A week or so ago I joined a group for lunch to talk to one member of the team that was leading an innovative start up “sponsored” from within a giant global corporation. Several things struck me about the extremely informative and entertaining conversation we had over lunch:

  • The level of energy and enthusiasm involved in and resulting from the opportunity to do something brand new (which you need to fuel the 18 hour days involved in building a business from scratch in just a few months).
  • The inevitability of the original idea crashing against reality early on, yet spawning what actually worked – passion and belief are important, but so is a thorough grasp of reality, and a willingness to make lemonade from the lemons.
  • The need for some “distance” from the corporate parent (organizationally and in this case geographically) so that the new business could do whatever was needed without carrying the burden of the parents rules and process bureaucracy – while at the same time being sufficiently “connected” (organizationally, and in this case through key individual sponsors) to keep the information (and funding) flow going.
  • The belief amongst the small team leading the effort (for the most part in their early thirties) that they were “inventing” corporate innovation and that whenever they finally worked out how to do it, the process would become the norm everywhere, because when it works it’s amazing what you can do.

I wish them luck. My first exposure to something like this was in 1999 (I have to remind myself that that’s nearly two decades ago), so they’re hardly at the forefront of something new, even if they are the new kids on the block. Since then, I’ve worked with a lot of companies trying to do the “innovation” thing in a variety of ways from buried inside to tossed out with funding to make their own way. I’ve seen a lot of crash and burn, a few one-off successes and very few sustained results. Innovation is hard, involves change and faces the inevitability of both resistance and regression to the familiar.

Nevertheless we keep trying to make it work.

So let me share some thoughts (my own and collected from others) about managing innovation in a corporate context.

  • A parent corporation’s fears of brand damage from the unsupervised upstart are seldom rational or realized. Strong brands are generally able to withstand minor stumbles and upstarts can’t generally generate a lot of damage, even in an age of social media, except to themselves.
  • The distance/connection strength balance matters, and it’s always (without any exceptions I can think off) dependent on the people involved. Without the right personal network, it’s not going to work.
  • Startups substitute time (long hours worked at whatever needs doing) for funding. Expect to be exhausted most of the time. For a lot longer than you think. That’s one reason who a lot of startups are founded and led by young people. They can take the stress.
  • The founding team stays involved in everything if it wants to be successful – but builds a bigger team with a shared vision as soon as possible if it wants to avoid burn out.
  • Most of the rules and processes designed to protect the parent (from all sorts of real and imagined risks) are death to the innovators who are there specifically to take (and manage) risks – not to avoid them.
  • Success is a guarantee of attention but not longevity. It’s a wise (and extremely rare) parent that can give their offspring room to run when the scale of their success becomes material. I’ve seen the re-absorption “now that you’re not a startup anymore” kill more innovation programs than bad initial ideas.
  • Playing at innovation – internal incubators, fancy technology, “cool” outreach to “hot” geographies; various shiny objects – dooms you to eventual failure, even though I’s possible to enjoy the ride. Innovation is hard work over an extended period of time and by definition, to be successful it must disrupt the status quo, not paper it over with a veneer of “different”, while not fundamentally changing anything.

The cynical amongst you might point out that maybe I’m just no good at this innovation thing and suggest I should turn my attention and energy elsewhere. But my first attempt saved the giant business I worked for hundreds of millions of dollars and generated hundreds of millions more in new business ideas in just a couple of years. The reward? The program got shut down after “meeting its objectives” – except the objective of embedding sustainable innovation in the “DNA” of the organizational culture. The leadership liked the results, but not the potentially disruptive consequences. I’ve seen a lot of that in the subsequent decades. It’s easy to play at innovation; hard to make it work.

If your innovation program is more theater than substance, good luck – you’re going to need it.

John Parkinson
Affiliate Partner
Waterstone Management Group