperature sensors and developed an algorithm, and LeakBot was born.

For insurers this solves a big problem that’s really worth solving and that makes it an innovator’s dream. We’ve received massive interest from the industry in LeakBot. Our team in HomeServe Labs has grown to 50 people and I now report straight to the group CEO, Richard Harpin. He sees LeakBot as a key pillar of growth for the whole group over the coming years."

What I learned

"To innovate, you have to look at the business model in its entirety and be prepared to change things. There are no sacred cows."

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Becoming an innovator

"My job now, compared to what I was doing before, is totally different. I love the autonomy and the excitement."

Open to new ideas

"As a team we’ve tried to challenge our ideas and kick underlying assumptions so we don’t get wedded to any one vision."

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Opening up to creativity

"People ask me now how you go about setting up an innovation hub. The trust that was cemented between Martin and me during the week of the programme, and the fact that we were on the same page about how to proceed, was so important afterwards, because I think a CEO has to take a bit of a risk to give an innovation team so much leeway and freedom, and then protect them from the rest of the business.

It’s very difficult to do what we’ve done over the last few years in a big company. Going back to what Rajesh said, it would be incredibly difficult and nigh on impossible if you didn’t have the backing from the top. You need protection to stop other executives trying to control the process or kill it or influence what you’re doing.

It’s important to let one person make decisions across all the functional areas – design, development, finance, operations, IT, marketing – because when you are innovating you need to change different aspects of the business model quickly and you haven’t got time to wait for things to go through committees.

I remember an article that Martin and I referred back to a lot of times, called 'How to Kill Creativity'. Martin addressed each point at a time, saying: we’re going to take you outside of all the procurement process; we’re going to take you outside all of the normal sign-off processes; we’re going to make sure you’ve got all the functions represented in your team, and I’ll protect you from the rest of the executive team.

My job now, compared to what I was doing before, is totally different. I love the freedom, the autonomy and the excitement. It’s great working with a team that has so much passion and that cares so much, because we’ve actually created something and we’re creating a new business.

It’s a perfect fit with what I'm interested in and what I'm good at. It all goes back to that week – and the outline of the strategy that we first put together in that week. It really was the formative experience."

Market Driving Strategies

Explore creative and innovative ways to build new market opportunities, exploit changing technologies and take novel concepts to market.