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Faced with falling market demand as organisations switch focus from having their own websites to connecting to customers via social media, the 20-year-old .uk domain registry Nominet used a three-pronged approach to innovation.
“The model, adapted from one developed by Silicon Valley’s Singularity University advocates optimising, augmenting and mutating innovation simultaneously,” Russell Haworth, CEO of Nominet told the Leaders in Tech Summit during London Tech Week.
“Innovation with product development is tremendously important, but 19 out of 20 product innovations fail, or only 5% succeed,” he said, adding that while product innovation has always been challenging, it is even more challenging now than it was 20 years ago because of the rapid pace of technological change.
“There is a lot of media attention paid to tech startups, but that is not the whole picture because there are lots of legacy and established businesses that can, do and must innovate,” said Haworth. “While innovation is important to early-stage businesses, it is absolutely necessary for larger legacy businesses.”
However, he said many established business make the mistake of taking a “fairly homogenous approach” to innovation. “Instead, we focused on optimising, augmenting and mutating innovation. And while each of these on its own is difficult, they have to be done in parallel. And to do that with the same degree of effort, we discovered requires a different set of skills.”
Reflecting on Nominet’s history, Haworth said the organisation had been established to run the .uk domain names and to keep the domain safe and secure, but the organisation has since become part of the UK’s critical national infrastructure.
“We provide invisible networks that allow people to connect from a .uk domain to a website, so while we are always in the background, we are important to the UK’s internet infrastructure, processing billions of DNS [domain name system] queries for 13 million .uk domains every day,” he said.
Facebook and other social media firms, however, provide online platforms that offer a viable alternative to having a website, which is a threat to Nominet’s core business.
“At the same time, there are many more domains like .london in circulation now, with such alternatives to .uk increasing from just 11 a few years ago to more than 300, putting Nominet at even greater risk of being a ‘one trick pony’ as the only organisation absolutely reliant on the .uk domain.”
Embracing the first element of its innovation model, Nominet started on the optimising innovation track, which Haworth said the majority of legacy organisations tend to do when they think about innovation.
“A razor manufacturer, for example, might launch a razor with an extra blade – which is optimising innovation. So we at Nominet had to find what our ‘extra blade’ might be,” he said.
As a result, Nominet decided to capitalise on its infrastructure providing capability to offer infrastructure as a service to other domains. “Every organisation needs a back-end to run their domain to make sure that it resolves, so we are now providing that service.”
While this move was necessary, Haworth said it was not sufficient. “We need to move beyond the optimising track, so we looked at the augmenting innovation track, which typically involves taking a fairly big technological swing and think about where the business can be extended beyond short-term incremental innovation.”
Managing critical national infrastructure
The answer, he said, came from recognising that Nominet effectively manages critical national infrastructure.
“We manage the domain name system, which is essentially a protocol that enables the internet to work, and as such it is also used by cyber criminals, which provides an opportunity for Nominet to apply its expertise in managing its own networks to manage external networks and keep them safe on behalf of clients,” said Haworth.
To capitalise on this opportunity, he said Nominet invested heavily in technology and developed its own DNS deep packet threat intelligence software, known as Nominet’s NTX Platform, which has been deployed by governments and large enterprises in Europe, the US and the Middle East.
“In fact, we are fortunate to be part of the UK National Cyber Security Centre’s [NCSC] Active Cyber Defence programme aimed at keeping public sector networks across the country safe and secure,” said Haworth, which has led to the establishment of Nominet’s cyber security business.
The third element of Nominet’s innovation model – mutating innovation – is about “moonshot” innovation that looks far beyond short-term revenue opportunities.
“It is really important to think about the massive technology shifts that are going to emerge in the next five years and put smart people behind that to think about the dynamics of the market,” said Haworth.
Read more about innovation
- The long-awaited UK government Innovation Strategy document includes evolving use of data, eradicating legacy and seconding senior tech staff to the private sector.
- Juan Villamil, director of enterprise infrastructure and production operations at DWP Digital, discusses how the Department for Work and Pensions tests out new tech ideas.
- UK data privacy watchdog is increasingly gearing up to support innovation to ensure developers of tech and digital services do not lose society’s trust.
As part of this innovation track, he said Nominet has a team of PhDs working on some “interesting problems”, including looking at how 5G spectrum can be shared dynamically and the security of the internet of things (IoT).
“IoT is obviously going to be very important in the future, and we are focusing particularly on IoT in the context of autonomous vehicles because we think that’s a big problem to solve – and that there’s an opportunity there for Nominet.”
In closing, Haworth said that looking at the three elements of the innovation model, technology would appear to be at the heart of innovation. However, he said a big part of challenge is around culture, not technology. “You need to create a strong [innovation] culture in the organisation that will otherwise tend to resist change to get people to align behind a greater ambition on these three elements of innovation.”
Again, Haworth said there are three key elements to achieving an innovation culture. First, is focusing on the organisation’s employee proposition to attract talent, which Nominet has done by enabling an “agile working environment” and emphasising its “profit with a purpose” status, which means profits are used for public benefit.
The second element is around communication about Nominet’s “Project 2020” which is a 1,000-day plan to meet business growth targets with 100-day sprints in which every employee is tasked with focusing on achieving three objectives to engage them in the journey to innovation.
And the third element, said Haworth, is around accountability. “In addition to aligning compensation systems and business focus behind the drive to innovation, we’ve had to make sure that we have a ‘one Nominet story’ so that culturally we are all behind the same goal.
“This approach is not easy,” he said. “But those that manage to pull it off will be the champions of innovation in the future.”