The Imperative for Corporate Entrepreneurship
In my conversations with executives charged with innovation and corporate transformation, I hear a pretty consistent refrain: innovation is friggin’ hard work. Even with a commitment to “innovation” from the top, real impact takes unwavering focus and often new DNA that isn’t resident in the current organization. It also requires a change to historical ideas and processes, and that doesn’t come easy.
Why? There is often a struggle between traditional thinking about how the business works today and the requirements to implement strategies that drive rapid change. Financial leaders may have made promises to the investment community about what growth looks like for their company and what metrics matter. Traditional public sector investors often believe they invest in a blue chip company that will grow, organically and through acquisition. It will deliver on goals of profitability and value over time. Maybe it will deliver outsized returns as others falter on execution issues and they take control of a market. Employees believe they work for a large corporation so risk is low and they are promised that their present and long term future is funded. They may not believe they can reach all their ambitions but the basic American dream can be theirs if they work hard enough, do their job and play nice.
Often in these cases, large corporation executives may not be fully realizing this: there is a 200 person top notch software company backed by hundreds of millions of aggressive capital that cares about growth over profits – in your sector. Their goal is to disrupt the industry and make you obsolete. They have you on their wall as a target, and their bet is that you’ll never change. They know they don’t have all the answers but they can move faster and take segments of the market and create demand for a new better service. In the end it may hit you harder than you thought. Strategists may tell you the business model will not survive, or isn’t scalable, but the truth is what you feel in your gut – they are on the right path and have a better product. The path you want to be on. But too much lies between your current situation and the path you and your company wants to be on.
Many consultants may say “disrupt yourself” and this is the right intent, but in my experience that’s not as easy as it sounds. You have a business that is profitable with many leaders who are intent on protecting those margins and stopping disruption. There are real assets that have leverage. Bonuses, pensions, and pride is tied into success as it is defined for the current business. The idea of disrupting something that is core to what an organization has been taught to care about is likely to generate an autoimmune response. White blood cells in the company may attack, and kill what is actually a good thing.
So what to do?
In my opinion, we need to change organizations through exposure and experimentation. Think of it like an immunization that’s meant to create antibodies that help your organization fight. Start to build new things that don’t disrupt initially but create value in new ways, that build on existing company assets like brand, subject matter experts and distribution channels. Find ways to deliver new value for a customer segment, by isolating good ideas and embracing an MVP mentality to start small and build. In the process we may have to oppose existing thinking, and change current models of doing business. You may partner with small startup to deliver a new kind of service. You may find an amazing executive who is excited to be part of the experiment. You will embrace experimentation, and small failures that get to big insights. In the process you can isolate the big ideas and be more prepared to invest what’s necessary to truly create success. There are processes and people who have been there and lived in that other world that can help you, so get the help. All of this is part of embracing the change that comes from realizing that the future isn’t guaranteed, it is earned by those who are unafraid and open to innovate.
In that future, companies reinvent themselves. Brands that are thought to have waning value evolve to be relevant and important again. Customers transition across lines of business in your category, and you know them better. And employees become excited again about the new things that the company has in development while they support the current models that give you leverage in the future. Maybe, people realize they are not as different from the “innovators” as they thought, and the coasts and the middle want the same things really. Some of this comes from exposure to something new, and some of this comes from accepting that the best path for all may be hybrid of new and old. Maybe that’s too much to ask but we can only discover that path by taking the first steps toward the “next big thing” with all parties at the table, with open minds.
For more blog posts on innovation and entrepreneurship check the Teem Ventures blog at http://teemventures.com/blog/