Everything in life is balance. So it’s also true for corporate startups.

New macro trends in the global political and economic scene are emerging; the “liberal internationalism” we experimented since the WWII, is now under attacks by many sides; markets closing and potential global conflicts are new shadows over our future (suggestions from “Three scenarios for the future of geopolitics”, World Economic Forum). Despite that, we can be optimistic, our economies and societies are strong yet, and new technologies are promising greater impulse to our evolution like never before. For our companies, innovation remains a well known success (survival) factor and huge investment are made in this direction. But it remains also so hard.

Considering those who are sincerely willing to innovate, many negative factors hinder the best intentions, and we could synthesize (with the help of an Impact Map for innovation initiatives in a company):

  • (what) new effective and sustainable business opportunities are hard to be identified;
  • (how) the effort in time and money is huge and in case of happy budget, time is always short and money could be easily wasted;
  • (who) old culture and traditional habits are not prone to look for change accepting failure, and often those let the usual business squashes the new one;
  • (why) too much often the business success is, beyond a matter of survival, an introvert sense of satisfaction and self affirmation

The “startup way” (any reference to the last book of Eric Ries is intentional but also years of practice helped to focus) is a new promising paradigm to foster innovation in corporate contexts, and we can recognize many reasons:

  • the “startup machine” demonstrated to generate innovative businesses (sometime surprisingly rich), when activated in fertile ecosystems;
  • development time is really fast, even shaming the pachydermic slowness of corporates;
  • money seems to be not the first issue;
  • no organizational structure and culture is working against;
  • the survival and success are fully dependent on the customer acceptance.

More over, the startup approach allows to move on the path of radical innovation, generating new business models that are the most useful innovation in perspective (even if disrupting the market itself where the corporate is used to win).

There is also another reason I have to mention with some reluctance: the hype around the startup circus is tempting the corporate management to produce some “operas” (yes, like at theatre) to engage and motivate their employees, and generate a perception of modernity in other stakeholders and customers as well. That refers also to the talent management, a linked critical issue in corporates, and then it deserves the proper attention.

Corporations are not the best humus where the seedlings can sprout, so to achieve this goal a special effort has to be provided, working on those negative factors mentioned before, and inspired by the approaches validated in the startup context. In addition (or even in substitution) to this, corporations can look at the startup ecosystems already active in the world, and start different kind of synergies for a mutual benefit.

Let’s focus now on the idea of gardening inside the corporate environment, with the precious suggestions in mind from the books of Eric Ries, Alex Osterwalder, Tendayi Viki and others). Unlike “bootstrap” startups, growing “under glass” (in some incubators) or spontaneously in the wild (with the tutoring of some accelerators, if possible), “corporate startups” have significant benefits coming from the parent companies (talents, access to customers, specialized competence in technologies and others, shared services, funds …) but they also take big risks due to their organization culture and structure. From the point of view of the company, different issues arise when such an “innovation program” is runned, basically balancing issues.

Based on my experience in multinational corporate environment, I could say the diverging forces trade-off regards:

  • expectations on time, required budget, and the urgency for gaining business results in short terms;
  • effort charged on the people involved, especially if not fully dedicated to the startup and still allocated on core business demanding activities;
  • freedom to explore the business opportunities where they are and not where the company is already pushing;
  • new open organization model not fitting the existing hierarchy;
  • ambition in generating new business models that could cannibalize the actual business or even disrupt the market conditions needed by the company to survive and win by usual.

An impressive metaphor of this has been introduced using the term “ambidexterity” (proposed by O’Reilly already in 2004, then reused many times): with the right hand you have to be able to be creative ambitious and explorative so to discover new business opportunities like a startup; with the left hand you have to remain rational structured and focused on execution quality and performance, so to exploit the usual business and remain competitive.

Here the play seems to require a partially independent use of “many” hands. At least four dimensions have to be considered:

  • the business perspective, that is the capability to understand the customer needs, working together so to identify the effective and sustainable business model and how to operate it;
  • the proper methodological approach, that is the mix of methods and tools (from lean startup to customer development, from design thinking to modern agile…) to be adopted tailoring on the distinctive context, in order to improve effectiveness, speed, and usage of resources;
  • the balanced organization structure, that is the one letting the startup be aligned with the very top level company strategy, aware of the company assets, supported by the management, open to interacting and learning from everyone in the organization and from outside, and also free to move autonomously and take courageous decisions (note that the team itself has to be internally agile and able to fit such demanding immediate environment)
  • the intrapreneurial mindset of the people involved, that is fostering the hidden attitudes emergence in talented people, and nurturing a culture encouraging innovation both on the top managers and the people involved in the program.

I’ll like to share my learnings about this kind of initiatives, achieved experimenting and coaching the adoption of these ideas and methods in a real environment, an ambitious program of a multinational corporate, for months.

Originally published at https://www.linkedin.com on October 8, 2018.

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Gino Tocchetti

Gino Tocchetti

Business Design, Corporate Innovation, Strategy Advisor