….how do you trigger innovation turnaround? How to leverage what you have built in your organization whether it is a “walking dead” startup or a large “tired” company and go back to the right track for success before you become irrelevant for good?….

A few month ago I posted “Substrates for innovation”, which discusses the topic of innovation as a social phenomena, and how can entrepreneurs realize their aspirations at different environments: @Home, @ Academy, @Startup and @Large companies.

In the following, I would like to discuss innovation models and strategies from the company’s perspective, in particular how to trigger innovation turnaround at less-innovative companies.

The problem

We, the entrepreneurs dream big and hope that after founding our startups, working hard, do the right things, we will become a unicorn, and/or have a nice IPO and become one of the giant successful conglomerates. We may experience some turbulence along the way (see diagram 1) but if we survive them, we are on the right track for success (“the upper path” at diagram 2).

Diagram 1

Click on image to enlarge

Diagram 2

There are many small and large companies, which may even be profitable, but are stuck some way in the middle… they could have walked through the “upper path”, however they did not. Regardless of the reasons they fell down from the upper path, the current situation that they are facing is that they are “stuck”. They are trying to execute, living from a quarter to quarter and try to keep their heads above the water and execute on their current strategy. Some are still startups (“walking dead”) and some are larger, perhaps public companies who are … surviving. Most of these companies are in an “innovation-less” situation, they are too much focused on generating short term revenues and they just cannot afford themselves to invest in innovation.

The important article from “Strategy+Business“, “How Old Industries Become Young Again” by John Sviokla discusses “Dematurity of Companies”, and how to avoid reaching this state. However once you are there, how do you trigger innovation turnaround? How to leverage what you have built in your organization whether it is a “walking dead” startup or a large “tired” company and go back to the right track for success before you become irrelevant for good?

Innovation  Turnaround Startups 

If you are a walking dead startup, my assumption is that your main assets is your team, perhaps some technology assets you can reuse, but it is not your product for sure (otherwise you would have been in a better position now) and probably not the market and the ecosystem you are working with (as you are talking with the right people, and since you have a great team they would have collect and process the feedback in order to successfully  serve the market, and evidently it is not happening).

Leverage what you already have, and pivot… think like a lean startup again. Keep the talents that make the team strong, the people that are motivated and are working together as a team. If necessary, add 1-2 talents where there is a gap, and think out of the box. With the right leadership, you are probably in a much better and lower risk starting point than a fresh new yet-to-become startup. Don’t look back, forget the sunk cost.

Innovation Turnaround Large Companies 

In this case it is a bit more complicated as the company cannot just restart. It has a running business, selling products and customers to serve; it may even be a public company that cannot easily change its path, and many mouths to feed. However you still need to find the innovation growth engine. There are two frameworks for it: External innovation and internal innovation

External innovation is becoming common in the last years through one or more of the following: strategic investments, accelerators, innovation hubs and more. External innovation is a good leadership move, a good tool to gain visibility into the latest and greatest things that startups and entrepreneurs are working on, and to collaborate with them. However in many cases it does not end in organic innovation that becomes part of the company’s “sticky” assets.

Internal innovation is more difficult as it requires organizational effort and to some extent a compromise or trade-offs with current activities.

Innovation can be related to many disciplines: Technology, business models and processes, and even HR, operations and management processes (See “Listen…Innovate…Simplify…“). I will refer to tech innovation later, but as for the other disciplines it is first a matter of company culture that should encourage people to think out of the box, incentivize them for success, and be tolerant to poor ideas. It should go all the way top to the bottom from the top management. Some of the executive staff members should be champions of innovation.

As for tech innovation, there is no magic formula here… however let me offer one simplified method that might help:

The pioneers – Establish a small CTO or CIO group (‘I’ for Innovation). Start with 1-2 persons who are tech savvy’s but also product marketing type of characters, if you don’t have one already. A kind of internal startup that will understand what the problems and needs of the different departments in the organization.

The ambassadors – Identify the “creative” guys (1 or 2 persons) at the different departments, the out of the box thinkers, who will partially work also for/with the CTO/CIO team in order to advance the ideas to proof-of-concepts/prototype/pilots etc.

The executors – don’t touch anyone else… let them continue their good work as before. Let the ambassadors drive the innovation and propagate it inside their departments, the rest of the gang will eventually execute the good  ideas.

The process above is not simple; it requires leadership and as with any other change management process, needs to be done carefully and with care.

Thanks for reading, and will be glad to get your comments.