We need an irregular approach to innovation.
Almost every big business recognizes the need to innovate. Sadly, despite spending millions on big consultancies, building in-house innovation teams and the occasional hackathon, most of them are pretty crap at it.
Big businesses are excellent at two things; maximizing profit and minimizing risk. However, innovation is inherently risky and the profits take time to materialize.
“The trouble is that for too long, business has been run by the wrong sort of pirates.” — Sam Conniff Allende
Corporate innovation has been a big thing for the past decade, but aside from incremental improvements by product teams (lots of tiny wins), one can’t help but think it’s a big, missed opportunity. How many big businesses can you really point to and say “wow, they really changed their game”?
“Change requires companies to step change rather than incrementally improve. The world’s best candle-makers continually made better candles, but they never invented the light bulb. Today companies need to leap to new business models and rethink fundamentals and what they stand for, not slowly tweak what has worked before.” — Tom Goodwin
For the most part, innovation has been managed just like the traditional business has.
- A big firm of consultants roll in, for the most part they tell you what you want to hear, provide many slides and the board feels good because why would you not trust a 2x2 from McKinsey? Many junior consultants worked late into the night so their Partner can reap the rewards of the ‘on-sell’.
- You get tired of spending money on consultants so you create an internal innovation team, hiring those eager to leave the consulting world. They’re smart people, they ditch the suit and run cross functional workshops. It’s all very nice and collaborative, but they don’t actually have a mandate or the ability to deliver on the post-it notes. Collaboration turns into compromise to ensure the politics of the organization is kept in check.
- You decide you need to learn from and invest in startups. You host a hackathon, maybe run an accelerator, dish out some small cheques to companies. You pass on the early stage and more risky opportunities only to find yourself regretting it later as by the time they’ve got traction, now they’re out of your league.
I might be being a bit hard here. Consultants aren’t all bad, innovation teams do come up with some good stuff, and startups can change the world. It’s just they don’t drive change. All the things that hold your business back impact them too. Big consultancy partners are highly insecure and need the next bit of business, innovation teams aren’t empowered and startups live on a totally different risk profile.
Remember corporate ventures? They were kinda trendy for a little while but never really got the attention startups did. Digital transformation is a bit like cosmetic surgery, deploying corporate ventures is more like starting a family that will look after you when you get old.
Unfortunately, the people who can really change your business, almost certainly don’t exist in your business today, or if they do, it’s unlikely they’ll put up with it for much longer. So you need to find people to help you start that family and that’s where irregulars come into play.
“Success depends on the flair, skills and initiative of people who cannot be effectively supervised.” — John Kay
I choose the term irregular as an alternative to pioneer or maverick, for they might not necessarily be leaders. Misfit might also be a good way of putting it but for me it has slightly negative connotation. Irregulars typically see the world differently, don’t follow the playbook, make decisions without a reliance on logic. They often don’t fit very well in traditional environments although from they do exist.
“No big business idea makes sense at first. Just imagine proposing the following ideas to a group of skeptical investors: ‘What people want is a really cool vacuum cleaner.’ (Dyson) ‘. . . and the best part of all this is that people will write the entire thing for free!’ (Wikipedia) ‘. . . and so I confidently predict that the great enduring fashion of the next century will be a coarse, uncomfortable fabric which fades unpleasantly and which takes ages to dry. To date, it has been largely popular with indigent labourers.’ (Jeans) ‘. . . and people will be forced to choose between three or four items.’ (McDonald’s) ‘And, best of all, the drink has a taste which consumers say they hate.’ (Red Bull) ‘. . . and just watch as perfectly sane people pay $5 for a drink they can make at home for a few pence.’ (Starbucks)” — Rory Sutherland
Irregulars like to work differently, and may not suit the typical startup world either. Many will infuriate VC investors who in my experience demonstrate many of the same risk mitigation issues as corporate upper middle managers. Those who get the ball rolling may not be the ones you need once you start to scale, they may also not want to be committing to the long term. Hence the ways of engaging and rewarding them need to look different too.
A successful corporate venture is probably one that results in the demise of your current cash cow (maybe Wealthsimple is a good example of this, given 62% of the business is owned by Power Corporation). An even better one is something that complements your original business (you could argue for Amazon Web Services as a decent precedent).
The good news is there are irregulars all over the place, it just takes a little courage, guts and creativity to engage them. To get started, think of it like an innovation side bet, eschew the old ways of doing things, and instead create your bigger brief.
If you read this far, I really want to hear from you.
