In the 90’s we experienced dot com one. You may recall the flood of Silicon Valley startups hitting the IPO market in the U.S. Some companies failed, like Pets.com. Others, like Amazon, have survived and are now thriving.
In the aftermath, there was a serial entrepreneur named Steve Blank who tried to explain the reasons why some startups failed and others succeeded. In 2005, Blank published “The Four Steps to the Epiphany: Successful Strategies for Products that Win.” This was the beginning of the Lean Startup Movement.
Blank later met Eric Ries, who became Blank’s understudy. Blank was finishing his third book, The Startup Owner’s Manual. Together, Blank and Ries developed a plan for reaching the business community to communicate the powerful insights Blank had discovered. They realized to impact the startup ecosystem, they had to influence the business people and venture capitals who fund startups. This led to Ries’ position as an Entrepreneur-In-Residence at Harvard Business School and to his first book, The Lean Startup, published in September 2011. Five years later, Corporate American is finally starting to pay attention to what Blank and Ries have been saying for the past few years.
Blank talks consistently about the importance of entrepreneurs in the startup process. Founders, are a critical element to startup success. In fact, only Founders can change the business model so their direct involvement in the search for a business model is imperative.
“As a founder you are testing a series of hypotheses about all the pieces of the business model: Who are the customers/users? What’s the distribution channel? How do we price and position the product? How do we create end user demand? Who are our partners? Where/how do we build the product? How do we finance the company, etc.” says Blank.
Lean startup training programs and bootcamps are starting to become an interesting option for aspiring enterprise innovators. For companies who want to learn lean startup principles, they can contact Moves the Needle, LaunchPad (Blank is an investor) and the Lean Startup Co (Eric Ries’ company and the organizer of the Lean Startup Conference). All of these companies provide training programs for corporate employees who want to be more innovative.
I worked for Moves the Needle (MTN) for three months, from late October to mid February 2016. This was a short stint but in that time I became intimately familiar with MTN and their lean startup training programs.
Using MTN as an example, they have a one-two punch for turning your slow-moving, legacy corporation into a lean startup.
1. Lean Innovation Three-Day Bootcamp
2. Lean Innovation Accelerator
The Bootcamp is a three-day workshop with internal corporate teams, many of whom are working on real projects that they bring to the training session. The Bootcamp is designed to be an introduction to lean startup principles. After the Bootcamp, Moves the Needle up-sells an Accelerator program, which is designed to deliver business impact. The Accelerator is a 90-day sprint where a Moves the Needle coach meets weekly with the internal team, typically over video or audio conference. The MTN coach focuses mostly on process and helps ensure the team is following the correct steps to be a lean startup.
While the Bootcamp / Accelerator combination has appeal to the aspiring corporate innovator, its weakness is that it normally doesn’t provide much of a business impact. This is primarily because of the massive cultural and structural barriers that still exist in the enterprise. These barriers kill innovation. Unfortunately, a Bootcamp or 90-day session with one team isn’t sufficient to overcome years of corporate bureaucracy and legacy.
This raises an important question for large, established companies who need to be more innovative.
How can I adopt lean startup principles and implement them in a way that has a meaningful business impact?
In my experience, there are at least four elements that are really important for having a meaningful business impact. Together, these elements can effectively overcome the barriers to enterprise innovation.
Step 1: Create a strong presence of external entrepreneurs and corporate innovators
MTN uses internal employees exclusively on its innovation teams. This is politically acceptable in the enterprise because if it’s one thing they have in abundance it's a lot of employees. Certainly, these employees have value and for what the enterprise is spending on its staff, it makes sense to try to leverage this human resource as much as possible. It makes sense, at least on paper. MTN plays into this and uses it as part of its value proposition. “We will transform your culture with our lean startup training” is how they position their products in the enterprise.
Let's be realistic. You can't wave a magic wand and transform your existing employees into world-class innovators overnight.
Genuine innovation takes years to master and those that become real innovators must commitment themselves to this goal over an extended period of time. True innovation comes from trying, failing and trying again. It takes time. What MTN is doing is selling a politically-acceptable fantasy that will never deliver on its promises.
The honest truth of the matter is the vast majority of corporate employees are not natural innovators. If they were, they would not be working in relative safety of the enterprise. They would be working at startups.
There is a strong, inverse correlation between those that are innovators and those that are politically savvy.
It’s extremely rare to find an employee who is good at both innovation and politics. Genuine innovators might start out in the enterprise, but they will leave in a few short years as they learn political skills are valued more than innovation skills. As such, innovators self-select out of the enterprise. What is left are employees who are particularly good at politics and who value security over risky adventure. And they are rewarded for their political savvy with pay increases and promotions.
Now, I realize this is an oversimplification and perhaps a cynical view. But I’ve observed it’s true. Those who are good at innovation are typically horrible at politics. It’s politically smart to be aligned with the rest of the organization. Real innovation blows up the status quo, creates chaos and changes the world. Can you see how different disruptive innovation is from good politics?
One of the ways to address this cultural disparity in the enterprise is to add external, genuine entrepreneurs to the innovation team. Entrepreneurial mavericks don’t have much respect for the status quo and they have even less regard for the corporate hierarchy. If you can keep them away from the mother ship, external entrepreneurs will give you genuine innovation without political headaches.
One of the most effective things you can to do increase the team’s innovation skills is to add a majority of experienced entrepreneurs to the team and turn them loose on the business problem. Their mindset, persistence, tenacity and grit will blow through enterprise innovation barriers as if they aren’t even there. This is because real entrepreneurs just don’t have time for that stuff. They are focused on changing the world and that’s all they really care about.
When you find men and women like this, grab them and add them to your innovation team. This is the single best move you can make to improve your odds of a meaningful business impact.
Step 2: Use a Player-Coach, not just a Coach
MTN uses a Coaching model in its Bootcamp and Accelerator programs. While this may be a more scalable business model for MTN, we think this approach fails to understand the fundamental barriers to enterprise innovation.
To effective change the mindset of the team, team members need a strong example to follow. A coach is not enough to create this shift. Innovation teams need a strong Player-Coach.
Consider Payton Manning, quarterback of the World Champion Denver Broncos. Perhaps unlike any other quarterback in the history of the NFL, Payton Manning is not just a player. He’s a coach on the field. Team members respect him because he’s mastered both the physical and mental aspects of the game. As Manning’s physical skills declined over time during his 18-year NFL career, he was able to compete at the highest levels in the world because his mental game could not be matched by opposing defenses. With a bad neck and a weakened arm, Manning and the Broncos won Super Bowl 50, just a few months ago.
This is the model that makes sense for enterprise innovation teams. It’s not enough to take internal employees and designate them as innovators. They need a real innovator to follow. They need a Payton Manning to show them how it’s done.
Unlike MTN's Accelerator program, our solution is an Intrapreneur Apprenticeship. Our goal is not just to deliver a business impact for the team. Our goal is to create a team of corporate intrapreneurs who can make innovation happen across the enterprise. We do that using a Player-Coach model by adding a kind of Payton Manning to the team.
Step 3: Understand your ultimate goal is to develop intrapreneurs
Nothing happens in a startup without the entrepreneurs that create them. Entrepreneurs are the creative, driving force of successful startups. Entrepreneurs are a rare, precious resource. Who else would risk everything to change the world?
To be innovative, enterprises need intrapreneurs. Intrapreneurs are slightly different than entrepreneurs. The main difference is that Intrapreneurs are more aware of the political and bureaucratic environments in which they operate. Short of this difference, they are very much like entrepreneurs who discover insight and create something from nothing.
In our Innovation Outpost, we focus on more than just lean startup principles. We work with corporate intrapreneurs to help them develop a resilient psychology and to connect with like-minded people to gain perspective and strength to overcome the inevitable challenges they will have to overcome. We learned these lessons by teaching entrepreneurs how to build successful startups and from building startups ourselves. We've applied these lessons to the enterprise to create successful Intrepreneurs.
The three elements of lean startup, resilience psychology and mastermind group are the building blocks of our Intrapreneur Apprentice program. It’s a powerful combination and it separates our program from everyone else’s.
Step 4: Look for deep experience with both corporate innovation and startups
MTN’s current Founders are Brant Cooper and Aaron Eden. Brant is the author and self-proclaimed thought leader on lean startup. Aaron used to work at Intuit in Human Resources, where he met Brant. As Brant and Aaron have attempted to scale their business, they’ve removed themselves from solution delivery and other customer-facing activities. Brant focuses on speaking engagements and Aaron now works in operations. Sales and delivery are handled by other employees recently hired by MTN.
With the Founders at the back office, who delivers MTN Bootcamps and Accelerator programs?
Somewhat surprisingly, MTN leaves implementation to a network of subcontractors. These subcontractors are mostly startup folks who are working on their startups while taking odd jobs from MTN for extra cash. In my time at MTN, all of the coaches I met where subcontractors, and not employees.
The most used MTN Coach is Brent Weber. His operating experience is exclusively in a startup environment. Having worked directly with Brent on a number of client engagements, its clear he doesn’t have much enterprise experience. To me, this is a big weakness as innovation in the enterprise is not the same as innovation in a startup.
Don’t get me wrong, Brent is knowledgeable in lean startup principles. You can learn lean startup from Brent. It’s just that Brent’s ability to help you navigate the enterprise is limited. And if you want to have a business impact in the enterprise, you need enterprise guidance to be successful.
Since I brought it up, I need to compare my experience with Brent’s. As a humble Midwesterner, this takes some effort. Here’s a graphic which I think tells the story of my corporate and startup experience.
In contrast to MTN, all of our Player-Coaches have both enterprise and startup experience. This is a rare combination and these folks are really hard to find. For this reason, we might remain a boutique innovation firm, at that’s perfectly ok with us. We don’t need to be the biggest. For now, we are happy just being the best.
- Finding people with deep enterprise and startup experience is a rare and valuable thing
- Adding external entrepreneurs to your innovation team is critical for business impact
- Your ultimate goal in the enterprise is to create intrapreneurs who have the experience and judgment to lead your innovation initiatives
If this post resonates with you and you'd like to learn more about how we inject entrepreneurial DNA into the enterprise, please feel free to contact us below.