Setting up for Success in Innovation - Use the VC Mindset
This has become a technique we’ve returned to again and again recently, in order to solve one of the more wicked problems we reliably encounter in pursuit of innovation (especially in slow-moving, scaled organizations), so I wanted to share it and seek builds.
One of the biggest failure points in intrapreneurship (i.e. corporate innovation) is the inability to receive the output of the innovation group back into the core business - often due to a lack of intentional design of both the mechanism and the decision-making model. There’s a host of other issues related to this (more coming soon via our listening tour), but this is where we’ve seen a number of genuine market successes fail. And there’s nothing more heartbreaking than to see the market say, “Yes, please! I’ll pay!” and to then have the business say no.
Enter the investor’s mindset. We’ve found putting the key sponsors (direct funders or indirect decision-makers) of the innovation initiative(s) in a new investor role, rather than their day-to-day manager role, a simple and highly effective technique that begins the necessary change management around this very issue.
So, instead of giving a new initiative the gladiatorial thumbs up or thumbs down (i.e. giving answers on the spot), they become advocates for growth, asking strategic questions and defending investment criteria and prudent risk-taking. They look to the not-too-distant horizon, not 10 or more years out, and tell the founding team what they need to come back with to prove that it’s worth follow on investment. Just as a VC would want her entrepreneurs to do.
This shift is absolutely critical, if significant new growth is to be realized via incubation or strategic corporate venture investment.
What do you think? Have you tried something like this out? What else have you seen work?