4 Innovation Strategies From Big Companies That Act Like Startups

Established companies have a reputation for being way too bureaucratic to be innovative. But taking a page from startup culture, some have figured out how to become agile and fast-moving despite their size, Soren Kaplan writes.

Stodgy. Slow. Bureaucratic. Big companies get a bad rap when it comes to innovation. It’s easy to focus on the failures: Blockbuster, Borders, Blackberry, and Kodak.

It’s also easy to become enamored by the latest fast-acting upstarts like Undrip, Tout, and Glyder. For many, "innovation" has become synonymous with small, agile, and social.

But there’s a quiet revolution happening in corporate America. Big companies are applying startup strategies and tools to jump-start innovation. It’s not about pontificating on the innovation process. It’s about being lean, focused, and maniacally strategic.

• Intuit organizes multi-day "lean start-ins" that gather "intrapreneurs" together from across the company to teach them how to apply rapid experimentation to create new products, services, and business models.

• Kimberly-Clark promotes one-day "expert acceleration sessions" that bring hand-picked outside "thought leaders" face to face with business teams to bust mental models and create game-changing strategies.

• Whirlpool uses a network of innovation mentors (also called i-mentors), who are loaded with innovation tools and guidance to help business teams focused on challenging market "orthodoxies."

Big companies that behave like small startups focus on two things. First, they accelerate the speed of innovation, just like a Silicon Valley incubator. Second, they give internal businesses and teams an outside-in perspective, similar to the type of reality-checking that comes from advisory boards or venture capitalists.

Here are four strategies that anyone can use to start-up, start in, or jump-start their innovation:

1. Follow customers Home

Intuit’s innovation success is tied to a value for finding and savoring customer surprises—unexpected insights about customer needs, problems, and desired experiences that can’t be anticipated or pre-defined. That’s why the company does customer "follow-me-homes," where everyone from CEO Brad Smith to engineers and marketers immerse themselves in the customer’s natural environment to see how things are working (or not) in the real world.

2. Tap Outside Collaborators

Kimberly-Clark knows that insular thinking is the death knell of teams and organizations. That’s why they work with their businesses to define specific problems and opportunities that need a jolt of external insight. They then recruit a small group of "thought leaders" from other companies, universities, startups, or think-tanks to join a collaborative innovation session for a day to lend their expertise. These deep dives deliver strategic and practical insight that would otherwise take months to gather through traditional research.

3. Stay Small

Big innovations don’t necessarily have to begin by taking big risks or making bet-the-farm investments. Intuit, for example, provides guidance to its "intrepreneurial" teams that they should use the "lean startup" model. It’s not about waiting around for senior leadership to sponsor and fund the next big idea but rather rapidly testing ideas to identify the things teams can do to have the biggest impact.

4. Use the Best, Invent the Rest

Speed and agility come from realizing we don’t have to invent everything ourselves—either the approach or the innovation itself. When going after breakthroughs, it’s essential to dismiss the "not invented here" stigma, as Apple learned the hard way with its foray into mobile maps. There’s no shortage of tools and templates out there. The strategy is to use the best—like the one-page Business Model Generation tool (from the book with the same name)—and then adapt it or combine it with other approaches that work within the specific company context. Same goes for the innovation itself. The most innovative companies don’t always wait to build a new technology themselves—they look outside, find what exists, and then go from there.

These big-company strategies aren’t about ivory-tower innovation departments, wacky hats, or Kumbaya creativity. They’re focused on pushing entrepreneurial thinking and practices into the places they’re needed the most—inside established businesses. And their explicit objective isn’t about reaching that elusive holy grail of creating a "culture of innovation" (though it can be the by-product of these efforts). Their strategies combine strategic thinking with the practical tools required for driving forward new products, services, and strategies, all focused first and foremost on leapfrogging to the next big thing.

[Images: zigzag, drafting paper, and house via Shutterstock]

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  • Bob Jacobson

    As I write I am attending the European INNOVA conference reflecting on innovation successes in Europe, where a very different model prevails than in America.  It's interesting that the participants have the same focus on SMEs (small and medium-sized firms) as the key beneficiaries of innovation funding.  This is based on the assumption that large firms can fend for themselves and also that they are beyond help.  This article makes a good case for this focus but also holds out hope that large companies can emulate SMEs and thereby serve as industrial anchors for across-the-board innovation.  it would be interesting to see the constellations of businesses that result.  They will certainly be different breeds than traditional value chains, etc.!

  • Sagentia

    Innovation, while an
    essential part of any company, can be a daunting concept in today’s highly
    regulated, increasingly cost-sensitive market. Start-ups have traditionally
    been seen as the life-blood of innovation. However, among many of our clients,
    we are also seeing evidence of larger firms starting to use techniques more
    often associated with start-ups to enable them to accelerate their innovation
    process. Whilst a start-up will typically focus on one idea at a time, more
    established companies have the advantage of being able to test multiple ideas
    quickly and with reduced risk associated with the failure of one or more of them.
    External collaboration is often an essential part of maximising the success of
    this strategy as it provides the large company with the technical agility to
    rapidly progress their innovation in ways that they otherwise often struggle to

    Mick Withers, Managing Director, Sagentia Ltd.

  • RolePoint

    I love that the term ‘intrapreneur’ is being used so much today. Your current employees, if trained well, are your best asset as a startup or otherwise. You don’t always need to look outside of your company for these innovators if they are already there. But you’re right, sometimes an outside expert can jolt your team into thinking in a new way.

  • Simone Oltolina

    5. use a "per project" approach, with a slush budget a no immediate constraints in terms of financial return/actionable products. Keep the group small and talented.

  • 10kft

    One of the biggest obstacles to innovation is that there is a disconnect between the people that chart the vision and the people that are implementing it. Transparency between vision and execution roles, enabling dynamic teams, motivation and iteration are all factors that enable and facilitate innovation.

  • Lida

    It's refreshing to hear this - I have a dream, that one day this great world will all engage in the lean startup mentality…

    I'd love to hear what these companies are innovating specifically.