Corporate innovation is something that is on the agenda for most CEO’s, executive leadership teams and boards of directors. If this is you, you may already be reviewing your innovation strategy. Have held workshops, hackathons and other innovation events in your company. Or you may be more advanced and ready to approve the implementation of an innovation system with a long term, multi year strategic plan for how the company intends to remain relevant in an age of disruption.
No matter where you are in your innovation journey, there will always be more to learn, more to get right and more moments where you will be required to get comfortable with feeling vulnerable in order to succeed.
Disruption is taking place all around us. There is no avoiding it, no hiding behind closed doors waiting for others to solve it or merely believing your company or your job is safe. It’s not. There is work to be done for us all. We are no longer a human race of knowers, nothing is certain. As technology continues to evolve, we are required to become learners with a curious mind and the courage to accept that perfectionism is self-destructive. The world today requires us to get comfortable with failure, it’s how we remain significant as individuals for the future of work.
Over the last decade, we have seen more and more large corporate companies turning to startups in search of solutions to support their innovation strategies. The number of Innovation consultants is rising, as everyone tries to solve big company problems and find areas of new growth for the companies of tomorrow.
STARTUPS AND CORPORATES ARE DIFFERENT
Finding practical and proven ways for startups and corporates to improve their communication is not always easy. Startups and Corporates have different needs. They behave differently. For successful innovation to happen, a corporate leadership team will need to acknowledge these differences and prepare to think and lead differently.
Finding trusted advisors to support your innovation journey is hard. Understanding what you don’t know about startups and entrepreneurial behaviour is even harder. Finding the right amount of help, for the right things, at the right time requires long term partnerships with the right people. Thinking you can do it alone is foolhardy.
At Pollenizer, we believe that everyone has the potential to turn ideas into new growth for business. Since Pollenizer began, we have been co-founding startups and helping corporates to innovate. We have learned many, many lessons, we’ve shared many learnings and we still have so much more to learn. Learning never stops.
My personal area of innovation expertise is startup governance and the culture of startup boards. An area that is often overlooked in the early planning stages of a corporate innovation strategy.
For many years, I’ve been mentoring entrepreneurs through the process and mindset of capital raising, empowering them to navigating numerous legal agreements and how to think and act as directors of a startup business. On the other side of the table, I’ve worked with many corporate employees, in many cases acting as broker between them and management as they each learn how to think and act like startups in matters of governance.
“A startup that is fundamentally broken from the beginning can never be fixed.”
Peter Theil. “Theil’s Law”
I want to share some related learnings, things that I’ve learned are important for corporate leaderships teams and other innovators to know before starting internal innovation programs.
Corporates are experimenting and holding innovation events such as Hackathons. Management are approving budgets and allowing employees to temporarily take leave from their day jobs to continue to work on their ideas, spending up to 12 weeks incubating their idea further to validate proof of market. Often this includes an ‘out of the building’ approach. Startup incubators/accelerators provide the perfect place outside of the corporate to validate business ideas. But what happens next, when employees have been given the permission to act like startups and have validated a business concept with real customers, solving real problems. Then what?
Most get blocked. Some projects gain budget approval to roll on for another incubation period. Conversations start to take place for future funding to keep going. It’s often at this stage that the conversations begin to explore the setup of corporate structures. However this slows the project and employees are encumbered by the distraction of these discussions. They’re stuck, still needing to ask for permission and unable to act autonomously with a true beginner’s mindset. The risks are high when this happens both for the corporate and the employees.
For a validated idea to have the best chance of success and before the team proceed into the proof of market validation phase. Employees need to resign from their jobs to become real startup founders, they need to incorporate a real company and they require real funding. This of course, can be quite confronting for both the corporate leadership team, the board and the employees themselves.
There are some corporates who are more prepared, their frameworks are progressed. These companies have worked with lawyers to create corporate structures and are ready to make investment commitments. However, they may not truly understand the makeup of founding a successful startup.
An authentic startup begins with the founders owning the majority shareholding and control of the business. Authentic founders have to feel the fear that capital is running out and that time is not to be wasted. Through their passion and belief, they search hard for solutions, taking bigger risks that give them greater chances of success.
Conversations and strategic planning for good innovation governance is required earlier than most realise.
Investors play a large part in validating startups. Corporates need to consider how others outside of the company might invest in a business they have started through their innovation programs. Investors are likely to steer clear of a startup where a corporate is a majority shareholder. They will see these controls to be damaging to the founders and the ultimate success of the business.
At Pollenizer, we work with our clients to identify any existing weaknesses in the company’s innovation capabilities. If we diagnose gaps in areas related to governance, we can help. We’ve developed a series of governance workshops, tools and processes that assist corporate leaders and their legal counsel to think differently, implementing governance frameworks in a timeline that aligns to your innovation strategy. Our incubation program provides the right support for corporate employees to take, what can be an emotional journey from employee to founder.