Although it continues to be a learning journey, several companies are starting to find the right mix of elements for their innovation programs to deliver results.
Beyond the 1-day ideation challenges and hackathons, the focus is now on company-wide implementation, in tune with the context and culture of the broader organization.
Getting started with intrapreneurship and gaining some early wins is far from easy, especially at legacy organizations that have existed for decades. Practicing what they preach, Daniela Ferraro (Enel) and Susana Jurado (Telefonica) started with small experiments, whilst consciously managing their environment, training their participants and nudging culture change.
Here’s a glimpse of their journeys, as presented during Intrapreneurship Conference Stockholm last May.
Enel is one of the world’s leading integrated electricity and gas operators. They work in 31 countries across 4 continents, with more than 65 million end users and nearly 62 thousand employees around the world. Their portfolio of power stations is highly diversified, running on hydroelectric, wind, geothermal, solar, thermoelectric, nuclear and other renewable sources of power. Almost half of the energy generated by Enel is produced with zero carbon dioxide emissions, making the group one of the leading producers of clean energy.
Innovation Drivers
Daniela Ferraro and her team knew that in a fast moving, complex world, assuring new growth was impossible without risk. But the nimble, agile capabilities of a startup don’t translate easily to a large, regulated company like Enel, who traditionally preferred to avoid risk and uncertainty as much as possible. Daniela knew they needed to cultivate a more entrepreneurial mindset within Enel in order to disrupt themselves before anyone else did.
Their Approach: Help Employees Think Like a Startup
Since 2015, Daniela and her team have been developing intrapreneurship with the Enel Innovation World Cup, a business model contest involving around 1000 employees worldwide, and included training courses based on the Lean Startup model for its business lines, and programs for the recently employed, such as New Hires Global Program, to promote the startup mindset. During the contest, employees are asked to propose innovative business models that fall within the company’s strategic business.
In the first iteration they had 100 new business model proposals, of which 36 were selected to pitch and 22 of them were selected to be developed.
The Shift to Customer-Centric
Before the program, the real-world wants and needs of customers were not taken into consideration before developing new products or services. Now, Enel pushes a customer-centric culture, with a mantra of ‘don’t develop something that nobody wants to buy’. Employees are encouraged to get outside the building and talk to customers, listen to their feedback, and start developing from there.
Managers as well were asked to stop operating from “Hi-Po” (highly paid personal opinion), and instead rely on data from customers to determine the strength and potential of new projects.
Leadership Engagement Is Key
Daniela and her team made sure that the program got buy-in from leadership by making them an important part of the process. The proposals, classified by geographical area, are evaluated by a committee chaired by the directors of each Enel Country. The winning team has the opportunity to develop their projects locally. Selected projects are submitted to the Committee of the Innovation Group, chaired by Enel’s CEO, which supports the projects on a global level.
Celebrating Failure
Failure within the Enel culture was not seen as a positive. It was not encouraged, and certainly not talked about. Daniela and her team knew they had to change this, so they created a program designed to highlight and talk about failures in a transparent way, inviting people to share what they learned from their failures.
It was so successful that last year, they dedicated an entire day to failure - ‘My Best Failure Day’ - where people submitted their failures and their peers voted for the best ones; the winners got to spend one month at a startup, and then come back and share what they learned.
The Outcomes (So Far)
One winner of the 2016 Innovation World Cup is Photovolt-AIR, which allows people to ‘adopt’ a renewable Enel Group power plant and earn money, is currently in the validation phase, with very positive feedback so far.
Another winner, PowerGift, enables consumers with solar panels to donate their surplus energy to a person, nonprofit or NGO of their choosing. They are currently onboarding new customers.
And as of 2017, Enel has launched their pilot Lean Startup Program, a ‘training to innovation’ model, in Italy in collaboration with Peakaboo pre-business incubator. The goal of the program is not to create internal startups but to develop instead an open mindset, an innovative spirit, and business skills that can be used in all business projects.
To be continued, for sure.
Telefonica is a Spanish multinational broadband and telecommunications provider with operations in Europe, Asia, and North, Central and South America. Operating globally, it is one of the largest telephone operators and mobile network providers in the world, with more than 340 million customers in 21 countries and over 120 thousand employees.
Innovation Drivers
In 2011, after the economic crisis and in an environment of constant change and uncertainty, Telefonica decided to become a digital telco - not an easy task for a 90-year-old company. They knew they needed to undertake a digital transformation not only to ensure they could weather future economic storms, but to future-proof themselves against disruption from a new, emerging generation of digital telecoms.
Their Approach: Lean Elephants
Susana Jurado and her team realized that the uncertainty their product innovation teams faced was not that different from the uncertainty startups face as a matter of course - so why not apply and adapt Lean Startup principles?
They ran two innovation projects as a test, operating each one like an internal startup, and applied what they learned to their existing open innovation program.
This grew into their Lean Elephants Innovation Framework:
1. Start small, but with a high level of ambition
2. Iterate quickly through each maturation stage
3. Test in the market from the very beginning
4. Learn fast, and learn cheap
5. Assemble multidisciplinary teams, with a mix of skills
6. Rely on the open innovation program to complement skills
7. Kill any projects that aren’t progressing.
Lean Elephants is a staged process that allows them to invest incrementally as projects are validated and progress, minimizing risk and resources. Open innovation calls enable employees to submit ideas and, if selected, devote 100% of their time to making their idea a reality.
This process allowed Telefonica to innovate twice as fast, testing more ideas and discovering new growth opportunities in less time.
Culture Hacking
They quickly learned that changing the culture in a large, established organization is tricky - you have to become a corporate innovation hacker. You need to understand how your particular culture works, and figure out how to make your initiatives work within it.
They meet regularly with different business units to understand their needs and most pressing challenges, and to explain how their Lean Elephants process can help them. Then, they launch innovation calls and projects to specifically address those challenges, with full support from stakeholders in the units they impact.
Telefonica intrapreneurs spend around 30% of their time gaining stakeholder buy-in and support.
When support doesn’t come easy, they start small, flying under the radar until they have tangible results to bring back to leadership. But even when they do get enthusiastic buy-in, they still start small and learn how things work before they scale - they know if they fail, they’ll fail big and are not likely to get such an easy buy-in the next time around.
Bringing In Branding
They also developed a transparent relationship with the branding department - something that is often overlooked.
Once they explained how the innovation process worked and what all the testing and experimentation was about - and how it helped position Telefonica as an innovative brand - the department got on board and now helps them develop branding for each project that aligns with Telefonica’s guidelines and approach.
Islands of Freedom
Susana and her team found that processes and organizations within the company were designed to support the core business - not innovation - and teams tended to be focused on measurable achievements rather than open exploration. So the business environment and mindset needed to be addressed.
They created what Eric Ries called ‘islands of freedom’, where intrapreneurs were given autonomy and trusted to work on their projects.
They were encouraged to get outside the building and meet with potential customers face to face. Intrapreneurs were supported with mentorship and training, and were expected to meet milestones and KPI’s, present results, and plan for next steps.
The Right Talent
Initially, Telefonica thought they would find their intrapreneurs through external hires from startups. But, as they put out more innovation calls, they realized they had an enormous internal pool of intrapreneurial talent who had simply been waiting for an opportunity to emerge and become visible.
They also found that the right mix of talent could make or break a project.
One project started with three intrapreneurs from customer research. After three months, the work done around the challenge, customer and market were fantastic - but the work done around the solution was weak, because they had no technical expertise on the team. Now, they pay more attention to the teams their intrapreneurs assemble to ensure a diverse and balanced mix of skills and capabilities.
The Outcomes (So Far)
In 2014, Susana and a colleague released a whitepaper explaining how they implemented their Lean Elephants approach at Telefonica and were invited to speak at the Lean Startup conference at Berkeley. This grabbed a lot of attention externally and internally, and bolstered support for intrapreneurship and innovation initiatives company-wide.
Susana realized just how much the company culture was shifting towards innovation when the R&D Controller asked her for lean startup book recommendations, and the head of HR at Telefonica R&D asked her to speak to HR managers about lean methodologies and how they could help the department meet their goal of becoming a lean organization. Internal and external organizations frequently ask for help in using lean, and their process is being used by business in various countries as a way of fostering intrapreneurship.
We're curious what's next!
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