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The Quest for Next Generation Innovation (Part 3)

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The Quest for Next Generation Innovation (Part 3)

Corporates are recognizing that the radical innovation they need is at the edge of their organization, not at its core. This...

5 Minutes Read

Corporates are recognizing that the radical innovation they need is at the edge of their organization, not at its core. This is a tough message, and it may upset some, but getting leverage on an emerging tech or a new piece of IP means working outside your corporate boundaries. In my experience this means learning to work with startups because they're free to focus on breakthrough innovation—the stuff that radically switches a process, customer experience, or can rewrite an entire industry value chain from the outside in. Welcome to the third of five posts that lay the ground-work for a next-generation innovation strategy (check out Part 1 Corporate Innovation Needs a Reboot and Part 2 What Start-ups Want). So Part 3:-

Corporates & Start-ups Need a Common Rule Book

For companies to thrive in the modern era means increasing the speed at which they innovate, experiment and collaborate inside, outside and across companies and industries. The people needed to make this shift and how they're marshalled will be radically different from what worked in the past. Rigid approaches to organizational management typified as the 1980s value chain mania is giving away to something much more fluid, connected, and nuanced. Silos are being broken down in the first steps to improve knowledge flows and redraw organizational power structures. The problem for many corporate teams is they're moving so slowly, and they're getting mired/ ground down in the day-to-day running and operational weariness. So, to help build an understanding between corporates and the startups they need here is a common rule book of five simple rules:

Rule 1: speed is everything. Startups and scale-ups move at 100 miles an hour. They break things and always (always!) question the status quo.

Moreover, their ability to absorb risk is, quite frankly, off the scale. These are not qualities one typically associates with the large legacy corporate, with its fixed cultural codes of behaviour, and ways of working honed over decades, rather than months or several years. Finding a way that links both sides together around speed and decisions is critical, and that means recognizing that…

Rule 2: the process is everything. Corporates are, quite rightly, heavy on process; they are (thankfully) risk-averse, and their default mode of working takes place in the safety of the silo. These silos typically develop over decades as a structural response to how large firms are generally organized and they often act as powerful cantons designed to preserve the status quo. "Pardon me? Move fast and break things? No, thanks, we're fine as we are…". Common rules on where power sits need articulating to provide…

Rule 3: clear line of sight on the decision-making process. Startups that aren't getting anywhere—or perceive that it's not going anywhere—won't want to stick around wasting time (read what startups want). Burning goodwill, energy, the firepower on decisions that chunk up and down the silos and the organization is beyond frustrating: Good ideas wither and die as procurement or legal approach onboarding with printed webforms, PDFs, interminable meetings etc., that drag on for weeks even months! Decisions need to be taken and fast, which means…

Rule 4: calibrate and calibrate again for risk. For older, established firms, the risk of opening up their company to external innovation is a risk too far. Internal R&D teams could feel defensive; that their approach is adequate because the over-reliance on external parties decreases profitability (if the costs of external collaborations exceed the value created). Also partnering with startups changes the risk profile of a firm, replacing technical risks of internal R&D with an unknown, untried and potentially risky partnership. New approaches are needed to make next-generation innovation safe, compliant and scalable, and that means…

Rule 5: getting past "proof-of-concept" and into "proof-of-deployment". Corporates have so many proofs of concepts coming out of their ears! Every vendor runs the prerequisite design thinking workshop that showcases the art of the possible and showcases how darn innovative they are. One rule that would help would be a "proof of deployment" rather than "proof of concept" approach. What corporates need is rapid, safe and compliant innovation with the raft of tools and technologies that startups can bring to the table. "Go on, show me that it works, not just here but every location we own in every country". That would be something, wouldn't it?"

Next year, Part 4 and 5.

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