Jun 12 2014

Innovation for grown-up companies

Duncan Shaw (@duncanshaw) is the Managing Director at MojoTech, and works out of our New York City office. He took some time away from fine-tuning his World Cup 2014 bracket to share some thoughts on innovation.

As the “senior statesman” at MojoTech, I am often able to relate stories of corporate innovation that pre-date the Cloud, the browser, and yes even the Internet…

Innovation is a funny word for many companies to define - often these days it used to describe using technology to create efficiencies, or enable a product extension, or best of all, launch a whole new business. Recently I was asked to weigh in on how best to encourage real innovation in a large, established business.

Fortunately I see it work really well with some current clients, and I suppose equally fortunately (for this purpose) I have seen it fall short and even totally fail…

Big businesses have the customer base, resources, network and brand strength to be in the drivers seat to profit from innovation, yet time and again, they get beaten to the punch by students, ex-employees and “nerds”. A Memo that says “we are an innovation company” is not enough.

In my view, a company cannot truly leverage their assets, until they recognize and address the common roadblocks and behaviors that can prevent success.

The Corporate filter.

The cycle for getting projects off the ground can be long and arduous. Approvals in a big corporation often requires research, case studies, business analysis, budget projections, layers of sign-off, and numerous other hurdles before getting to to “yes”. Along the way, innovative ideas can get “reshaped” to enable the approval, often neutering it before it begins. Some of the best ideas are born without ROI as a metric. Companies should (try to) see beyond this.

Lack of talent.

This is not to say they lack smart, talented folks, but often the people most suited to drive innovation (not R&D of their core business), explore boundaries and challenge the status quo are the least likely to be found inside the corporate org chart. Structural change is needed to create a “real” innovation mission. Entrepreneurial thinking should be nurtured and rewarded. Sometimes that means bringing in a different type of talent and providing them a public mandate.

The brand police.

Companies spend years developing and curating a brand that speaks in a very specific manner to its stakeholders - customers, suppliers, investors, media, employees. Innovation (process, product, pricing, marketing, etc) makes the brand police very nervous and quick to shut down ideas that float outside the norm. Conversely, a compelling new concept may be hamstrung if it has to stand under umbrella of a strong brand that speaks the wrong language to potential adopters.

Putting the Cart before the Horse.

How many “Labs” concepts have we read about? Big Co makes a splash announcing an Innovation Lab: hiring 300 people, buying a ping pong table, crafting a cool name, lots of press - all before a single idea, concept or napkin sketch has been prototyped. This massive capital and cash flow drain creates unrealistic expectations of immediate contribution from the new “Lab”. They've been pre-destined to fall short and almost inevitably be cut back or killed. You can still get a lot done with 4 people and 100 days. Start there. Build off of your success.


Congress is not alone when it comes to horse-trading. To push any new innovation through the corporate machine, that idea needs support. And support often comes with some strings.

“I'll support your idea if you support mine.” “Sure, we can do this but only if you involve Betty and Don from my team.” “If it includes the use of my widget, it’s a go.”

In the end, simple concepts with great promise can get bogged down and become so “heavy” they never get finished, never get released or worst of all, actually get rolled out to customers...

Expensive Attitude.

Innovating should be a balance sheet activity, not a P&L activity. Big companies often have large R&D budgets for their core businesses, but treat innovation activities as a budgetary expense. This is usually due to the fact that companies view innovation as a way to increase efficiency, handle customer service better, or as a digital product extension to a traditional business line - these are usually just technical replacements/enhancements to existing “things” - not actual innovation. Ideas are a commodity and they can be mined in plentiful supply from your core business- essentially for free. They can be vetted, filtered and sorted also for little or no cost. So then what? Set the good ones free of course… Hand them over to a small agile team (internal, external, temporal) totally unencumbered by the mother ship and challenge them to build a new business, a business that builds equity, not cash flow. (Hint - you can always “buy” it back…).

Too Smart to Fail.

Big companies are loaded with really smart, highly trained, and very experienced operators. They make sure everything is in place for success before a project begins. Business Plans, Case Studies, Proforma Projections, White Papers, Marketing Campaigns... All before a single thing is even built! It's understandable. They want to mitigate professional risk. But creating new products and services in this way, is incredibly inefficient. Instead, just START. Ready, Fire, Aim - build, test, iterate - test, pivot, test - pick your axiom, but for goodness sake, stop thinking and start doing - don’t let your brain, training and reputation get in the way!

We'll be writing more on these ideas in the coming months. Stay tuned.

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