What company today isn’t trying to become more entrepreneurial? I hear it all the time from corporate executives: “We need to be more like a startup.” Yet, big companies are not startups. They can learn and adapt entrepreneurial mindsets and some methods, but they can not and should not try to revert to being a startup. Large companies do many things better than startups, so we don’t want to lose sight of these strengths as we pursue transformative innovation. Large companies’ ability to bring business discipline, market focus, and scale is a competency that startups can’t duplicate. Startups can be chaotic, and some of them focus too much on technology development and not enough on the market and on strategic goals. We want to harness the best of both worlds in creating new sources of growth.
Large and innovative are not mutually exclusive. Apple, Amazon, Medtronic, and Google are just a few examples of large organizations that began their lives as disruptors and have managed to mature into companies that innovate across all three horizons. Co-creating with entrepreneurs and startups can be one of their key secrets to success. Adapting lean methods and other entrepreneurial approaches is a way to help you get better at approaching high-risk, high-unknown opportunities outside of your core sustaining innovation efforts. With the help of this new mindset and new set of skills, you can more effectively work with those entrepreneurs who can be important partners in your transformative efforts.
There is another valuable benefit to corporations: the cultural transformation that can be accelerated by working side by side with entrepreneurs and exposing your teams to their mindsets and approaches. I believe that deep engagement and collaboration with entrepreneurs are important ways to actually begin changing your culture for the better — helping your organization to become more entrepreneurial from the outside in.
Ed Kaczmarek from Mondelēz told me as much in describing Mobile Futures. “It starts the marketers thinking like entrepreneurs, where they can begin breaking down all of the processes that they have known to try to make them better, to be better marketers and do better marketing and engage consumers in new and innovative ways. It very much was cultural transformation that we designed the program to achieve. I think what it also did was it showed all big brands that it’s possible and that you have to lead. We’re not going to sit around and wait until all of our competitors are doing work with startups. We’re going to be the ones out there leading and forging ahead.”
In my book Collective Disruption, I share the entrepreneurial mindset model (image below) as a useful way to illustrate how many organizations typically approach risky innovations versus how seasoned innovators (including successful entrepreneurs) undertake these efforts. For the typical company, at the beginning of any strategic innovation initiative, everyone’s excited and optimistic: we’ve got a great idea, and we’re going to rule the world (the dreaming stage). Then, we may encounter challenges, and we face failure (the doubting stage). The process is never as easy as we think it will be. Failure is a natural and useful element of innovation; it’s how we learn and adapt our solutions or determine whether the time has come to try another challenge.
Entrepreneurial Mindset Model
As we develop innovative concepts into real-world practical solutions, we’re learning more. The problem isn’t as simple, and we begin to truly understand the complexity of the challenge. It’s this third stage (quitting or persevering) that truly separates innovators from dreamers. Those who persevere and don’t often quit experience a transformation of having worked through the challenges, and, thus, they acquire a new confidence built on deep knowledge and experience.
Those organizations and individuals that never progress beyond the early stages become hardened in their positions and adopt ever more risk-averse approaches to future endeavors. They enter a vicious cycle of disillusion.
Successful entrepreneurs (and visionary corporate innovators) understand the power of this informed clarity. Individuals and organizations that repeatedly fight their way through to transformational outcomes acquire an ability to champion innovative and potentially risky ideas. It’s not blind optimism; it’s a recognition and calmness about the process of trial and error and a development of informed instinct as to when the time is appropriate to continue with the challenge or move on to the next one. I believe that one of the best (and fastest) ways to evolve an organization’s culture to one that supports entrepreneurial mindsets and agility is to work alongside those who have crossed this chasm.
If your company has collaborated with entrepreneurs, how have you seen the benefits of the entrepreneurial mindset seeping into your corporate culture? If you haven’t had this level of collaboration with outside entrepreneurs, as of yet, what characteristics would you like to see integrated into your corporate culture when you do start to build such relationships? Please share your thoughts in the comments below.