The Innovation Advantage of Big Companies
Yes,
it sounds like a contradiction. But large organizations are in a better
position to create startups with staying power-- if they learn to stay out of
the way and provide the right support.
Executive director, Ed Kaplan Family Institute for Innovation
and Tech Entrepreneurship, Illinois Institute of Technology
Launching
and developing a new venture inside of a traditional organization is probably
harder to do than a pure startup. But ultimately it's far more impactful,
because you also create a new entrepreneurial culture, a real sense of urgency,
and a bias for action and change along with that venture. For example,
there's Arity, an exciting and rapidly growing division of Allstate, which
started as a tiny outpost hidden in the Merchandise Mart in Chicago, far from
the insurer's suburban headquarters. Arity focuses on mobility solutions,
navigation, and autonomy tied to transportation, and it's a great example of a
properly funded and supported internal startup "tail" that is setting
the innovative curve and wagging the whole corporate dog.
These
days, because innovation and disruption are clearly so in vogue, this kind of
initiative should have at least a reasonable prospect of success--even in large
enterprises-- as long as the people working elsewhere in the organization are
at the very least indifferent to the venture's success. I realize that this is
a pretty low if unfortunately realistic bar for internal support and
encouragement. And I know life would be great if everyone in the business
was onboard and universally rooting for the new initiative's success - all for
one and one for all. But that never happens in the real world. Everyone's
a pessimistic expert and they have a million reasons why you'll never succeed -
a problem for every solution.
The
passive-aggressive resistance and the overt opposition that all new ideas
encounter could, in a given case, be driven by risk aversion, jealousy,
ignorance or fear. Or it might be the ongoing competition for scarce resources,
or a historic lack of technical skills. But the friction is almost always
- at least in part - the product of the sheer reluctance to change, as well as
the comfort and reassurance of business as usual. Inertia trumps initiative and
innovation in big business on a daily basis. If you're looking for real change,
it's a waste of time and energy to fight the status quo and the habitual ways
of doing things. You've got to create a new model and a better way of
doing things that eventually makes the old ways - "the way we've always
done it" - look like yesterday's news. You can't talk a culture into
changing, or simply browbeat people into getting better. Progress begins
only in the execution; then the culture starts to shift.
And, of
course, it's always a bad bet to assume that the same people who brought you to
the precipice are going to be the ones to save the day. You can't extract
yourself from problems that you behave yourself into. Frankly, it's difficult
to see the picture when you're inside the frame --even if you are so inclined--
and far too few folks are willing to take a hard look. In most cases you're
more likely to confront willful blindness and a lot of looking the other way
rather than any kind of supportive vision. This is sad for so many reasons and
one of the main explanations for why, as a nation, we're falling further and
further behind in terms of large-scale innovative solutions in so many critical
areas, such as medicine and education.
Successful
in-house ventures, truth be told, are far more likely to have a greater and
more consistent overall impact (if they're sustained) than the random,
under-funded and stand-alone startups that are on the outside looking in and
mainly making all the noise in the media. Incremental improvement isn't much of
a story these days and certainly doesn't drive views or clicks. Clearly,
startups can provide the sparks, concrete examples and the inspiration. But
it's the steadfast stalwarts and the aggressive advocates inside the
enterprises who have the heft, momentum, assets and clout to make the kinds of
changes that will have long-term effects at scale as well as the kinds of
impact that will move the economic needle in a meaningful fashion. They're the
ones who can take the new concepts, strategies and approaches that innovative
thinking and new disruptive technologies create and ultimately turn them into
major improvements in our businesses, communities and lives. That's what Arity
is trying to do. But only if they're given the time, space and opportunity to
do so and not constrained or crushed by the actions of others before they can
even get out of the gate.
Ovid
said it best a zillion years ago: "A new idea is delicate. It can be
killed by a sneer or a yawn; it can be stabbed to death by a quip and worried
to death by a frown on the right man's brow." The best leaders understand
this fragility and make it their business to run interference for and
forcefully protect their pioneers. They don't sit back and let the folks
"work things out" among themselves. They actively intervene when
things are going sideways and send a consistent message that immediate and
continual change is essential, unavoidable, and inevitable. That there's
no place in the business for the people who can't get with the program. They
also set and enforce a tone of tolerance and, even more critically, they give
their people permission to experiment and fail, without ever accepting the idea
that failure is ultimately acceptable.
And
they work continuously to identify, root out, and expunge the typical behaviors
that will otherwise create barriers to success. These include the noxious
naysayers, the "gotcha" guys just standing in the wings waiting for
slip ups, the "by the book" bozos who spend their days looking
backwards and longing for the ways things used to be done, the "management
by committee" clods who'd rather delay everything than decide anything,
the stewards of the concrete layer of middle management who are intent on
making sure that nothing positive or productive ever gets past them, and the pure
paranoids who think it's all a pernicious plan to get rid of them.
But the
most important thing that any leader can do in these circumstances is to make
clear to those people who are always ready to presume the worst that it's no
longer a matter of giving the new plans and ideas "enough rope to hang
themselves" or the "benefit of the doubt" because that won't get
the job done. Empty gestures, cheap talk, lip service and hoping that
ignoring things (or simply trying to stall and wait them out) so that they will
eventually disappear are all failed strategies.
To
succeed today, everyone in the organization needs to assume the best of people
and of the new opportunities rather than holding their breath, wishing for the
worst, or fearing the future. They'll need to lean into these new ideas and
give them a little extra edge - a presumption and a push in favor of helping to
make things happen - instead of dragging their feet and getting in the way.
And, they'll need to join in actively celebrating signs of progress along with
the early successes and, at the same time, quickly forget and forgive the
initial missteps - of which there will most assuredly be plenty. Or, if they
can't get with the program, they can always leave. We had a saying for this:
"Our average employees now work somewhere else."
