Article

How to innovate in a corporate setting: three lessons from the battle field

18 October 2019 | By Bart Vijfhuizen

Sustainable digital innovation and corporates, it is certainly not a happy marriage. Whether it is in the form of full scale change programs that fail to ignite real change, or startup programs that have trouble finding connection with the parent company, the oasis of sustainable innovation often remains a mirage. Yet sometimes, separate from all this corporate force play, small and initially unnoticed innovation initiatives somehow get traction and turn out to be the driver of the change that had long been desired.

I often see the same chefs cooking the food. Is that possible? All 40+ people who say what it should look like. Seeing digital as a project.

- Michael Dooijes - StartupBootcamp

This type of digital innovation initiative does not start with a corporate transformation as its goal. Nor is it the brilliance of innovation that makes the difference. This type of initiative succeeds because a small group of people manage to create the conditions in which an idea can grow into a new revenue stream. Conditions in which a new way of working and a new culture come naturally, instead of being imposed on people.

What type of conditions are these? And what type of person drives them? For this article I interviewed three people that can tell from their experience. I want to share their lessons.

Lesson 1: concretize as quickly as possible

People who work in an organization long enough start thinking from a shared frame of reference. So if a product manager at an energy company tells his manager that he wants to put an app on the market where users can see their power consumption in real time, then the manager knows exactly what the product manager means.

But if the same product manager goes outside of their shared frame of reference by proposing to create a peer-to-peer electricity marketplace, then the manager probably starts asking a lot of questions. The usual consequence: an endless stream of meetings, e-mails, PowerPoint presentations and business case calculations that draw all energy from the proposal. The result: either the idea dies a slow death, or it is implemented with so many assumptions that the launch ends in a big disappointment.

The crux is to break through this time-consuming spiral from the start by becoming concrete as quickly as possible. This includes two elements:

  1. visualize the idea, and;
  2. make a rough estimate of business viability

Let’s look into visualization. This has a few advantages:

  • It forces you to think the idea through
  • It surfaces differences in perception
  • It makes testing of assumptions possible

Visualizing is not a goal here, it is a means. A means to advance the idea, to speak a common language, to validate with potential users and to communicate about it. A sketch on paper can be enough.

The rapid visualization of ideas has proven to be extremely valuable. Abstract stories do not lead to action, tangible prototypes do. They ensure that you talk about the same and enable you to test ideas with users.

- Bart van Riessen - ECT

Once everyone is on the same page regarding the idea, it is good to do a first check on commercial viability. Creating a full blown business case is not necessary and even dangerous in this phase. After all, there are so many assumptions that each calculation gives nothing more than an illusion of certainty. So keep it simple, but be honest, and ask yourself three questions:

  • Are users going to accept this idea?
  • Is there a reasonable chance that users will pay for this?
  • Is this market big enough?

How do you get the answers? By doing a qualitative validation with potential users, combined with a market analysis.

Lesson 2: you only discover the true value in the market

People are notoriously unreliable in predicting their own behavior. The mobile phone and tablet are just two examples of products that consumers thought they didn’t want. This doesn’t mean that user research is worthless (after all, I just suggested to do user research a few sentences ago). It does mean that exploratory research can never be the end point of validation. A real life market test in the form of a pilot or beta is the way to find out what will make the new product, service or business model a success. And more often than not it’s something else than originally anticipated.

Our first proposition was a platform for mortgage advice via video calls, in which independent providers of mortgage advice were linked. It soon turned out that the market was mainly on the supply side. We then decided to no longer market the platform as a marketplace, but to sell it as a service to banks & insurers.

- Rutger Teunissen - 24sessions

Especially in corporate settings, there’s often no room for the types of pivots or changes of course that will mean the difference between success and failure.

The idea that you are building something to learn - and therefore with the chance that you will throw it away again - is new to our organization. If it is built, it is ready, is the thought. That sometimes makes getting approval for further development difficult.

- Bart van Riessen - ECT

At the same time, it is crucial not to step in the trap of endless experimentation without results. Finding a balance between experimenting and drive for results is as hard as it is important.

Pilots are interesting, but too often pilots do not deliver enough. What you need as a startup is commercial traction, customers who actually buy your proposition. The ultimate validation. After all, Boards also want success stories. So focus on fast learning, and prove as quickly as possible that commercial success can be achieved.

- Michael Dooijes - StartupBootcamp

As Michael explains, boards are going through an understandable cycle. In the first year there is often plenty of room to experiment and learn. It is often understood that financial results cannot be demanded immediately. The focus is then on softer KPIs. However, time always comes when financial results are demanded. And that time often comes suddenly. So it is important to start working on visible success early on.

Initially, for many corporates, changing the way of thinking is the most important aspect of working with startups. They manage on KPIs such as market intelligence, start-up engagement, exposure and ecosystem build. Later that more specific KPIs will be focused on ideation, testing & scaling.

- Michael Dooijes - StartupBootcamp

Lesson 3: Success depends on the circumstances that you create

Innovative ideas, by definition, have trouble thriving in a corporate environment. There is often room for innovation, and the people involved are given the mandate and budget to innovate. But they are opposed, consciously and unknowingly, by the thousands of colleagues who (must) stick to existing processes and procedures.

Perhaps the most striking example was the requirement of a purchasing department that we had to have a paper shredder. Understandable in itself, but we work completely paperless. Of course I could have bought such a device to get rid of it easily, but on principle I resisted it. It took me six weeks before the customer dropped the requirement.

- Rutger Teunissen - 24sessions

So having an idea is not nearly enough. Success requires perseverance to get through tough processes. It takes the humble attitude that allows you to patiently explain the same story time and time again, and the sensitivity to approach each stakeholder in exactly the right way.

Our most important success factor is, I think, our perseverance. Consciously or unconsciously we have been severely disadvantaged a number of times. Then after a successful pilot, we still had to do one or two pilots that really didn't produce any new insights. Then you can stand your ground and refuse to do another pilot, or be humble and persist. I see many startups give up after that first pilot.

- Rutger Teunissen - 24 sessions

The good news is that more and more organizations are creating a kind of "special economic zone" for (internal) startups, where certain purchasing conditions do not apply and there is more room to deviate from the applicable IT standards.

But even if the guidelines and procedures are properly arranged, it is also important to create the optimal conditions for the adoption of the digital innovation. Innovative products don’t sell themselves. Their adoption require attention, for example through training, guidance and follow-up. In short, persistence is also important here.

As a startup, we had everything to lose, so we guided clients in all areas to be successful with our product, including training, for example. An additional advantage was that we provided this as a paid service, so that we had a healthy revenue model from the start.

- Rutger Teunissen - 24sessions

In short, be a maverick

These lessons come from people we at Jungle Minds call mavericks: unorthodox, independent thinking people. People who possess a rare combination of vision, guts, empathy and perseverance. People who dare to make choices and are not afraid to bear the consequences. People who manage to create new digital value that nobody can object to.

In short, if you want digital innovation to be successful, be that maverick.

Bart van Riessen is Product Manager Digital at Hutchison Ports ECT Rotterdam (ECT), one of the largest container terminal operators in Europe. In his role in the development of new digital propositions, Bart has become one of the driving forces for building ECT's digital capabilities.

The ability to play chess on many different boards, to move the right piece at the right time. I think that is the most important and underestimated characteristic that one must possess to make change happen within a corporate organization.

Michael Dooijes is co-founder & managing director of the Fintech & Cyber ​​security program at StartupBootcamp, a worldwide network of sector-oriented startup accelerators. Michael is the connection between startups and corporates. He recruits promising startups who are stimulated in their growth through investments, guidance and cooperation with corporates. He helps Corporates with finding the right startups / scale-ups and with corporate innovation programs.

For us it is first and foremost about the team behind the startup. One of the main reasons for failure is founder clash, not the idea.

Rutger Teunissen - CEO & co-founder of 24sessions, a software-as-a-service solution that enables companies to advise clients online. Rutger started 24 sessions in 2015 and now almost all banks and insurers use their software for customer contact via video calls.

The major disadvantage to our product has at the same time perhaps been the biggest advantage: it touches on the core of the services provided by banks and insurers. We were immediately confronted with the highest legal and safety requirements. It was hard to get through that. But once we were in, it was a confirmation of the quality of our product for prospective clients.