Want to Bring Entrepreneurship Inside?
Learnings from Innovation in Action 2016 workshop “How Entrepreneurship Brings Better Innovation Capabilities” in Sweden
If you are interested in how to use entrepreneurship in large organisations and how to collaborate with startups, you should envy my experience of participating in the workshop that was part of the symposium Innovation in Action 2016: Beyond Ideation.
At the Innovation in Action , the yearly major symposium on innovation management in Sweden, which was held on 08-09th…www.linkedin.com
Being among innovation management professionals from large corporations, consultancies and startups, sharing challenges and ways to overcome them, feeling energy and open attitude — for me was a great opportunity to learn more about internal innovation affairs. To me, someone who burns with passion for innovation management, that was an invaluable experience that I wish to share with you.
The idea of the workshop was to go through the process and understanding of why we need entrepreneurial mindset and tools to use in companies, what obstacles we face and how it can be done. Dariush Ghatan, a smart and energetic trainer from Googol, has firmly taken the lead in immersing us into the picture and the role play. We have formed three groups: HR, CFO, Strategy, and I volunteered to represent CIO (cool! my dream came through J). As a warmup, we shortly discussed leveraged strategic and entrepreneurial approaches for a long term disruptive business.
What has stick out to me from this brainstorming was the point around Courage v.v. Safety Net. Courage is entrenched into startups, they need it to bootstrap idea, to act fast, to pitch for funding, to fail, to iterate, and be driven by challenges. Courage is important to overcome the fear — fear of change, of risk, of losing the job. To counteract risks large organisations have designed whole structures including collective decision making — a safety net. Because they are too big to fail — too much is at stake.
However, innovation and risk are the twin sisters, as risk is part of the process — it is learning. Startups know it. How can companies isolate those risks and know what risks to take now and which — later? How to dare to fail fast, cheap and light, and in right areas? The best discussed strategy — small steps, one thing at a time (deciding at simplified stage-gates) with allies (inside and outside) that accept failure and risk together. That’s what entrepreneurs do. A lot of entrepreneurial ideas will fail, just accept it, because finally some ideas will have a rewarding (>30%) cash flow (usually 1 out of 15, if more innovative flex exists).
So, collaboration is also a part of the safety net. In fact, I did not think of it from this perspective yet. The other presenters — Björn Larsson from Zoomability, Magnus Lundin from Swedish Science Parks and Incubators (SISP) and Jakob Lindblad from Ideon Open — also shared their experience and run discussions around collaboration with startups, science parks and incubators. There are many strategies on how to work with startups, and the most popular still is M&A, even though the BCG study of 2016 (and few others) showed that there is little correlation between M&A and new value creation. Corporate venture capital investing now entails not only minority equity investments, but also accelerators and incubators, innovation labs, hackathons and various events together with startups.
Companies work with those innovation instruments in house or externally. According to the experience of SISP, the most successful way is to work externally and integrate the learning back in the company so that to improve the organisational culture. A good way to innovate is a triple helix model, when companies work with research institutions and gain access to complementary funding from the public sector. Open innovation is crucial in this respect. As well as supporting startups with existing infrastructure, equipment and markets to help them scale, while boosting business by testing their product with low risk.
Swedish SISP (5000 members, out of them 1000 startups) are changing too, and increasingly match startups with companies as well as venture capital with public funding, and most importantly — start providing support for international commercialisation of highly innovative firms. They also facilitate innovation process within companies with Lean Startup methodology and open innovation by getting ideas from companies, masking and channelling them to startups or researchers for development, or, for example, by verifying concepts with incubator’s teams. Companies can go and learn from startup incubators and gather ideas, or opposite — bring the ideas in and use the incubator’s process to develop them. Moreover, there are examples of companies bringing overall incubation process inside the company and then using it for working with internal and external ideas. Consequently, I have learned a great deal about how Swedish incubators and science parks work and build innovation capabilities of partners through collaboration.
The hottest discussions started when our formed HR, CFO and Strategists teams were asked to prepare a presentation for a sceptical CEO to prove that company needs to embark onto more risky but more rewarding business strategy and how. In a fun role-play “C-meeting” the Strategists argued that external environment is changing and we witness how totally different industries are coming into our competition, and thus the company should plan alternative route and cooperate with other partners to build future-proof products — otherwise you, CEO, will lose your job (that was a strong argument!).
As the major challenges the Strategists named failure acceptance and uncomfortable feeling to change, finding right partners and deciding on investment areas by splitting resources into two parts — for new exploration and for exploitation of business. CFO agreed that collaboration is good for saving resources on longer term due to higher returns and shared risks.
HR group said that through partnerships we can attract talents and improve culture by developing a sense of urgency for innovation. They also suggested encouraging managers to say YES to new ideas and actually evaluating their performance on this. Embolden tribe leaders then attract individuals for innovation projects and all contributors are rewarded at each development gate, including the ones who failed, under condition that they record and share the lessons. Voilà! — our stubborn CEO of the 368 years old company has got convinced and we happily move towards digitally charged new business doing.
All it took us just 25 min to review major entrepreneurship integration challenges and come up with various measures. Imagine if that was possible in real world. Surely we, innovation pioneers, hear many times “but”, “if”, “cannot” — and perhaps we get frustrated and even feel powerless at times. However when being in a TRIBE we can again gather our strength and inspiration and with renewed or newly learned skills we return to the battle field — for the brighter future of our organisations, and hopefully — the World.
Meanwhile we were pondering how the hell we’re going to get home as Stockholm has not seen such a snowfall in 116 years!