CREATE A CULTURE OF INNOVATION AT ANY LEVEL
By Lisa Regan @mybldanube
Established companies are established. Which means they’re big, operate with layers of complexity, and have a set way of doing business.
And as these established—we call them enterprise—companies look toward new ways of working, and new products to create, it often happens that their company culture isn’t quite ready to support the transformation. Sure, leadership might be looking to make a change, but they get pushback from the product or business teams. Or self-starters on individual teams may be eager to experiment, but they get the sense leadership isn’t interested. To find out what works to shake up a big, entrenched culture, we spoke to Brant Cooper.
Brant is co-founder of Moves the Needle and author of The Lean Entrepreneur—in addition to his many years at startups—and helps large enterprise companies like Intuit, Capital One, and Hewlett-Packard shift traditional business practices toward innovative ones.
We also recently dove in with Brant to explore the role of leaders in continuous innovation in this webcast conversation with Carie Davis, Coca-Cola’s Global Director of Innovation and Entrepreneurship.
Lisa Regan: What are the obstacles to innovation in large corporations?
Brant Cooper: We actually hear the same story pretty often: A company has made a first foray into integrating Lean Startup practices, but they can’t move the new methods past a small product team or innovation group. That’s pretty much always because other parts of the business—legal, or regulatory compliance, or marketing—are worried about the risk to the brand. We start to hear, “What will our customers think about that? It might adversely affect our brand.” Or maybe there are legal and regulatory compliance considerations around accepting payments. And those are all valid concerns. Big companies have to protect their core business—it’s where they make all of their money. So while this idea of bringing startup practices to large enterprises is not really new, often it hasn’t worked because those companies are right when they say, “Listen, we can’t just become a startup.”
So then the question is: What can you do about that? And I think the first thing you have to do is: Ask. Talk to people. A lot of these innovation teams will just sit inside their work area, and they’ll go, “Oh, Legal will never allow us to do that.” And they don’t even ask! Pick up the phone, or go out for a cup of coffee, and just see what the response is. Like, maybe they’re worried that you’ll want to run an MVP that’s not fully baked, but they don’t know that an MVP is usually not going to be released to millions of people anyway—it’s for targeted early adopters. And once Legal finds out that you’re only interacting with a small handful of customers, they’re like, “Ugh, don’t bother me with this trivial stuff.”
But it’s also possible to actually get those operational teams—branding, sales, IT, legal, compliance, even HR—truly on board with new methods for creating products. In our training, we encourage people from those teams to join the innovation teams and the internal product teams so that they are able to experience first-hand what it’s like to run experiments. Then, they can understand why the teams are acting the way they are, and what these experiments mean, and what’s really happening when they’re interacting with customers. When I say “join,” I don’t mean that they’re sitting on the side and taking notes—they’re active participants. We ask them to provide ideas.
Another strategy we use is to train the business and operational teams to themselves act like an internal startup, where the employees are their customers. We ask them to think, “What are some products or services that we can roll out to our internal employees that will enable them to innovate better?” If legal or HR start re-framing their employees’ concerns as problems that they might be able to solve, then they can act like an internal Lean Startup and propose solutions. They can go and do customer development on their own employees, and then run experiments with employees to see which one of the ideas might actually work.
“IN STARTUPS, PEOPLE PUSH THROUGH NO MATTER WHAT THE EVIDENCE MIGHT STATE. IN LARGE ENTERPRISES, IT’S EXACTLY THE OPPOSITE.”
LR: At enterprise corporations, what’s the role of managers in guiding teams through entrepreneurial processes?
BC: This is a big question. How do you mentor internal innovation teams? It’s not the same thing as managing. A lot of managers have a lot of experience, and they’re very successful within large enterprises. But their skill set really is around managing known processes, versus mentoring teams to try to discover new processes. We’re finding that to be a very tough nut to crack. We do some “train the trainers” work, so that they can then do the workshops themselves and teach. But even beyond training the trainers, it’s: How do you teach leaders to mentor the teams, not just manage them?
Here’s an example: In one of the sessions that we did at Intuit, a senior manager said it was interesting that they actually had to teach the teams how to persevere, that teams were willing topivot too early. It was interesting because, in the startup world, I encounter something different. In startups, people push through no matter what the evidence might state, or they’re scared to even seek the real evidence. In large enterprises, it’s exactly the opposite. They get a little bit of evidence, and then they’re ready to pivot to the next idea.
Intuit’s senior managers were like, “Actually, there are all sorts of ways that you guys can test ideas.” You need that perseverance. The real innovation is not going to come easy, so you have to teach the internal entrepreneurs that they really need to iterate as much as they can before they “give up” and go off to a different idea.
To get there, you have to come up with new ways to measure these teams so that, on a week-by-week basis, they’re making significant progress. It’s, “You will go talk to 15 customers in the next week,” rather than just making promises like, “Oh, yeah. By the end of the month, we hope to have a dozen downloads.” The mentoring is really about teaching entrepreneurial teams to push aggressively.
LR: Why do you think it is that in the established companies, everybody gives up and goes, “Okay, let’s just pivot”?
BC: That’s a good question. Here’s another example of a client that we’re working with, a large consumer website. The President and CEO were urging the teams to move faster, so you had these teams running experiments, then they’d go, “Oh, I don’t know if we can do this.” And it was this senior leader that was going, “No, no. You have to do this. Push faster. Move faster.”
So it could just be that, when growing up inside larger, well-established organizations, you’ve been mentally trained to sort of resist failure. Or if you fail too quickly, you’d better do something else where you might be able to succeed. Maybe there’s even a fear of persevering, because, like, how far do I want to push on an idea that might not succeed? Is that going to come back and ding my career? So a lot of people inside these large enterprises are still trying to figure out, “Is senior leadership really on board with this whole idea of failing fast?”
That said, I’ve always been impressed that, when bringing these ideas to large enterprises, they have entrepreneurial people there. They have people that like chaos, that like wearing many hats and are problem solvers. And actually inside these large enterprises are pockets of agile programmers and design thinkers. So they already have these skill-sets at the grassroots. Those are the people that we can help identify, and teach them a little bit more about Lean Startup and how they can start running experiments. And then how they can teach it and how they can become mentors.
Real cultural transformation is going to take a while, and it’s going to be difficult. It’s not a linear journey. It’s not from here to there. It’s not short. Because you’re going to have ups and downs, and you’re going to come across these obstacles, and you have to go out and find mentors, and you have to go and find allies—all in order to overcome the obstacles.
But I think the rewards at the end are pretty big, especially if you’re the one that’s driving it, right? You’re sort of an internal hero. Hopefully what it does is help your organization create real value for their customers and discover new business opportunities that result in real revenue. I think there’s a lot of upside. And the bottom line: My hope is that employees feel empowered to create new value for customers. I think it’s necessary for these big companies to survive, but it’s probably also necessary for these big companies to keep their best employees, as they feel empowered to not just follow the process inside their known market but to go out and discover new value.
“HOW DO YOU GET BUY-IN? DON’T WAIT FOR PERMISSION. JUST START RUNNING YOUR EXPERIMENTS.”
What about the person with an entrepreneurial spirit who’s working in a large company? Can they make a difference on their own?
Recently I presented at a startup conference where I met a lot of people at the practitioner level who were asking that question: How do you get buy-in? What I tell them is: Don’t wait for permission. Just start running your experiments. I’m sure you can find something that you can work on. Maybe it’s after hours, and maybe it’s beyond your existing scope. But once you start having evidence, you’re in a position to start training leadership because you’re not just asking for resources and money, but you’re showing them evidence that there’s something here that they should be interested in. Pretty likely the leadership is going to look at that and say, “Yeah, okay, I think you should continue that experiment.” And so that’s starting down the path.
My other bit of advice is to go find like-minded people. Run a meet-up inside the company, do a lunch-and-learn, do a regular happy hour where you get together with entrepreneurially minded people and start asking, “What are some experiments that we can run?” And you can start churning out evidence. Again, the leaders will start to take notice. And as a matter of fact, it’s likely that, when you reach out like that, you will find leaders that buy into this approach as well.
Eventually, I do think you have to have that C-Suite executive that says, “Yes, we are going to do things differently,” to get it to spread and to really get a cultural transformation. But you can get the whole process started just by going and doing it.
Lisa Regan is a writer for The Lean Startup Conference and creates content for individual companies—tech startups to design firms. She divides her time between the San Francisco Bay Area and Vienna, Austria, where she also writes on art and travel.