Cancer Research UK: brainwaves from the ideas lab

The charity's Radical Innovation Unit was set up to explore new ways to generate revenue. Tristan Donovan finds out how it works

CRUK Innovations Unit
CRUK Innovations Unit

"Can't tell you," Kevin Waudby says, almost whispering. Damn. Another line of inquiry runs smack into a dead end, joining a growing pile of discarded questions.

Waudby's caginess is understandable, however. He is the head of Cancer Research UK's Radical Innovation Unit, a team that is working at the cutting edge of fundraising, devising and experimenting with new income-generating initiatives.

And Waudby has no intention of giving anything away about the unit's juiciest experiments, such as the three projects it is currently focusing on. What are they? Can't tell you. Not even a clue? No. When will they happen? One this year, the others next year. "You'll notice them, I'll say that; they're great ideas," he adds, tantalisingly.

The unit, housed in the CRUK offices overlooking London's Regent's Park, was formed in 2006 at the behest of the charity's directors, and the reason for its creation was simple. "For a significant proportion of our income, we rely on a relatively small number of income streams," Waudby explains. "There's a risk associated with that; if one of our major sources of income has a downturn or a bad year, we are exposed. The team was set up to look for completely new ways of raising money to help mitigate that risk."

The unit has one clear and daunting goal: to create new fundraising products that will contribute an annual income of £10m to the charity within five years of launch. Even by CRUK standards, that is a hefty sum, equal roughly to the charity's investment income in the 2008/09 financial year. CRUK's total income that year was £498m, of which £433m came from fundraising.

The unit's ideas must be outside the scope of CRUK's existing operations. "If, for example, we have an events idea, we have a very competent events team to take that idea to market, so my team doesn't need to work on it," says Waudby.

Compared with other CRUK fundraising teams, Waudby's unit is small. How small, he won't say - it's definitely single figures, but he won't give an exact number. "It's difficult because it flexes up and flexes down because of contractors, so it depends," he says.

The team is drawn largely from the private sector and is structured around the processes used by the unit to develop new ideas. "I have one person, Clare Cotton, who we call our venture catalyst: she is responsible for the front end of innovation," he says. "She identifies where those strategic opportunities are and generates those ideas."

Cotton's job is to generate ideas using 'open innovation' techniques. In brief, the concept is that idea generation should not be confined to a dedicated research and development team but opened up to others inside and outside an organisation. "I have a very small team and a small budget, so it's really important that we work cost-effectively," says Waudby. "In essence, we use volunteers to help us generate ideas. We use techniques around open innovation, such as The Big Ideas competition that we've run three times with external and internal groups of people."

The unit also runs two other types of event: Hot Houses - two-day events where volunteers from professional backgrounds help to develop business cases for new ventures; and the Open Ventures Challenge, which brings together social entrepreneurs, businesspeople and supporters to generate new ideas. "It's a really, really cost-effective way of doing it," says Waudby. "At the same time, you're getting the right expertise in the room or the community in order to generate the ideas."

Once a promising idea is in place, Cotton writes up a business case that is then presented to CRUK's equivalent of the BBC TV series Dragons' Den: the venture board.

Half of the board are senior executives from CRUK, the other half are advisers from the business world, including William Reeve, co-founder of DVD rental firm LoveFilm, and Amanda West, chief innovation officer at news agency Thomson Reuters. "We take our ideas to them at a really early stage because we want to get a sense of whether the board likes the ideas we're working on before we give it a lot of resource and time," says Waudby.

If approved, the unit's project leaders then start experimenting with and researching the proposal. They ask the target audience what they think, challenge the assumptions behind the model and investigate the market in detail. Should the idea survive this scrutiny, it goes back to the venture board, which decides whether to invest in a trial project.

This process is vital to the unit's work, says Waudby. "It's really important we're creating focus at every stage and the venture board helps us to do that," he says. "What it also does is to help us involve senior leadership in the ideas we're working on. Because we're working on radical ideas, we're looking at ideas where there tends to be a high level of risk and we need to know the board and the charity's senior leadership are happy that we've addressed the risks and that they are supportive of us taking an idea to market."

Focus is a word Waudby uses repeatedly. The unit, he explains, has a laser-like focus on its £10m-a-year target. "It's really important to have that focus. Creating focus, knowing where you want to look for ideas, having your strategic priorities and involving leadership in your decision-making are absolutely key."

The first high-profile result of the unit's work is MyProjects, a website launched in November 2008 where donors choose what type of cancer research they want their money to be spent on. The idea came from the first Big Ideas competition. "Although in our major giving offer it was possible to restrict income to a specific area of our work, we didn't generally offer that more broadly," says Waudby. "But what we noticed was that consumers were increasingly expecting choice. What MyProjects allows us to do is enable all supporters to give to a cancer they've been affected by. It's about choosing the cancer you want to beat."

After the venture board backed MyProjects, it was being tested for real only three months later. "One way you create focus is by failing fast and succeeding sooner," says Waudby. "What we tend to be doing with radical ideas is presenting consumers with new ways of giving to charity, and it takes time for them to get used to them. We get them in the marketplace and see whether they work, rather than spend huge amounts of time and resource doing lots of research that won't always tell you what you will find out from getting out there."

MyProjects has attracted new and untypical donors, he says - although he won't be drawn on the details - and CRUK is exploring how the site can be used to develop an online fundraising community. "We're trying to create a community around this product, or at least allow our supporters to create communities around it," he says. The charity has begun talking to MyProjects' biggest backers and is looking to arrange meetings between them and the researchers whose work they have funded. "It's like community fundraising: community fundraising 2.0 - online not offline," says Waudby.

Not every idea works. Although MyProjects succeeded, the unit's DNA Designs project bit the dust. The idea was to use the genotyping equipment at CRUK's research centre in Leeds to produce artworks based on the buyers' DNA. "In terms of our brand, it is a nice brand-aligned idea because it is ultimately about science," says Waudby. "The venture board loved the idea, absolutely loved it."

But it all comes back to focus - and when it came to the £10m question, DNA Designs simply didn't make the grade. To call the idea a failure, however, misses the point. "It's really important an organisation accepts that some of the risks it takes won't come off," says Waudby. "The important thing is that you learn from that, understand why and try not to make the same mistakes again. With one idea that didn't work, we went through a review process on it that led to two new ideas that we're confident will work. So it's not the end of the product, necessarily; it might just be the first failed iteration."

Indeed, DNA Designs' death wasn't in vain. CRUK's trading arm took on the idea and turned it into a new source of income.

Waudby says the methods used by the unit are equally applicable to medium-sized organisations. "If you've got all the basics right and you're refreshing your products regularly, then you're in a space to try something radical," he says. "Although many organisations might not be able to establish an innovation unit, a lot of the principles that we work with are relevant to any organisation."

The sector could do more to give staff time away from the day-to-day routine to investigate and develop new fundraising ideas, he suggests, because innovation is something that charities ignore at their peril.

"Organisations that just expect it to happen might struggle, particularly in the future, because it is becoming increasingly competitive," Waudby says. "The sector has been incredibly innovative, but it is going to face some challenges from outside in the future - and I think the pace of innovation and the pace of new ideas need to pick up."

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