How to keep the fanfare going when innovative and entrepreneurial.

You tried innovation challenges, but they didn’t result in new big ideas for your business? You tried a new open innovation initiative, but the company’s immune system killed it? You tried to assemble multi-disciplinary teams around great ideas, but the teams failed to pull the idea through? You tried entrepreneurial initiatives but new ventures could not be kept alive?

Recognize these memorable initiatives? They were probably great fun at the beginning, but frustration towards the end.

Fact is that a lot of innovation initiatives are being started with much fanfare and are living a short live. Strange, one would think because companies have great people, great ideas and great processes. But somehow the chemistry does not work.

So what is the problem? You are tasked to create new business: you are in search of great ideas, you want to couple great ideas with your best people, you want these teams to build a business plan and defend it towards the leaders, you want the leadership to open their wallet to fund the idea, and you want the company to support the resulting venture on a path to success.

My experience tells me that you need seven factors for success.

It all starts from the top

The CEO has an important role to play when it comes to creating new business bottom-up. The CEO must clearly articulate the company’s vision and more importantly its purpose because new business needs to be created within that purpose. Purpose is literally about putting every single employee in its customer’s shoes, it is about what every single employee is doing for somebody else and not about what he or she thinks what is needed.

Once this is clear, top management needs to be open-minded towards new business proposals, to make resources (both people and financial) available for the new business, to measure its success differently (customer trials rather than pure financial metrics), and, to allow failure (and learn from it). But above all, the top must be very transparent in their communication and actions towards all layers of the organization.

Go for Big Ideas

People have lots of ideas. Ideas are not the problem. The challenge is to have great ideas: breakthrough ideas that improve current products, or disruptive ideas that change the world, that disrupt businesses and that create new markets. The challenge therefore is not so much collecting lots of ideas, but clearly delineating the problem space, within your company’s vision and purpose and go for the big ideas. So don’t be content with mediocre ideas.

Encourage risk taking and be prepared to accept failure

Big companies pamper their talent: they typically have lists of high potentials and key professionals. So if you are assembling teams around a great idea, you want to tap into that talent. That is what you would think. However, key talent is typically groomed to be great corporate citizens – the ideal son-in-law that complies with all processes and rules, who knows he will climb the corporate ladder.

A company's key talent is typically risk-averse, and all new venturing could potentially derail their careers. 

Top management needs to promote risk taking, and accept the risk of failure. Running a new venture to create new business is de facto risky. Folks who dare to take the risk to run with their idea should actually be recognized as heroes, they should be celebrated – in the same manner as great corporate citizens are celebrated. And if they fail, not only they, but the whole organization should learn from it. Running or participating in a new venture should be a plus on your resume. Once this trust is created, key talent will be willing to ride the venture boat.

Provide the opportunity to be an entrepreneur!

Not everybody is an entrepreneur, nor can everybody be an entrepreneur! Normal business must go on – somebody needs to pay the company’s salaries. Typical employees of large corporates do not have entrepreneurial genes. But there always will be a few who have. And these few should be given the opportunity to go for it, but only if they are provided with the right context, and the right tools to help them.

The company needs to learn and help them building a business opportunity plan for their idea: who is the customer, how big is the market, what is the value proposition, do we have the technology, … And they also need to know what it means to startup a business: the importance of protecting technology, how to get funding, how to build a great team, … Your entrepreneurs in spe will typically have most of those skills but complementing their skill portfolio will bring them further.

Create an environment where the intrapreneur can thrive

I see a lot of corporations hire entrepreneurs to lead some of their new venture businesses. However, an intrapreneur is not an entrepreneur in a big corporation. An entrepreneur can start from a blank canvas when designing her new product or service, has different sources of money to fund her venture, and can tap into her network of buddies and friends when hiring talent. The intrapreneur however, is facing bigger challenges. She does not have a blank canvas (does it fit in the corporation’s product portfolio?), she only has one place to go to fund her venture (the CFO) and she has to follow the corporation’s recruiting and compensation plans (set by HR).

Even if after multiple powerpoint presentations to different management layers she gets the venture up and running, she is likely to get attacked by the corporate immune system.

A corporation needs to create an environment where intrapreneurs can thrive. Not all the corporate rules can apply to this specific group of entrepreneurial minds. They should be allowed to shortcut some processes, to bend some rules – but under supervision of a sponsor preferably from the executive suite. That support is extremely important towards the middle management layer who is in the midst of the battlefield between intrapreneurs and good corporate citizens – managers are asked to sacrifice some of their resources to the new venture impacting their own business well being. Middle managers need to have support from the senior suite to solve their resulting resource problems. A delicate balancing act.

Contain your entrepreneurial efforts

Having different rules for different sets of people in your corporation will result in conflict. Therefore, intrapreneurial efforts need to be contained in dedicated environments that are shielded from the regular company operations. Regular business must go on, and, must follow strict processes and rules to minimize risk for the overall company.

These special environments can be either at the corporate level in incubation or innovation centers, or, in departments along the regular business in business divisions. Different vehicles apply to different company environments, cultures and industries.

Liaise with the current business and don’t go stealth!

The worst strategy is to run your new venture in stealth mode. One will gain in agility and speed of execution when shielded off, but lose much more when suddenly the mature venture becomes visible in the company –

compare it to a submarine making an emergency surface amidst a flotilla of ships.

Nobody knows the venture, and in many cases it is even viewed as a competitor for the own business and organization so that the corporate immune system gets activated.

Critical here is to be visible and transparent whilst remaining insulated from the rest of the corporation. Linking up with the relevant current core and adjacent business will make sure that the venture is known, that it is well understood why it is operating differently and how it fits within the company’s overall vision and purpose.

When you have all seven dimensions covered, you should be on a solid path to build a great environment where new businesses can be created, grown and sustained in the long term.

Thierry has a long experience in innovation, intrapreneurship and sustainability in various roles in the corporate world. He always approached these essential drivers of business growth and transformation from a people and operational perspective, now the focus of his hands-on consultancy. This post was written following his presentations at the Intrapreneurship Conference in New York, October 2015, and, at the Breakthrough Innovation Conference in Berlin, Germany, March 2016.