Speeding up innovation in a corporate environment


How do you not only make corporate innovation easy, but entrench it into the fabric of your company? Bring the spirit of startups into the corporate world.


The State of Play


In the 21st century market share is ephemeral. Just get in your time machine and go ask Blockbuster. They actually had a chance to buy Netflix – the nimble and disruptive new DVD rental platform founded by Reed Hastings. When Reed proposed that Blockbuster should buy Netflix for $50 million Blockbuster declined. Blockbuster filed for bankruptcy in 2010. Netflix’s market cap is now valued at $19.7 billion.

What we can learn from this is that Blockbuster did not have the vision or capability to adapt to the shifting sand beneath their feet. They didn’t realise that things move quickly in the digital world and those who cannot adapt fall from grace spectacularly. With the power of hindsight, it’s obvious that Blockbuster should’ve moved into a more online-centric business model and bring their huge customer base along with them. But they didn’t. In many ways business leaders in the modern era are subject to powerful forces of corporate survival of the fittest, with companies investing in R&D to better anticipate future climes and to avoid pulling a Blockbuster.

The above is a very extreme example, due to the polarity and public nature of Blockbuster and Netflix, but the scenario is hardly uncommon. This has led to the startup within a corporation. Keeping on top of technology and trends is etched firmly in many corporate playbooks nowadays, but how do you reconcile that in an environment where, in theory corporations can access today’s most promising talent pool, have the budget to try and fail, can theoretically out-innovate anyone else, but in practice, deeply ingrained processes, cultures and incentive systems tend to actively suppress innovation that threatens the status quo?

“Skunkworks were emblematic of corporate structures that focused on execution and devalued innovation.”


How Corporations Have Reacted


In the last couple of years, corporate giants such as Coca Cola, General Electric, American Express, MasterCard, and IBM have been tapping into the agility and unbridled creativity of the startup world by hosting innovation contests and funding the ‘best’ for internal startup projects.

Unlike hackathons, which, let’s be honest, are usually just PR exercises with no concrete outcomes, these companies are trying to create continuous innovation, and for the companies who can master it– the art of executing on core products while continually inventing new products and new businesses – they shift from skunkworks style innovation by exception and into innovation by design.

If corporations can pull it off, and infuse entrepreneurial thinking into the the ranks, the prize is talent.

“At least 90% of millennials say they would rather work at a startup than a corporate giant…”


Talent Acquisition


As someone who deals with startups, entrepreneurs, and corporates on a daily basis I can say that in my experience the startups are a younger crowd. Of course, age, wisdom, and experience are virtues and highly sought after commodities in the corporate world, but with that comes a perceived staleness that startups don’t have. Working in startups is hard work but somehow more attractive. Things move fast and there’s a lot of room for bringing your own ideas to the table and actually have a say on how things should be done. It’s not exactly hard to tell that millennials in particular are lured the “feeling of newness” that startups possess.

If corporates can tap into this intangible feeling of newness and manifest startup culture (hard to define, but characterised by creativity, innovation, entrepreneurial thinking), talent follows. Innovative companies like startups attract more talent than corporations, but this can come as compromise. The structured and regimented corporate environment can be attractive to people who want that security, and infusing entrepreneurial vigor means you can have the best of both.


Innovation Hubs > Skunkworks


Of course, it isn’t easy to create a startup within a company (sometimes called an ‘Innovation Hub’), and even then Innovation Hubs within larger corporates are constantly searching for quality & fast-acting boutique dev teams that can execute these MVP products being created. Replicating the haphazard moves of a 3-7 person outfit can be done within an Innovation Hub, better yet with the safety net that these hubs have with the funding from the corporate mothership.

“It’s marrying the stability of established industries with the iterative and agile nature of startups.”

If corporations can nail the startup within a business model, and actively allow the unit to create products that can influence the core offering of your business, then you get continuous innovation and avoid the Skunkworks, which – if we’re honest – are emblematic of corporate structures playing at innovation.


Failure as a Metric


Part of distancing your innovation hub from the Skunkworks model is being able to not only tolerate failure, but to embrace it and to learn from it. Silicon Valley celebrates failure because of how important it is to realise that things need to be piloted in the real world and if they fail they fail. There is no shame in failure, as long as you can call yourself more experienced after the fact. Evaluating things to death and discouraging risk is sure to turn off free radicals of innovation. Innovators must be given the room to fail and try again. It’s essential.


Technical Resources



“The default speed for a startup is breakneck, and it’s how continuous innovation is fostered.”

A startup’s agility from the development side of things is usually down to their methodologies. Corporations are slow, glacial entities. Breaking through the sluggish approval/moremoremore/more/ and committing to one or two week sprints effectively replicates the agility of a startup, and helps you build much more viable products that not only work, but do not miss market windows or become obsolete before they are even finished. The default speed for a startup is breakneck, and it’s now continuous innovation is fostered.

If assembling or outsourcing a tech team to build products your innovation team is coming up with, instill agile principles (or hire teams who already develop within the agile framework) to make sure the speed in which the innovation hub builds is like a legitimate startup or high calibre tech studio.

In summary, successfully creating a startup within a company that actually possesses the key attributes of a startup and can retain them within a rigid corporate environment is hard. Successfully marrying the iterative and agile nature of small companies to the structured and sometimes bureaucratic decision making of corporates means innovation by exception becomes innovation by design.

The Skunkworks is dead, but long live innovation.

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