We train people to innovate and then tell them to stop doing so
Tendayi Viki (United Kingdom) is the founder and principal consultant at Benneli Jacobs and author of the bestseller The Corporate Startup. He has worked as a consultant for several companies including Pearson, Standard Bank, the World Bank, General Electric, and Whirlpool.
Bigger companies have a lot to learn from startups and vice versa.
One of the people in the world who knows most about this is entrepreneur, author, innovator, and former academic Tendayi Viki.
Tendayi has worked as a consultant, advisor, and coach for several large organizations including Airbus, Standard Bank, the British Museum, the World Bank, General Electric, Whirlpool, Tetrapak, and Pearson.
Tendayi co-designed Pearson’s Lean Product Lifecycle, which is an innovation framework that won the Best Innovation Program 2015 at the Corporate Entrepreneur Awards in New York and Best Innovation Culture 2015 at the Corporate Entrepreneur Awards in London. Pearson is a London-based global education company with over 35,000 employees.
Tendayi has previously co-founded several companies including Tasksauce, Book Editions, and Research Innovations, and he has mentored and advised startups and innovation teams for Lean Startup Machine, the Startup Foundation, Founder’s Hive, Rockstart Accelerator, and the Worldwide Web Foundation.
I asked Tendayi to draw on all of his experience and answer a few questions.
You expect that large companies will benefit a lot from the Lean Startup movement. Can you explain why?
Originally, the Lean Startup methodology was not designed for large companies. It was created by people like Steve Blank and Eric Ries to solve problems for startups, especially the challenges around premature scaling and therefore failing.
Lean Startup has developed into a powerful movement when it comes to understanding how to search and execute, and it offers some great tools that large companies can also benefit from.
For large companies, the reality might not be so much to search or execute but rather to search while executing. They have to focus on their core business and at the same time explore new business opportunities, and the key is to figure out how to balance this dual growth strategy.
Big companies know how to scale things, and they can plug new products and services into their scaling machine. However, the key questions are: When are you ready to scale? When have we tested the product enough and in the right way?
The answer is to move back a couple of steps and ask yourself: Do we have a real customer need? Have we created a viable solution? And do we have the right business model to deliver on that need?
If the answer is yes to these three questions, then you’re ready to scale, and Lean Startup gives you the tools that you need to start asking these questions.
A lot of the time, you’ll hear lean startups mentioning the importance of failing cheap and fast, but I don’t really see that mindset working in a bigger organization.
The interesting thing it that Lean Startup is not really about cheap or fast but about doing the right thing at the right time. The startup community often confuses bootstrapping with lean.
You can use a lot of different tools for this process of discovering when you have to create a viable solution. In some cases, prototyping can work—in others, design thinking or minimum viable products. The key is to test your ideas before you scale. Sometimes you do this just by an interview, other times it’s a landing page, and sometimes it might be building a version of the product. It all depends on the risky assumptions you are testing and where you are in your innovation journey.
You have some principles for building innovation ecosystems in established companies. What are these?
In our book The Corporate Startup, my co-authors and I present five principles around this.
I’ve discovered that a lot of large companies study the Lean Startup, train their teams to use it, and then the teams go back to work in the company. However, the problem is that they’re not going back to a startup. They’re going back to the same organization that works in a different way from what they have just learned. So the same manager who sent them to training now tells them to stop doing experiments and write a 30-page business plan.
Should innovation units then be physically separate from the core business?
It depends. What is the company? What is the environment like? It’s not like you’re hiding. You appear as line time in the budget each year, so even if you’re building things separately, you still have to align with the goals of your separate division and with the company’s overall mission, vision, goals, and budgets.
I know that you’re also quite critical when it comes to this idea of “acting like startups.”
Innovation is now the main strategic priority in most companies. The majority of executives indicate a need for their companies to develop sustainable innovation processes. However, when seeking advice on what to do, managers are often told that their companies should start “acting like startups.” This “sage” advice has resulted in the proliferation of idea competitions and innovation labs, where innovation theatre rather real innovation takes place. The success of these innovation labs has been patchy at best, with very few successful new products.
If acting like startups is not the right mindset or method, then what is?
Large companies are not startups, nor should they strive to be. While startups focus on searching for profitable business models, most large companies are executing on an already successful business model that is generating revenues and profits. This means that large companies are faced with the perennial question of how to execute or exploit the currently successful business model while simultaneously searching for or exploring new opportunities for future growth. This has always been a challenge for established companies, but the pace of change in the modern economy now makes these challenges even more pressing.
So rather than acting like startups, large companies need to build innovation ecosystems. These ecosystems will contain core products currently generating revenues and innovative new products that are aimed at the future. The company has to be world class at managing both types of products and using the right methods for innovation. This means that companies need to understand the elements that are involved in creating an innovation ecosystem—from the strategic lens to incremental investing and day-to-day product development best practices.
Managing innovation is therefore key?
Every company should have a clear strategy for their innovation efforts. This strategy should be based on taking a point of view about where the world is going, what are the key trends affecting our business, and how we are going to use innovation to respond. This is the case whether you’re a small or big company. You need to be able to clearly tell your staff where they should invest their energy when it comes to innovation. This is an innovation thesis. This enables you to clearly discuss whether new product ideas are an expression of this strategy or not.
Finally, you should ask more questions. For instance: Do we have enough transformational innovation and disruptive innovation in our organization? When we look at our innovation portfolio, is there a gap between our strategy and what we actually do?
You also talk about the importance of innovation accounting.
Yes. The point is, What is the right thing to do at the right time? This is the practice we want our product teams to engage in. So to support this work, our investment decisions should be based on asking the right questions at the right time. Rather than ask for long business cases, we can use incremental investing. Start with small investments and then double down our resources on those projects that are showing the most promise and traction.
How do you envision the companies of the future? Will they be a hybrid between startups and big corporations?
I don’t know, to be honest, but I know that companies are going to have to change the way they work. They have to become more responsive. Companies of the future should be highly collaborative, work with startups and universities, and co-create with customers. I think this will require companies to decrease the distance between the CEO and the customers, and I think that companies are going to have to break down their silos and become more cross-functional.
A DISCOVERY IS SAID TO BE AN ACCIDENT MEETING A PREPARED MIND.
A. von Szent-Gyorgyi