Video: Steve Blank on Difficult Discussions and Building Teams that can Hack the System

By Kaitlin Milliken, Staff Writer

In every industry facing disruption, established companies have tried a lot of things to respond — from idea challenges to internal incubators to Silicon Valley outposts. But do these innovation activities actually move the bottom line?

“If you step back and look at the results … the answer is: not really,” says Steve Blank, a Silicon Valley-based serial entrepreneur. “Companies really have no end-to-end process for innovation.” Blank has been one of the primary evangelists of the lean startup movement, and he teaches at some of the top business schools in the US, including University of California Berkeley, Stanford University, and Columbia Business School.

In this installment of Innovation Leader’s Innovation Confidential video series, Blank shared how companies can set up a system that fosters innovation and effectively creates change. Watch the videos below.

Sourcing, Curating, and Prioritizing Innovation Activities
Blanked emphasized the importance of establishing an innovation pipeline. In the model he advocates, companies need to decide where they will source innovation, which problems they want to solve, and how to prioritize innovation activities. And often, Blank adds, legal, procurement, and HR processes must be adjusted to support those innovation activities.

Companies also must give thought to where Horizon One, Two, and Three innovation work should be happening, Blank says.

“For Horizon One and Two innovations, in hindsight, they really should have been deeply embedded inside operating divisions,” Blank said.

Horizon Three work may need independence and distance, especially when it potentially creates conflicts with existing offerings. But many companies, Blank says, have “neglected to have the organizational conversations much earlier… [Including,] what happens if we find early product-market fit, but it doesn’t fit in any division, or worse, [it] might kill existing sales? … How are we going to deal with [that]?”

Building Teams that Hack the System
While making change as an individual can be frustrating at large companies, Blank said building balanced innovation teams — pairing innovators and builders — can help achieve change.

“It’s usually the innovators who have the idea — [without] understanding that they need another complement to their skills,” Blank said. “And even those who have crossed the finish line individually will tell you what a horrible process it was.”

Innovators and builders bring different sets of skills to their teams. According to Blank, innovators “see something that most people don’t about technology opportunity … regulatory insights … or some other type of disruption.” Examples: Steve Jobs and Elon Musk.

Meanwhile, builders and intrapreneurs create the actual product and often shape the business case. Examples: Steve Wozniak at Apple and JB Straubel at Tesla.

“Inside a company, [the intrapreneur is] almost always the person who can figure out a way across all the obstacles at a large company to … get something shipped and delivered to customers.”

For more insights from innovation experts, watch the rest of our videos in our Innovation Confidential series.

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