FBI: The Rapid-Response Trio Who Bust Silos and Bet on Disruption

Red lights flashed through the dark corridor as the FBI rapid-response team stormed the room, their footsteps echoing in perfect rhythm.

The alert had blared just minutes ago – something had gone terribly wrong. The air was thick with urgency, the kind that comes when a situation spirals out of control.

Without waiting for direction from their superiors, they moved with precision, eyes scanning the scene for clues. Their complementary training kicked in as the tension mounted.

One of them was hunched over a flickering screen, deciphering complex codes and tracking every detail with laser focus.

Another scanned through the files, analysing patterns, piecing together the scattered fragments of intel.?

The third stood apart, sketching out scenarios and bold responses. She could already see beyond the immediate chaos to where they could strike next.

The stakes were high, and the clock was ticking. This was no ordinary team: They were the only ones who could crack the code, bust the whole things open and turn a threat into a success.

But they were not from the Federal Bureau of Investigation.

They were a very different FBI trio: Finance, Business and Innovation.

And their mission was clear: to outmanoeuvre the market chaos and seize an advantage before it was too late.

But enough crime fiction talk.

If you live in the corporate real world, you’ll know that in most companies, innovation gets hampered by the very structures designed to support it.

Silos between departments create communication barriers. Colleagues from Finance, from the core Business and from Innovation operate mostly in isolation.

There’s no FBI alliance to speak of. Each focuses on their own priorities, with occasional interactions, but usually without a cohesive strategy.

Internal suspicion is at least as common as collaboration.

Finance tends to be seen as the gatekeeper, the party-pooper even, who limits creative ideas due to budget constraints and entrenched risk aversion.

Business teams are always incentivised to prioritise the needs of paying customers today – at the expense of innovative concepts and future market demands. New products or services typically fail to resonate with customers.

Meanwhile, Innovation teams are often seen as wasteful of company resources. They’re typically left to chase ideas without much strategic or financial guidance. Left to their own devices, they can fall in love with the unproven potential of their ideas. So great disappointment follows when they’re unable to bring them to market or scale them successfully.

In this fractured approach to innovation, high-potential ideas get watered down or abandoned due to lack of collaboration. It inevitably leads to a stagnant innovation culture, missed business opportunities and a failure to respond to big market changes.

So this is where the concept of the FBI Trio comes in.

Who are the FBI Trio?

The FBI Trio –Finance, Business, and Innovation– when done right, is a dynamic, agile team of three people at the heart of strategic decision-making in any organisation.

Combined together, they create a powerful force for driving innovation:

• A representative from Finance ensures that everyone is applying a consistent, robust approach to budgets – based on incremental funding.
• Someone from the core Business aligns the innovation with market demands and strategic goals, ensuring that innovators get access to customers.
• And a professional Innovator pushes the boundaries of what can be done, turning creative concepts into testable hypotheses and scenarios.

There’s a fractal quality to FBI. You can form an FBI trio at any level of your company – for example:

• At the org level, an FBI trio can be composed of the CFO (F), a Business Unit Leader (B) and the Chief Innovation Officer (I)

• At the innovation portfolio level, you can make up an FBI trio of a Senior Manager from Finance (F), the Head of Sales (B) and the Innovation Portfolio Owner (I)

• And even at the project level, an FBI trio can be assembled with an Associate from the Finance department (F), a Customer Account Manager (B) and an Innovation Product Owner (I)

The only principles to respect with FBI are:

• There is some equivalence in seniority and influence between all three members
• Each member acknowledges each other’s expertise and professionalism
• They come together to make (imperfect) decisions quickly

More broadly, the concept through which these three very different functions come together, and collaborate on an ad hoc basis, can be referred to as the FBI Alliance.

This alliance brings financial discipline, market insight, and explorative innovation into alignment – working together to drive the company forward with agility.

My proposition in today’s article is simple:

That assembling FBI trios at various levels, empowered by a clear Innovation Mandate, is your best approach for creating the collaborative, silo-busting approach needed to drive innovation.

Innovation that moves the needle inside your company.

The Innovation Mandate: Set the stage for Collaboration

What’s an innovation mandate, you ask? Put simply, it’s a strategic tool that defines the organisation's innovation goals, priorities and resources. It delegates responsibility and accountability for innovation to innovation professionals.

[Read all about the Innovation Mandate here in our recent article of Culture for Lunch. You can also request a free Innovation Mandate PDF template.

And don’t miss tonight’s 30-minute webinar introducing the Innovation Mandate. Sign up here.]

Conveniently, a clear Innovation Mandate empowers the FBI trio (at any level of the organisation) to invest in innovation and make appropriate strategic decisions – without needing to ask permission from the CEO every 10 minutes.

For example, picture a project-level FBI trio overseeing an early-stage corporate venture on hyper-personalised health recommendations.

The trio can consult their Innovation Mandate and then, jointly, based on customer feedback, make the strategic decision to pivot their venture to focus on nutrition, and inject another 3 months’ worth of resources into it.

FBI is not “another framework”; it’s simply a flexible way to collaborate.

Put three very different people in the same room every couple of months and incentivise them to work together towards a common, strategically aligned goal.

It certainly helps if you also have an innovation mandate in place, since it ensures that Finance, Business and Innovation roles are aligned with the company’s strategic goals from the outset.

Get Finance more involved in Innovation

Bust the myth of the Innovation Roadblock

I know what a few creative innovators are thinking at this point…

“Work with Finance, seriously? On innovation? I thought their role was to p1ss on our bonfire.”

Well I’d like to dispel the common misconception that Finance is always a barrier to creativity and innovation.

All depends on the ambitions and the risk appetite of the company.

So be explicit!

If ambition and risk appetite have been vaguely defined as LOW (or worse, simply haven’t been defined) then it’s no surprise that the Finance department will do its best to keep “speculative” expenditure on “highly uncertain” activities, like explorative innovation, to a strict minimum.

If the company rewards predictable projects, with high NPV and healthy short-term ROI, then it’s no surprise that Finance colleagues see every opportunity through the biased lens of a high discount rate.

In other words, explorative innovation projects look bad on paper.

But if the organisation is explicit in its need to invest in explorative innovation for its long-term prosperity,?

If it’s explicit in how much risk can be allocated to innovation projects and what the expectations on the innovation portfolio are,

Then Finance can absolutely be an active participant in the innovation process, rather than just a gatekeeper.

Financial discipline can even be a channel for creativity, by ensuring that innovation efforts are sustainable and impactful.

(Some might say that this is also the thinking behind the new ISO 56000 standards on Innovation Management. A topic for another day!)

The value of getting in early

There’s also a great advantage in involving Finance early in the innovation process.

How do you think Finance colleagues feel at being consulted only once an existing project needs extra budget?

“Wait, what is this? You’re trying to do what exactly?” is a typical reaction, if it’s the first time they hear about your Blockchain-for-Dead-Animals project.

Rather, if you can get Finance colleagues involved at the beginning of the process, then you change the narrative from Finance being gatekeepers to being champions, even co-owners, of innovation.

The Innovation Mandate deliberately formalises the role of Finance in innovation, because it ensures that you integrate financial considerations from the start.

I’ve certainly found that you avoid countless last-minute rejections or roadblocks – not to mention a much healthier culture of collaboration, instead of the confrontational approach we see in so many companies.

Betting on Disruption: The Real Options Approach

In our last article (I Wanna Be a Rockstar), we talked about the application of Real Options in innovation.

Much of the literature on Real Options from the past 30 years is academic and therefore intimidating, at least for people without a finance or econometrics background.

This might explain why a Real Options approach isn’t widespread in business today.

But I’m working on challenging the notion that they’re too complex for practical business use.

Think of Real Options as a practical way to work with innovation risk by considering different scenarios and estimating the chances of each one happening. (Risk in a wider, non-negative sense, which includes upside opportunity.)

Real Options help you make smarter decisions. About when to invest more in a project or when to pull back.

Any FBI trio should be happy playing around with Real Options. Picture the following meeting:

• ???? The Innovator expresses their wild ‘intrapreneurial dream’ (a term inspired by Claus Hirzmann 's work on Real Options): “We have a brilliant idea. Customers can save 2 hours/day with this new solution. It will appeal to 2 million B2B clients worldwide!”

• ???? The core Business person can temper the passions a bit and bring things closer to current realities: “No doubt there’s an opportunity here, but let’s not get overexcited. I know our market; there are at least 4 things (ABCD) that need to be true before we can acquire customers on this scale. The upside you propose is only 5% likely, in my opinion.”

• ???? The Finance colleague can direct the trio to map out the Real Options scenarios: “OK, so what are the different possible outcomes here? Let’s draw out a decision tree. What are the probabilities of each assumption (ABCD) being true or false? And what will it cost us to learn each step of the way?”

• ???? And then the Innovator steps in to define the experiments: “Well if assumption B is the riskiest and cheapest to test, we should test this one first. My team and I can design an online experiment to test it out.”

• ???? Core Business colleague: “Great, we can get you access to some test clients by next week.”

• ???? Finance colleague: “We’ll sign off the funding today so you can run this experiment for 1 month, with 2 full-time employees. Have fun with the experiment and see you next month!” ?

It might take some practice at most companies to get a meeting as smooth as this one.

But you might have noticed how Real Options align with the Lean Startup approach: We prioritise experiments, take calculated bets and invest more, or cut investment, based on validated learning.

Notice also how reasoning in Real Options allows for both down-to-earth realism and the expression of a wild 'intrapreneurial dream' – which is where the (non-linear) upside potential lies.

They also align with the Innovation Mandate: Quite simply, Real Options provide a structured way to manage uncertainty and risk at every level – organisation, portfolio or project.

But the true magic is that by working together and using a Real Options approach, an FBI trio can massively reduce the downside risk of large, upfront investments.

They can make an uninvestable project investable.

FBI, Portfolio and Culture

Building a balanced Innovation Portfolio

Not all companies take the concept of an innovation portfolio seriously.

Among those who do, there’s a tendency to oversimplify the allocation of resources – for example across time horizons and investment themes only.

In contrast, an FBI trio at Portfolio level has the power to compose an innovation portfolio in a way that more accurately aligns the company’s exposure with the company’s overarching ambitions and risk tolerance.

Thanks to the combined expertise of Financial, Business and Innovation experts, the trio can consider non-linear factors –like network effects, growth loops, options– when composing their portfolio.

Working together in this way helps them avoid the common trap of over-investing in incremental innovation.

It increases the likelihood that they’ll fund genuinely disruptive ventures that lead to sustainable competitive advantage and support the company's overarching strategy.

The FBI trio and your Culture of Innovation

As mentioned earlier, it’s a misconception that Finance is only interested in short-term returns.

With a credible innovation mandate in place, which allocates meaningful resources to longer-term investments, all three members of the trio have an explicit objective to explore, experiment and create the future.

When these behaviours are valued, even expected, your company’s culture of innovation naturally evolves to one that supports experimenting with new ideas, frequently failing (cheaply) and learning.

For colleagues across Finance, the core Business and the Innovation function (and elsewhere in the company), it can be hugely motivating to see this FBI alliance at play, with such agile collaboration between what used to be impregnable silos.

Finally, your company can break away from the usual –cynical and confrontational– approach between “those trying to break everything” and “those who resist change”.

Conclusion

The great thing about the fractal nature of FBI, is that regardless of your level of seniority in your organisation, you can form an FBI trio.

If you’re the Innovation team’s intern, hook up with two more interns from Finance and the core Business and figure out how you can jointly influence investment decisions on an innovation project.

If you’re the company CEO, ask your CFO, your CCO (or other Business leader) and your Head of Innovation to get together and consider a big strategic decision (like closing down your CVC unit) together.

So whether you're the intern or the CEO, the power of the FBI alliance lies in its ability to drive collaboration across levels, bypassing the silos that always hinder innovation.

As we’ve seen, bringing these three parties together, especially when guided and empowered by a clear innovation mandate, plays a pivotal role in bypassing traditional silos and betting on explorative innovation to drive business and prosperity.

Forget the stereotypes that Finance is just a gatekeeper, or that Business is only present-focused, as well as the foregone conclusions about how certain teams can never work together.

Instead, I challenge you to establish an FBI Alliance in your company, empower it with an Innovation Mandate, and adopt this more integrated approach whenever a key innovation decision needs to be made.

I’m convinced this radical approach can transform any company, in any industry, into an innovation role model that is both creative and financially sustainable.

As mentioned, later today (Europe evening / Americas afternoon, Tuesday 13th August) I'm hosting a 30-minute webinar introducing the Innovation Mandate.

?? Sign up here

to learn how to delegate authority and accountability for innovation from company board level into the hands of innovation professionals.

If you're not able to attend, or if you missed it, ??check out this free tool to assess whether your company has a genuine mandate to innovate or not.