Why Some Startups Win

If you don’t know where you’re going, how will you know when you get there?

I was having a second coffee with an ex student, now the head of a marketing inside a rapidly growing startup.  His company had marched through customer discovery, learning about the customer problem, validated solutions and was now scaling sales and marketing.  All good news.

But he was getting uneasy that as his headcount was growing the productivity of his marketing department seemed to be rapidly declining.

I wasn’t surprised. When organizations are small (startups, small teams in companies and government agencies) early employees share a mission (why they come to work, what they need to do while they are at work, and how they will know they have succeeded). But as these organizations grow large, what was once a shared mission and intent gets buried under HR process and Key Performance Indicators.

I told him that I had learned long ago that to keep that from happening, you need to on-board/train your team about mission and intent.

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Why Do You Work Here?
I had taken the job of VP of Marketing in a company emerging from bankruptcy. We’d managed to secure another infusion of cash, but it wasn’t going to last long.

During my first week on the job, I asked each of my department heads what they did for marketing and the company. When I asked our trade show manager, she looked surprised and said, “Steve, don’t you know that my job is to take our booth to trade shows and set it up?” The other departments gave the same type of logistical answers; the product-marketing department, for example, said their job was to get the product specs from engineering and write data sheets. But my favorite was when the public relations manager told me, “We’re here to summarize the data sheets and put them in press releases and then answer the phone in case the press calls.”

If these sound like reasonable answers to you, and you are in a startup, update your resume.

Titles Are Not Your Job
When I pressed my staff to explain why marketing did trade shows or wrote press releases or penned data sheets, the best response I could get was, “Why that’s our job.” In their heads their titles were a link back to a Human Resources job spec that came from a 10,000-person company (ie. listing duties and responsibilities, skills and competencies, reporting relationships…)

It dawned on me that we had a department full of people with titles describing process-centric execution while we were in environment that required relentless agility and speed with urgency. While their titles might be what their business cards said, titles were not their job – and being a slave to process lost the sight of the forest for the trees.  This was the last thing we needed in a company where every day could be our last.

Titles in a startup are not the same as what your job is. This is a big idea.

Department Mission Statements – What am I Supposed to Do Today?
It wasn’t that I had somehow inherited dumb employees. What I was hearing was a failure of management.

No one had on-boarded these people. No one had differentiated a startup job description from a large company job. They were all doing what they thought they were supposed to.

But most importantly, no one had sat the marketing department down and defined our department Mission (with a capital “M”).

Most startups put together a corporate mission statement because the CEO remembered seeing one at his last job or the investors said they needed one. Most companies spend an inordinate amount of time crafting a finely honed corporate mission statement for external consumption and then do nothing internally to make it happen. What I’m about to describe here is quite different.

What our marketing department was missing was anything that gave the marketing staff daily guidance about what they should be doing. The first reaction from my CEO was, “That’s why you’re running the department.” And yes, we could have built a top-down, command-and-control hierarchy. But what I wanted was an agile marketing team capable of operating independently without day-to-day direction.

We needed to craft a Departmental Mission statement that told everyone why they came to work, what they needed to do while they were at work, and how they would know they had succeeded. And it was going to mention the two words that marketing needed to live and breathe: revenue and profit.

Five Easy Pieces – The Marketing Mission
After a few months of talking to customers and working with sales, we defined the marketing Mission (our job) as:

Help Sales deliver $25 million in sales with a 45% gross margin. To do that we will create end-user demand and drive it into the sales channel, educate the channel and customers about why our products are superior, and help Engineering understand customer needs and desires. We will accomplish this through demand-creation activities (advertising, PR, tradeshows, seminars, web sites, etc.), competitive analyses, channel and customer collateral (white papers, data sheets, product reviews), customer surveys, and customer discovery findings.

This year, marketing needs to provide sales with 40,000 active and accepted leads, company and product name recognition over 65% in our target market, and five positive product reviews per quarter. We will reach 35% market share in year one of sales with a headcount of twenty people, spending less than $4,000,000.

  • Generate end-user demand (to match our revenue goals)
  • Drive that demand into our sales channels
  • Value price our products to achieve our revenue and margin goals (create high-value)
  • Educate our sales channel(s)
  • Help Engineering understand customer needs

That was it. Two paragraphs, Five bullets. It didn’t take more.

Building a Mission-focused Team
Having the mission in place meant that our team could see that what mattered wasn’t what was on their business card, but how much closer their work moved our department to completing the mission. Period.
It wasn’t an easy concept for everyone to understand.

My new Director of Marketing Communications turned the Marcom departments into a mission-focused organization. Her new tradeshow manager quickly came to understand that his job was not to set up booths. We hired union laborers to do that. A trade show was where our company went to create awareness and/or leads. And if you ran the tradeshow department, you owned the responsibility for awareness and leads. The booth was incidental. I couldn’t care less if we had a booth or not if we could generate the same amount of leads and awareness by skydiving naked into a coffee cup.

The same was true for PR. My new head of Public Relations quickly learned that my admin could answer calls from the press. The job of Public Relations wasn’t a passive “write a press release and wait for something to happen” activity. It wasn’t measured by how busy you were, it was measured by results. And the results weren’t the traditional PR metrics of number of articles or inches of ink. I couldn’t care less about those. I wanted our PR department to map the sales process, figure out where getting awareness and interest could be done with PR, then get close and personal with the press and use it to generate end-user demand and then drive that demand into our sales channel. We were constantly doing internal and external audits and creating metrics to see the effects of different PR messages, channels and audiences on customer awareness, purchase intent and end-user sales.

The same was true for the Product Marketing group. I hired a Director of Product Marketing who in his last company had ran its marketing and then went out into the field and became its national sales director. He got the job when I asked him how much of his own marketing material his sales team actually used in the field. When he said, “about ten percent,” I knew by the embarrassed look on his face I had found the right guy. And our Director of Technical Marketing was superb at understanding customer needs and communicating them to Engineering.

Mission Intent – What’s Really Important
With a great team in place, the next step was recognizing that our Mission statement might change on the fly. “Hey, we just all bought into this Mission idea and now you’re telling us it can change?!”  (The mission might change if we pivot, competitors might announce new products, we might learn something new about our customers, etc.)

So we introduced the notion of Mission Intent. Intent answered the question, “What is the company thinking and goal behind the mission?” In our case, the mission of the company was to sell $25 million of product with 45% gross margin. The idea of teaching intention is that if employees understand what we intended  behind the mission, they can work collaboratively to achieve it.

We recognized that there would be a time marketing would screw up or something out of our control would happen, making the marketing mission obsolete (i.e. we might fail to deliver 40,000 leads.) Think of intention as the answer to the adage, “When you are up to your neck in alligators it’s hard to remember you were supposed to drain the swamp.” For example, our mission intent said that the reason why marketing needed to deliver 40,000 leads and 35% market share, etc., was so that Sales could sell $25 million of products at 45% gross margin.

What we taught everyone is that the intention is more enduring than the mission. (“Let’s see, the company is trying to sell $25 million in product with 45% gross margin. If marketing can’t deliver the 40,000 leads, what else can we do for sales to still achieve our revenue and profitability?”) The mission was our goal, but based on circumstances, it might change. However, the Intent was immovable.

When faced with the time pressures of a startup, too many demands and too few people, we began to teach our staff to refer back to the five Mission goals and the Intent of the department. When stuff started piling up on their desks, they learned to ask themselves, “Is what I’m working on furthering these goals? If so, which one? If not, why am I doing it?”

They understood the mission intent was our corporate revenue and profit goals.

Why Do It
By the end of the first year, our team had jelled. (Over time, we added the No Excuses culture to solve accountability.) It was a department willing to exercise initiative, with the judgment to act wisely and an eagerness to accept responsibility.

I remember at the end of a hard week my direct reports came into my office just to talk about the week’s little victories. And there was a moment as they shared their stories when they all began to realize that our company (one that had just come off of life support) was beginning to kick the rear of our better-funded and bigger competitors.  We all marveled in the moment.


Lessons Learned

  • Push independent execution of tasks down to the lowest possible level
  • Give everyone a shared Mission Statement: why they come to work, what they need to do, and how they will know they have succeeded.
  • Share Mission Intent for the big picture for the Mission Statement
  • Build a team comfortable with independent Mission execution
  • Add a No Excuses Culture
  • Agree on Core Values to define your culture

Why Tim Cook is Steve Ballmer and Why He Still Has His Job at Apple

What happens to a company when a visionary CEO is gone? Most often innovation dies and the company coasts for years on momentum and its brand. apple-equals-microsoftRarely does it regain its former glory.

Here’s why.


Microsoft entered the 21st century as the dominant software provider for anyone who interacted with a computing device. 16 years later it’s just another software company.

After running Microsoft for 25 years, Bill Gates handed the reins of CEO to Steve Ballmer in January 2000. Ballmer went on to run Microsoft for the next 14 years. If you think the job of a CEO is to increase sales, then Ballmer did a spectacular job. He tripled Microsoft’s sales to $78 billion and profits more than doubled from $9 billion to $22 billion. The launch of the Xbox and Kinect, and the acquisitions of Skype and Yammer happened on his shift. If the Microsoft board was managing for quarter to quarter or even year to year revenue growth, Ballmer was as good as it gets as a CEO. But if the purpose of the company is long-term survival, then one could make a much better argument that he was a failure as a CEO as he optimized short-term gains by squandering long-term opportunities.

How to Miss the Boat – Five Times
Despite Microsoft’s remarkable financial performance, as Microsoft CEO Ballmer failed to understand and execute on the five most important technology trends of the 21st century: in search – losing to Google; in smartphones – losing to Apple; in mobile operating systems – losing to Google/Apple; in media – losing to Apple/Netflix; and in the cloud – losing to Amazon. Microsoft left the 20th century owning over 95% of the operating systems that ran on computers (almost all on desktops). Fifteen years and 2 billion smartphones shipped in the 21st century and Microsoft’s mobile OS share is 1%. These misses weren’t in some tangential markets – missing search, mobile and the cloud were directly where Microsoft users were heading.  Yet a very smart CEO missed all of these.  Why?

Execution and Organization of Core Businesses
It wasn’t that Microsoft didn’t have smart engineers working on search, media, mobile and cloud. They had lots of these projects. The problem was that Ballmer organized the company around execution of its current strengths – Windows and Office businesses. Projects not directly related to those activities never got serious management attention and/or resources.

For Microsoft to have tackled the areas they missed – cloud, music, mobile, apps – would have required an organizational transformation to a services company. Services (Cloud, ads, music) have a very different business model. They are hard to do in a company that excels at products.

Ballmer and Microsoft failed because the CEO was a world-class executor (a Harvard grad and world-class salesman) of an existing business model trying to manage in a world of increasing change and disruption. Microsoft executed its 20th-century business model extremely well, but it missed the new and more important ones. The result?  Great short-term gains but long-term prospects for Microsoft are far less compelling.

In 2014, Microsoft finally announced that Ballmer would retire, and in early 2014, Satya Nadella took charge. Nadella got Microsoft organized around mobile and the cloud (Azure), freed the Office and Azure teams from Windows, killed the phone business and got a major release of Windows out without the usual trauma. And is moving the company into augmented reality and conversational AI. While they’ll likely never regain the market dominance they had in the 20th century, (their business model continues to be extremely profitable) Nadella likely saved Microsoft from irrelevance.

What’s Missing?
Visionary CEOs are not “just” great at assuring world-class execution of a tested and successful business model, they are also world-class innovators. Visionary CEOs are product and business model centric and extremely customer focused.

The best are agile and know how to pivot – make a substantive change to the business model while or before their market has shifted. The very best of them shape markets – they know how to create new markets by seeing opportunities before anyone else. They remain entrepreneurs.

arc-2-5
One of the best examples of a visionary CEO is Steve Jobs who transformed Apple from a niche computer company into the most profitable company in the world. Between 2001 to 2008, Jobs reinvented the company three times. Each transformation – from a new computer distribution channel – Apple Stores to disrupting the music business with iPod and iTunes in 2001; to the iPhone in 2007; and the App store in 2008 – drove revenues and profits to new heights

apple-2001-to-08-arcThese were not just product transitions, but radical business model transitions – new channels, new customers and new markets–and new emphasis on different parts of the organization (design became more important than the hardware itself and new executives became more important than the current ones).

Visionary CEOs don’t need someone else to demo the company’s key products for them. They deeply understand products, and they have their own coherent and consistent vision of where the industry/business models and customers are today, and where they need to take the company.  They know who their customers are because they spend time talking to them. They use strategy committees and the exec staff for advice, but none of these CEOs pivot by committee.

Why Tim Cook Is the New Steve Ballmer
And that brings us to Apple, Tim Cook and the Apple board.

One of the strengths of successful visionary and charismatic CEOs is that they build an executive staff of world-class operating executives (and they unconsciously force out any world-class innovators from their direct reports). The problem is in a company driven by a visionary CEO, there is only one visionary. This type of CEO surrounds himself with extremely competent executors, but not disruptive innovators. While Steve Jobs ran Apple, he drove the vision but put strong operating execs in each domain – hardware, software, product design, supply chain, manufacturing – who translated his vision and impatience into plans, process and procedures.

slide1When visionary founders depart (death, firing, etc.), the operating executives who reported to them believe it’s their turn to run the company (often with the blessing of the ex CEO).  At Microsoft, Bill Gates anointed Steve Ballmer, and at Apple Steve Jobs made it clear that Tim Cook was to be his successor.

Once in charge, one of the first things these operations/execution CEOs do is to get rid of the chaos and turbulence in the organization. Execution CEOs value stability, process and repeatable execution. On one hand that’s great for predictability, but it often starts a creative death spiral – creative people start to leave, and other executors (without the innovation talent of the old leader) are put into more senior roles – hiring more process people, which in turn forces out the remaining creative talent. This culture shift ripples down from the top and what once felt like a company on a mission to change the world now feels like another job.

As process oriented as the new CEOs are, you get the sense that one of the things they don’t love and aren’t driving are the products (go look at the Apple Watch announcements and see who demos the product).

Tim Cook has now run Apple for five years, long enough for this to be his company rather than Steve Jobs’. The parallel between Gates and Ballmer and Jobs and Cook is eerie. Apple under Cook has doubled its revenues to $200 billion while doubling profit and tripling the amount of cash it has in the bank (now a quarter of trillion dollars). The iPhone continues its annual upgrades of incremental improvements. Yet in five years the only new thing that managed to get out the door is the Apple Watch. With 115,000 employees Apple can barely get annual updates out for their laptops and desktop computers.

But the world is about to disrupt Apple in the same way that Microsoft under Ballmer faced disruption. Apple brilliantly mastered User Interface and product design to power the iPhone to dominance. But Google and Amazon are betting that the next of wave of computing products will be AI-directed services – machine intelligence driving apps and hardware. Think of Amazon Alexa, Google Home and Assistant directed by voice recognition that’s powered by smart, conversational Artificial Intelligence – and most of these will be a new class of devices scattered around your house, not just on your phone. It’s possible that betting on the phone as the platform for conversational AI may not be the winning hand.

It’s not that Apple doesn’t have exciting things in conversational AI going on in their labs. Heck, Siri was actually first. Apple also has autonomous car projects, AI-based speakers, augmented and virtual reality, etc in their labs. The problem is that a supply chain CEO who lacks a passion for products and has yet to articulate a personal vision of where to Apple will go is ill equipped to make the right organizational, business model and product bets to bring those to market.

Four Challenges for the Board of Directors
The dilemma facing the boards at Microsoft, Apple or any board of directors on the departure of an innovative CEO is strategic: Do we still want to be a innovative, risk taking company?  Or should we now focus on execution of our core business, reduce our risky bets and maximize shareholder return.

Tactically, that question results in asking: Do you search for another innovator from outside, promote one of the executors or go deeper down the organization to find an innovator?

Herein lies four challenges. Steve Jobs and Bill Gates (and 20th century’s other creative icon -Walt Disney) shared the same blind spot: They suggested execution executives as their successors. They confused world-class execution with the passion for product and customers, and market insight. From the perspective of Gates there was no difference between him and Ballmer and from Jobs to Cook. Yet history has shown us for long-term survival in markets that change rapidly that’s definitely not the case.

The second conundrum is that if the board decides that the company needs another innovator at the helm, you can almost guarantee that the best executor – the number 2 and/or 3 vice president in the company – will leave, feeling that they deserved the job. Now the board is faced with not only having lost its CEO, but potentially the best of the executive staff.

The third challenge is that many innovative/visionary CEOs have become part of the company’s brand. Steve Jobs, Jeff Bezos, Mark Zuckerberg, Jeff Immelt, Elon Musk, Mark Benioff, Larry Ellison. This isn’t a new phenomenon, think of 20th-century icons like Walt Disney, Edward Land at Polaroid, Henry Ford, Lee Iacocca at Chrysler, Jack Welch at GE and Alfred Sloan at GM. But they’re not only an external face to the company, they were often the touchstone for internal decision-making. Years after a visionary CEO is gone companies are still asking “What would Walt Disney/Steve Jobs/Henry Ford have done?” rather than figuring out what they should now be doing in the changing market.

Finally, the fourth conundrum is that as companies grow larger and management falls prey to the fallacy that it only exists to maximize shareholder short-term return on investment, companies become risk averse. Large companies and their boards live in fear of losing what they spent years gaining (customers, market share, revenue, profits.) This may work in stable markets and technologies. But today very few of those remain.

In the 21st Century an Execution CEO as a Successor Increasingly May be The Wrong Choice
In a startup the board of directors realizes that risk is the nature of new ventures and innovation is why they exist. On day one there are no customers to lose, no revenue and profits to decline. Instead there is everything to gain. In contrast, large companies are often risk-averse engines – they are executing a repeatable and scalable business model that spins out the short-term dividends, revenue and profits that the stock market rewards. And an increasing share price becomes the reason for existing. The irony is that in the 21st century, the tighter you hold on to your current product/markets, the likelier you will be disrupted. (As articulated in the classic Clayton Christensen book The Innovators Dilemma, in industries with rapid technology or market shifts, disruption cannot be ignored.)

Increasingly, a hands-on product/customer, and business model-centric CEO with an entrepreneurial vision of the future may be the difference between market dominance and Chapter 11. In these industries, disruption will create opportunities that force “bet the company” decisions about product direction, markets, pricing, supply chain, operations and the reorganization necessary to execute a new business model.  At the end of the day CEOs who survive embrace innovation, communicate a new vision and build management to execute the vision.

Lessons Learned

  • Innovation CEOs are almost always replaced by one of their execution VPs
  • If they have inherited a powerful business model this often results in gains in revenue and profits that can continue for years
  • However, as soon the market, business model, technology shifts, these execution CEOs are ill-equipped to deal with the change – the result is a company obsoleted by more agile innovators and left to live off momentum in its twilight years
A shorter version of this article previously appeared in the Harvard Business Review.

The 11 Bad Habits Killing Innovation in Your Company

osterwalder-photoAlexander Osterwalder invented the Business Model Canvas, co-founded strategyzer.com and was the lead author of Business Model Generation which sold a million copies in 30 languages.

Alexander and I often collaborate on new ideas for corporate innovation.  Here’s his guest post on what bad habits to avoid inside of a company.


Big companies have great execution habits to manage and improve successful business models and value propositions. But the habits that foster execution can easily kill new growth initiatives inside your company.

Bad Habit #1: The current business model dominates the agenda
In most companies the future suffers at the expense of the present. Companies are great at improving their existing business model and value propositions, but fall short when it comes to inventing entirely new business models, value propositions, and growth engines. In fact, by the time a company realizes it needs to reinvent itself for future success, it’s often too late. This happens because managing the present often takes oxygen away from inventing the future. Rita McGrath, a Columbia Business School professor says, “there’s pleasing today’s customers and there’s developing tomorrow’s business.” You need to be excellent at both.

Remedy: Create a protected space in your org chart where you invent and test new business models and value propositions. Equip this “space” with power and prestige. Become an ambidextrous organization — one that is excellent at managing and improving your existing business, alongside inventing new ones.

Bad Habit #2: One-size-fits-all decision making hurts speed & inventiveness
Companies that grow in size and scale proven products and services can quickly fall into a trap of slowness, unthoughtful risk aversion, and failure to experiment. As Jeff Bezos puts it, one-size-fits-all decision making “hurts speed and inventiveness” inside large organizations. In fact, Bezos constantly adjusts Amazon’s culture to ensure that the company never slows down and loses its entrepreneurial and nimble approach to finding future business success.

Remedy: Amazon distinguishes between non-reversible decisions with substantial sunk costs (like e.g. investing in a new warehouse in Amazon’s case), and reversible decisions like experimenting with a new offer. The former requires slow and careful decision making. The latter requires speed and agility.

Bad Habit #3: Insisting on untested and detailed business plans
Most established companies require detailed business plans for new ideas. This results in carefully crafted and thought-through documents with detailed spreadsheets and a great focus on how an idea will be implemented. However, the first goal of an innovator should not be to think hard about an idea and describe its implementation. First and foremost, an innovator’s job should be to rapidly, cheaply, and continuously test and adapt ideas until there’s enough evidence from the field to prove they will work. Only the latter helps avoiding big flops because it systematically reduces the risk and uncertainty of new ideas. Business plans actually maximize the risk of failure because of the focus on executing an unproven idea rather than testing it.

Remedy: Use business plans only for execution of existing businesses. Don’t ask innovators for business plans. Instead, implement processes that force innovators to systematically prototype and test ideas, reduce risk and uncertainty, and ultimately provide the evidence that an idea will work and is worth doing.

Bad Habit #4: Opinions matter more than evidence
Senior leaders acquire a lot of knowledge and experience about their business over the course of their  career. Unfortunately, this knowledge may be irrelevant when it comes to new value propositions and new business models. For example, the knowledge that Kodak’s leaders acquired during their successful decades in analog film didn’t equip them for digital photography. Quite the contrary. The rules to compete in the digital age are completely different. That’s why it’s so important for companies to “get out of the building” and interact with customers. Steve Blank, father of the Lean Startup movement, stresses that you will never know enough about your customers if you are holed up inside a boardroom. A good idea might still be a bad idea because customers don’t care about it. Michael Schrage, a research fellow at MIT, emphasizes that “a testable idea is better than a good idea”.

Remedy: Educate leaders that judging ideas for new value propositions, business models, and growth engines requires evidence from the field rather than just “expert opinion” from leadership. Implement processes that judge ideas based not on how they look, but based on the evidence from the field that support them.

Bad Habit #5: Outsourcing customer discovery and testing
Large companies have a habit of hiring outside agencies to do market research and customer discovery. That’s dangerous when it comes to developing new value propositions, business models, and growth engines. You can’t hire outside professionals to test and learn from customer interactions and make decisions for you. New ideas require many rapid iterations between prototyping, immediately testing with customers, and then deciding how to adapt your idea based on the acquired insights.

Remedy: For radically new ideas you should defer hiring outside agencies until you’ve found product/market fit. Instead, roll up your sleeves and internalize the hard work of rapid prototyping, testing, learning, and deciding. Third parties can help you with the process, but they can’t do the work for you.

Bad Habit #6: Senior leadership too busy for hands-on innovation
Senior leaders are very busy and time pressed people. Typically, they see the “getting out of the building” to test ideas with customers as a task to be performed by subordinates. But leaders have to be more than just sponsors of new business ideas. Decision makers are the ones who can make things happen. They are the ones who need to feel the market and talk to (potential) customers to learn that some of their initial assumptions or strong opinions might be completely wrong. Equipped with these market insights they can help move things faster.

Remedy: Distinguish between senior leaders who manage the present like running factories, and senior leaders who are involved in creating the future and need to “get out of the building”.

Bad Habit #7: Obsessing about competitors rather than customers
Unfortunately, many companies are more obsessed by their competition than their customers. Your customers are far more important than your competitors. Your (potential new) customers can tell you how to beat your competitors. Customer have the evidence your organization needs to validate or invalidate new business ideas and potential growth engines. That doesn’t mean you should completely ignore the competition. After all, business models and value propositions aren’t designed in a vacuum. However, competitors should not be your primary focus. As Steve Blank says, “You can’t drive forward by looking in the rear view mirror.”

Remedy: Obsess over your customers first when developing and testing new value propositions, business models, and growth engines. Then, evaluate how these new ideas perform in the competitive landscape.

Bad Habit #8: Focus on technology risk at the expense of other risks
New business ideas face many different risks. The California design firm IDEO distinguishes between three types of risk when they assess prototypes: desirability, feasibility, viability. Desirability is about the risk of your customers not being attracted by your new value proposition. Feasibility is about technology and infrastructure risks. Viability is about financial risks. We added a fourth risk, adaptability. Adaptability is about the risk of a business model and value proposition not being fit for evolving external factors, like competition, technology change, or regulation (risk: external threats).

Remedy: Make sure you test all four types of risks: desirability, feasibility, viability, and adaptability.

Bad Habit #9: Innovation is career limiting
In many companies being an innovator is not an attractive career path. First, in most organizations any type of failure is seen as a negative for your career. Yet good innovation processes require rapid experimentation and failure to gain insights, adapt, and ultimately succeed. Second, corporate incentives are geared to rewarding execution, where failure is not an option. Third, in most companies, innovation is still seen as a department for pirates and “the crazy ones” who really add no value to revenue and profit. And finally, prestige in companies is measured by who commands the largest budget and staff. But great innovation programs always start small.

Remedy:
Create different incentive systems for the people focused on execution, and the people focused on innovation. Make innovation a prestigious job in your company. After all, the innovators are ensuring your organization’s survival in an age of constant change.

Bad Habit #10: Innovation is siloed from Execution
Companies struggle to get the “execution engine” and “innovation engine” to collaborate, rather than to compete. Rather than realizing that managing the present and inventing the future are equally important and should be equally resourced, they often fight for the same resources. Often the execution engine deprives the innovators from access to valuable resources like customers, brand, or skills. That means the innovators end up competing without any competitive advantage against the more nimble and agile startups.

Remedy: Create a culture where executors and innovators collaborate because they understand each other’s value to the organization. Create processes and incentives that grant innovators access to customers, brands, and skills so they can outcompete the more nimble and agile startup ventures.

Bad Habit #11: Integrating new ideas into the execution engine too quickly
New ideas are fragile and they need to be carefully nurtured and scaled before they are integrated into the execution engine with its rigid processes, key performance indicators rules, and procedures. If you integrate new ideas before they fully mature you might kill them. For example, Nespresso, the successful daughter company of Nestlé, only survived and thrived because they were physically distant from Nestlé’s headquarters.

Remedy: Protect new ideas until they fully mature; for example, like in Nestlé’s case, by locating the project outside of the company’s headquarters.

Join Alex Osterwalder at the Business Model Canvas Masterclass in San Francisco, Nov. 3 – register here

osterwalder-photo


 

Intel Disrupted: Why large companies find it difficult to innovate, and what they can do about it

In the 21st century it’s harder for large corporations to create disruptive breakthroughs. Disruptive innovations are coming from startups – Tesla for automobiles, Uber for taxis, Airbnb for hotel rentals, Netflix for video rentals and Facebook for media.

What’s holding large companies back? Here are four reasons:

First, companies bought into the false premise that they exist to maximize shareholder value – which said “keep the stock price high.” As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. These metrics make it difficult for a company that wants to invest in long-term innovation. It’s a lot easier to get these numbers to look great by outsourcing everything, getting assets off the balance sheet and only investing in things that pay off fast. To do that, companies jettisoned internal R&D labs, outsourced manufacturing and cut long-term investment. These resulting business models made them look incredibly profitable.

Second, the leaders of these companies tended to be those who excelled at finance, supply chain or production. They knew how to execute the current business model.

Intel under their last two CEOs delivered more revenue and profit than any ever before. They could point to record investment in R&D for more expensive chip fabs yet today the writing is on the wall that Intel’s leading days are over.  Why?

Over the last decade, Intel missed two important disruptive trends. First, the shift away from desktop computers to mobile devices meant that Intel’s power-hungry x86 processors weren’t suitable. ARM, a competitor, not only had a better, much lower power processor, but a better business model – they licensed their architecture to other companies that designed their own products. Intel attempted to compete, (and actually owned an ARM license) but fell victim to a classic failure of ignoring a low-end disruptor and hobbling their own chances by deciding not cannibalize their own very profitable x86 business. All of Intel’s resources – fabs, manufacturing strategies, and most importantly executive mindset — were geared towards large, expensive x86 processors, not low-cost mobile cores of someone else’s design.

The result, Intel just laid off 12,000 people, 11% of their company.roadkill

But it’s not over for Intel. Their most profitable segment is very high-end processors used in data centers in servers and the cloud. Today that’s built on the premise that an x86 architecture is the one best suited for big data. It’s becoming clear that extracting intelligence from that big data requires machine learning architectures which are better implemented with non x86 chips from companies like NVidia. It’s possible that by the end of this decade history might repeat itself in Intel’s most profitable segment.

The third reason why companies find it hard to innovate is the explosive shifts in technology, platforms and markets that have occurred in the last 15 years–personal computers moving to mobile devices; life science breakthroughs in therapeutics, diagnostics, devices and digital health; and new markets like China emerging as consumers and suppliers.

Which brings us to the fourth reason it’s harder for large corporations to offer disruptive breakthroughs: startups.

For the first 75 years of the 20th century, when capital for new ventures was scarce, the smartest engineering talent went to corporate R&D labs.

But starting in the last quarter of that century and accelerating in this one, a new form of financing – risk capital (angel and venture capital) — emerged. Risk capital has provided financing for new ideas in the form of startups. Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions).

Startups have realized that large companies are vulnerable because of the very things that have made them large and profitable: by focusing on maximizing shareholder return, they’ve jettisoned their ability to do disruptive innovation at speed and scale. In contrast, startups operate with speed and urgency, making decisions with incomplete information. They’re better than large companies at identifying customer needs/problems and finding product/market fit by pivoting rapidly. Their size lets them adopt flatter and more agile organizational structures while providing incentives that reward risk-taking and collaboration.

Startups are unencumbered by the status quo.  They re-envision how an industry can operate and grow, and they focus on better value propositions. On the low-end, they undercut cost structures, resulting in customer migration. At the high-end they create products and services that never existed before.

As we’ve seen, corporations are very good at maintaining, defending and refining existing business models, and they’re pretty good at extending existing models by identifying adjacencies. But corporations are weak, and have become weaker, in identifying new disruption opportunities.

Innovation can come from inside the corporation, by adopting Lean Startup language and methods, developing intrapreneurship, and fostering innovation-driving behaviors such as GE’s FastWorks program. And corporations can foster innovation from the outside by promoting open innovation and buying startup-driven innovation. Google has bought close to 160 companies in the last decade. Its acquisition of Android may have been the biggest bargain in corporate history.

So to succeed, corporations must re-think and then re-invent their corporate innovation model, replacing a static execution model with three horizons of continuous innovation: This requires a corporate culture, organizational structure, and employee incentives that reward innovation. It requires establishing acceptable risk level and innovation KPIs for each horizon.

And it also requires understanding the differences between executing the existing business model, extending the business model and searching for and disrupting the business model.

Lessons Learned

  • Even the most innovative companies eventually become yesterdays news
  • To survive companies need to run three-horizons of innovation
    • Horizon 1 – execute their existing business model(s)
    • Horizon 2 – extend their existing business model(s)
    • And for long-term survival – Horizon 3 – search for and create new/disruptive business model(s)


(this article first appeared in the Peoples Daily.)Peoples Daily

How to Set Up a Corporate Innovation Outpost That Works

This is the second in a series about the changing models of corporate innovation co-authored with Evangelos Simoudis. Evangelos and I are working on what we hope will become a book about the new model for corporate entrepreneurship. Read part one on the Evolution of Corporate R&D.

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Innovation and R&D Outposts
For decades large companies have set up R&D labs outside their corporate headquarters, often in foreign countries, in spite of having a large home market with lots local R&D talent. IBM’s research center in Zurich, GM’s research center in Israel, Toyota in the U.S are examples.

These remote R&D labs offered companies four benefits.

  • They enabled companies to comply with local government laws – for example to allow foreign subsidiaries to transfer manufacturing technology from the U.S. parent company while providing technical services for foreign customers
  • They improved their penetration of local and regional markets by adapting their products to the country or region
  • They helped to globalize their innovation cycle and tap foreign expertise and resources
  • They let companies develop products to launch in world markets simultaneously

Other companies operating in small markets with little R&D resources in their home country (ABB, Novartis and Hoffmann-La Roche in Switzerland, Philips in the Netherlands and Ericsson in Sweden) pursued R&D outside their home country by necessity.

Internationalization of R&D

source: Market versus technology drive in R&D internationalization: M von Zedtwitz, Oliver Gassmann

Innovation Outposts Are Moving To Innovation Clusters
Today, large companies are taking on a decidedly 21st-century twist. They are putting Innovation Outposts into Innovation Clusters -in particular Silicon Valley – to tap into the clusters’ innovation ecosystems.

(An Innovation Cluster is a concentration of interconnected companies that both compete and collaborate. Silicon Valley, Herzliya in Israel, Zhongguancun for software and Shenzen for hardware in China are examples of technology clusters, but so was Detroit for cars, Hollywood for movies, Milan for fashion.)

In the last five years, hundreds of large companies have established Innovation Outposts (and here) in Silicon Valley. The charter of these Innovation Outposts is to monitor Silicon Valley for new innovative technologies and/or companies (as emerging threats or potential tools for disruption) and then to take advantage of these innovations by creating new products or investing in startups.

While that’s the theory, the reality is that to date, most of these Innovation Outposts are at best another form of innovation theater – they make a large company feel like they’re innovating, but very few of these outposts change a company’s product direction and fewer impact their bottom line.

Companies who want their investments in Silicon Valley to be more than just press releases need to think through an end-to-end corporate outpost strategy.

This series of posts offers companies the tools to develop an Innovation Outpost strategy:

  • Determining whether a Corporate Innovation Outpost is necessary
  • Planning how to establish an Innovation Outpost
  • Deciding how to expand the Outpost

Sense and Respond

The first objective of an Innovation Outpost is to sense, i.e., look for or monitor the development of potential innovations that:

  1. Can become threats that could lead to the disruption of the corporate parent. For example, American Express’s Silicon Valley Innovation Outpost is monitoring innovations in financial technologies that are created by companies such as Square. Evangelos and I are in the process of developing a tool for diagnosing corporate disruption through innovations pursued by startups.
  1. Would allow the corporation itself to be disruptive by entering adjacent markets to the ones it currently serves or creating and introducing novel and disruptive offerings for new markets. For example, USAA is looking for software innovations that will enable it to introduce Usage-Based Insurance products to disrupt the car insurance market.

The second objective of the corporate Innovation Outpost is to respond to identified threats and potential opportunities. Companies tend to set up their outposts to respond in one of five ways:

  1. Invent: They establish project-specific advanced development efforts like Delphi Automotive’s autonomous car navigation project or broader Horizon 3 basic research efforts that take advantage of, or investigate, technologies and business models the innovation ecosystem is known for in order to create new products and services. For example, Verizon’s Silicon Valley R&D center focuses on big data and software technologies, as well as online advertising-based business models. Sometimes these Horizon 3 research efforts may be associated with a moonshot the corporation would like to pursue as is the case with Google (Google Car), Apple (iPhone) and IBM (Watson).
  1. Invest: They allocate a corporate venture fund that invests in startups working on technology and/or business model innovations of interest. For example, UPS recently invested in Ally Commerce in order to understand the logistics opportunities arising from manufacturers selling directly to consumers rather than through distributors.
  1. Incubate: They support the efforts of very early stage teams and companies that want to develop solutions in areas of interest–for example, Samsung’s incubator focuses on startups working on the Internet of Things—or they experiment with new corporate cultures and work environments –for example, Standard Chartered Bank’s startup studio.
  1. Acquire: Companies buy startups in order to access both the innovations the startups are developing and their employees, and in the process inhibit competitors from getting them. For example, Google acquired several of the robotics startups that had what was considered the best intellectual property.
  1. Partner: Collaborate with startups in order to develop a disruptive new solution using their innovations along with the corporations or to distribute innovative solutions the start up has developed. For example, a few years ago Mercedes partnered with Tesla in batteries for electric vehicles.

After working with over 100 companies, Evangelos and I clearly see that some of these five responses are more effective than others. Moreover, the speed of the response is as important as the ability to respond.  Corporations that establish Innovation Outposts often lose on speed, not on their ability to sense. What makes an outpost an effective contributor versus one that’s simply an expense item starts back at corporate headquarters with a company’s overall innovation strategy. So before we talk about the tactics of establishing an outpost, lets think about what types of discussions and decisions should first happen at the “C-level” before anyone leaves the building.

Lessons Learned

  • Companies are establishing Innovation Outposts in Silicon Valley
  • They do this to sense and/or respond to technology shifts
    • Sense means monitor the development of potential innovations that can become threats or would allow the corporation to be disruptive
    • Respond means, Invent, Invest, Incubate, Acquire or Partner
  • Most of these Innovation Outposts will become Innovation Theater and fail to add to the company

The next post will describe The Six Critical Decisions to Make Before Establishing an Innovation Outpost.

Blank’s Rule – To predict the future 1/3 of you need to be crazy

In a rapidly changing world those who copy the past have doomed their future.

When companies or agencies search for disruptive and innovative strategies they often assemble a panel of experts to advise them. Ironically the panel is often made up of people whose ideas about innovation were relevant in the past.

I’ve seen this scenario play out in almost every large company and government agency trying to grapple with disruption and innovation. They gather up all the “brand-name wisdom” in an advisory board, task force, panel, study group, etc.  All of these people – insiders and outsiders – have great resumes, fancy titles, and in the past brilliant insights. But unintentionally, by gathering the innovators from the past, the past is what’s being asked for – while it’s the future that’s needed.

You can’t create a blueprint for the future. But we know one thing for sure. The future will be different from the past. A better approach is to look for people who are the contrarians, whose ideas, while they sound crazy, are focused on the future. Most often these are not the safe brand names.

If your gathered advisory board, task force, panel, study group, etc., tasked with predicting the future doesn’t have 1/3 contrarians, all you’re going to do is predict the past.

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In the 1950’s and 60’s with the U.S and the Soviet Union engaged in a full-blown propaganda war, the race to put men in space was a race for prestige –  and a proxy for the superiority of one system of government over the other.

In 1961 the U.S. was losing the “space race.” The Soviets had just put a man in orbit and their larger rockets allowed them to launch larger payloads and perform more space spectaculars than the U.S. The new President, John Kennedy looked for a goal where the U.S. could beat the Soviet Union. He decided to raise the stakes by declaring that we would land a man on the moon “before the decade is out” (brave talk before we even got someone into orbit.) This meant that NASA had to move quickly to find the best method to accomplish the journey.

NASA had panels of experts arguing about which of two options to use to get to the moon: first they considered, direct ascent; then moved to another idea, Earth-orbit rendezvous (EOR).

Direct ascent was basically the method that had been pictured in science fiction novels and Hollywood movies for a decade. moon rocketA giant rocket would be launched directly to the moon, land and then blast off for home. But there were three problems:

  • direct ascent was the least efficient way to get to the moon and would require a giant rocket (the Nova) and
  • the part that landed on the moon would be 65 feet tall (requiring one heck of a ladder to the surface of the moon.)
  • it wasn’t clear that a rocket this big could be ready by the end of the decade.

So NASA settled on the second option: Earth-orbit rendezvous. Instead of launching a whole rocket to the moon directly, Earth-orbit rendezvous would to launch two pieces of the spacecraft – one at a time – using Saturn rockets that were then in development. These pieces would meet up in earth orbit and send a ship, (still 65 feet tall as in the direct flight mode), to the moon and back to Earth. This idea was also a decade old – it was how they proposed building a space station. The advantage of Earth-orbit rendezvous to go to the moon was that it required a pair of less powerful Saturn rockets that were already under development.

If you can’t see the movie click here

All the smartest people at NASA (Wernher Von Braun, Max Faget,) were in favor of Earth-orbit rendezvous and they convinced NASA leadership this was the way to go.

But one tenacious NASA engineer, John Houbolt believed that we wouldn’t get to the moon by the end of the decade and maybe not at all if we went with Earth-orbit rendezvous.

Houbolt was pushing a truly crazy idea, Lunar-orbit rendezvous (LOR). This plan would launch two spaceships into Earth orbit on top of a single Saturn rocket. Once in Earth orbit, the rocket would fire again, boosting both spacecraft to the moon. Reaching orbit around the moon, two of the crew members would climb into a separate landing ship they carried with them – the lunar excursion module (LEM). The LEM would detach from the mother ship (called the command module), and land on the moon.landers The third crew member would remain alone orbiting the moon in the command module. When the two astronauts were done exploring the moon they would take off using the top half of the LEM, and re-dock with the command module (leaving the landing stage of the LEM on the moon.) The three astronauts in their command ship would head for home.
The benefits of Lunar-orbit rendezvous (LOR) were inescapable.

  1. You’d only need one rocket, already under development, to get to the moon
  2. The part that landed on the moon would only be 14′ tall. Getting down to the surface was easy

Yet in 1961 LOR was a completely insane idea. We hadn’t even put a man into orbit, let alone figured out how to rendezvous and dock in earth orbit and some crazy guy was suggesting we do this around the moon. If it didn’t succeed the astronauts might die orbiting the moon. However, Houbolt wasn’t some crank, he was a member of the Lunar Mission Steering Group studying space rendezvous. Since he was only a mid-level manager he presented his findings to the internal task forces and the experts dismissed this idea the first time they heard it. Then they dismissed it the 2nd, 5th and 20th time.John Houbolt

Houbolt bet his job, went around five levels of NASA management and sent a letter to deputy director of NASA arguing that by insisting on ground rules to only consider direct ascent or earth orbit rendezvous meant that NASA shut down any out-of-box thinking about how to best get to the moon.
Luckily Houbolt got to make his case, and when Wernher Von Braun changed his mind and endorsed this truly insane idea, the rest of NASA followed.

We landed on the moon on July 20th 1969.

——-

I recently got to watch just such a panel. It was an awesome list of people. Their accomplishments were legendary, heck, every one of them was legendary. They told great stories, had changed industries, invented new innovation platforms, had advised presidents, had won wars, etc. But almost none of them had a new idea about innovation in a decade. Their recommendations were ones you could have written five years ago.

In a static world that would be just fine. But in a corporate world of continuous disruption and in a national security world of continuously evolving asymmetric threats you need to have crazy people being heard.

Or you’ll never get to the moon.

Lessons Learned

  • Most companies and agencies have their own John Houbolts. But most never get heard. Therefore, “Blank’s rules for an innovation task force”:
  • 1/3 insiders who know the processes and politics
  • 1/3 outsiders who represent “brand-name wisdom”
    • They provide cover and historical context
  • 1/6 crazy insiders – the rebels at work
    • They’ve been trying to be heard
    • Poll senior and mid-level managers and have them nominate their most innovative/creative rebels
    • (Be sure they read this before they come to the meeting.)
  • 1/6 crazy outsiders
    • They’ve had new, unique insights in the last two years
    • They’re in sync with the crazy insiders and can provide the insiders with “cover”

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How to Avoid Innovation Theater: The Six Decisions To Make Before Establishing an Innovation Outpost

This is the third in a series about the changing models of corporate innovation co-authored with Evangelos Simoudis. Evangelos and I are working on what we hope will become a book about the new model for corporate entrepreneurship. Read part one on the Evolution of Corporate R&D and part two on Innovation Outposts in Silicon Valley. 

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Corporate Leadership’s Innovation Outpost Decision Process
Today, large companies are creating Innovation Outposts in Innovation Clusters like Silicon Valley in order to tap into the clusters’ innovation ecosystems.

These corporate Innovation Outposts monitor Silicon Valley for new innovative technologies and/or companies (as emerging threats or potential tools for disruption) and then take advantage of these innovations by creating new products or investing in startups.

Most CEOs assign the responsibility to establish and manage their innovation outposts (and the outpost’s relationships to startups) to their R&D organizations. While that avoids internal management conflict, it’s the wrong way to make an innovation outpost decision.

Instead CEOs and their exec staff should start with a high-level discussion to decide whether their companies should even establish an Innovation Outpost, whether in Silicon Valley or some other innovation ecosystem. Because this is a critical decision that requires broad management buy-in, the conversation should include senior management, particularly the Chief Digital Officer, the Chief Strategy Officer, the Chief Financial Officer, and the Head of R&D, and maybe even their board of directors.

This group needs to carefully consider six key questions to understand if and where an Innovation Outpost makes sense for their company.

1. Do we believe “startup-driven” innovation (innovation that comes from relationships with external, early-stage companies) should be part of the corporate innovation portfolio?

Including “startup-driven” in the corporate portfolio may make sense if a company:

  • Is being disrupted now, as is happening in many IT, print, retail and telecommunications corporations
  • Anticipates being disrupted in the near future, as is the case in the automotive and chemical industries
  • Cannot keep up with the pace of innovation in its industry, as is happening in the pharmaceutical, financial services and consumer packaged goods industries
  • Wants to promote intrapreneurship to extend its business model and retain creative employees like Google, Amazon, and Facebook do

2. What is the timeline to ROI and the amount of risk we are willing to assume? Will an Innovation Outpost provide results at the speed we need?

An Innovation Outpost focused on the sense and respond model (see Post) will best work for a company when:

  • A disruption has not already happened or is not imminent. In other words the disruption is expected to happen within 5+ years.
  • A disruption does not present an existential threat to the corporation, it can be addressed with a relatively modest investment required to establish and expand an outpost, rather than the large investments required for corporate moonshots, e.g., IBM’s Watson. (We’ll cover “corporate moonshots” in a subsequent post.)
  • Startups are developing IP relevant to the disruption.

Acquiring a growth-stage private startup can provide a faster ROI at lower risk than the acquisition of an early-stage startup. For example, Google’s acquisition of Nest (which had customers, revenue and a distribution channel) allowed it to enter the connected home market immediately. In contrast, Facebook’s acquisition of the virtual reality hardware company Oculus still requires significant product development, identification of a viable business model – and the target market and revenue may never materialize.

If the innovation threats the company faces do not match these, the corporation may need a different approach to addressing the disruption such as making a large scale acquisition, e.g., VMWare’s acquisition of Nicira, merger, or outright selling itself, e.g., EMC’s sale to Dell.

3. What would be the charter for our Innovation Outpost?

Senior managers should define the 1-2 big strategic problems that can be addressed through a day-to-day presence in the innovation ecosystem. These challenges may be either strategic or tactical. For example, one of Verizon’s strategic innovation goals for its Silicon Valley organization is to create disruptive solutions (technologies and business models) to monetize the digital media accessed by its subscribers on their mobile devices.

In the process of defining the challenges and goals for an Innovation Outpost, a company must understand why these can be addressed in a particular innovation ecosystem. They may require the utilization of technologies that are prevalent in the ecosystem, (big data or 3D printing) or specialized business models, (on-demand services) or specific innovation practices (design thinking and lean startup) or the development of a particular type of partner ecosystem (IBM’s Watson partner ecosystem.)

Identifying these strategic problems enables the corporation to decide on the location of the Innovation Outpost, define success, and the innovation KPIs that will be used to measure progress.

4.  How quickly can we get out of the building to explore and validate the ecosystem?  

Before committing to a particular innovation ecosystem, the CEO and exec staff need to get out of the building and visit the ecosystem to be assured that the reality on the ground matches the corporation’s innovation challenges. These visits should be led by the CEO, and maybe even include the corporation’s board of directors, along with execs who are expected to be innovation change agents. This exploration requires a deeper understanding than can be accomplished in a single visit.

While the default for most Innovation Outposts is Silicon Valley, it may not necessarily be the best fit for a particular company. Visiting the Valley might help an exec staff understand whether this innovation ecosystem would be right for them. For example, CVS opened its Digital Innovation Lab in Boston as did John Hancock, while Thomson Reuters picked both Boston and Waterloo Canada and Coca-Cola has its Bridge Innovation Lab in Tel Aviv. Exploration may require several visits to each of the innovation ecosystems of interest to pick the right one.

5. What is our company’s strategy for successfully integrating an Innovation Outpost?

Innovation Outposts most often fail when they come up with innovations no operating division wants and/or the company refuses to fund. (The ghosts of Xerox’s failure to adopt their Innovation Outpost inventions that became the Apple Macintosh still haunt Innovation Outposts.) There needs to be prior agreement on what happens if the division develops disruptive products that do not fit the existing company business model. Does it become a new division? Does it get spun out? Sold?

6. How do we establish the Innovation Outpost and staff the innovation enabling group(s) which will be part of the first phase of the Outpost?

Establishing an outpost enables innovation but does not constitute innovation. Once a company has decided to open an Innovation Outpost, it has to choose:

  • How to leverage startup innovation in the cluster – will the outpost invest, partner, acquire, incubate or invent?
  • What is the timeline to a ROI for Innovation Outpost? Again, the participation of the senior executives in these decisions is critical.

This process for establishing the Innovation Outpost will be the topic of the next post.

The complete six-step decision process is shown in Figure 1.

 

Outpost flow chart

Figure 1: The decision process for establishing a Corporation Innovation Outpost

Lessons Learned:

  • To avoid “innovation theater”, Corporations should use a step-by-step decision process to determine the role the Innovation Outpost will play
  • The decision to establish (and later expand) an Innovation Outpost must be taken by the CEO working with the senior management team
    • It requires hands-on management by the CEO and the senior executive team
    • Just saying it has “executive support” means it’s dead-on-arrival
    • If the Innovation Outpost’s is successful it will almost certainly conflict with other corporate innovation-related decisions.
  • Just establishing an Innovation Outpost doesn’t mean that the corporation is innovating
    • At first it just means there’s a new building

The next post will describe How to Set Up a Corporate Innovation Outpost.

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