Corporates often find innovation much more difficult than their startup counterparts. But if these corporates overcome any initial resistance to mirroring startup processes, they can reap serious benefits
In fact, our experience working with startups and corporate innovation teams shows that there are clear similarities between the two apparently different worlds.
On one side, the startup ecosystem has different players with startups at the core, surrounded by other bodies like incubators/accelerators and investors which enable startups to grow with mentorship and investment.
The following is a description of the main roles these startup ecosystem players play in enabling innovation:
Startups – The human institution where ideas are generated and managed in an environment of extreme uncertainty.
Incubators/accelerators – Provide mentorship and coaching to startups to help them validate their ideas and grow. Also, in most cases, they provide early stage investment.
Investors – They allocate money to startups run by outstanding entrepreneurs who are able to provide evidence of market interest for an idea or prototype.
These three key players are intrinsic to the startup ecosystem and well known to anyone who follows it.
Interestingly, there are analogues to these roles within the corporate space.
Here they are:
Groups of intrapreneurs (acting as startups) – A group of corporate employees who work part-time on generating and validating ideas. As entrepreneurs do in startups, intrapreneurs have the mandate to validate ideas by gathering market evidence using the corporate resources and assets.
Mentors and coaches (acting as incubators/accelerators) – Corporations bring experts on innovation management to act as mentors and coaches. These experts guide groups of intrapreneurs on methods and techniques to generate ideas and quickly validate them in the market. Depending on the size and maturity of the business, corporates can rely on external mentors and coaches to do this.
Management team (acting as investors) – The CXO level of the organization plays the same role as investors do for startups. CXO level usually meet the teams of intrapreneurs on a quarterly basis and check the market evidence gathered so far. Based on the market evidence, they decide to keep funding the idea/prototype. Apart from the financial decision, the CxO level also decides on allocating extra people to the team to keep growing the idea.
In many cases, corporates are actually in a better position to innovate than startups. Corporates have great talent inside the organization who can work part-time on developing new ideas (this also boosts their motivation). Also, groups of intrapreneurs have better access to finance inside the organization than startups do with investors.
Have you identified these three roles inside your organization?
