Entrepreneurship

To innovate disruptively, you have to behave like a startup

To innovate disruptively, you have to behave like a startup

I continue with Steve Blank, another interesting point that he raised in his ESADE conference was about building internal innovation in the company. In Blank's opinion, large conventional companies are less efficient than startups when driving disruptive innovations. Invites to act as a startup.

Those of us who have worked in large companies have thought about it many times. Paradoxically, and despite the resources are much greater, innovation within an existing company is much
more difficult than in a startup. This is due to the fact that existing companies are
They face a complex dilemma between the efficiency of existing processes and the uncertainty that innovation often brings. Every policy and procedure for efficient manufacturing "stifles" innovation.

Existing companies have two factors against them:

  • The
    markets are in favor of capital efficiency. Financial profitability is prioritized even in investments in R&D.
  • Its main strategy and sometimes only purpose is to focus resources on executing
    your business model.

As a consequence, companies are
optimized for execution above innovation
. Large organizations hire employees with a
series of skills and competencies. In turn, to evaluate these employees the
companies create metrics to monitor, measure and reward the
execution.

In large companies that are listed on the markets, financial metricss
have priority. As a result, the roles of staff and units
develop their own performance indicators and
processes to ensure that each part of the organization is on track
unison with the objectives of the company.

These key process performance indicators are
those that make an efficient company, but are also the cause of your
inability to be agile and innovative
. Each time another is added
execution process, business innovation dies a little more.

The three steps to driving innovation

1. The company's management must understand that the
innovation is an integral part of all
parts of the company
. If they don't, then the management team simply becomes the custodian of the founders' legacy. This
it never ends well, according to Blank.

2. The
recognition that innovation is chaotic, messy and uncertain.
Not everything will work, and failure in innovation is not a cause
to fire, but to learn. Managers need tools radically
different to control and measure innovation
. A
company needs innovation policies, innovation processes and
incentives for innovation, so that they compete with those that already exist to
the execution.

3. Embrace disruptive innovation. To build innovation
internally companies can adopt the practices of the new
companies (startups) and accelerators. They can
buying intellectual property, acquiring large equipment, purchasing products from another company, or even buying companies
whole. And if they are especially challenged in a market they can
acquire and integrate disruptive innovation.

Previous posts about Steve Blank's speech at ESADE

  • The business world today: financial efficiency vs innovation
  • 50 years of disruptive innovation await you

Video: Harvard i-lab. Startup Secrets: Business Model (September 2020).