Ace Moghimi, Contributing Writer; Venture Partner, NextGen Venture Partners
My experience set has been a unique one. I’ve had the privilege of building innovation capabilities within large companies in hubs including Boston, Toronto, and Singapore. I feel honored to have witnessed first-hand both opportunities and missed opportunities, but most of all the untapped potential that large organizations have to drive incremental and transformative change through innovation.
As an experienced “Intra-Innovator” in big organizations, and aspiring “Extra-Innovator,” I’ve compiled a list of tips, things to look out for, and untapped opportunities to help you create significant change at big companies.
- Ask for Moral Support: Anyone looking to build a fledgling business needs support from mentors, friends, family, investors, customers, and others to succeed.
- Gather ALL the Information: You think your idea is a good one. But to build consensus and support early on, you need something tangible. This might be in the form of a prototype that demonstrates value such as a validated customer need, product/market fit, a benefit provided to internal stakeholders, or buy-in from the ecosystem you operate within.
- Build Your Network: A validated idea is a tree in the forest. To have successful outcomes, you will need to build your social network for the change you seek. Experts, naysayers, competitors, your smartest friends. Build your ‘venture’ network in the right place.
- Timing is Everything: Once you’ve fully-formulated a solution and acquired the necessary support, the third essential piece is knowing where, when, and how to go public, ensuring that you’ve covered all your basis to reduce negative organizational impact and unintended consequences.
In the startup realm, entrepreneurs work to build consensus and support early on in their journey toward product/market fit. To drive successful outcomes, building your social network to enact change is as important as the change you seek to implement. There is no exception to this rule when working at a large company. While established structures and bureaucracies of large organizations create a different set of challenges for the intrapreneur, organizations also provide tremendous resources and assets, which allow you to pursue exciting and creative projects that may not be as accessible for an entrepreneur. If you are considering or are at the helm of innovation in your organization, here are the fundamental political and structural questions to consider:
- Who is really in control, or better yet, who wants to be in control and why?
- Are there any “Game of Thrones” battles currently playing out between executives you need to be sensitive to?
- How is your company structured?
- How many management layers does your company currently have?
- On a scale of 1-10, what’s the level of bureaucracy at your company; does it impede speed or progress; and can you move as fast as your competitors, startups included?
- How much of that impediment is a function of organizational design and structure, versus managerial overhead and politics? Are they related?
- What competitive assets do you already have in place that could be leveraged to your advantage? What might you need to build or bring in?
As you might discern from the line of questions, successful innovation requires a heavy dose of introspection, soul-searching, and open discussion about how a company might get out of its own way. At the end of the day, innovation comes down to quality conversations that build successful relationships. These relationships are anchors for work that is required in rethinking the design of your organization that will later allow you to implement courageous ideas.
The point is, innovation is a social game at big companies: the more social capital you have, the greater your chance of success. As new projects come online they may appear threatening to existing business areas, so building the right relationships and collaborations must be a priority. This is the reason why many experts understand that launching an innovation capability without direct oversight and support from the CEO or senior executives is problematic. While external competition is healthy and drives progress, internally it can create divisiveness, undermining efforts of individuals and teams. After all, innovation thrives on collaboration and quality conversations with like-minded people. Competing internally will hamper your company’s efforts to compete externally, and that’s a recipe for failure, whether you’re dealing with innovation efforts or not. Take caution in the type of culture you are creating.
From what I’ve seen, most new innovation leaders follow the protocol of keeping their build-outs in stealth mode to protect their ideas and ambitions, even if the CEO is their main supporter. Why is that? In large organizations, it might come down to survival, and the desire to change the status quo, which might trigger a response from leaders in the core business. It’s important to note that nothing of real value can get done without them, so you’ll need to identify strategies that keep them involved and benefiting from your efforts. There may be other reasons for flying under the radar, such as, “People don’t understand what we are doing,” or, “Our new ventures will cannibalize existing businesses,” or a myriad of external and internal factors around timing and market dynamics.
An alternative approach is to openly communicate and share every one of your efforts. That can help to build support, but in some organizations it leads to having your ideas knocked down before you even start building your strategy (a very real consequence for many new innovation leaders, especially those with very little social capital to go around.)
There are flaws in both the stealthy and open approaches, though you could argue that the former will leave you worse off than the latter.
Some advice about overcoming the flaws of each approach:
To begin, work to understand your internal network and do your homework on who is who. Determine which players are highly collaborative, focused on the future, and already have strong connections and respect within the ecosystem you’re working in. Target those people first. We call them “promoters.” It’s important to not only focus on senior management, but middle management as well, for they are the gatekeepers. Many senior members/generals rely on the advice of their captains before making big decisions. To move your ideas forward, buy-in from them is just as important as developing buy-in from the top command, especially within more hierarchical firms.
One thing you may want to do is create a list of people whose buy-in you will need, with ratings displaying levels of support based on your analysis. Next, determine how much information you need to share to move the conversation (and decision to support) forward. Thinking about what’s in it for the sponsor is critical. If they only see you as added headcount for their own pet projects, you’re moving in the wrong direction. This process should be about tackling new territory together — otherwise, you run into allocation problems down the road. The issue of duplicative work is already a huge problem for companies. Don’t compound this problem by trying to tackle ongoing work happening in other areas of the company. As you demonstrate success, opportunities to collaborate grow.
Next, be quick to eliminate the notion of your team as a threat to established businesses. Many business unit heads might see you as competition, or your presence as a critique of the work they are currently doing, or even how they are doing it! One way to build the bond needed to move ideas forward is to identify themes across the organization that matter to multiple stakeholders, and are not in direct conflict with any one area. Be forewarned: this is easier said than done. For areas where you can’t avoid friction, figure out how to build strong partnerships with a trusted business unit leader, perhaps in the form of a project where your two teams become one for an extended period of time, and attack a specific challenge. To avoid control issues in such partnerships (both during and after a project), outline clear roles, responsibilities, and expectations ahead of time. At the end of the day, the innovation leader is there to support the evolution of an existing business area or create an entirely new business for the company. Make sure you know when to lean into your power, versus when to succumb to your partners for the health and well being of your company.
Of course, developing strategic alliances also has its downsides in what I’ll dub “ripple effects.” Building alliances with one group may have unintended consequences, such as the alienation of another group. No good deed goes unpunished, so it’s important to understand the systemic effects your decisions will have when you move in one direction versus another. Anticipating and being sensitive to these potential impacts, and proactively addressing them, can keep you out of trouble.
Use the ratings list we discussed earlier to create a heat map of where these sensitivities may lie, and run through as many scenarios as you can to anticipate unwanted consequences. Mapping out the connections and relationships between leaders can paint a clear picture of where there might be less risk to start.
Unfortunately, when dealing with a large company where lots of people are involved, there is no strategy that will completely keep you out of trouble. In such cases, look to those who can shelter and believe in what you’re doing. Innovation efforts take several years to become successful, and it takes a deep commitment and persistence to see them through. A major mistake many companies make is to shift direction too early, losing key talent.
In summary, innovation efforts have real potential to spur incremental and transformational change at large organizations. These efforts demonstrate not only an ability to build and deploy new products and services, but stand as examples of how Industrial Era businesses and structures can evolve to embrace the flatter structures and faster cycle times that the Information Age requires. Typically, they don’t go far enough and most companies find solace in keeping one foot firmly planted in ways of the past, perhaps to their detriment.
The key to unlocking innovation at scale will require a deep self-assessment on the part of entrenched organizations; a commitment to building the organizational structures of the future; and most importantly, embracing and empowering the catalysts within to drive change.