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Enterprise leaders are under pressure to perform and transform simultaneously—to keep business-as-usual running smoothly while also disrupting from within to drive results. This takes a certain mindset that is all too rare—and the beliefs that enable courage, innovative thinking and radically human communication. But it also requires new ways of working across the business.
“Things are moving more quickly today, and organizations need to build an innovation engine within their operational model,” says Bill Randall, a Senior Client Partner with Korn Ferry’s new Applied Enterprise Innovation team, which aims to help large APAC organizations innovate at speed and scale. “This is the ‘how’ that supports the perform-transform mental model.”
Leaders are looking for new ways to innovate at scale, but they face many problems. They are worried they’ll be disrupted before they begin shifting their own business, but they’ve also seen too many failed transformations. They want more ROI from their tech investments, but development teams feel handcuffed by slow policies, processes and culture.
“Innovation at scale is not about special people, special times, or special projects,” says Randall. “Innovation is about everybody’s everyday job and the core mechanisms we use to get business-as-usual done.”
Randall works with Senior Client Partner Eric Tachibana to help leaders implement a scientific model for business transformation. It’s a process that drives innovation across all products, not just one, and becomes intrinsic to the way everyone, across every level of the organization, does their work.
“The Working Backwards toolkit is a fast, cheap and powerful way to find out truths about your market,” says Tachibana. “And it can result in 10 to 15 big, game-changing ideas and thousands of small business improvements at any point in time.”
The core idea is to work backwards from the customer. It’s not a new idea, but as Randall observes, “organizations have lost their customer obsessiveness. Day Two administrative focus has taken over.”
The magic of the Toolkit, is that it is engineered into everyone’s day job. And that makes it a unique approach in the field.
“You don’t need to work with thousands of employees to make them customer-obsessed or entrepreneurial—they become customer-obsessed as a by-product of simply using the tools,” he says. “This is the scaling, democratizing magic of the model’s mechanisms.”
Two elements underpin the Working Backwards Toolkit: mechanisms and mindsets. Mechanisms are experimental tools grounded in the scientific method.
“A scientist looks for patterns and generates a hypothesis to try to explain them,” notes Tachibana. “They then design experiments to validate or invalidate that hypothesis. If enough experiments validate the hypothesis, it’s escalated to a theory. If the hypothesis is invalidated, the scientist goes back to observation and pivots to a new hypothesis.”
While the scientific method looks at natural phenomena and asks questions about the laws of nature, the Working Backwards Toolkit explores economic markets and asks questions about product-market fit.
Specifically, the Working Backwards Toolkit helps teams to discover three things before making big investments:
“Most leaders tend to jump straight into solution mode,” explains Randall. “One of the things they find most eye-opening in this process is customer validation. They don’t usually dive into the deep behavioral issues or needs that actually drive customers.”
Tachibana says most new product failures are due to issues that could be identified through those three mechanisms.
“85% of new products fail, and the reasons they fail are unexpectedly simple,” he says. “First, they fail because we assume there is a customer for the solution, but, when we launch the product, we realize those customers don’t exist. Second, the customers exist but they have a different problem to what we expected. Third, the customers and problems exist, but our solution doesn’t actually solve their problem. And fourth, the customers exist with the expected problem, and the solution delights, but we can’t figure out a way to make money at scale.”
Build the mindset, skills, structure and culture to transform your organization
Working Backwards works best when everyone trusts in the tools and applies them consistently. And this takes a certain persistent humility.
“We have to stand by a base assumption that we’re wrong and let experimental data drive decision making,” observes Randall. “Not only does this accelerate the path to successful products, it also allows you to avoid investing a bunch of money into a product that we can prove would fail because the experiment was invalidated.”
Without Working Backwards, getting rid of bad ideas can be even harder than finding great ones. Ironically, the more organizations invest in failed innovations, the more the sunk costs compound and the harder it is to stop. Yet this is the reality across the business sector.
However, consistently applying the Working Backwards Toolkit gives leaders the unbiased data they need to make better decisions. Leaders also need to be committed to embedding the process within.
“Everyone who learns the tools should go back to their day job and start applying them every day,” says Tachibana. “They might generate small changes to the processes they use. Or they might invent the next unicorn product. Either way, you could have thousands of new innovation opportunities progressing at any given time.”
Another mindset shift involves seeing customers everywhere, which can be a catalyst for positive culture change. “The tool helps you understand human behavior, whether that’s for internal or external customers,” says Randall. “There is huge value in how it infects teams with empathy, and you also end up with a shared language about how we approach innovation.”
Most importantly, the Working Backwards Toolkit allows any company to build a core competency in innovation that is repeatable and scalable. Rather than bringing in a consultant to ‘fix’ one issue, it allows you to fix all of the issues yourself.
Tachibana gives the example of a major energy company in Southeast Asia. “As an energy supplier, they are transitioning from fossil fuels to alternative sources of power. They needed to rethink their entire operating model. Should they branch out into new business areas to leverage their existing infrastructure—like logistics? Or electric vehicles, or something completely out of the box.”
Using Working Backwards, the energy company has funded start-up initiatives to test some of these hypotheses.
“We’ve seen companies applying Working Backwards secure over $100 million in internal or external funding to market new ventures, with a combined revenue impact globally of over $25 billion, since 2019,” says Randall.
Our research shows leaders who are able to perform and transform at the same time are rare—globally, just 14% have that capacity. However, with the right tools, they can empower everyone in the organization to identify, test and execute the ideas that will enable the next stage of growth.
Learn more about new ways to lead through change.
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