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In our latest Innovation Insider episode, I sat down with Ron Arnold — long-time insurance executive, advisor, and founding partner at boutique consultancy 11Eight — to talk about what really makes innovation stick inside large, complex organisations. And spoiler alert: it’s not what you think.
“The innovation tools are the easy bit. The hard bit is working out how you make those tools work within a corporate context.”
From leading venture investments at IAG to steering transformation efforts across some of Australia’s biggest insurers, Ron’s lived through the war stories of innovation in regulated, risk-averse environments. And he’s clear on one thing: innovation isn’t failing because we lack ideas or tools. It’s failing because we don’t get the setup right.
Innovation Needs Scaffolding
Ron introduces a compelling metaphor — “innovation scaffolding” — as the structure that enables innovation to thrive inside the corporate machine.
“You need a scaffolding within which the innovation is going to work… and that scaffolding has to solve one problem in particular: how does the innovation effort gain traction in a rules-driven, risk-averse organisation?”
This scaffolding is less about stage gates and more about decision rights, authorities, and constraints. It’s about setting up the innovation team to act — fast, autonomously, and safely — without blowing up the core business. And that setup, Ron argues, is often neglected.
“If you don’t get that scaffolding right, you’re going nowhere.”
Choose Your People — and Your Leader — Wisely
Innovation is a people game. And according to Ron, the wrong leader can kill momentum before it starts.
“I’m not a fan of the leader of an innovation function being an innovation professional.”
Instead, he suggests the function should be led by someone with deep internal credibility — someone who knows the business, has access to decision-makers, and can navigate the system.
“If you’ve delivered things for the organisation already, you’re starting from a good base of trust.”
And what kind of team do you need? Ambidextrous, hands-on, scrappy operators who don’t outsource everything and “have a bit of mongrel about them.”
“You want people who treat the money like it’s their own. Scarcity is a good thing. Scarcity drives invention.”
Buy-In Is More Than Lip Service
Senior leadership support is non-negotiable. But it’s got to be real — and sustained.
“You need real buy-in from the top… not just the MD or CEO, but the exec team, the board, senior leaders. And they have to support it with their actions, not block it with their actions.”
That buy-in must also be backed by a clear mandate: is the innovation effort focused on core improvement, new business models, disruption, or something else entirely? Without clarity, teams chase the wrong things — and become easy to defund when the budget crunch hits.
Fund It Like You Mean It
Speaking of funding, Ron pulls no punches.
“If you’re serious about innovation, you need to lock in multi-year budgets. Three years minimum, five is better.”
It’s a tough sell in cost-out environments, but essential if you want innovation to survive leadership changes, economic headwinds, or shifting strategies.
He points to corporate venture capital as a model that often endures because the funding is balance-sheet based — and less exposed to short-term OPEX cuts.
Beware the Operational Trap
One of Ron’s more controversial takes? Innovation shouldn’t always sit within operations — especially if you’re aiming to build something truly new.
“It gets very difficult if you ask the same people who run the existing factory to build a new one.”
Operations is great for incremental improvement, he says. But if you’re tackling new business models, it’s better to separate the function — and resource it with people who think, act, and build differently.
Governance Should Be About Risk — Not Opinions
Finally, we talked governance — a common choke point in big organisations.
Ron’s view is refreshingly simple: good governance is about managing risk, not micromanaging ideas.
“Governance should focus on reputational risk, legal risk, and whether something is immoral or unethical. That’s where veto rights should sit.”
The goal is to enable the innovation team to move quickly, not get tangled in endless loops of opinion-based gatekeeping.
Final Thought: Innovation Is Now a Capability
In Ron’s view, innovation is no longer optional. It’s a capability every modern organisation needs to develop — just like finance, tech, or HR.
“I just can’t see how going forward, not having a focus on it and a capability in it is a recipe for success.”
For insurers, the case is especially clear: data, AI, emerging tech, and changing customer expectations are reshaping the industry. Those that invest in innovation — even in lean times — will be the ones that stay relevant.