Why can’t corporations innovate? I’ve never done an interview where some version of this question isn’t asked. They have the talent, the budgets, the elaborate distribution and marketing capabilities to fuel success. But their ability to innovate is shackled by their own inertia created from their original success. The innovation or unique market fit that originally enabled them to become an established player, stymies their ability to grow because it naturally creates change resistance. This idea is explored within Michael Mauboussin’s brilliant book, Think Twice: Harnessing the Power of Counterintuition.
Mauboussin is the Chief Investment Strategist at Legg Mason Capital Management (previously he was the Chief U.S. Investment Strategist at Credit Suisse) and his book tackles reducing mistakes and capitalizing on the mistakes of others, through mental models and counter-intuition. His theory on the power of inertia jumped out as something large corporations struggle with.
He begins with the story of David Johnson taking over Campbell Soup Company in 1990 and wondering why there was an annual autumn promotion for tomato soup. In World War I, Campbell’s decided to grow its own produce to assure quality and created a huge surplus months before soup season – so they ran a promotion to move the inventory. Over the 80 years between the need to move the inventory and Johnson’s inquiry, Campbell’s had evolved their sourcing so there was no surplus – but the promotion remained because, well, it had always been so.
VentureFuel just completed an amazing project with one of the largest companies in the world, where we developed a go-to-market strategy on an emerging technology. The strategy laid out how to drive immediate Q4 returns as well as long-term growth. The project took 6 weeks and included interviews with dozens of VCs, emerging tech founders and internal/external stakeholders. Yet, we still haven’t made it through the procurement/legal process to get a contract to begin the consulting work. By the way, we have worked with this client before and there were almost zero “sticking” points on the paperwork. Yet we created a first-to-market 60-page strategy on nascent technology faster than it took to begin the consulting?
Now, make no mistake, many processes are slow by design. And all processes originated with good intentions before becoming crystallized as “the way we do things.” But, if unchecked, they can impede positive change. Here are 3 ways corporates can break through:
- Revisit Your Processes: Ensure they are serving you today, or as Peter Drucker famously suggested, “If we did not do this already, would we, knowing what we now know, go into it.”
- Take Calculated Risks: I knew that beginning our strategy project without a contract was a risk to our business. But I also knew waiting 6 weeks to start the project would be a risk to our client’s ability to move first – so we stepped out on a ledge to get it done.
- Let the Outside, In: Every day, VentureFuel solves established corporations’ challenges by working with startup founders and emerging technologies. Through these early-stage partnerships, our established clients get an injection of new thinking and unencumbered creativity. Startups don’t care about processes; they care about outcomes. They can shake off your cobwebs.
Processes enable the repetition of best practices, enable efficiencies and are hyper-critical to the scaling of business. Unchecked, these processes evolve into legacy growth impediments, strangling new thinking and the creation of opportunities for disruption. Process, control and growth can co-exist but require an eyes-wide-open understanding of purpose and a willingness to side-step tradition to evolve your business.
If you’d like to find out how VentureFuel can help you harness the power of innovation for your organization, reach out to us at firstname.lastname@example.org