What companies need to have is a clear understanding of what innovation really is. Innovation is NOT the same as creativity. Hackathons, bootcamps and ideajams might be fertile ground for creative ideas but these in themselves do not constitute innovation. Innovation is the combination of creative new ideas and sustainably profitable business models.
So beyond the hackathons, bootcamps and ideajams companies need to develop processes and frameworks through which intrapreneurs can take their ideas and search for sustainably profitable business models. Companies have to provide the tools that support sustainably profitable business models, and also a system that allows teams to fail, pivot and iterate. The main discipline here is in making sure that ideas are not taken to scale too soon, before they have validated business models.
Indeed, neither a bootcamp, a hackathon or any other one time training or activity can do the trick. For a company to maintain its entrepreneurship capability, there needs to be a strong supportive culture that is consistently and constantly maintained and nurtured.
Intrapreneurship requires a culture that supports freedom, independence and experimentation. All of which have a certain contradiction to rules, authority and process, the same elements that appear in most corporate training.
To overcome this tension, the focus should be placed on mindsets, behaviours and approaches that are continuously and organically exhibited and are not artificially created during a one-time session. It’s a longer solution but if executed properly can deliver the genuine culture and values the company truly admires.
First, you have to explain and educate people in your company on what it means to think and act like an entrepreneur. Most probably don’t know. Otherwise they would be entrepreneurs and not working at your company in the first place. This is something that most organisations tend to forget.
Let them know what you expect, which objective they should be working towards, i.e., do you want them to search for new business opportunities, growth, how to beat a competitor,…what is the challenge you expect them to solve? Thinking and acting like an entrepreneur means looking for opportunities. If your objective is growth for example, such opportunities are likely to be found by looking at customers, their needs and how well your company and industry does satisfy these needs. In any case, provide a little guidance.
Second, you need to equip them with the tools and train them how to use the tools, that is, you need to show them how to use the tools in a comprehensive fashion, a process they can go through to find opportunities and develop offerings, business models, revenue models, and design whole new strategies and businesses to seize these opportunities. Pick a set of tools that is appropriate for the type of challenge you give them. The Adobe Kickbox is a good example of such a toolbox.
And third, you need to institutionalise your intrapreneurship initiatives, that is, make them recurring and incentivise them in some kind of fashion. The Danish engineering company Danfoss for example runs a business plan competition called “Man on the Moon”, which aims at rewarding innovative ideas with real business potential throughout the company. After having ran the programme on annual basis for some time, Danfoss now decided to make it a year round effort. There are clear criteria and a clear process for pitching your ideas to the executive board, get them funded and be rewarded for your entrepreneurial efforts.
Let me add another perspective. We believe that corporates can foster intrapreneurship in several ways – a cost-effective and sustainable one is to engage in collaborations with startups. These interactions could help intrapreneurs address issues related to reevaluating corporate culture, strategies, structures and procedures.
The long term benefits include solving business-specific problems quicker or at lower risk than a corporate might do otherwise; innovating big brands, including attracting new customers, partners and talent; rejuvenating corporate culture by creating awareness of new technology and an entrepreneurial mindset; and expanding into future markets by accessing new capabilities or new channels.
Corporate venture investing is another innovation tool. A company should take a long term strategic approach to having a venture investment program. The program will yield insights into trends, strategic partnerships and financially beneficial investments, all of which need to be tied back into the business units and other innovation efforts.
A real key to long term success is tying all of these tools together. So that the manager who is working on intrapreneurship efforts is aware of the external companies that are being reviewed for investment, and visa versa, and that areas of focus are coordinated. As the company’s investment portfolio grows, this bilateral visibility becomes even more important.
That’s where elements such as agility, adaptability and lean can really be useful if properly applied and with confident leadership in place. By transforming the operating model of the company to have limited amount of overheads such as reports, dashboards, and decks and a one stop shop for all functions to get data and provide updates, you not only free wasted time to your employees, you organically develop alignment of efforts and a common language between functions based on data.
A system that is designed to be flexible enough has a naturally built-in slack to enable it to change of course and pursue different paths in a short time, empowering the business to explore new opportunities whilst running its core operations with no interference.
To build a sustainable innovation process, companies have to think about it from an ecosystems standpoint. The work to be done is not to simply launch a couple of products. We are really trying to build a long lasting innovation machine. In an innovation ecosystem, there is a role for existing operations and brand assets.
For one of my clients Pearson, I have been part of a team that has launched and rolled out a Lean Product Lifecycle. In addition to inspiring people to use innovation tools like lean canvases and experiment boards, we have set up a process that aligns all this work with existing enabling functions.
For example, we worked with finance to rework the innovation funding process so that it is done in an incremental way. We also, worked with legal and compliance to ensure that innovation teams are aligned with legal requirements depending on how far they are in their innovation project. This work also involves ensuring that innovation teams are not burdened with heavy requirements early in their process when they are still iterating and discarding loads of ideas.
I often get a similar question when speaking about culture and I regularly disappoint with my answer. When asked about the recipe for an innovative culture I swiftly respond that it’s for you to find out. Just as DNA is unique to every individual (aside from identical twins) so is the context and need of each organization. And as such, a certain culture that works in one organization may not work in another.
But to provide some guidance, I also add that while not providing the recipe, I can provide the ingredients or platform (call it a kitchen). Both contain elements that have a universal truth about them and which when applied at the right amount can be useful for any organization.These include having the right leaders in place that can promote a flexible mindset, an agile approach and a customer focus with everything they do. As culture is directly derived from the leaders, these can help develop the high-performing teams that can ensure the company continues to grow and innovate.
One cause of a lack of internal entrepreneurial culture may be employees who do not see innovation in a positive light. In some cases, this may be the result of previous changes which were poorly implemented; in other cases, it may arise from a deliberate policy of recruiting ‘safe pairs of hands’ in place of people who will ‘rock the boat’.
A lack of entrepreneurial culture is the collective result of rational actions by employees who are simply not incentivised to think or act outside their immediate job description.
More often, however, a lack of entrepreneurial culture is the collective result of rational actions by employees who are simply not incentivised to think or act outside their immediate job description. A slightly cynical (but probably accurate) view is that, since most employees usually do not have a stake in the business they manage, they are motivated by projects and activities which improve but do not jeopardise their personal wealth, status and job security – regardless of the long-term implications for the firm.
Some tips to address these issues are:
A culture that supports innovation can only be built in an organizations whose structures and processes support innovation. I am often invited to run a lean innovation session for product teams in a large company.
I teach their product teams business model design, experiment design, minimum viable products and other lean startup product development best practices. We have a great session, they return to their jobs fired up. And then…Their manager refuses to give them money to try out their new idea unless they complete the 20 page business case.
This is the power of organizational structures and incentives. The company has just spent money on building up human capabilities in its product teams. However, its organizational capabilities encourage management behaviors that are in direct conflict with the human capabilities it is trying to build.
And so, if companies take an ecosystems approach, this means that they really work on changing internal structures and processes. It is the only way to build a long lasting innovation capability. In this ecosystem there should be a process for integrating innovative new products into the company’s core product portfolio. This is made easy because the company will have developed an innovation strategy so that these new ideas are aligned with company goals from the beginning. The strategic goal should be to have a balanced portfolio that covers the three main types of innovation: core, adjacent and transformational.
There’s a certain management practice that works best in startups and one that works better for scaling up the business and operating in a large organization. I do believe that in todays dynamic world, good leaders should be able to operate in both environments as this is many times required whether you are a startup founder or a corporate careerist.
Anyone who has experienced real intrapreneurship knows that it often feels very much like a startup.
Anyone who has experienced real intrapreneurship knows that it often feels very much like a startup. All the odds are stacked against you as while there’s a lot of optimism in the beginning, the challenges and troubles don’t take too long to pile up and in no time you are already faced with a do or die situation. These constant challenges requires the change agent and their team to have as strong a perseverance as new founders have. That perseverance is what many call “the founder’s mentality’.
As such, there’s a lot in common with startups in terms of required mentality. The challenge is to maintain that mentality as your tenure increases in the organization. As sir Ken Robinson mentioned: “We don’t grow into creativity, we grow out of it”. Basically saying that we are all born with some creative capacity – the challenge is to keep that creativity as we get older, since too often we get educated out of it, either in university or our employment.”
If you’re interested in understanding how to organize your innovation efforts to deliver sustainable results, by building the internal capabilities and culture, as well as by engaging with startups and outside innovation ecosystems, you will find great value in attending the Intrapreneurship Conference 1-day Event in London on Sep 22: Intrapreneurship, from Start-Up to Scale-Up where Tendayi, Marc, Eric and Sidd will speak (amongst many others).
You’ll benefit from 15% discount on top of Very Early Bird ticket price with code IntraCnf-IMSE via http://intrapreneurshipconference.com/london
Hans Balmaekers heads up the Intrapreneurship Conference, the #1 global platform for corporate innovators to understand best practices and connect with like-minded peers. Fueled by a belief in the potential for big business to have a positive impact for the world, his ventures are all about creating opportunities for learning and collaboration. All driven by a simple question: are we learning as fast as the world is changing?
Check all sessions and speakers and more info on http://intrapreneurshipconference.com/london