Following the trend and success of setting up labs and incubators for startups, corporates are investing millions on implementing similar approaches. But is it really working?
“A thorn in my side”, Jan Kennedy says. “People need to realize labs are not an answer in itself”.
As a taster to his keynote at the upcoming New York edition, we sat down with Jan to discuss the state of intrapreneurship. Jan Kennedy is founder & CEO at the Academy for Corporate Entrepreneurship and one of the partners for the Intrapreneurship Conference.
You promise to create an army of Intrapreneurs – Why? Is Intrapreneurship like war?
The word “army” certainly does seem to provoke reactions of “war” in many people. And I do find the analogy of war quite useful in the context of intrapreneurship, even if it is somewhat too simple.
Most large established organizations are in a way at war. They are in a battle for survival, which is becoming increasingly shorter as markets change more quickly and new opponents rise-up faster, making it harder for the incumbent to remain relevant.
It’s not so much that intrapreneurship is like war, rather, an organization’s entire existence is at stake. The war is between the company and disruption. So how do you fuel the fight for survival against disruption? Who in your organization is fighting for your organization to survive – beyond the next 5 to 10 years?
At the Academy for Corporate Entrepreneurship, we’ve gone through the phases of transferring existing business models from one country to the next to achieve growth by rapid expansion. I think we’ve become really good at tweaking those models for cost savings and efficiency gains. Now the world is realizing that innovation is the next big driver of growth and the key to keeping large companies relevant.
So how can an established company become truly innovative?
First of all, a single lab or incubator or spending millions in R&D is not an answer in itself. You need more of what got the company going in the first place – entrepreneurship. The ability to search out new opportunities, test them, fight for them and pursue the entrepreneurial journey to make a new value proposition real.
When companies start out, they are spending virtually 100% of their time just figuring out how to search for and go after new opportunities. “Executing” them comes closer to 0% of their time, mostly because there’s no repeatable business model yet to execute on.
The mindset and way of working is completely different. It’s startup culture. As the organization grows and scales, a gradual shift occurs and people are put into “execute” roles to manage and optimize processes and ensure efficiencies and more growth of the existing product or service. Very little time is now being spent on searching out new opportunities.
In my opinion, the intrapreneur is someone who can carry that original startup spirit, mindset and skills to actively seek out and develop new opportunities. Although a new startup only needs one entrepreneur to get going, established organizations need an army of Intrapreneurs to create enough opportunities that will make a difference and win the war against disruption.
Why do so many struggle, while others report solid returns on their programs?
If you work in a corporate and you are trying to put together a program with the goal to foster intrapreneurship, then you have my sympathy, because I know how hard it is. I speak almost daily with people in this position.
No one gets it right first time. Launching an intrapreneurship program is an intrapreneurship activity in its own right – a journey into the unknown.
There’s also no right or wrong way to do it, there’s just ways that are effective and ways that are not affective – and that is what everyone needs to figure out for their own organization. Let’s assume sign off for an intrapreneurship program has been granted, there are however some common problem areas I see, that cause programs to not be as effective as they could be:
- Understanding Entrepreneurship: You have to fully understand entrepreneurship at its core and appreciate the unique behaviors and challenges that it brings. If the people designing and running the program don’t come from that world and are not completely up to date then it’s like sending ship mechanics to build a formula 1 car.
- Structure: We now understand more about teaching and applying entrepreneurship, which enables us to use a structured approach. Programs that lack structure tend not to get good results.
- Lean Experiment Mind Set: Programs that embed experimentation at their core are more successful than those that don’t and often make the difference in gaining real traction or not.
- Mentoring: Often understated, we have seen many cases where teams benefit from a mixed roster of mentors who have “been there, done that” and can save teams a lot of time in avoiding common pitfalls. Mentors also provide a healthy external perspective and ensure you follow the right methodologies.
- Selection of people, ideas and teams: Selection processes vary a lot but zooming in on the right type of idea that aligns with business unit objectives as well as the right people to join the team makes a big difference to the overall outcome.
The process you apply doesn’t seem that difficult. Why isn’t everyone doing it?
Ultimately, entrepreneurship is a mind set and a skill that needs to be learned and practiced. If you don’t have the mind set, then you probably won’t get very far with the skills either – you really need both.
The Academy for Corporate Entrepreneurship is in a unique position because we have benefited from many learning’s of applied knowledge and activities within startup programs as well as corporate innovation or intrapreneurship programs. We know what has worked and what hasn’t, due to our network of mentors working in the field. We’ve been actively involved with the Founder Institute and learned from hundreds of semesters around the world training thousands of employees to become entrepreneurs.
We’ve learned form lean experiment experts how to test assumptions quickly and accurately and all of our team has the entrepreneurial spirit engrained within them. So we are able to make the process look easy, but it’s not easy for participants to complete the process. You still have to endure the entrepreneurial journey with all of its ups and downs.
Starting a new venture or launching a new product and developing ideas will never be easy because there are so many challenges you will face along the way. But with the right guidance you can increase the speed and success rates of developing and launching new ideas. But it’s ultimately down to the teams to make it happen, as with any startup team or entrepreneur!
Every organization seems to be setting up a lab, incubator or accelerator. The solution, or just following the hype?
This point is really a thorn in my side. Millions are being invested into incubators or labs, often in a start-up hub city such as San Francisco, Silicon Valley, New York, London or Berlin etc.
Generally it’s a good thing and I view these labs and incubators as the next generation of R&D activities that allow for more testing, faster changes, more input from the external startup work etc.
But what gets to me sometimes is when they are seen as “The Answer” to the corporate threat of disruption and becoming insignificant in the future. No Way! They are part of the answer and a really good move to be able to develop solutions and technology faster.
For me it raises 2 key questions:
- Where is the market and business model validation being conducted before actually building the solution/technology in the incubator or lab?
- Does it mean that only the employees in these labs are responsible for innovation and that innovation is not the responsibility of a much wider pool of employees?
It’s great to have these labs and incubators as a resource, but often they are focused on technological development and not so much market or business model validation. I’ve spoken to companies that have concerns that money is flowing into new incubator spaces but they are doubtful they will have a flow of good enough ideas where customers and problems have been validated, before building the solution in the lab or incubator.
Money would also be well spent to train intrapreneurs to ensure a constant flow of good market validated ideas to enter the incubator or lab. If that doesn’t happen, those incubators and labs quickly lose favour with management and can be closed down.
Accelerator programs are slightly different in the sense it’s a play for the corporate to try and collaborate with an external startup not made up of it’s own employees. Again, this is generally a good thing and can lead to acquisitions and launching new products, but in my opinion and for many reasons, it’s not a long-term sustainable strategy for the fight against disruption.
Intrapreneurship: a mind set, a process or a culture?
It certainly begins with a mind set, for both the participant of a program but also the sponsors of a program. In my opinion you do need processes to effectively implement intrapreneurship, just as startups can benefit tremendously from accelerators and incubators.
Without processes, you are relying on an underground rebel movement. This is how Intrapreneurship has been for the past 20 years. Luckily we have arrived at a turning point where also management wants the benefits of intrapreneurship. Good processes will help successful implementations and scale.
In my work I have seen that when a lot of implementations can be made, it starts to impact culture and changes the way people work. It could be a lot easier though, if the CEO creates a top down mandate for intrapreneurship activity and puts resources behind it….
