5 Tips for Corporates to Innovate like Start-ups.

Two entrepreneurs sitting on boxes and batting a football as they prepare to start a new venture.

You’ve probably heard it before. How large organizations will need to become nimbler, more responsive, and more entrepreneurial in order to stay ahead.

Do you nod your head?  “Well about time too! Things might move faster round here.” Or do your hackles rise because you don’t want to work for a start-up?You joined a big company for the structure, the promotion prospects, the hierarchy and your place in it. You know where you’re heading and what the benefits package is…  and it’s not about a handful of shares that no-one can value right now.

Both reasonable assessments. And that is why large companies and start-ups are often seen as distinctly different in the way they compete, employ people and innovate.

But academics and business commentators are relentless about how large organizations “need to change” - particularly as the pace of new technology introductions increases. However, it’s rare to find examples of very large established companies where the entrepreneurial founder has died or moved on, that have nevertheless managed to return to a more entrepreneurial culture. The nearest we often find are well-established large companies where the founder is still involved and who is able to re-invigorate the entrepreneurial culture of earlier times. An example of this is what Scott Cook of US accounting software giant Intuit has managed to do.

Cook founded Intuit thirty years ago and grew it to a $4.1 billion turnover enterprise, with market capitalization of $17 billion. Then sales plateaued, growth potential in core markets slowed and the focus turned, predictably, to stripping out cost.

Can a large company be a start-up?

But this wasn’t enough for Cook and he became hungry again for significant organic growth. Cook had started the business on his kitchen table so he knew what a start-up was and he knew what being an entrepreneur was. Could he strengthen those values in the culture of a multi-billion dollar company?

Most of us don’t imagine that a large company can be a “start up”. But Cook, who was familiar with Eric Ries’ book ‘The Lean Start-up” was struck by Ries’ description of a start–up as ‘a human institution designed to create a new product or service under conditions of extreme uncertainty.’

“We match up with that exactly.” Cook told his employees at the annual conference, and this became his vision for transformation.

Purists will say that Intuit with its predictable revenue streams on established products and services is not experiencing the same ‘conditions of extreme uncertainty’ as those experienced by a real start-up. But Cook clearly found the definition something with which he could inspire his teams.

A recent article in Forbes magazine reports on what Cook has done – we’ve picked out some tips and combined them with our own.

Five Tips for Corporates to Innovate Like Start-ups.

  1. Introduce a ‘hypothesis and test model’ for concepts.

Designing an effective test for your concept it as important as the concept itself. A good test provides the information to help with decision making. Use your imagination when designing tests. Use the net, Adwords, a market stall, take a short lease on an empty shop, partner on a one off basis with a distributor.

     2.     Create an environment where you can test ideas quickly and cheaply.

At Intuit, the legal team developed a ‘toolkit’ so that product managers could test new business ideas without having to talk to the legal department. This reduced the time required to set up a test environment from two months to two hours.

      3.    Become passionate about problem solving.

James Dyson reportedly developed over 5000 prototypes of his vacuum cleaner. He believed that with each prototype he was solving problems and enabling him to develop the key features that would differentiate his product from the competitors.

      4.    Business leaders need to support the entrepreneurial culture.

They also need to be willing to have their ideas assessed on the same basis – through developing hypotheses and testing. Cook admitted that early on, he wasted a lot of money by not submitting one of his ideas to the rigorous testing he expects his teams to apply to their ideas.

      5.    Gain deep empathy with customers.

In technological markets more than other fields, customers often don’t know what a solution looks like or what’s possible. All innovators need to understand their customers, but perhaps the technical innovator needs a broader empathy for the customer’s lifestyle and emotions. Customers can find it hard to articulate product and service frustrations. The innovator who gains deep customer empathy and who then combines it with creativity can define  the customers’ problems and come up with solutions.

A More Entrepreneurial Approach to Innovation.

At AnatellÔ we offer training in corporate entrepreneurship/intrapreneurship.

Not every client wants to change their innovation processes radically and overnight. However, we have found that many are interested in expanding their repertoire of innovation processes tools and techniques and particularly to learn new ones that enable them to develop and test more ideas more rapidly.

What’s more, AnatellÔ’s emphasis on developing the right innovation mindstates to drive innovation processes means that teams that train with us build their entrepreneurial competencies along with their knowledge of innovation process.

Read more about Scott Cook's transformation at Intuit.

© AnatellÔ 2012. All rights reserved.


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