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E125 | How To Drive Innovation Inside Your Organisation with Pete Newell

Are you wondering how your business can innovate better? Are you confusing methodologies and activities with the process of actually keeping and creating a pipeline of innovation? 

Then don’t miss this hugely insightful episode all about innovation, with the internationally recognised innovation expert, Pete Newell. 

Pete finished his 32-year military career with a 3-year tour running the US Army’s skunkworks – or in layman’s terms, he was the Director of the US Army’s Rapid Equipping Force (REF). He had a remit to go and find problems and solve them, using commercial technology to solve a battlefield problem. 

Out of the 300 problems he was tasked with solving, he found resolutions for 20 of them. An incredible hit rate.

When he realised he couldn’t stay in that role indefinitely, Pete retired from the military to found BMNT, an innovation consultancy and early-stage technology incubator that helps solve some of the hardest real-world problems in US national security, state and local governments, and beyond. 

Pete is also founder and co-author, with Lean Startup founder Steve Blank, of Hacking for Defense (H4D)®, an academic programme originally taught at Stanford University. 

“[This is] the only class they take in their academic career that allows them to use everything they use in university or network they build to work on a real problem with real people to give them real experience that leads to real jobs.”

So to find out what the fundamental things are inside an organisation that you need to do to drive innovation in your business, don’t miss this fantastic conversation. 

On today’s podcast:

  • The work of BMNT
  • Rapid Equipping Force (REF)
  • Hacking for Defence (H4D)®
  • H4X® – the operating system
  • When Silicon Valley met the military
  • The innovation pipeline

Driving Innovation At Speed with Pete Newell

Pete Newell is the CEO and founder of BMNT. BMNT is involved in building enterprise level innovation practices within large organisations, and creating a platform that both allows them to incubate new companies and accelerate their entry into the market.

“A lot of the work we do is focused on the future space and helping large government organisations actually work better with the commercial world and deliver better services faster or for the benefit of the folks in a country.” 

BMNT achieves this thanks to the operating system for innovation they’ve created – a framework called H4X®, that drives innovation at speed. 

H4X® is an adaptation of the problem curation techniques honed on the battlefields of Iraq and Afghanistan, combined with the best practices employed by successful Silicon Valley startups. 

The result, says Pete, “is a disciplined, evidence-based, data-driven process for connecting innovation activities into an accountable system that delivers solutions and overcome obstacles to innovation”.

Rapid Equipping Force (REF)

How does Pete know what the successful problem curation techniques in Iraq and Afghanistan were?

Prior to founding BMNT, Pete served as the Director of the US Army’s Rapid Equipping Force (REF). Reporting directly to the senior leadership of the Army, he was charged with rapidly finding, integrating, and employing solutions to emerging problems faced by soldiers on the battlefield. 

From 2010 to 2013, Pete led the REF in the investment of over $1.4 billion in efforts designed to counter the effects of improvised explosive devices, reduce small units exposure to suicide bombers and rocket attacks and to reduce their reliance on long resupply chains. 

“Over a three year period, I worked on everything from underground robotics to unmanned aerial systems to traumatic brain injury analysis. the real challenge is [getting governments] to understand their own problems, and extracting them, and articulating them in a manner that other people could understand.”

Previously, the military had not spent time trying to understand the problem, they’d jumped straight into fixing the obvious issue. Pete professionalised the methodology of problem recruitment, curation and prioritisation in order to innovate effectively. 

He spent 99% of the time understanding the problem he was trying to solve, before thinking of how to solve it. 

“We started 360 projects and delivered 115 unique solutions to the battlefield, 20 of which eventually became long term programmes. So from an investor’s standpoint, we were rock stars. I took a $120 million budget and turned it into $3 billion worth of investment.”


Becoming an entrepreneur isn’t something you can study or learn from a book or watch on TV, says Pete. The mentality of a successful entrepreneur is to learn as you do it. 

“And we realised that the process that I had built on a battlefield of curating problems, and truly understanding what the problems were and prioritising them, was the missing part of lean methodology.”

Pete took this way of working and literally turned it into an operating system that helps people actually apply innovation inside their organisations. 

So how did Pete integrate the military with Silicon Valley?

The challenge originally posed to BMNT was to create an environment whereby the DOD can have a conversation with people in Silicon Valley. But what people hadn’t realised previously, was that both Silicon Valley and the DOD have business processes, it’s just that the processes don’t overlay with one another, meaning both industries didn’t communicate well together. 

So Pete, rather than talking about ‘military stuff’ at Silicon Valley, broke down the problem to truly understand what the Government’s problem actually was, and took that to the people in Silicon Valley. 

He then recruited a host of Stanford students to work on the problem, up and down the chain, to translate the military problem into civilian speak. And once they’d created a dual use problem, one that wasn’t just specific to the military, they were able to approach venture capitalists to fund the innovation.

“They were able to build a new problem definition that made sense, but also made sense from a commercial standpoint, and a military standpoint. And they were able to recruit people to actually work with them.”

Hacking for Defence

And it’s this applied innovation methodology that he teaches, alongside The Lean Startup founder, Steve Blank, on the Hacking for Defence (H4D)® course they created – an academic programme originally taught at Stanford University. 

“[This is] the only class they take in their academic career that allows them to use everything they use in university or network they build to work on a real problem with real people to give them real experience that leads to real jobs.”

Steve and Pete originally set up the course to take the problem curation process and match it against the lean methodology in the Lean Startup class that Steve taught. They took military problems and inserted them into the classroom, recruited students to take them on as teams and treated them like startups, put them through this learning process to produce solutions. 

“So we’ve actually had 19 companies launch out of the class. If you Google a company called Capella Space, Capella is probably the largest of them.”

The innovation pipeline

“Often people mistake the activities that lead to innovation as innovation itself.”

An example, Pete says, is if you run a hackathon and you get some interesting data, but you don’t do anything with the data, then you’ve not innovated, because nothing has changed. 

And the problem with most innovation pipelines is that people under invest at the front end of the pipeline. With so few ideas actually coming to fruition, innovation is expensive. But it’s necessary. Which is why they’ve established the incubator side of the BMNT programme. 

The reason Squadcast works with Chrome, says Pete, is because someone’s built an operating system to make them play nicely with one another. And that’s exactly what they’ve done at BMNT. 

“We have essentially built what we call H4X®, the operating system that can take you from one end of the pipeline of bringing things in, all the way through where it goes out the other side. And that’s what we’re implementing inside large enterprise organisations.”

Culture change

One of the essentials, the prerequisite to innovative success, says Pete, is to have a passionate problem owner. 

If you want to see your solution deployed, you have to have the equivalent of an entrepreneur startup founder, own the innovative solution. The US government is particularly bad at simply throwing money at problems and then getting frustrated when nothing changes. 

“You have to recognise what we call the decay rate of your current capabilities. The capabilities you have in place to do things today are decaying based on the change in tech. Sometimes that accelerates beyond your ability to grasp but if you don’t have the pipeline of innovation and other things, you’ll never see the weak signals that that’s going to happen. Nor will you be able to ramp up with a solution fast enough to keep up with that cycle. And you will just fall further and further and further behind. And waste more and more and more your resources.”

Which is why having a culture change in your organisation prior to innovation is essential. 

“You have to build a culture inside your organisation that understands that it can’t just be a cell that does innovation stuff. It has to be inculcated inside your entire organisation.”

And the supporting power base for innovation has to be absolutely right at the top of the organisation. 

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