Creating businesses is the challenge of the day for large organizations. After years of cost-cutting and downsizing, companies have realized they can’t shrink their way to success.
In a world where what’s possible is advancing at breakneck speeds, social behavior, technology and global economy are driving forces for change. Established brands have realized they can’t stay relevant, differentiate themselves or gain a competitive advantage by tweaking aging product portfolios, buying out rivals or expanding to developing nations.
Innovation is crucial now more than ever, so companies must become Janus-like — looking in two directions at once, with one face focused on the old that still accounts for the bulk of their revenue and the other seeking out the new.
Innovation brings the hope of new value and the fear of the unknown. It is often born at the fringes of an organization’s established divisions and, at times, it exists in the spaces between. The truth is that innovation is a messy business. The high levels of uncertainty associated with new ventures need adaptive organizational structures to succeed. A company’s operating, financial and governance models are seldom the same as existing businesses. In fact, most new business models are not fully defined in the beginning; they become clearer as new strategies are tried, customer needs are understood and anticipated and new applications are developed to facilitate new experiences. This uncertainty results in half-baked superficial changes that happen at the edge because it is easiest there, that require minimal organizational effort and that get the most visibility. Launching innovation labs, incubators or venture units requires a few bodies on the ground in a trendy office — even if they don’t produce much tangible value after the post-launch media hype wears off.
See also: Secret Sauce for New Business Models?
Crossing the threshold to innovate is imperative, but transitions from the current tried-and-tested state to the new state with unfamiliar rules and values is daunting for most people. It takes clarity of vision to create momentum and inspire others. Above all, it’s a balancing act between the old and the new cultures that are often placed in conflict with one another if the company takes an either or approach to corporate entrepreneurship.
Even when a breakthrough innovation is ready to be implemented, delivery becomes impossible in this corporate environment. Most leaders find there’s a fine line between corporate entrepreneurship and insubordination.
I get asked by CEOs and heads of departments how we solve these problems. How do we make a real impact with consensus and harmony? I suggest a new approach is called for, one that blends these cultures to avoid extreme behavior and creates equilibrium in areas of strategy, operations and organization. We have only to look at any successful enterprise such as Apple, Uber or Netflix, and we’ll find innovation at its core. These companies are bold about taking risks, driving change for the better and doing it at scale through human-centered design. This understanding and building a collaborative culture to actively seek out solutions to challenging problems and identifying relevant strategies continues to expand the realm of the possible.