Combining an entrepreneurial mindset with corporate experience can lead to growth.
If you want to disrupt an industry, your best bet is to start from square one.
The problem is that once companies reach a certain size, the status quo (which has, until now, served them well) tends to get in the way. Certain protocols and processes that were once necessary for order suddenly turn into barriers, and it's hard to make a business case for straying from a company's core competency. What you might not realize, though, is that proceeding in the safe zone is actually deterring you from exploring what you might be great at next. It can also keep you from staying ahead of the curve when smaller, more agile companies start encroaching on your land – and they will.
Defining the entrepreneurial mindset
According to a survey by Accenture, although 93 percent of business executives believe innovation is fundamental to driving lasting success, only a mere 20 percent of them consider their current efforts effective. For legacy companies, disruption takes place when they adopt an entrepreneurial mindset. I don't mean starting a company but rather undergoing a distinct shift in both culture and process.
From a culture standpoint, I define the entrepreneurial mindset under this framework:
- Learn fast and incentivize employees to take more risk in their innovation efforts. Allow an environment that is less fear-driven.
- Obsess over customers so you're acutely tuned into their wants and needs.
- Be in a constant state of doing to avoid the analysis paralysis that so often squashes strategic growth efforts.
As far as processes go, think about how entrepreneurs define the problem, then find the solution. They don't just dive into untested ideas. Instead, they ask whether customers want that solution. If so, they test and develop a proof of concept before scaling the "winner."
Combining corporate experience and an entrepreneurial mindset
More established companies can learn a lot from an entrepreneur's mind. By combining that mindset with your corporate experience, you can drive true innovation. Here's how to get started:
1. Go straight to the source.
It's important for legacy companies to interact directly with the startup and entrepreneurial ecosystem. It's not always an easy task, but it's well worth the effort. By engaging entrepreneurs, you will get a first-hand look at the way startups approach problems with new solutions. You can then use those insights to inform your own innovation efforts. Engagement can vary from open innovation programs to incubators to corporate accelerators, and each comes with its own benefits.
For instance, at the University of Missouri-St. Louis, we partnered with energy tech startups to create a 12-week accelerator program. By collaborating with these startups, we were able to participate directly in product and service innovations. An open innovation program, on the other hand, would give you the opportunity to discuss industry-specific hurdles with peers. By enrolling in some of these programs, you might uncover customer pain points you hadn't even thought of.
2. Find a healthy level of risk tolerance.
Institutional memory can do a number on your ability to innovate. It keeps you from going down the same rabbit hole twice, which isn’t necessarily a bad thing. However, nothing ventured means nothing gained. That's why startups really hit it out of the park when it comes to leap innovation. They see a new problem and decide to solve it. Being the first mover brings better margins – you can charge a premium for your efforts.
I’m not saying swing for the fences all the time; you'll need to find a healthy level of risk tolerance. Let’s say a startup bats at a .400. A corporation, on the other hand, might be satisfied with a .300. As far as averages go, both are excellent, but the startup isn't necessarily mitigating its risk as much as it could. And the corporation may be trying to mitigate its risk too much. It's fine to be cautious – as long as you learn in the process.
Determine the level of risk you're willing to take. Then, start with some low-hanging fruit to motive and encourage your employees to continue working toward lasting innovation. There's nothing like a win to embolden everyone to soldier on. Disruption, as they say, is an evolution.
3. Engage your entire leadership team.
If you hope to spark disruption, it needs to start at the top – I'm talking at the department level as well. For this to succeed, all your directors have to understand and buy into your future initiatives.
You won't achieve the breadth or depth of innovation that you desire if it's in a silo. There has to be a level of trust for the whole thing to work; otherwise, you run into gridlock.
More established organizations haven't always been known for their agility, but that doesn't mean your company can't break the mold. Follow these three steps to drive strategic growth through innovation.