When do you pull the plug on internal tech projects?
It’s a critical question anyone involved in the innovation process must constantly consider. If not, a firm risks wasting millions of dollars on projects that might never see the light of day.
Vanessa Colella understands this problem better than anyone. As the chief innovation officer at Citigroup, which has an $8 billion annual technology budget, there are plenty of decisions to be made around which ideas are worth chasing and which ones should be put to bed.
Read more: We spoke with Citi’s innovation chief about which fintechs it wants to invest in, how its internal ‘Shark Tank’ judges know when to kill an idea, and why red tape helps some startups flourish
Colella, who also runs Citi Ventures, recently spoke to Business Insider about how the bank decides when to kill a technology project in its internal incubator, D10X. Historically, how much money has already been invested and the relationship to the project have been the two biggest factors in that decision for big companies, she said.
Citi’s approach, however, is different, Colella explained.
“In D10X, when you kill something is entirely done on the basis of, ‘Is it validated in the market or not?’ Our employees will come to growth boards — growth boards are our version of kind of ‘Shark Tank’ or ‘Dragon’s Den’ — and they’ll say, ‘It’s with a heavy heart but a strong conscience that I recommend that you kill my project because here’s what we learned when we went outside the building and worked with our clients and cocreated with our clients: They don’t really need this.’ And those employees will come back later with another idea and do something else.
So D10X takes the relationship and the awkwardness that sometimes happens in an organization about you don’t want to kill an idea because you feel bad about that particular person, and it separates the person and the idea. This person could be terrific, and we want you to come back with your next best idea, but that particular idea wasn’t something that was going to get market traction.”
As a result, Colella said any potential subjectivity that could creep into the decision-making process is eradicated. Requiring market validation so early in the process helps the bank from continuing to pour money into a tool or platform that doesn’t have a clear problem to solve for.
“We haven’t written tens of millions of dollars of checks to build something, we’ve just tried to understand, is the thing a big enough pain point?” Colella said. “It’s a lot easier to kill something when you’re examining is it a big enough problem than when you’ve already built something and you’re trying to justify the fact that you built this thing.”
You can read a condensed and edited version of our conversation with Vanessa Colella here.
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