And creating and empowering a subgroup of entrepreneurs could be the key.
In a rapidly changing digital world, it’s fair to observe that many of the larger, established organisations struggle to think or act in a nimble, entrepreneurial way. It seems that it’s too easy to develop a certain rigidity when working in or leading a big company. In particular, when approaching new process, decision-making, day-to-day operations, technology choices and, most importantly, change.
However, one thing still remains the same: the customer still is – and will always be – king. When it comes to engaging an ever more demanding and digital audience, being quick to respond and react to customer change is essential to business success. Whether that means adapting to new customer needs or industry change, responding to new competitors or diving into new markets, or making decisions on strategic tech platforms.
We recently held a half day workshop with senior company executives at many of the UK’s major financial services organisations, designed to share and discuss how businesses build an effective corporate innovation model. Essentially, how do they bring true innovation into the company?
The unanimous opinion was that none of the big corporates represented has yet cracked the test & learn model that startups are so very good at. The desire is there to do this kind of work, do it first, and deliver new products and services at light speed. But there are various inhibitors and red tape blockers in the ecosystem, including these common challenges: corporate functions to consult and get approval, non-aligned objectives, regulation, legacy systems, short-term quarterly results focus, and a requirement for financial certainty.
On the topic of short-term focus, contrast Jeff Bezos’ ability to take a long-term view and place significant bets with most FTSE 100 CEOs’ need to deliver quarterly results in what is typically a 3-4 year tenure. There is a significant difference between the pioneers / entrepreneurs, on the one hand, and the settlers / executives, on the other.
The advantage that big corporates have over the fast moving startup is the ability to run things at scale. (Indeed, all startups long for the hypothetical day when – as a newborn unicorn – they are entrusted with running things at scale!) And yet the ability to run things at scale is only useful if you have scaled the right thing. Thus, a critical challenge for many organisations will be adopting radical MVP (Minimum Viable Product) thinking in the business, and not just in IT. Businesses must define what is the least investment needed (in terms of time, budget, resources, etc.) to test the most uncertain assumptions for their new product or service.
Being agile is what startups do day-in, day-out, and that’s what the larger enterprises need to be able to adopt. The ‘fail-fast’ motto in Silicon Valley and Shoreditch may seem cliché, but it’s as relevant now as it was a few years back.
Our workshop attendees identified six key attributes to activating innovation in big business:
- Establishing a focused challenge
- Creating a small, yet dynamic team
- Getting customers involved from the start
- Testing and learning – failing fast and reiterating
- Being agile and flexible with any collaboration and technology
- Being ready to scale
Of course, big organisations will find it difficult to replicate the unstructured, unfettered moves of a five-person outfit, given the corporate systems and vast teams needed to operate on a global scale. Developing individuals in the organisation to be internal corporate entrepreneurs is one way to help change the culture of an organisation to be more like a startup.
This does require patience and persistence. Executives at the workshop pointed out that the culture of an organisation does not change overnight. We need to find ways to work within the existing culture whilst building confidence and momentum. Technology choices, low-code platforms and dev ops approaches may be part of these approaches.
Ultimately, though, this is a journey, and not an easy one, but those corporates who complete it stand to gain that essential quality in our fast-changing world: adaptability.