3 Proven Ways to Inspire Big Brands to Innovate Like Start-Ups
In today’s ‘innovate or die’ world, corporate giants are forced to generate inventive breakthroughs. Big enterprises everywhere are facing the challenge of survival if they don’t adjust to the ever-changing market. In simpler terms, big corporates also need to behave like start-ups. They need to ‘think different’, be Agile, and stay ‘innovative’.
Why Should Big Corporates Bother to Act Like Start-Ups!
Maybe you are wondering why big corporates should act like start-ups. Here is a simple proof from the historical list of Fortune Global 500 companies to make it convincing for you.
A quick comparison of Fortune 500 companies in 1955 vs. 2017 shows that only 12% of firms that found a place on the 1955 list were present on the 2017 list. The rest of the companies have either merged/acquired, became insolvent, or have fallen from the past glory. If you take a closer look, the companies that have managed to be on the 2017 list have a common factor: they continuously reinvent and innovate and act as successful disruptors. A great example is the 125-year-old General Electrics (GE)! It is never far-fetched to say that brilliant innovations never cease at GE.
All these companies did not cling onto their infatuation to the traditional business models. They have been positively adapting with the volatile environment and the complicated customer behaviour.
Effective Tips to Build a Start-up DNA in Your Established Setup
Innovation isn’t something that just happens. We need to create the right conditions and cultural mindset for it to grow. Here are some tips as to how big organizations can innovate like small start-ups.
1. Build Internal Incubator
If an established organization really wants to launch disruptive products/services, they need to accelerate internal start-ups. This can be done by promoting intrapreneurship. An intrapreneur is an employee who thinks like an entrepreneur. He will build his innovative idea inside the company as an entrepreneur, using the resources and capabilities of the firm rather than launching his/her own business.
Offer your employees a friendly space to express and test their new ideas. Embrace a ‘no idea is a bad idea’ policy. Mount a suggestion box or a chart paper for them to jot down their ideas. These ideas will undergo a peer review and potentially receive funding for product development. I am sure you will be soon looking for an additional writing space to accommodate the ideas of your idea champions!
Remember that the illustrious success of Gmail, Google Maps, AdSense, etc. is the result of Google’s famed internal innovation principle ‘20 percent rule’. This is a unique Google initiative that allows employees to dedicate 20 percent of their time to work on a Google-related passion project of their own choosing or creation.
It is also important to have clear objectives, a specific budget, and readiness to learn from failures. These corporate start-ups should also get proper guidance from idea to executive pitch.
We, at Bridge Global, have initiated this when our founder Hugo Messer asked us to come up with new business ideas. We got an overwhelming response. We are currently moving ahead with the idea validation, testing, and MVP process. Our business model in Indonesia is aiming at driving innovation in Indonesian enterprises.
2. Acquire a Start-up
This one is a contrast to the first one. Here you are bringing in a cool start-up rather than creating one inside. It is true that your big brand has the essential expertise and resources to invent. But you better acquire a start-up as the entrepreneurial energy of a start-up may be unimaginable to you.
Acquiring a start-up or working with them is a great way to engage with entrepreneurs. It helps you to recoup the enviable start-up culture inside your four walls. Start-ups are programmed to work in tighter timelines and constricted budget. This trait can be a great learning exposure for your employees to think like start-ups. Use your money in exchange for the talent and ideas of the start-ups. The result is mutual gain.
You can start it as an accelerator or incubator program for a short period of time by mentoring and offering co-working space to some cool start-ups. You can acquire them eventually if you find them as viable.
If you feel that stirring disruptive innovation from within is difficult due to some inherent organizational shortfalls, go ahead and acquire start-ups!
3. Work with External Incubators
What about sending your innovative talents outside your four walls and letting them work within incubators? That’s what Procter & Gamble did when they sent a team from their corporate headquarters in Cincinnati to an incubator in Chicago. The result of the experiment was Tide Spin, an app-based laundry service.
As aptly stated by the famed serial entrepreneur and academician Paul Earle “Companies need to step away from their corporate cubicle farm. If you want to learn how to play baseball, it’d be a pretty good idea to go to a baseball field.”
Quick Tips to Get Your Culture Right for Innovation
• Encourage small and cross-functional teams
• Embed equality, transparency, and visibility into your system (shunning rigid hierarchy will help you a lot!)
• Stop micro-managing as they hamper bold ideas
• Give adequate support and autonomy to passionate idea-churners
• Stop being fussy with failure, because the fear of failure hinders innovation
It’s impossible for a business to survive on its original ideas alone for a long time. It needs to push for innovation. It needs to embrace ‘Lean’ to get rid of all sources of waste in its operations. Here is a story of a 47-year-old company that embraced Lean Startup.
There is no doubt that ‘fast-moving’, ‘risk-taking’, ‘snappy innovation’, etc. are no longer the characteristics of start-ups! Your long-standing organization will also become a rock star innovator by fostering a progressive culture and environment.