The Quest for Intrapreneurship & Innovation

The Challenge 

In a highly competitive world, how does a large, established company compete against a plethora of nimble start-ups that thrive on innovation and agility?  

Company leaders need to change the mindset of their organizations at a core level to beat disruptors at their own game. It is not enough to take incremental steps—that takes too long. Some choose the inorganic path of mergers and acquisitions for innovation which is expensive and not always fruitful. Others look to organic growth by starting their own internal innovation or venture groups. This organic approach is fraught with challenges including inadequate funding, tension due to corporate culture, KPIs which were created for mature lines of business, and the people assigned may not have the holistic skillset needed to create a repeatable process from ideation to launch. 

Hitachi, a 110-year-old company with $80B in revenues, faced those challenges and was determined to discover its next billion-dollar business. It needed the right partner with the right expertise that also embodied a co-creation culture. It found that partner in Mach49.  

What is Mach49? 

The company was founded and is led by Linda Yates, a seasoned CEO with over 25 years of experience creating global strategy and driving innovation for large multinationals around the world. Yates’ vision is to help global enterprises leverage their talent, ideas, brand, assets, competencies, capital, and customers to drive meaningful growth. Focused 100 percent on execution, Mach49 is committed to developing the client’s internal muscle to create a pipeline and portfolio of new ventures to beat start-ups at their own game. 

Mach49 brings a unique cadre of successful entrepreneurs, venture capitalists, and C-suite executives to leverage teachable, repeatable, scalable methodology. Combining that with a library of processes, tools, templates, and activities the goal is to build client capability, not dependency. 

The Principles of Disruption 

The first step in creating the venture team is to understand the principles of disruption and embrace them. Mach49 does a good job of capturing the full spectrum of what is important for corporations to understand. Here is a synopsis: 

Frame the Challenge by creating an aspirational challenge that is broad enough to generate disruptive ideas yet be bound by well-defined value propositions of real customers and stakeholders. 

Unleash Your Internal Talent by giving your intrapreneurs the time and space to focus on new venture creation. 

Embrace Risk and Failure by viewing risk as a badge of honor, not a blemish on one’s career. 

Add Method to the Madness by arming the team with a portfolio of tools, frameworks, and methodologies. 

Find Real Customer Pain by conducting direct customer and stakeholder interviews. Do not outsource this task. 

Master the Art of the Possible by staying current on the latest trends and technologies to thrill customers. Having the vision to leap from pain to product to market is the magic moment for great start-ups. 

Work from the Future Backwards by establishing offerings in the context of an opportunity framework that is big enough to drive “mothership” growth. Then define a minimal viable product that can be tested quickly and inexpensively to learn, find traction, and validate product-market fit in support of the roadmap. 

Prototype and Pilot: De-risk, De-risk, De-risk by utilizing an agile and rigorous methodology of prototyping, piloting, and pivoting to remove the greatest amount of risk with the least amount of capital. 

Seize the Mothership Advantage to Reach Escape Velocity by leveraging the company’s customers, channels, talent, technology, brand, supply chain, and capital to ensure new ventures reach escape velocity into the market quickly and robustly.   

Do Good, Have Fun by launching new ventures, especially those working to solve big, global problems, is one way to allow people in the organization to be entrepreneurial, creative, to feel alive, have an impact, and to have fun. 

Now that we understand the principles, here comes the hard part—execution! 

Process 

The Mach49 team acts and participates as co-founders in the ventures. The process consists of four parts – Ideate, Incubate, Accelerate, and Scale. Here is a closer look at the Incubate and Accelerate processes as summarized in slides presented by Paul Holland, Managing Director at Mach49: 

These rigorous and fast-paced processes grounded with the innovation principles have yielded fantastic results, with corporations successfully building and launching venture teams 90+ percent of the time. 

Hitachi and Mach49  

Hitachi worked with Mach49 to create its new venture organization. That organization is led by Hicham Abdessamad, Chairman, Hitachi America Ltd. and Chief Executive, Hitachi Global Social Innovation Business. As Hitachi worked through the process, it always kept three questions at the forefront: 

• Is the innovation solving the problem? 
• Can we scale that solution and repeat it? 
• Can Hitachi create value for our customers and partners in the ecosystem? 

There is a very good interview of Hicham by Paul of Mach49 that goes into detail of the challenges, learnings, and success Hitachi is having with its new venture team (interview). A summary of that interview is also posted by Paul here. 

How is this Going at Hitachi? 

 (Spoiler alert, it is a success!)  

As Hitachi was diligently working to find the pain during customer interviews, we spoke with a manufacturing customer that relies heavily on artificial intelligence (AI). They were very concerned about the risk this posed to the company if there ever was a problem with AI code. 

Hitachi looked for companies to partner with on alleviating this customer’s pain. It was important to find a partner that had similar ideology, particularly around the environment and sustainability issues, was focused on innovation, and, of course, one that was willing to help find a solution. Hitachi partnered with Swiss RE, an insurance and reinsurance company out of Switzerland that had experience with all types of insurance and was willing to explore “outcome-based” coverage. 

Together, the two companies created a solution that bundled Hitachi’s digital manufacturing solution with Swiss RE’s newly created parametric AI insurance into a simple monthly recurring fee. This resolved the customer’s pain and created a replicable solution that the partners can now scale and deploy to ecosystem companies anxiously awaiting this innovative solution. 

Planting the Seeds of Incubation and Innovation 

Many large corporations want to seed the organization to innovate, incubate, and successfully sell and scale new products and solutions. But it goes beyond planting the seeds. It is hard work. It requires patience, nurturing, and the courage and space to let the initiatives bloom and grow. Hitachi found a partner that specializes in and has a proven methodology for getting an innovation engine up and running. Customers will have remarkable business outcomes, and partnerships will flourish. 

Good luck to all of you on your quest for intrapreneurship and innovation!