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Intro

The vertical integration process is not only cultural and procedural, it's also physical. Large companies have to do a couple of things having to do with innovation. The hardest time to change for a company is when it has a big winner of a product. Our experience over the last couple of years working with EY is there's a remarkable ability to get the ear of the C-suite and get them to reconsider what they're already doing quite successfully to add a new dimension to their thinking that then takes them to the next level.

Announcer

Welcome to the Decoding Innovation podcast series, brought to you by the EY-Nottingham Spirk Innovation Hub, where we explore the innovative technologies, business models and ideas that are shaping the future of industries. During each episode, Mitali Sharma, a principal in the EY-Parthenon Strategy practice, meets with stakeholders at the cutting edge to discuss innovations in their space, challenges they need to overcome and their outlook on the future.

Mitali Sharma

Hello and welcome. I'm your host Mitali Sharma and today's topic is commercialization of innovation, which can be one of the toughest things to do when you're trying to bring a new product to market. To talk to us more about it are two luminaries in the field — John Nottingham, the Cofounder and Copresident of Nottingham Spirk, and Joe Gfoeller, the Director of Investments. Gentlemen, welcome to the show.

John Nottingham

Thank you.

Joe Gfoeller

Thank you.

Sharma

John and Joe, before we get into the heart of our discussion, would you mind sharing with our audience your background and your journey so far? John, if we can start with you?

Nottingham

So, John Spirk and I started Nottingham Spirk right out of college. We turned down Fortune 500 job offers and founded the company in a garage.

Sharma

That’s very interesting. Joe, what about you?

Gfoeller

My background is in finance. It's been a career in investments for some private equity, and then, venture capital. I've known John and John for almost 30 years now and worked with them in different capacities over the years with my role being that of investor in different projects. Then, joined them full time as a director of investments about nine years ago.

Sharma

Thank you for that. John and Joe, if we can start with the basics. Why is it, in your opinion, that so few patents get commercialized?

Nottingham

If you consider all patents issued by the US government, it's pretty well known that only 5% get commercialized. The reason for that is companies typically innovate in silos. They're a little bit tepid about innovations, particularly breakthrough or disruptive innovation. What Nottingham Spirk has done over the years, it has evolved a process that we call vertical innovation. We've actually trademarked that term — vertically integrated innovation. By applying that process, we have created almost 1,400 patents and of those, 95% get commercialized. That's the difference.

Sharma

Why do you think that the commercialization rate is higher for you, versus general patent database?

Nottingham

It's simply creating a culture of innovation, continuous relentless innovation and applying a process whereby, we have all the processes from end-to-end — from the very beginning, applying customer insights; going seamlessly to design, engineering, prototyping, supply chain, cybersecurity and commercialization, and it doesn't stop. That's the difference.

Sharma

Tell us a little bit more about this vertical innovation process.

Nottingham

Well, the vertical innovation process is not only cultural and procedural, it's also physical. We're located in a building where everyone is interacting at all times. Again, it's insights, it's designs, engineering, prototyping and commercialization. It's a seamless process in the building and the building is designed so that people run into each other all day long, and communicate and seamlessly apply this process.

Sharma

Let's talk about Nottingham Spirk more. How did you come up with the idea?

Nottingham

Well, originally, it's pretty organic. John Spirk and I started working together in design school, and we interacted well together. There's synergy. When we graduated, we continued that synergy in a garage and started building a staff. Continuously over the decades, we've been in business and we've evolved this culture of innovation. We've shared it with our partners and our clients.

Sharma

What was the thinking around the entire concept? Did you want to just make the product or did you want to take the product all the way to the market — at first?

Nottingham

We wanted to work with great partners and clients to facilitate the process from end to end, all the way through to the customer and even beyond the customer having insights that get customer feedback once the customer is interacting with that innovation product.

Sharma

Why Cleveland?

Nottingham

Oh, Cleveland's wonderful. We have, it's part of our culture. There're Midwest values. There is a thinking about innovation that is different from the coast, and Cleveland has a legacy of manufacturing and innovation all through its history. So, we think it's a great location to have an innovation company.

Sharma

What kind of people do you hire?

Nottingham

It's important to look at two things — talent and chemistry. We hire the best from all over. We also have an internship program. We're located on a college campus. So, we can have interns from engineering schools, design schools and business schools, where “we try before we buy” to see if very talented people can also help the chemistry that'll evolve our culture.

Sharma

Is there a certain thing that you look for when you are hiring a person which might be different than what maybe a Fortune 500 looks at?

Nottingham

You know, it's funny. We look at what do they do in their spare time. We find that these engineers in their spare time are working on their cars. Or they're building things, or they're doing something. That gives you an idea of passion, gives you an idea of their personality and really how they fit all the way around.

Sharma

When I think of Nottingham Spirk, I think of your expertise in both design and engineering. How do you bring those two talents to the market and how do you think about it?

Nottingham

Engineering design and insights are very particular point of view with insights. Typically, in many corporate areas, designers and engineers don't get along. Designers are thought of as creative and artistic, and so forth, whereas engineers are practical and pragmatic. But yeah. Our place, our designers, our engineers and our insights department all get along famously. They love each other and they support each other. They celebrate their differences on a daily basis. That intimate communication is what makes our culture special.

Sharma

John, you are located in a remarkable building, which I think adds to the aesthetics of the development process. Tell us a little bit more about that.

Nottingham

When you're planning an innovation company, you don't want an ordinary building. You want something inspirational. You want something that relates to your process. So, when we saw this building, it reminded us of something. We had the fortune of going through Pixar studios when they were building their headquarters. Their headquarters building is called the Steve Jobs Building. If you read about that building, Steve Jobs actually planned it, so that it had a central atrium and stacked floors around the atrium. It was vertically integrated. One of the few companies we've seen that really are vertically integrated. It's designed so people interact with each other during the day. If you look around me, we have a central atrium, stacked floors and we're designed so that people interact all day. It's a church. It was a church. It was Christian Science Church, built in 1930. Church architecture is designed for inspiration, designed for the members to think beyond themselves. I think in an innovation culture, you want to do the same thing. So, I think our headquarters is really part of our culture and our clients love it. When they come in here, they can't believe what they see.

Sharma

What we see behind you, is a part of that?

Nottingham

This is our rotunda. Just to give you a sense of scale, our rotunda is bigger in diameter than the US Capitol rotunda. And so, it's a central atrium. Everybody relates to it. It's five floors. So, we're up and down all over the place. This is how we spend our day.

Sharma

Just to tell the audience, EY also has some space. So, we have had the fortune of visiting this remarkable building with its beautifully restored architecture. Changing gears a little bit, John, if we can talk a little bit about how you think of a project — from its inception to when it gets greenlit? Can you talk to our audience more about that?

Nottingham

Once we take on a project, an innovation, we have a process of vetting it very carefully before we jump into it. It involves insights, it involves strategy and market planning. But once we hit on a project, we look at it and plan it all the way to commercialization. We don't start until we think that we have a very good idea that we're going to commercialize it within a very short period of time. That's how we address every project we enter into.

Sharma

Could you give us an example of that?

Nottingham

So, before we take on a project, we vet the ideas very carefully. We vet them. We want big ideas, not small ideas. We don't want fads. We want sustainability. We want to engage our clients. We want to engage our customers. We have a strategy that looks toward the long term and the immediate term. Once we decide on a project, we plan it that this is a sustainable product that will start, from the very beginning and take it all the way through to commercialization. It's a very interesting process all the way through.

Sharma

You talked about that in the vertical innovation process perspective. Tell us a little bit about your investment thesis. Is it stage gated, or do you think about funding right up front and take it all the way through?

Nottingham

Well, once we vet a project, we get all our stakeholders and we fund it. We have planning funded all the way to commercialization, so that it is a relentless process all the way through. Once we start, we don't want to stop. We give an analogy of a sport utility vehicle (SUV) starting on solid ground and going through quicksand to the solid ground of commercialization. You don't want that SUV to stop, or else, it'll sink into the quicksand. So, you want quick decisions. You want funding. You want all of the practitioners from insights, design, engineering, prototyping, supply chain — everyone in the SUV. That same team goes all the way through to commercialization. It's relentless and it's very fast.

Sharma

When you are working on a project internally, versus working with a partner like a Fortune 500 company, is that process the same or do you have to modify it?

Nottingham

The innovation process is fascinating because it's really the same. Whether it's through private equity or Fortune 500 company or an independent project, you still have to have the team, still have to have the funding, you still have to have a great idea that has big potential. So, there's a lot of similarities.

Sharma

You've been working with companies large and small for the last 50 years. When you think about Fortune 500 clients and maybe even larger established clients, what has been, in your opinion, the biggest hurdle for those companies to do it on their own?

Nottingham

Well, I think that particularly large companies have to do a couple of things having to do with innovation. First of all, they need to spend the majority of their innovation dollars on their core products and their core business. But they also need to discipline themselves to think at the same time, adjacent innovation and breakthrough — sometimes called disruptive innovation — at the same time. What we tend to do is tend to be on the adjacent and disruptive breakthrough side, not as much on the core side. That balance is very effective we found. Our clients love it. So, a good example is an example of the powered toothbrush market. Several years ago, Nottingham Spirk independently looked at the powered toothbrush market and at the time, a powered toothbrush was only 1% of the market — mostly because it was US$100 Sonicare-type toothbrushes. We independently saw the opportunity to do a battery toothbrush for US$5 retail. Never been done. But we did it independently. We funded it with private equity. We created a product we called the Spinbrush. We independently created the Spinbrush toothbrush. We vertically, used a vertical innovation process from start, all the way through to commercialization and launched the product independently. It was a phenomenon. It became the largest-selling powered toothbrush of all time. It was eventually acquired by Procter and Gamble (P&G) and put the crest name on it.

Sharma

So, that's a very interesting story. Tell us about the thought process of how you came up with that US$5 price and was that an endpoint that you aimed for, or was it something that you eventually came to after you had developed the toothbrush?

Nottingham

Well, we did our market research. We found that on the manual side, there were some new entries in the manual toothbrush market that hit the US$5 mass market price.

Sharma

Okay.

Nottingham

So, we said, “Look. Manual toothbrushes are selling for US$5 retail. Imagine if you do a powered toothbrush for US$5 retail.” Now, that's a trick because it uses two alkaline AA batteries, a motor, a switch, two moving nylon heads in a package and we had to land it for US$1.25 factory cost to retail it for US$5, because the retailer wanted to spend US$2.5 to market it for US$5 retail. They sold hundreds and hundreds of millions of them.

Sharma

So, when did P&G come into the picture?

Nottingham

P&G couldn't ignore the fact that we were rising in the marketplace. Matter of fact, remember that 1% penetration with spinbrush, you got 30%. So, one thing led to another. We started talking and they asked to acquire us. We said, “Okay” and gave our investors a big return on their investment.

Sharma

Talk to us a little bit about why you picked toothbrush, because initially when we were talking, you said you select the project very carefully? Then, once you've selected it, then you bring the power of vertical innovation and make sure that there's a pathway to commercialization. That's why you've got this result of 95% commercialization rate, versus the 5%. So, talk to us a little bit about why you selected the toothbrush.

Nottingham

Well, we're always looking at market trends first of all. The nice thing about toothbrush is everybody — young, old, rich, poor, doesn't matter — everybody brushes their teeth every day. So, that is a huge market. Billions of people are brushing their teeth. So, it was a big idea and a big market. We thought that if we could bring a true innovation, a great product for an unbelievably low price, we had a winner and we did.

Sharma

So now, we've talked about when you do take the product to market and you put the power of Nottingham Spirk, power of the vertical innovation behind it, and actually commercialize and make it successful. When do you decide to actually apply brakes to a project?

Nottingham

Remember, our view of product development is relentless and continuous. We're not applying brakes. We apply pivots. So, as we go through, the market may change even in the very short time that we're doing this. Typically, our projects are 12 to 18 months, from beginning to commercialization. The market might change. Or you might have something that affects the market. So, you pivot and we've done that many times. But you don't stop. You keep on going all the way through because you see, you've identified a market. You've identified a trend. You've identified an opportunity, and the opportunity may slightly evolve and change, but you evolve and change with it.

Sharma

So, it's an iterative process?

Nottingham

Yes.

Sharma

Interesting. John, you work with a lot of different kinds of companies. What is a perfect partner for you?

Nottingham

Wow! A perfect partner is a partner that enjoys the ride, is open to possibilities, and is flexible and communicative. We have some wonderful partnerships with client companies and there's nothing like innovation that gets people all excited. It's great to get C-suite engagement and strategically have the C-suite buy into the process. That's why they love coming here to our facility. I think they're energized by it. You want to give, you want everybody to be on the same page, so that when we have this ride, we’re all in it together. We challenge them to make decisions in 24 to 48 hours because if we pause too long, the SUV sinks into the quicksand.

Sharma

So, this is very interesting. You are saying momentum is very important.

Nottingham

Momentum is very important. Communication is very important. Decision-making is very important. That's why I say it's relentless and yet, the momentum has to keep on going. You can't stop. Once you start, you don't stop until you reach commercialization. Now, what's commercialization? It's a soft launch. It doesn't have to be a national launch. You can have a soft launch in a region. You can have a soft launch with, if it's a retail product, with a few retailers. But you can control the launch that if there are any issues, you could tweak them until you get it right and then you scale it rapidly.

Sharma

John and Joe, for both of you, why is it sometimes hard for established companies to maybe look at their portfolio, and innovate and bring something different to the market?

Gfoeller

It's not an answer that would at first occur to most people. What we've noticed is that sometimes, the hardest time to change for companies is when it has a big winner of a product. If you were to go to a major truck manufacturer and it's selling a million pickup trucks a year and making a great profit margin on those trucks, and you want them and you said, “When was the last time that you did value engineering on that truck just to ask yourself questions like why does it, the bill of materials costs what it costs? Why do I make it the way I make it on the assembly line?” The people that make that truck would say, “You know what? Those are interesting questions. I haven't got time for these questions. I'm selling trucks. I have a backlog of orders. Please get back to me when I'm not selling these trucks anymore.” One important fact — the best time for them to innovate is when they can take that lead they've established with that successful vehicle and build on it by making it even better in terms of cost, in terms of the way they make the product to make it a better product, in terms of features they add. That would delight their customer. So, what we're really looking for is a customer that's willing to say like Jacuzzi was for example. We began to work with them. We invented the hot tub. We created the industry. We have leading market share. We have the best tubs in the marketplace. And yes, we're willing to allow you, Nottingham Spirk, as our partner, because we're equity owners in the company, with the private equity that controls the company. We're willing and eager to have you tear down the tubs that we are currently selling so successfully, and think of a better way to make them. Think of a better way to, better parts to put into them that will make the tubs more efficient, or energy efficient, that’s something that's critical today. And that will add features that will delight the customer by making it a more pleasurable experience to use a hot tub and making cleaning, for example, less difficult. We've done all those things in the last almost four years now that we've owned the company and as a result, we've almost doubled our market share — from what was already market-leading share to really a dominant position in the marketplace now because the industry leader embraced innovation, even as they were already enjoying quite a bit of success.

Sharma

Joe, you just mentioned taking an equity position in a client or in a project that you're working with. Tell us more about the kind of financing or investment vehicles that you bring to the table when you start working with customers or clients?

Gfoeller

Certainly, Mitali. I will differentiate into two different types of clients. On the startup side, we're working with the venture capital model. Our typical use case has been to work with family offices. We have nothing against working with the venture capital firms, but we've tended to work with family offices because we're a family-owned business, which means our time horizon is much longer. We're prepared to be patient. We do a lot of market analysis insights, as John noted, on the front end and really what matters to us the most is, when we find a product that we think can be a significant player in a domestic market of a billion dollars or more, at a gross margin of 50% or higher — typically, in a situation where we're selling both a durable product and a consumable. So, there's a recurring revenue stream with high quality of revenue and earnings. We’ll get excited about an opportunity like that. They’re very rare, but we'll get excited by an opportunity like that, put a lot of work in the front end to make sure that we can productize that technology and then, after we've convinced ourselves that we can truly productize the technology, then, we'll bring family offices in, which, like us, are running on a generational basis. They're not thinking about the two- or three- or four-year investment cycle. They're thinking about the next generation of their family and how to build family wealth over a decade or more. That's great for us because it often, as John said, requires pivoting to get the technology right for the marketplace. You might have to adjust the product that you're making, adjust its pricing, adjust the channels that you use to get to market. These are all considerations that you try to do the best job possible with on the front end. But we're not perfect. So, we miss things. We get things wrong and then, we have to do the course corrections, or the market changes on us, economic conditions change. We have to think about, again, the market and how we successfully compete in the market. That would be the venture side. On the private equity side, we're developing strategies here now to work with private equity groups that really honor innovation. There, our partnership with EY, is I think going to be crucial because what we're doing is taking our product capability, our ability to dramatically impact the cost of making a product, as well as delighting the customer with an innovative product, and combining it with the EY strategic consulting capability critical to have the right insights. We have to have that and then, the supply chain expertise that EY brings in it. The world, in the last couple of years, has become really sensitized to the risks and opportunities opposed by the supply chain. When we bring EY in these critical roles, I think it makes for a very compelling partnership opportunity for private equity, certainly in the case of Jacuzzi, which is really our first major effort, I think the first of many. In private equity, this ability to take the long view and to innovate already-profitable products in a way that disrupts an industry that a company is already dominating, points the way to, I think, this is a very successful strategy for us and EY in the future.

Sharma

Joe, you talked about family-owned businesses needing and their ability to have patience when they bring a product to market. In a public company, that is a luxury they sometimes don't have because they have investor pressures. So, tell us a little about the thought process that needs to happen in that situation and how you enable that when they start working with you.

Gfoeller

I think in the case of public companies, it's a different time horizon. And yet, we still have to counsel patience. For that to happen, one has to have C-suite engagement, right? The CEO, COO and CFO level, there must be buy-in, right? The first thing one encounters with a public company is we'd love to innovate, but we're too busy making money on the products that have made our name, our reputation in the marketplace and frankly, everybody's budget is spent for the next 12 months, right? So, we'll look at it two years from now, three years from now. And we're always looking for and I think, having the convening power of EY, which is such a trusted brand when it comes to strategy consulting and supply chain consulting. That convening power, where EY can literally counsel the C-suite to say, “No. This is a new opportunity that we've brought you. You need to find budget, you need to make time for this now.” Our experience over the last couple of years working with EY is there's a remarkable ability in partnership with you to get the ear of the C-suite and get them to reconsider what they're already doing quite successfully, to add a new dimension to their thinking that then takes them to the next level. I think without mentioning names, we're working on several projects now that as they succeed and break from what we're doing, into being sold in the marketplace. I think those examples will create momentum, and nourish the momentum for our partnership to do more and more of this work because, I'm thinking of several CEOs, COOs and CFOs that we've met. Once they kind of get used to a modification and they're thinking, they realize that even within the context of the pressures that come with being a public health company, disruptive innovation is possible and very desirable. You simply have to make space for it in a way, within the way that you manage the company.

Sharma

John, a little bit ago you talked about pivoting during the course of a project. When does that pivot happen? Is it initially, all through the process, toward the end and what's been your experience there?

Nottingham

Let me just tell you a story about a project that we had involving men's and teenage body spray. Deodorant spreads. We first started with insights. We talked to the customers and they expressed an interest of carrying the body spray with them — portable. But that the aerosol containers were too big. So, we said, “Well, how big should it be?” And they said the size of a lip balm container. Well, at the time, there's never been an aerosol that small. So, we literally had to invent it. We had to invent it from design and engineering, and literally prototyping it by hand to prove that it could work. Once we did, we went back to the customer and said, “Okay. Here it is. What would you pay?” And the customer said no more than US$0.99. Well, that means we had to have a factory cost of US$0.25. We went back and value engineered it, and did indeed do that. So, so far so good. Then, we go to our soft launch. Now, the soft launch was four of these in a multipack for US$4. Well, we launched it in a specific set of retailers and we put it right next to the aerosols that were US$4 — the larger cans. It got lost in the shuffle. So, we pivoted. We said, “Okay. They said US$0.99. Let's do a single pack for $0.99 in a blister pack and put it where the other body sprays aren't.” We watched that again in a soft launch and it was a huge success, particularly in the UK. That way we knew we had something and then we could scale it up. We had to pivot.

Sharma

Joe, tell us a little bit about the funding mechanism and where it gives you the most challenges? Is it at the beginning of the process or somewhere in between or toward the end?

Gfoeller

There's an old saying about real estate that there's only three issues to concern real estate — location, location, location. I think when it comes to venture, it's technology, technology, technology. If you have a great idea, which as a former venture capitalist, I can say we have the best capability I think in the country to be able to judge whether an idea is a great idea and in many cases, if you can vet that. And including your vetting, the idea that you have to have this billion-dollar domestic market that's accessible with a gross margin or the 50%, if you can get that done and then, show that the technology can be productized successfully with a durable and consumable, you're probably going to have a winner. The odds go way up. What I have here, what we have here now with EY in particular at Nottingham Spirk, is I think a unique ability to vet a technology before we ever go to investors for funding. We have 60 plus brilliant industrial designers, market analysts, engineers and fabricators, prototype builders in-house. We can build virtually anything from start to finish in-house to make the first million or 10 million or 100 million, as we did in the case of the body spray. That ability to know that we can make it, to have a pretty good sense of how it would be made and the cost associated with the fully costed bill of materials in making that, what the design for manufacturing would look like by the time we're done, it is the dream of a venture capitalist or private equity executive. There is no such capability in-house today, I would wager, in any venture capital firm and very few private equity operations. Then, you combine that with the strategic analysis capability of EY, the tremendous world-leading expertise in supply chain and analytics of all types in logistics management and then, all of back office of financing, tax and trade considerations. We put all that together. When we go to investors, we can speak with great authority about the potential for an opportunity. That, in turn, reduces perceived risk in the mind of investors, and that makes what is always a hard job, an easier job to accomplish on venture. In private equity, all this is even more true, right? Because the private equity industry, I think, prides itself in being able to do a fair amount of this due diligence in-house. But venture capitalists are like private equity investors in that, they’re financial engineers — not electrical engineers, mechanical engineers or chemical engineers. So, at the end of the day, they're typically relying on one person — the man or woman who would be CEO of this business — to provide with all these answers, which means you're hoping that somebody is Bill Gates or Steve Jobs and the good Lord didn't make too many of those, right? So, that's kind of a big bet. What we do is we say, “Yes. We want the best possible management that we can get and we'll look for that next Bill Gates or Steve Jobs. But we're going to build a team around them composed of EY professionals and Nottingham Spirk professionals, to take as much of that risk out of the equation for their benefit. The benefit of all the investors.” So, it's always hard. But I think our unique capabilities make a hard job a lot easier.

Sharma

John and Joe, you've had a tremendous 50-year run. As you think about the next 50 years, what are things that are different from the past — for you personally, for Nottingham Spirk — and what would be your advice to the clients that you're going to be working with and startups going forward?

Nottingham

First of all, it’s not like there's one big change. There's always change. So, throughout our history, we have had to react to change, embrace change, look at new trends, pivot. And so, it's a constant thing. It's relentless. Now, having said that, we now have this ecosystem with EY, with EY partners, with EY clients and we are global now. There's no limit to what we can do because I don't know that there's anybody on the planet that has the ecosystem and the capabilities of all these practitioners in the ecosystem. We can do almost anything. Joe, what would you say?

Gfoeller

I would say the speed of innovation has picked up. And because of the globalization of everything, the urgency of innovation has increased. I think when I began as a venture capitalist a long time ago, we thought in terms of domestic economies. You never really think that much about what the Chinese were doing, what was happening in India, what Germany might be thinking about in terms of Western Europe. Now, you think about everything in terms of a global market by and large. Then, the complexity of it has all increased because of this merger of the cyberworld into the tangible world, right? When I first began to work on venture, nobody thought, John, when you and I were doing consumer products, started with consumer products, nobody thought about toys that would be Internet of Things-enabled (IoT-enabled) or kitchen appliances or bathroom appliances that would be IoT-enabled. Now, the Internet of Things, is becoming the internet of almost all things. So, everything we do virtually, that has an electrical current running through it, must with its battery or plug, must be thought about it from an IoT-enablement point of view. That's where, at one, I think, critical instance, our alliance partnership with EY comes in because the great expertise that EY can bring through the many engagements that it’s already had with IoT enablement, are allowing us to take our devices, which are already beautifully designed and turn them into smart devices. Then, something new that EY and we are working on together that I think is a good example of us together embracing the future is now bringing cybersecurity to the party because, like a lot of things in my experience in tech, there's a rush to IoT enablement with some of the loose ends not necessarily being all that well dealt with on the front end and one of the big things now is cybersecurity. If everything is connected, how do I make sure my data privacy is maintained? How do I make sure that my car, my home is cybersecure? There aren't great answers to that right now, but great answers are being developed. As they are developed, I think because of the alliance that we have with EY, EY-NS will be at the forefront of that cybersecurity capability, which is very exciting.

Sharma

Indeed. So, as you think about the future, what keeps you guys up at night?

Gfoeller

I think the opportunity, frankly. There's so much that we can do together between EY and NS, but you can't boil the ocean, as the old saying goes. You have to eat the elephant one bite at a time. So, I think even though we're both growing steadily, even rapidly, even though the partnership is working out as well as it is, as a leader, one has to make “resource allocation” decisions and those can be challenging at times. So, I think that the thing I think about the most is what do we do first? What do we do second? What do we do third? And then, once having made those decisions, what are the implications on our strategy in terms of future decisions that we get the opportunity to make? So, it's a nice problem to have. I'll admit that. But it's going to be a challenge I think because the partnership between Ernst & Young LLP and Nottingham Spirk really is a great example of one plus one equaling three or even four. Sometimes, you have to be more careful with growth than anything else because growth poses its own opportunities and challenges.

Sharma

John and Joe, you’ve talked a lot about your alliance with EY. What do you think that you bring to the table with this alliance that nobody else has?

Nottingham

Well, every consulting company now has an innovation center, but no consulting company has what EY has and what Nottingham Spirk has, where you have the chemistry between a great consulting company and a great product development company. When clients come in, they are simply amazed at what they can have done — between the strategy and an end-to-end innovation process that will produce results in 12 to 18 months.

Sharma

John and Joe, thank you for your time today and I really appreciate the experiences that you've shared with us.

Nottingham

Thank you.

Gfoeller

Thank you.

Announcer

The Decoding Innovation podcast series is a limited production of the EY-Nottingham Spirk Innovation Hub, based in Cleveland, Ohio. For more information, visit our website at ey.com/decodinginnovation. If you enjoyed this podcast, please subscribe. Leave a review wherever you get your podcasts and be sure to spread the word.

 

The views of third parties set out in this podcast are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.

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