Inside Mirvac’s innovation program, Hatch
Industrial and residential property developer Mirvac won the 2014 Urban Taskforce Innovative Development Award for its office tower, 8 Chifley, and in 2015, the same building dominated the Property Council of Australia/Rider Levett Bucknall Innovation and Excellence Awards taking out the top prize. 8 Chifley incorporates seven unique vertical villages and is one of only a handful of commercial buildings in Australia to achieve ‘World Leadership’ in environmentally sustainable design.
In 2015 Mirvac was ranked number three in Australia on BRW’s 2015 Most Innovative Companies list. At the forefront of construction innovation, Mirvac’s CSR Velocity wall panel system has the potential to revolutionise house building in Australia, with panels manufactured and assembled off-site in quality-controlled conditions, dramatically reducing construction times and overcoming the challenges of wet weather and chronic trade shortages.
In 2015 Mirvac also picked up the BRW award for best innovation program for their internal innovation program Hatch – a platform to facilitate innovation and bring the best ideas to life.
Samuel Tait met with Christine Gilroy, group general manager, innovation to find out how Hatch is delivering innovation at Mirvac.
Samuel Tait: What was your background before taking on the group innovation role at Mirvac?
Christine Gilroy: I started at PriceWaterhouseCoopers as a chartered accountant, then moved into banking, and have been at Mirvac for nine years in a variety of roles – I started in funds management, before moving into mergers and acquisitions and strategy. I think it was the strategy side that was a natural segue into my innovation role. Plus I’ve always had a personal passion for innovation – a real curiosity for the world and a desire to learn more. I’ve probably seen far too many TED talks.
ST: How do you define innovation at Mirvac?
CG: Innovation can be a very elusive concept. It was important to clearly define it so we were all on the same page. We define it in four words: ‘change that adds value’. The definition is very broad. It’s not just about having the latest app or gadget. And it’s not something the IT guys do, or another team does. It’s something that every single person at Mirvac can do. And it includes both incremental innovation (small tweaks and improvements to existing products and processes), as well as big, disruptive, game-changing innovation.
ST: What is the role of innovation at Mirvac?
CG: We see innovation as being crucially important in two ways. Firstly, innovation will help us be the best that we can possibly be. We feel very privileged to work in an industry where we have the opportunity to meaningfully impact and contribute to our customers’ lives. We’re building their homes, and their shopping centers, and where they work, and we’re creating urban environments for people to dwell and live their lives. We want to do it as well as we possibly can. That’s the first reason why we care so much about it.
But the second reason why innovation is so important, is because if we don’t innovate, we won’t be here anymore. It is surely a matter of survival. There’s a quote from Jack Welsh, which I love, “If the rate of change inside the institution is less than the rate of change outside institution, then the end is in sight. The only question is the timing of the end.” Innovation is not a nice to have – something you do in the good times when there’s spare money floating around. It’s an imperative – something that is critical particularly in a business’ darkest hours. The world is changing very, very quickly. Change is the new norm. You can’t just roll out the same game plan that worked for the last 10 years. The risk for corporates like us, is that we can get stuck in our boardrooms, lose touch with our customers and miss the change that is happening outside.
ST: Could you describe how Hatch, the innovation program that you run at Mirvac, came about?
CG: Mirvac has always innovated, but a few years ago it became clear that we could be innovating better. We took a good, honest look at innovation within the business. What we found was that we were quite reactive in the way that we would innovate. A problem would pop up on a project and a team of experts would jump in and solve that problem. That’s what we do really, really well.
What we weren’t doing as well – was innovating strategically. We weren’t sitting back and assessing the universe of opportunities and challenges, and making a strategic decision about which opportunities or challenges to pursue with the limited resources we had available.
So our innovation tended to be quite ad hoc, some parts of the business were innovative, others not so much. It was inconsistent, plus there was no formal funding, resourcing, process or framework. None of those things existed. People were battling their way through the business trying to get ideas up. Sometimes, and to their full credit, they succeeded. But others got frustrated with the effort of pushing an idea through the hierarchy and banging their head against a wall. The risk was that some of our best ideas were not getting airplay. There were many barriers to innovation present in the business, so in 2014 our innovation program, Hatch, was created to help break down these barriers.
The Brisbane Hatch space before…
… and after (click image to enlarge).
ST: How does the Hatch innovation program work within the Mirvac organisation?
CG: Hatch sits outside of the traditional hierarchy and is designed to deliver against eight innovation missions for the business. These innovation missions are broad areas of focus that feed directly from our business strategy.
My team is made up of 45 innovation champions who work on innovation two to three days a month, in addition to their usual roles. ‘The champions’ are a demographic slice of the organisation – they’re a mix of different divisions, functions, locations, and seniorities. The innovation champions were selected because they are influential, respected and and motivated people who really want to drive change at the front line. When you have 45 people who have all those attributes, you have quite an amazing network of people within the organisation. We have ‘innovation champions’ because we really want to embed change at the front line. There’s no innovation team sitting off to the side, it’s something that’s very, very embedded. The champions have been through six months of training in the end-to-end innovation process, so they are real ambassadors for innovation, making sure it’s kept top of mind. We introduced a best practice process for innovation. It’s based on design thinking methodologies and we worked with an external consultancy, Inventium, to adapt it to our business. The process was developed so we can create a predictable and repeatable pipeline of innovation, and not just leave it to luck.
So to sum up how the Hatch innovation program works – the 45 innovation champions, who have been allocated to mission teams, are now starting to work those missions through the innovation process. It’s been an amazing learning experiences for us all, and very rewarding to see the progression and big shift in thinking.
ST: How did you go about selecting the innovation champions from across the business?
CG: Last year at our annual roadshow our CEO put a call out to the business. Anyone could apply for the champion role with their manager’s approval. In two intakes we had over 150 applications for 45 positions. It meant a formal change to the champion’s existing role with the recognition of two to three days a month dedicated to innovation. We were looking for people who were influential, but we were also careful to not just select people who’d been here for a long time. It was important to have people who were new to the organisation as well, who brought fresh perspectives.
A side benefit of the champion group is that we are seeing incredible relationships being built across the business. That means a better understanding of other people’s perspective and all the benefits that come from diverse teams.
The specific traits we looked for were people that were influential, respected, positive, curious, interested in learning, passionate about driving change. Each generation is well represented – gen Y, gen X and baby boomers. We have a good mix of seniorities – some champions are very senior, while others are straight out of university. And within the group there is no team hierarchy. It’s a great opportunity for some really talented people to step up and show their skills. In some ways it’s also a talent program. It could otherwise take some of the young talented champions years to break through the hierarchy. Instead it gives an opportunity to people who want to step up and drive change in the organisation at the front line.
ST: What is the role of the missions within the innovation program at Mirvac?
CG: Missions are broad areas where we want to focus our innovation efforts. The missions become a way of prioritising and focusing innovation for us. There’s so much noise, and there’s so many opportunities, that we actually have to say, “This is what we’re going to focus on for now”. It’s a way to actually say that something is off the table. With opportunities everywhere, how are you going to decide which ones to look at? You end up trying to tackle too many opportunities and getting nowhere. So focusing and directing that effort is crucial.
We have limited resources and we want to make sure that we’re applying them as efficiently as possible. The concept of opportunity cost is important to think about. You might think, this idea over here isn’t great, but everyone has fallen in love with it and it won’t take too long to pursue, so let’s put five people on it for a week. But by spending time on an idea that isn’t as important, you’re not spending time on the important ideas that will help deliver our missions. Our missions are a visible signal to everyone in the business so they understand where the organisation is heading.
For example, one of our missions, ‘act as one Mirvac team,’ focuses on our culture. Our business is an integrated platform, and what I mean by that is we cover the whole spectrum. We buy a piece of land, we demolish the building on it, we design a new building, we build that building, we get a tenant for that building, we manage that tenant throughout the lifecycle, and then demolish the building and start again. It’s really, really important that we work well across that integrated platform, that we work as one team, and are not siloed in what we do. We are a very collaborative business, but we can always get better. So this cultural mission is a very important one and any idea that leads us a step closer towards achieving that mission is time well spent. It’s a priority for the business.
ST: What is the role of the customer in relation to innovation at Mirvac?
CG: The customer is everything – customers are at the heart of innovation and our innovation process. Our innovation champion training is called ‘customer-centric innovation’. You can’t innovate in isolation to your customer. We’re building the capability in-house so we can be out there, on the front line: interacting, observing, talking to our customers, understanding what it is they’re trying to get done, and understanding their frustrations, their workarounds, their experiences. So it all begins and ends with the customer and customer experience.
Our process involves scanning customers for the biggest innovation opportunities, formulating solutions to address those customer issues, and then testing those ideas with the customer. We don’t want to take ideas away to perfect them in isolation, and then receive a rude shock when we unveil it to the customer. It’s a continual process. We call it experimenting, and it’s based on lean startup methodology. This involves identifying the key assumptions that underlie an idea and going out to test them with those front line customers. This is a new methodology for our business and we are just learning how best to do this.
ST: What are some insights you have gained from ethnographic research and observing people’s behavior, rather than focus groups and asking them direct questions?
CG: It’s fascinating to study customer behavior and psychology. We can learn so much by observing our customer behaviors and that can really enrich the information we get from talking to them.
For example, as part of our work on the innovation missions, we recently spent time out at our shopping centres observing and speaking to customers, and we saw all kinds of fascinating behaviors. Like when people’s hands are full of shopping, they usually head straight for the exit as fast as possible. Some mothers had great workarounds for dealing with the frustration of bags. In the car parks we observed mothers putting their children straight into the child seat of a supermarket trolley, with the pram left in the car. Why? Because there’s a limit to how many bags they could hang off a pram, but a trolley could facilitate both bags and a child. There were surprises and workarounds everywhere, and this provides us with great opportunities for innovating and improving the customer experience.
ST: What is the importance of culture in innovation?
CG: Embedding innovation into the culture is key. I don’t think you can have innovation off to the side, being delegated to a group of people. It’s something you want to have in the DNA of everyone in a company. At Mirvac you would say that safety is in our DNA. That’s something that you don’t need to prescribe, it’s absolutely paramount, it’s top of mind, and it’s just something that we all do. We want innovation to be the same. Something woven into our fabric. It’s the only way we’ll succeed.
That’s why we have the innovation champion model – the training that our innovation champions go through means we have smart, influential people learning a new way of thinking, and that can begin to seep through the company. They’ve learned the theory but the biggest challenge is learning to implement this new approach in our day-to-day BAU (business as usual). It’s a long journey that we’re just starting.
ST: Could you discuss the value of using external partners as part of your innovation program?
CG: Having external partners as a resource to advise and help us define best practice while providing expert advice has contributed significantly.
Inventium advised us on the framework for our innovation program and this was crucial. Having been at Mirvac for nine years I knew the business and the people really well, and Inventium were able to advise on best practice approaches, processes and frameworks for innovation. That way we could understand what has worked, and what hasn’t worked for other companies and learn from the experience of the most innovative companies in the world. There’s a perception that Google is all fun and games, ping pong and sleeping pods which lead to these ‘eureka’ innovation moments. But what we learned was that innovation at companies like Google and Apple is supported by incredibly robust processes, systems, and frameworks. Innovation doesn’t happen by accident in these organisations, it is carefully orchestrated and meticulously planned.
Inventium understood the best practice approach to innovation, and helped us up-skill our people. Such a big part of innovation is about building capability, so they were fantastic partners to kick us off on that ride and push us in the right direction. We now work with both Inventium and Orange Squid, who help with weekly mentoring of our innovation champions.
ST: What three pieces of advice would you give for people to be successful in their own innovation programs?
CG: The first one would be to ensure you fall in love with opportunities, not ideas. Start with a question and not an answer. Make sure all that time and effort is spent actually solving a problem that exists, and a big problem that is worth solving. That’s my first piece of advice.
The second one is around customers. Putting the customer at the heart of the innovation process and never losing sight of the fact that innovation is all about the customer.
Thirdly would be around focusing energy. You can’t do everything at once. It’s important to prioritise what you’re going to do now, what we’re going to do down the track, and then communicate this widely so that everybody knows where the innovation focus is for the business.
Watch out for the second part of Samuel Tait’s interview with Christine Gilroy out next week. Part two covering operations of innovation they discuss the biggest challenges to delivering innovation, review their innovation process in depth, how they measure the impact of innovation and her advice for successful programs.