Mail adds for services which promise to maximize the chances for corporate innovation success are becoming the nowadays spam. The last one to hit my mailbox begun with: “For any growth-oriented enterprise or business, accelerating entrepreneurship and innovation is a top priority…”. That is supposed to be strong statement which, personally, don’t find strong enough. Innovation has evolved to be more than just one of the priorities or growth catalysts. It has grown to be an essential survival differentiation. Companies that fail in entrepreneurial innovation are nowadays faced with the ever-increasing possibility of total extinction.
So as the moto goes: “Innovate or Die” and I am not going to defend it here – go ahead and read “You Need an Innovation Strategy” from Harvard Business Review if you are not convinced. I will rather try to explore if and how we can really witness a longstanding, large and successful at business-as-usual organization, go out of its way and successfully innovate.
Most organizational innovation strategies focus on: a. Defining the Innovation mandate, b. Communicating it, and c. Sourcing compatible ideas from the inside and outside. The goal and success KPI set is to the identification of the successful “Innovation Seed”. All these steps are extremely important but just not enough. The experience proves that even when all this is in place, frequently the seed does not flourish. Whereas the same idea, emerging this time from a startup venture and not through a corporate vehicle, succeeds and disrupts the market.
What would be the problem? One might think that as long as the BoD approves it and the CEO directs it, then in a matter of some months, any given organization shall have a handful of innovative business ideas deployable in the market. Well, more often than not, that is not the case and somehow the boardroom strategy fails to materialize in the corporate corridors.
In a 2018 survey from Innovation Leader, responders from 270 corporate leaders in strategy, innovation, and research and development roles agree that the two biggest obstacles for corporate innovation are:
- Politics, turf wars, and a lack of alignment (cited by 55% of respondents)
- Cultural issues (cited by 45% of respondents)
Both of them are collectively attributed to the “Corporate culture” and as Peter Drucker (one of the most widely influential thinkers on the subject of management ) claimed: “Culture eats strategy for breakfast”.
With “Corporate Culture” we call the sum of all the written and unwritten operational laws and ethics of a company. “We are what we repeatedly do” according to the infamous & controversial interpretation of Aristotle’s sayings, and consequently, Corporate Culture is what largely defines a company both internally and externally.
Our Culture is what guides us during the execution of a complex project, what differentiates us in the market from our competitors, what helps us to overcome operational glitches. This is where trust nests, teamwork thrives, and transparency flourishes (or where all of them perish). For a longstanding successful organization, Organizational Culture can easily prove to be its biggest asset. Often and rightfully compared to an immune system which distinguishes between “own” and “foreign” and protects the organization from incompatible practices, “bad” thinking and “bad” people.
Now…, do take a wild guess about how a “disruptively innovative new idea” can be perceived by such a system…
An Innovation, by definition, is not an existing part of an organization. It is something new and hopefully disruptive, and it will tick all the boxes for being considered as a foreign organism. The corporate immune system will most probable identify it as the “enemy”. At best it will neglect it, starve it from resources and abandon it to slowly die. At worst, the corporate immune system will directly attack it crippling it and killing it at sight. Usually, attempting to introduce outside innovation to a longstanding organization, results to a blood bath. Dinosaurs, on the other hand, enjoy a protective and cultivating environment (until they all extinct together…).
So, is there a way around this? Should we maybe try and apply the medical sedation techniques that doctors use for introducing a transplant to the human organism? Shall we then administer immune suppression drugs to our corporate organism, baffling its immune response for letting innovation coexist with the rest organizational legacy? Well, sorry but no… A numb organizational immune system corresponds to a corporate culture that ignores incompatible practices, and “bad” thinking. The globalized competitive business environment we operate within would swallow such a sedated corporate player at first sight. Sedation is not a choice in the nowadays business environment.
Of course there is a way. Microsoft is doing it, Amazon amazes us with it and Google is going on with it all the time. The answer is to “build out” and not “up”. Assuming that you have created the strategy, communicated it, embraced the change makers and succeeded in identifying an innovation seed, the key is to now need to keep it separate from the existing structure: The advice is to take the innovation seed, put it in a separate protective environment and support it to function independently of the established corporate structure and systems until it becomes strong.
You may ask: “What would be the point of pursuing corporate innovation if, once identified, you segregate it from the corporate thus minimizing synergies and economies of scale?” At best this may sound as a waste of resources. At worst, as foolishly not taking advantage of the combined strengths. But you need to do this for keeping the new practice clear from the corporate immune system. For giving it a chance to flourish and become strong enough. As it will evolve, grow and become successful you will also have to work within the corporate for creating the right migration and integration path. There is no single plan that would fit all. Only by working at both ends you will know the way and point in time that both organizations will embrace each other and create the synergies for exponential value generation.
Its not an easy task and certainly not one being free of cost. For ensuring a successful separate supportive environment, of course you need first of all a funding stream. But this is not enough. As every Venture Capitalist very well knows an Innovative Idea is a great asset, however without the right team it’s not worth even one dollar. The greatest enabler is having the right team and that’s the key assistance that the corporate can offer for ensuring the crucial first steps.
Corporate innovation is not a game for the fainthearted. You are obliged to join this game, but you also need to do so by being ready to bet your greatest assets: Your finest people! You must be prepared to trust them, strongly incentivize them, and set them free to participate in the aspiring new venture. It might be a lot to ask for, but it is also the most efficient way to multiply the probability of your success.
Author: Gerasimos Michalitsis