Startup principles for corporate innovation
BIA has the privilege to work both in the entrepreneurial and corporate world. We love to bring these two worlds together to empower organizations to innovate and create a big impact in the world. We have seen great potential in applying startup principles in corporate processes. This article covers some differences between entrepreneurial and corporate thinking, and how to cultivate a hybrid culture in order to foster innovation.
Managing uncertainty: pivot or persevere
Startups are by definition risk-takers, with a natural entrepreneurial spirit and willingness to pivot in entirely new directions based on feedback. On the other hand, large companies are risk-averse, fostering cultures and processes based on optimizing products, brands and delivery for business success at scale. Companies at scale can’t afford unnecessary risk-taking, but uncertainty is the key defining feature of innovation.
The build-measure-learn loop helps startups quickly get close to real customers and gain real-time feedback on needs. They then face the decision to pivot or persevere. Many corporate teams and their leaders refuse to acknowledge failure. Of course, in most companies, the reward system is designed in such a way that admitting failure costs money. That doesn’t help a big firm learn to innovate. Perhaps your first idea is not the best, and you’re unlikely to succeed if you are fixated on your own vision but fail to create something people actually want. Some of the best innovations in the last years were a result of entrepreneurs pivoting away from their first idea and making improvements based on feedback, which ended up filling a gap in the market. Focus on what is working and deviate away from what is not. Love the problem, not the idea.
Bringing down your walls and encouraging collaboration
Perhaps the smartest people you need for your project might not work for you. To tap into their genius, you have to be engaged with collaborative work processes that cede some control. It is standard procedure in entrepreneurial communities, but not the way most executives in large companies were raised. To connect with these creatives, you need to be willing to play in a more flexible work environment than the traditional command-and-control one. In fact, some of the best and brightest minds may even be outside. Companies need to be encouraged to look outward from all departments, elevating the concept of cross-functional to cross-organizational. Entrepreneurial companies can teach their new corporate partners lessons, such as how to cede some control for the greater good, how to connect and collaborate, and how to identify great ideas no matter where they originate.
Customer Development is another area where lean thinking can foster innovation in the process. For startups it is about “getting out of the building” to engage with customers directly and upfront, validating who customers are and what their problems are before undertaking significant product development. Formal, sophisticated consumer and market research has its place, but for new breakthrough initiatives, corporates need to put away their spreadsheets and get their teams outside of the building to engage directly with customers. There’s great power in getting product or service development teams directly involved in upfront customer engagement. Simple contextual interviews in your customers’ environment will invariably surface new insights that are then more deeply understood by development teams because they’ve heard them in the customers’ own words.
To learn more about how BIA is helping corporates cultivate a hybrid culture and create space for innovation to thrive get in touch with us!