The One Thing That Will Kill An Innovation And What You Can Do To Avoid It

How not to repeat the mistakes that led to Theranos and Enron.

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When most innovators pitch what they think is the next brilliant innovation, I’m shocked by how many of the innovators will make what sound like extreme claims without taking take the time to fact-check. 

fact versus fake lightbulbs

While fact-checking is most commonly applied to journalism. There have been many public reveals where a newspaper or magazine failed to fact-check a story such as the New York Times and Jayson Blair and who could forget The New Republic and Stephen Glass

So egregious are these two examples that the stories behind the fraud became movies (“A Fragile Trust: Plagiarism, Power, and Jayson Blair at the New York Times” and “Shattered Glass”). 

I’m proposing that fact-checking can and should apply to innovation.

The Risk From Not Fact-Checking

In both cases, the journalist straight out plagiarized or made-up stories. A failure by their publication to fact-check resulted in them missing the ruse. There are similar parallels to recent high-profile failures in innovation. Failing to fact-check the innovation behind Theranos has resulted in bankruptcy, humiliation to several high-profile investors (e.g. former Secretary of States George Shultz and Henry Kissinger along with VC Tim Draper at Draper Fisher Jurvetson (DFJ)), while the Theranos leadership faces fraud charges. 

To avoid the embarrassment of getting it wrong in my writing, podcast, and innovations, I will sometimes hire fact-checkers. My eyes were open to the impact and benefit fact-checking could have during the writing of my book, Beyond The Obvious

My Experience With Fact-Checking My Book

When I was nearing the completion of my manuscript in late 2010 and early 2011, I was also the CTO at Hewlett-Packard. When drafting stories to add depth to the book, I realized that some stories I would love to tell I couldn't because of non-disclosure agreements. 

How was I going to ensure that I didn’t accidentally include some detail or story that was legally barred from being shared? My publisher wasn’t much help, as they didn’t see it as their responsibility. 

My solution was to ask my agent to find me the best fact-checker, which he did. The fact-checker I chose to work with was a fact-checker at one of the leading newspapers. At first, I thought it was a frivolous cost that I was funding out of my pocket but, I am a “belt and suspenders” kind of guy. 

I shipped off the draft version of the manuscript and instructed her that only items that could be 100% independently verified with public information could be included in the book. And off she went. It wasn’t long before the benefit of a fact-checker became clear.

Fact-Checking The Apollo 13 Story

The fact-checker sent me a one-line email question related to a story I included in the book about Apollo 13. 

During the Apollo 13 mission, where there was an explosion on the spacecraft and the mission became one of bringing the astronauts home safely. To achieve this, the NASA team had to come together and innovate solutions under intense time pressures. The particular story was about crafting an air scrubber filter for the lunar module. As a result of the explosion on Apollo 13, they transformed the lunar module into a lifeboat. However, the lunar module wasn’t designed to provide life support for three astronauts, who were producing more carbon monoxide than the two astronauts the module was designed to support. To remove the build-up of this dangerous gas, the ad-hoc scrubber filter had to use items they had with them and time was the innovation constraint. 

“You wrote the Apollo 13 story based on the movie – correct?” 

The movie in question was “Apollo 13” starring Tom Hanks. I thought about the question and replied, “Not sure. Why?”

“The movie listed a rag as one item used. I confirmed with NASA that it was a sock. I’ve made the edit.” 

A rag versus a sock! Does that level of detail really matter? 

For writing and innovation, the answer is YES. 

The fact-checker applied the same level of detail and verification to the entire book and was worth every penny paid. Since then, I always have a fact-checker as part of my team when working on my books and other significant writing projects. I’ve also now expanded it to include fact-checking innovations before I do any endorsements.

Is Fact-Checking Innovation The Same As Due-Diligence?

Some will look at the term fact-checking, and assume that “due diligence” is the same thing. They are not the same.

I have been a member of teams and have also led many due diligence efforts during my executive career. It is a crucial step in important transactions, such as acquisitions and, joint-ventures.

The fundamental flaw in due diligence is — bias and expertise. The team performing the due diligence is part of the team behind the transaction and their aim is to say “yes” to the deal. Therefore, the bar is low. And let’s not overlook that the purpose of acquiring or partnering with a company is to gain the expertise they do not have, which means the team doing the due diligence lacks the expertise to fact-check the innovation they gain from the transaction.

What is the Aim of Fact-Checking Innovation? 

The aim of fact-checking innovation is to validate all claims, promises, and projections made about an innovation. In the excitement, inventors and leaders (especially in Silicon Valley) can get caught up and express claims that are not technically workable, or sometimes, are just not true.

The fact-checking process, just as they do it for journalism, it is to ensure everyone involved, including potential investors, partners, and supporters, clearly understands what they know and what is unknown. 

How Do You Fact-Check Innovation?  

A reliable fact-checking of innovation requires two elements: completeness and expertise

Completeness

Just as fact-checking for publication looks at every statement/claim/quote made in the article or book, an innovation fact checker is to fact check EVERY claim made internally (presentations, notes, briefings, etc) and externally (confidential and non-confidential information shared with outsiders of the organization).

Leveraged Experts 

Journalistic fact-checkers leverage outside experts to validate (e.g. NASA and the sock) each statement or claim made in an article or publication. Innovation fact-checkers do the same with experts from industry, government, and academia. The fact-checker is looking to identify claims as validated, and not validated. If innovation is an exceptional forward-looking innovation, there will be claims that cannot be validated. The parties involved should monitor this list of not validated claims for progress as they develop the innovation. 

What Does An Innovation Fact-Checker NOT do? 

While we’ve discussed what they should do, it is just as important to understand what they do not do. 

A journalistic fact-checker does not pass judgment if a book will be a New York Times Best Seller. of if an article will get a million views. 

Innovation fact-checkers do not pass judgment on the market potential for the innovation. That is to be done by the investors, backers, and partners. The output from the fact-checking process is one of many inputs investors should consider before deciding to invest/support an innovation. 

Next Step on Fact-Checking

To avoid the next Theranos or Enron, investors and backers should secure the services of an outside independent innovation fact-checker who has proven experience, expertise, and resources to fact-check internal and external claims with well-qualified experts. 

This allows everyone to go into the relationship with eyes wide open and with full transparency, thus avoiding another Theranos, Enron, and let’s not overlook Volkswagen, who made unvalidated claims of an advanced “clean diesel” exhaust innovation that turned out to be a fraud. 

Conclusion

It is not uncommon to have an innovation fail and fact-checking by itself will not guarantee success. Fact-checking will validate the claims made by the team and allow investors and backers to understand what they are backing and the risk involved.

As Ronald Reagan said, “Trust but verify”. 

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