- Where to Play 2021+
Danielle Ferry was a guest in our Innovation Rockstars Podcast, where she shared interesting insights about the Why, What, and How of Innovation Growth Boards at Moody's Analytics.
Moody's Analytics is internationally renowned for working towards the highly valued mission of helping capital markets and risk management professionals worldwide respond to an evolving marketplace with confidence. As a subsidiary of Moody's Corporation, Moody’s Analytics was established in 2007 to focus on non-rating activities, with the vision of becoming the global leader in solving critical business problems.
Our latest Innovation Rockstar Danielle Ferry has been part of Moody's Analytics for the past decade, in a variety of different roles. For the past three years, she has held a specific focus on evolving early-stage product ideas into transformative future growth initiatives as Senior Director of Strategy. Danielle is also an advisor with the Hollt Accelerator which is a modern-day broker, accelerating deals for FinTech startups between corporate clients and investors. And in addition, Danielle also holds a Ph.D. in Economics from the City University of New York. From this perspective, it is safe to say that Danielle knows a thing or two about adopting venture capital mindsets and mechanics to drive innovation.
Danielle joined us on the Innovation Rockstars Podcast to share how Moody’s Analytics has embraced innovation growth boards to bring accountability and metered funding into the innovation process at enterprise level.
Moody’s primary mission: Empowering Moody’s customers to make better, faster decisions. In working towards this mission, Danielle elaborates on how the Innovation & Strategy team has adopted Growth Boards to gain the same sense of agility in their own processes, to make better, faster decisions.
Considered to be the enterprise equivalent of venture capital, innovation growth boards have allowed Danielle and her team to bring innovation-based approaches into their product development while also introducing the concept of VC-style funding to support selected projects. Having experimented with this approach, and successfully applying some of the basic concepts within the Moody's Analytics accelerator, have built a track record with enough successes to support the development of a growth board at the Moody's Corporation level.
In principle, through its adoption, this methodology in effect holds the benefit of building greater agility into the business through informed decision-making; mitigating risk with a metered funding approach at the resource allocation phase of early-stage projects. With this evidence at hand, the senior leadership of Moody’s is not only willing but actually really excited, to apply this at the corporate level and observe the prospective results.
Danielle admits that they are still in the early implementation phase of nurturing a growth mindset at this level within the organization. Yet, with this transition already underway she and her team have already come to learn a number of valuable lessons. Here are some of the key insights she has shared with us in introducing innovation growth boards at corporation level.
"The growth board should be made up of senior executives who have oversight over some key operations in the organization.", Danielle suggests. It is essential that they also have the right mindset and attitude. Out of her own experience, she clarifies that the growth board is responsible for ensuring that the company has a balanced portfolio of initiatives across different innovation horizon lifecycle stages. She adds that the growth board must prioritize clearing hurdles for their project teams and remain accountable for utilizing best practices and innovation. To emphasize her point, she reiterates that growth board members not only need to have the authority to impose action. With the right mindset, they are empowered to ask the right questions and be open to stepping away from the traditional: "What's the ROI going to be on this project?".
Danielle keenly underscores her view when asked about her take on the relationship between structure, accountability, governance, and innovation. She answers by explaining that "there are certainly people who think that innovation is about loosey-goosey-anything-goes, and for those folks, the word "process" tends to be a dirty word." She disagrees with this conviction strongly and brings attention to the value that process can bring to innovation. In the same breath, she discloses that it is vital to find the right balance in doing so: "You don't want to be creating barriers—the key to innovation is always speed and agility. And so I think, when used right, when you find the right balance, you can use process and governance to be enablers of speed and learning."
You don't want to be creating barriers—the key to innovation is always speed and agility. And so I think, when used right, when you find the right balance, you can use process and governance to be enablers of speed and learning.
Danielle Ferry, Moody's Analytics
Danielle elaborates on how the mechanics of the growth board are substantially different from the "traditional Moody's way" of doing things. As a 112-year-old company, the organization had come to rely on conventional means of assessing projects and assigning funds. She enacts how a group would go to the board and ask for a significant sum of money and petition, "you know we'll deliver something to you in five years, and here's an ROI." Danielle follows this with a lighthearted statement to say, "That - let's be honest, they kind of made up, right?" Danielle uses this example to illustrate why she and her team wanted to take a different approach and experiment with a metered funding model.
Early-stage ideas are financed over a series of rounds with metered funding, and all decisions relating to allocations are based on goals and milestones. At earlier funding stages, these goals are learning-based, while in the later rounds, funding is growth-based. As a result, this approach supports innovation and also mitigates the risk of over-investment in unproven concepts.
She explains that though they are in a transition year—where funds have already been allocated to projects—the growth board now behaves as if that money has not been unlocked. This approach asks that teams still present to the growth board as though they need formal approval at each development phase. She refers to this as "building that muscle memory", and a means to strengthen the understanding that teams must meet criteria at various stages to proceed with their projects' development.
"We've defined our definition of the stages of the innovation lifecycle: they're similar to what many others use; we just kind of put it into our own language. But at each stage, we have expected activities and the metrics that we use to track success." Danielle acknowledges that getting both the project teams and the growth board members to understand and know the details of each stage has required substantial training. She conveys that the challenge has been to educate and encourage that ROI is not a reliable indicator at the early stages of innovation. As a result, she and her team have invested the time to establish and communicate what each of the relevant stages in the process is, together with associated activities and metrics teams can expect to realize in them.
"The very first stage is just simply discovery: going to understand the problem space.", Danielle explains. She details that this involves deriving key learnings and findings based on customer research. Once the problem space is validated, we advise that teams then proceed to the next step.
She describes the possible activities involved in this next step to be a design sprint wherein teams focus on the problem space, get comfortable with it and develop prototypes to put in front of consumers to garner more feedback. Danielle tells us that some of the questions the growth board might ask to inform their decision at that stage are:
"How many user testers did you test this in front of?"
"What did they think of it?"
"What did you learn from this?"
"How many design sprints have you done within your domain space?"
Danielle states that it is only much later when the growth board knows that they are at the point where they're able to scale, that they start to ask questions such as "What's your customer traction? What are you going to make off of this?"
She goes on to summarize the benefit of developing prototypes and using clear KPIs by expressing how this approach informs product development: "We always get good feedback that allows us to make tweaks. And, within the next week, we can have a significant improvement upon what we have already."
When asked about the true impact of introducing a growth board, Danielle takes the opportunity to pause and reflect on just how fundamental the process and mindset change has been for Moody's. She highlights her experience, "I really think you cannot overstate the impact of the process change. Because outside of Moody's Analytics accelerator, very few people were taking this approach to product development. Now we're almost imposing this on the project teams in key domains and business units. Not only am I seeing the adoption in those product teams but also how they are spreading it to other parts of the organization through the use of tools like design sprints."
She proceeds to consider some of the secondary impacts, specifically reinforcing that the introduction of growth boards has provided more meaningful opportunities for collaboration. Danielle speaks to where she sees this in practice:
"[In these meetings] they are identifying opportunities to collaborate, that wouldn't have happened otherwise. Then they are also doing that in front of senior management, which is then also kind of getting that message of "Oh, there's a whole ton of more opportunities for collaboration. I can help enable that."
She states again that since collaboration has not always been a strong suit for Moody's, having senior leadership buying in to and encouraging it is exceptionally beneficial.
In addition to this, Danielle extends her comment to report on how the process has helped unearth common challenges that the growth board members are in a position to help solve. She illustrates this through an example "we have a very ambitious growth target and part of that involves we need to do a ton of hiring. And we're having trouble, frankly, doing that at the speed that we need to. We have the Deputy Chief HR Officer on the growth board, and so, a takeaway item from our recent meeting was, "Can you please go away and meet with these people? Have them meet with your people and start to come up with a plan for how we can accelerate hiring."
I think first it's really important to have buy-in from your key stakeholders. This thing has to have teeth, if it's going to work. And, if you don't have support from the senior most levels of the company, it's not gonna work. I think, you know if you're gonna go, you got to go all in!
Danielle Ferry, Moody's Analytics
When asked to elaborate on some of the potential pitfalls, decision-making biases, and considerations in implementing growth boards, Danielle emphasizes three key points:
"I think first it's really important to have buy-in from your key stakeholders. This thing has to have teeth if it's going to work. And, if you don't have support from the senior-most levels of the company, it's not going to work. I think, you know if you're going to go, you got to go all in! That's number one."
She discloses that her second point is a variation on that theme. She admits openly, "It's actually a tremendous amount of work to set this up and to run it on an ongoing basis. And, I know firsthand that this is taking a lot of my time. So again, you really have to be committed." Danielle builds on this to offer her practical insight: "You go out and do well! And you've got to accept that this is something that you can't just do kind of as a hobby; it has to be a real thing."
As her third point, Danielle reminds our audience that it is essential they understand that though there is a blueprint for establishing an innovation growth board, every organization must tailor this to their own needs and culture. She suggests that teams must remain open to the idea that the effort in itself is an experiment. Inspiringly, she encourages constant iteration, advising that members of the growth board tell themselves, "You know we're not going to get it right the first time, and that's okay. We'll just keep moving!"
To support her recommendation, Danielle reveals lessons she has learned through her own experience: "People don't like to be told how to innovate... And so, we made a quick pivot, and we decided instead we will just apply these techniques internally in the Accelerator. [We decided that] we will show success, and we will win over the detractors. And that's actually worked."
So today, we have this idea where we've created the growth board (and then, that's a large part related to the success of the Accelerator), and the growth board is now pushing those ideas kind of top-down. But then, on the other hand, Accelerator 2.0, particularly through its enabling function that we envision for the future, is going to be doing that from the bottom up.
"We have created a culture where there is now an appetite for others in the organization to come to us and say, "Can you help me apply some of these tools?". That wasn't there when the unit was untested. But now it is! And then, honestly, the third leg here is that former members of the Accelerator, including myself, have been dispersed throughout the organization. And we're almost good Trojan horses now that we can teach our operating units how to apply these things and do so organically through our own product development."
Innovation always inherits risk—that is a given—but Danielle Ferry encourages you to also fortify your innovation efforts with iterative experimentation and quantified evidence to find better, faster results.
We thank Danielle for this insightful interview!