Inside John Lewis' innovation battleground

John Lewis' chief information officer, Paul Coby, does not like the 'A' word.

John Lewis: the team behind Alfred, one of JLAB's five start-up finalists
John Lewis: the team behind Alfred, one of JLAB's five start-up finalists

"I never normally talk about Amazon," Coby told Marketing during an interview. "But I heard their chief technology officer [Werner Vogels] speaking, and he said, 'we’re a tech firm that happens to be a retailer'."

For a slow-moving corporation, it seems simultaneously marvellous and terrifying that a company might disrupt an entire, unrelated sector by accident.

That terror is perhaps the rationale behind John Lewis’ JLAB accelerator.

Launched in partnership with L Marks, JLAB offers 12 weeks of mentoring, a possible £100,000 prize and the chance of a contract with John Lewis to five start-ups. L Marks is also behind William Hill’s new accelerator.

It’s quite a cost-effective way of being able to think about innovation

Another reason is that Coby, as one of the most senior figures in UK IT, can’t deal with the all the pitches coming his way.

He said: "My in-tray fills up with people sending me stuff. At the one end, it’s start-ups, and at the other it’s Accenture or IBM, all pushing this killer thing.

"How on earth do you tell? I’m sure I’ve turned down some fantastic products or pieces of software."

One year into the JLAB experiment, is it possible to go panning for disruption?

Cost-effective disruption

At first glance, it seems like the answer might be yes.  Last year’s JLAB competition was won by Localz, an Australian beacon tech business that can tell retailers when a customer has walked into a store based on their phone signal.

For John Lewis, Localz offers a way to speed up its increasingly popular click-and-collect service. After Localz was crowned last year’s JLAB winner, the retailer trialled the tech among 100 employees, or "partners".

Partners could order something online, walk into a John Lewis store to collect it, with Localz alerting staff they were nearby. By the time they walked up to the collection desk, their parcel would be ready. Now John Lewis is working with Localz to build a customer-facing trial version of the software.

Given John Lewis now processes more than 6m click-and-collect orders a year, £100,000 to speed-up the process looks like small change.

The ambition is to apply this kind of disruption to different departments within John Lewis. For example, this year’s JLAB has "sponsors" from across the business, including the director of retail and the buying director for electricals and home technology.

Paul Coby said: "It’s been a fantastic way to bring everybody in, and get everybody thinking innovation. It’s quite a cost-effective way of being able to think about innovation."

All the rage

Cheap disruption is certainly becoming fashionable. More non-technology brands are adopting Silicon Valley concepts like accelerators, incubators or venture funds, inviting in the very start-ups that might otherwise eat their lunch.

Unilever launched its Unilever Foundry programme last year, while Diageo, Heineken, Sainsbury’s and William Hill have all launched tech labs recently.

A year in, it’s too early to tell whether labs spell the future for big-name brands, or might turn out to be expensive side-projects.

Examples from the high-tech industry suggest it isn’t always easy to capitalise on innovation when it’s parked off in a lab.

Everybody now talks about getting Uber-ised. I’m a bit cynical about how much people have really thought this through

For example, few innovations from Microsoft Research filter down to its parent.

Another example is Google, which launched Google X as its future-gazing arm, producing driverless cars and Google Glass. But the firm has now abandoned the lab model in favour of a corporate restructure, where Google X is its own company. There are lessons here for non-tech brands enthusiastically embracing the labs idea.

Coby acknowledged that brands might be chasing disruption without much of an end goal.

He said: "What you’re seeing there is all of us dinosaurs [wrestling] with the world changing fast. Everybody now talks about getting Uber-ised. I’m a bit cynical about how much people have really thought this through."

Ideas from the outside

For John Lewis, it was important to adopt a model that had a set start and finish, and fit in with John Lewis’ own ethics. Coby cited Spedan Lewis, son of founder John Lewis, who established the John Lewis partnership in 1920.

Coby said: "I always think of him as a sort of British Steve Jobs of the 1930s. It was a revolutionary way to run a company, and he was about doing the right thing and making money at the same time.

"For us, the innovation bit is really important but giving a leg-up to small companies is also something we’d like to do. We’re attracted by that idea."

Asked why he felt the accelerator model would work better than, say, a venture fund, Coby said: "I didn’t want to build a different version of us."

John Lewis already has Room Y, an internal innovation arm that prototypes tech like 3D printing. JLAB, Coby said, needed to be external.

He said: "We wanted to keep some flexibility. We’ll probably do something different with JLAB next year, and I didn’t want to get immensely beholden to an investment company."

Failing fast

While JLAB was Coby’s idea, it’s innovation manager John Vary who oversees the day-to-day running of the accelerator.  

What we are trying to do is infect people in John Lewis with that [entrepreneurial] way of thinking over the next few years, as that innovation culture grows

He told Marketing JLAB had already learnt from its mistakes. Last year, the five start-up finalists were based in Level 39 in Canary Wharf. This year, they will work more closely with John Lewis at the retailer’s head office in Victoria, so that employees can get involved.

And while last year’s competition focused on customer engagement, 2015’s crop of start-ups are more likely to solve internal business challenges.

Vary said: "This year we went to different people inside the business and focused on their challenges. Our buying and brand team wanted to look at the connected home, while retail wanted effortless payments."

That’s why this year’s finalists involve start-ups like Qudini, a queuing management app, and Alfred, an app to control multiple smart home devices.

For Vary, JLAB will be successful when it’s less of an event, and more part of the day-to-day activity of John Lewis.

He said: "How does it evolve from being an accelerator to the everyday? It’s not just about external ideas, but investing in internal ideas as you would an external company.

"What we are trying to do is infect people in John Lewis with that [entrepreneurial] way of thinking over the next few years, as that innovation culture grows."