If you’ve been following the last few articles, the theme has been exploring the unique endeavor of “entrepreneurship within large organizations” (aka “corporate entrepreneurship”), its challenges & paradoxes, its opportunities, and what it takes to get it right. Based on our experience of helping others & doing it ourselves, we’ve identified some key “best-practices” that are foundational to success.  So far we’ve covered:

1. C-Suite Vision & Championing
2. External Connectivity/Customers
3. Strategic Focus & Sponsorship

(I encourage you to read these articles for context)

This time we’ll zoom-in on another critical success-factor – the importance of a “core innovation process” – a consistent, disciplined, yet fast & flexible approach that gives direction to an innovation-initiative as it matures from a fledgling idea to a legitimate business opportunity.

An analogy that comes to mind is “acting” – it can range from something as simple as an “in-the-moment-improv” (or children’s charades) to a Shakespeare production that is very structured, planned & practiced. The innovation funnel is much the same way, starting with an idea that can be born on a post-it-note, to a scaled-up business model with complex operations and a supporting “cast”/organization.

While it’s impossible to plan & predict every step of the “business-building adventure,” it’s nevertheless far from random and requires a consistent approach to be successful. Clearly there’s a wide variety of “innovation processes” to choose from, but here are some of the underlying factors we believe to be the backbone of those that are most effective:

1. A Portfolio Approach & Mindset (“several plays”)– it’s proven that the more concurrent/competing solutions we have for a given problem (especially early on), the greater the learning/cross-pollination potential, and the greater chances of success. A large quantity of ideas is critical to fill the innovation funnel (especially given the “death-rate”). Also, it’s important for teams and management to develop the skill of evaluating an innovation “portfolio” (similar to a stock portfolio – risk, diversification, health…) instead of only looking at individual ideas. It’s not only the initiatives within a given stage, but all the initiatives across the innovation funnel that makeup the portfolio.
2. Phases, Milestones & Funding (“several acts within a play”) – a consistent approach enables focus and cadence. When phases of the process are clearly defined with corresponding deliverables, it enables teams to stay focused on the right kinds of activities and goals. It also establishes outcomes & metrics that can be reviewed at key milestones to determine if an initiative should proceed or not. Keep in mind that two important things are happening as we move through the funnel – 1) de-risking the initiative to increase the odds of success (as basic assumptions are proven … or not), and 2) building our learnings to continually pivot the initiative into more successful territory. As these objectives/milestones are achieved/proven, commensurate funding (aka “progressive funding”) is released to fund activities for the next milestone. This enables organizations to increase the level of funding in a controlled way as success is proven.
3. Methodology & Tools (“the script”) – as teams move through the process, different tools & frameworks can be applied. While there are many innovation approaches that are available, in general those focused on a deep understanding of user-needs & fast-prototyping are typically better suited for the early stages of the innovation funnel (like design-thinking), while those focused on business-building and scaling are typically better for later stages (like business model design and lean startup). In the end, when it comes to methodology, the most important thing is to pick an approach and stick to it rigorously. This provides a stable base to begin producing outcomes, develop tools & frameworks that prove effective, and develop capabilities & expertise in using them.
4. People & Casting (“the actors”) – while this point is so important that we treat it as its own “success-factor” (which we’ll write about in a future post), it’s important to note that the phases of the process also trigger/imply that different skills & capabilities are needed to enable the evolving maturity of the initiative. Indeed the skills/people needed for ideation & creativity (at the start of the funnel) are vastly different than those needed to run operations of a scaling business later on. Like a theatrical play, the “cast” adapts as the story evolves. This also requires intentional management and oversight (managing the right casting of teams & capabilities), but the process is intended to help us anticipate and prepare for these “people-needs” as the initiative matures and needs emerge.

So as you think about how innovation works in your organization – are there clear phases & milestones defined? … is it managed as a portfolio of ideas/initiatives? … are there consistent tools & methodology to enable the work? … is “people-casting” intentionally managed?

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If you’ve been following the last few articles, the theme has been exploring the unique endeavor of “entrepreneurship within large organizations” (aka “corporate entrepreneurship”), its challenges and what it takes to get it right. Based on our experience of helping others & doing it ourselves, we’ve identified some key “best-practices” that are foundational to success.  So far we’ve covered:

1. C-Suite Vision & Championing
2. External Connectivity/Customers

(I encourage you to read these articles for context)

This time we’ll zoom-in on another critical success-factor – the critical importance of “Strategic Focus & Sponsorship” to guide the innovation funnel. Imagine an aircraft carrier (aka “large company”) about to embark on a voyage. It’s about to leave port and in less than one hour will disappear over the horizon … but to get to this moment in time, there’ve been weeks (if not months) of planning and strategizing – defining the mission dictating the duration, supplies, crews, maintenance, etc. Clearly the main purpose of the aircraft carrier is to serve as a base/hub for targeted interventions – ex sorties of aircraft, deployment of special forces on speedboats, helicopter drop-offs etc – but all of these are consistent with the defined over-arching mission of the aircraft carrier.

The exact same is true with innovation-organizations in large companies. While they are “smaller missions operating off of the aircraft carrier” it’s very important for them to stay aligned with the overall mission. We believe this is paramount at two inter-related levels:

1. Top-Down Strategic Innovation Spaces/Agenda – the company has a strategy it is executing upon and needs specific innovation-support in targeted areas to help explore possibilities and new horizons beyond the scope of its traditional business. Since there’s a vast scope of potential horizons, clearly defining them is essential to ensure a strategy-driven innovation agenda (ex aka “strategic innovation spaces”, “priority domains,” “areas of focus”). It’s the only way your “aircraft sortie” will actually make an impact toward the bigger mission and find its way back to the aircraft carrier. Without it you’re lost, wasting resources on “random targets,” demotivating your crew, and quickly losing relevance to the mother ship. Tangibly this means the C-suite’s involvement in selecting specific innovation-spaces (typically 3-5) to explore & fund, within which we will chose specific initiatives to experiment.
2. Bottom-Up Core Business Sponsorship/Buy-in – this one can be tricky (and sometimes controversial – since having enough autonomy is also very important) … however if no one in the core business is interested at the innovation-initiative-level, chances are high you’re creating “innovation-orphans” … also known as the “innovation island of abandoned toys.” It’s the “cool but useless (CBU)” stuff that may be a breakthrough to us, but has no chance of survival back in the real world of the core business (…no interest, no resources, too far away from the core, etc.). Even though you’re flying the mission, somebody back at the aircraft carrier has to care, provide support, and be deeply invested in the outcome. This means core-business sponsorship at the initiative-level, both at the beginning of the process (“push”) and continued “skin-in-the-game” to create “pull” for the initiative coming back out of the innovation funnel  (…management sponsorship, money, people, time, access to customers, exposure … connecting back to the core).

So as you think about how your innovation efforts fit to the strategy of your company…what can you do to make sure you’re playing an essential role to enable that strategy?…what are the specific innovation-spaces that have been chosen (have they even been selected)?… and how do you show a direct line of relevance to them?

On the other end of the spectrum, how do you make sure the individual initiatives you’re working on demonstrate a direct line of relevance to these innovation spaces, and the core business? … how do you ensure & preserve core-business sponsorship from beginning-to-end throughout the innovation process to maintain buy-in and avoid adding to the “island of abandoned toys?”

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If you’ve been following the last few articles, the theme has been exploring the unique endeavor of “corporate entrepreneurship”, its challenges and what it takes to get it right (I encourage you to read the last few articles for context).

Based on deep experience in helping others & doing it ourselves, we’ve identified some key “best-practices” that are foundational to success. In the last article I highlighted the importance of “C-Suite Vision & Championing” (see previous article). This time we’ll zoom-in on another critical success-factor – the importance of “External Connectivity/Customers.”

Have you ever been in a large room with an echo? What are its characteristics? – high walls & ceilings, enclosed space, reverberating acoustics, etc. In many ways large organizations are exactly the same – …large population of employees, sharing the same culture, using similar vocabulary, discussing the same problems, coming up with similar ideas, etc. While there’s no question this comes with a lot of strengths, it’s obvious that when it comes to innovation, it can be challenging … even deadly!

Why? Since we know that innovation thrives on external inspiration, non-congruent thinking, challenging of paradigms and deep end-user insights…then listening to ourselves, group-think, and confirmation-bias are real threats that will happen unless we actively fight it.

How do we do that? Here are three success-factors that we’ve found to be critical in breaking out of the “internal echo-chamber”:

• External customer-connections – it’s often surprising how few employees in large organizations have real direct interaction with customers (many times direct customer-interaction is farmed out to agencies or other third parties). It’s beyond “customer-contact,” it’s trying to share/feel the customer experience, targeting specific areas to understand it at a deeper behavioral level. Also, don’t overthink it. Start with the “users/customers” that are on your door-step with whom you can have direct contact (ex in your stores, in your personal network, those your salesforce talks to every day, etc.). You’ll be surprised how much you learn from just “walking a mile in their shoes” … doing what they do – in their homes, in their workplaces, their buying experiences, their recreational activities, their relationships, etc.
• External networks – I once heard someone say – “in any given industry there’s about 200 people you have to know…and they know everyone else.” This is so true. Networks can be industry-specific (ex automotive, healthcare, financial, etc.), or subject-specific (ex big-data, sustainability, urban development, etc.). In both cases they provide excellent external stimulus, opportunities for analogous-exploration & thought-partnership, as well as insights to trends & latest breakthroughs (ex technology, startups, investment, etc.). Remember, it’s a “relationship-business,” so guard against the common pitfall of big organizations “who expect to only show up to a conference when they need something” (you’ll be disappointed). The key is to become part of these networks, regularly plant & water the seed of interaction/collaboration, attending gatherings & events, initiating & maintaining relationships, contributing and interacting…for the long-term.
• External expertise – getting a different viewpoint can often be supported by including external experts in your internal initiatives. Beyond bringing skills & specialization you may not have, they can be used to demonstrate aspirational capabilities and provide a different perspective/angle. They’re allowed to ask the “dumb questions” or have the “wacky ideas” that often lead to different ways of thinking. A variety of categories of expertise come to mind – methodology/approach, technical, academic/pedagogical, human dynamics (teams, facilitation, etc.). Again, the significant advantage is that you’re allowing “external experts” to participate directly in “your work,” thereby benefiting from their direct interaction & impact, rubbing shoulders with your people, and mitigating the risk of internal re-filtering or distortion.

In summary, innovation thrives with stimulus that comes from outside of ourselves. It challenges established norms and creates new ways of thinking. If this is so vital for us as individuals, how much more for large organization whose natural tendencies are to become introverted & ingrown. Using the principles mentioned above, what will you do to fight to stay externally connected?

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