Nurturing an Entrepreneurial Mindset

NURTURING
INTRAPRENEURIAL
MINDSET
Tathagat Varma
@tathagatvarma
Image: http://www.anthonycasto.com/mind-nurturing/

CONTEXT SETTING
• Purpose: Why this workshop?
• Vision: What should change?
• Strategy: How will this happen?

ENTREPRENEURSHIP
• “Entrepreneurship is the pursuit of opportunity beyond
resources controlled” - Prof Howard Stevenson, godfather
of entrepreneurship studies at HBS

• Entrepreneurship is the willingness to take risks and
develop, organize and manage a business venture in a
competitive global marketplace that is constantly evolving.
Entrepreneurs are pioneers, innovators, leaders and
inventors. They are at the forefront of technological and
social movements – in their ﬁelds, in their forward thinking,
in their desire to push the envelope. They are dreamers
and most importantly – doers. - Presidio Graduate School
https://hbr.org/2013/01/what-is-entrepreneurship

NOT A JOB, ROLE OR A TITLE…
IT IS THE PASSION, THE DRIVE,
THE INNER CALLING!

THE ONE TRAIT ALL
SUCCESSFUL PEOPLE HAVE!
“Successful people are 100% conﬁdent that,
whatever the challenge, they will be able to
ﬁgure it out--and at the same time, they are
100% willing to forgo everything they think they
know and admit to knowing nothing.”
https://www.inc.com/nicolas-cole/the-1-trait-all-successful-people-have-in-common.html

THE GRIT!
• Giving up was so easy!
• “By the time I made my 15th prototype, my third child was
born”
• “By 2,627, my wife and I were really counting our pennies”
• “By 3,727, my wife was giving art lessons for some extra
cash”
• Failed 5,126 times over the next 5 years!

THE LONG MARCH!
Dyson spent the next three years traveling the world
and trying, unsuccessfully, to sell his dang vacuum.“These
vacuum makers had built a razor-and-blade business
model reliant on the proﬁts from bags and ﬁlters. No
one would license my idea,” he explained.“Not because
it was a bad one, but because it was bad for business.”
The companies turned him down because it was a very
good idea!

NO TAKERS!
“When the vacuum was ready, the ﬁrst thing I did was to show it to
the makers of domestic appliances.They didn't want it. I licensed it to
Amway in the U.S., which was a disaster.“
They seemed determined to continue selling bags, worth $500 million
every year. Later, Hoover’sVice President for Europe, Mike Rutter, said
on UK nationalTV:“I do regret that Hoover as a company did not take
the product technology off Dyson; it would have lain on the shelf and
not been used”.
“So I decided to become a manufacturer myself. I borrowed $900,000,
with my house on the line.”

G-FORCE
• Launched in Japan for $2,000!
• It impressed the Japanese
with its performance and
quickly became a status
symbol
• Won the 1991 International
Design Fair in Japan

WINNER!
In less than 2 years, Dyson was the UK’s best-selling
vacuum. Miele, Bosch, Siemens, Electrolux and Philips tried
to stop Dyson showing how their models clogged and lost
suction.
Later, manufacturers started to admit that bags reduced
suction, and then tried to jump on the bandwagon to
produce `bagless’ vacuums, but these also clogged just like
a bag vacuum. Meanwhile 60% of people were buying a
Dyson because it was recommended to them.

MORE CHALLENGES!
James Dyson’s vacuum was nearly never made due to patent fees
and legal costs incurred defending his invention against patent
infringement by a giant corporation. During the development
years when James had no income, this nearly bankrupted him.
He risked everything, and fortunately the risk paid off.Then in
1999, Hoover UK tried to imitate a Dyson and James was forced
back to court to protect his invention again.After 18 months
Dyson ﬁnally won a victory against Hoover UK for patent
infringement.

REFLECTION TIME
• Form groups of 4-5 per table
• Each table discuss and list out ideas under
• Why did he pursue the idea?
• How did he get the idea?
• What challenges did he face?
• How did he circumvent them?
• What, in your view, made him succeed?

WHAT IS MINDSET?
• Oxford Dictionary: the established set of
attitudes held by someone
• Cambridge Dictionary: a person's way
of thinking and their opinions
• Merriam-Webster Dictionary: a mental
attitude or inclination, a ﬁxed state of mind

MINDSET
• A broad set of beliefs about the world which
forms the backdrop for the decisions we
make and how we behave in life
• Mindset affects what we believe in, how we
act, and what we ultimately achieve!

MELIORISM
• Oxford Dictionary: the belief that the
world can be made better by human effort.
• Merriam-Webster Dictionary: the
belief that the world tends to improve and
that humans can aid its betterment.

ENTREPRENEURIAL
MINDSET
FinancialTimes: Entrepreneurial mindset refers to a
speciﬁc state of mind which orientates human conduct
towards entrepreneurial activities and outcomes.
Individuals with entrepreneurial mindsets are often
drawn to opportunities, innovation and new value
creation.
Characteristics include the ability to take calculated
risks and accept the realities of change and uncertainty.

3M Post It Notes
Dr. Spencer Silver, a 3M scientist, discovered the formula
for the sticky stuﬀ back in 1968. But it was Silver's
colleague, Art Fry, who ﬁnally came up with a practical use
for it. The idea for repositionable notes struck Fry while
singing in the church choir. His bookmark kept falling out of
his hymnal, causing him to lose his page. So, taking
advantage of a 3M policy known as the "bootlegging"
policy, Fry used a portion of his working hours to develop a
solution to his problem.

After years of product development, 3M introduced the
concept of Post-it® Notes in four major markets in 1977.
But, without actual samples in hand to try, consumers didn't
catch on. A year later, 3M blanketed the Boise, Idaho,
market with samples upon samples of Post-it® Notes. After
trying the notes, more than 90 percent of users said they'd
buy the product themselves. The test was a success! By
1980, Post-it® Notes were being sold nationally.
http://solutions.3m.com.hk/wps/portal/3M/en_HK/post-it/index/post-it_past_present/history/the_whole_story/

3M
In 1983, 3M’s chairman, Lew Lehr, said: “For
many years the corporate structure [at 3M]
has been designed speciﬁcally to encourage
young entrepreneurs to take an idea and run
with it. If they succeed, they can and do ﬁnd
themselves running their own business under
the 3M umbrella. The entrepreneurial
approach is not a sideline at 3M. It is the
heart of our design for growth.”

3M Bootlegging Policy
To foster creativity, 3M encourages
technical staﬀ members to spend up
to 15 percent of their time on
projects of their own choosing. Also
known as the "bootlegging" policy,
the 15 percent rule has been the
catalyst for some of 3M's most
famous products, such as Scotch
Tape and — of course — Post-it®
Notes.。
http://solutions.3m.com.hk/wps/portal/3M/en_HK/post-it/index/post-it_past_present/history/the_whole_story/

Intra-Corporate Entrepreneurship
- Gifford and Elizabeth Pinchot, 1978
“Today's large corporations are suffering from size. They are so large that the managers
making decisions are often isolated from a personal knowledge of the problems to be
solved. The traditional answer for this situation is decentralization.
Unfortunately, decentralization alone is not enough. In a hierarchical organization,
promotions can be won by social graces, loyalty to one's boss, and in general, political skills.
Courage, original thought, and ability to observe the obvious but overlooked fact, do
not necessarily lead to success.
If we are to get really good problem-solving in our decentralized corporation,- we must
introduce a system that gives the decision to those who get successful results., not to
the inoffensive. Such people will be willing to take moderate risks and will be more
concerned with achieving results than with gaining inﬂuence. These are among the
characteristics of the successful entrepreneur.
What is needed in the large corporation is not more semi-independent departments run by
hard-driving yes men'. but something akin to free market entrepreneurship within the
corporate organization. Such a new way of doing business would be a social invention of
considerable importance, both for the individuals in it, and for the productivity and
responsivity of the corporation.”
http://www.intrapreneur.com/MainPages/History/IntraCorp.html

Intrapreneurship…
• “Intrapreneurship refers to employee initiatives in organizations to
undertake something new, without being asked to do so.”

• “A person within a large corporation who takes direct responsibility
for turning an idea into a proﬁtable ﬁnished product through
assertive risk-taking and innovation”, - American Heritage
Dictionary, 1992

• “Intrapreneurship is the act of behaving like an entrepreneur while
working within a large organization. Intrapreneurship is known as
the practice of a corporate management style that integrates risk-
taking and innovation approaches, as well as the reward and
motivational techniques, that are more traditionally thought of as
being the province of entrepreneurship." - Wikipedia

Intrapreneurship
“Intrapreneurship involves creating or discovering new ideas or opportunities
for the purpose of creating value, where this activity involves creating a new
and self-financing organisation within or under the auspices of an existing
company. An intrapreneur is a person who practises intrapreneurship.

According to this definition, a corporate manager who starts a new initiative for
their company which entails setting up a new distinct business unit and board
of directors can be regarded as an intrapreneur.

In contrast, a corporate manager who starts a new initiative using pre-existing
corporate structures is not an intrapreneur. Nor is a leader of an R&D unit within
an organisation, whose innovations are managed by the organisation.

Were this R&D leader to create a new stand-alone organisation, which performs
its own functions and sells its own products – albeit with strong continued links
to the parent firm, organisation – it would count as intrapreneurship.” - FT.com

Memo to the CEO…
https://www.linkedin.com/pulse/memo-ceo-giﬀord-pinchot/
Almost every industry is
being or will soon be
disrupted.

Acquisition has proved
to be no substitute for
internal innovation.

The world is unstable.

Big companies now
innovate in partnership
with startups.

Why Intrapreneurship?
“Although addressed to you, this memo will be read by your employees, who will begin
implementing intrapreneuring with or without your support. It will go better for you and your
shareholders if you get involved in building the environment for intrapreneuring.

The young talent you need to drive innovation is not buying the old social contract between
corporation and employee. They are demanding work that is personally meaningful, work
that is aligned with their environmental values and/or concern for social justice. They expect
substantial freedom to make decisions and the opportunity to make major contributions
early in their careers.

In essence, they are demanding an intrapreneurial career. If you don't meet their needs,
they will stay with you only long enough to get trained and put your company on their
résumé. Many of the best of your older employees have similar attitudes and needs. If their
needs are not met they may retire on the job or leave to start their own ﬁrm.

Though these independent attitudes do cause problems, if you understand how to manage
them, these intrapreneurial attitudes can work strongly in your favor. Your intrapreneurial
employees, young and old, can deliver the radical increases in the volume, quality and cost
eﬀectiveness of innovation that you need to deal with today’s disruptive economy.”

How serious is the need?
Dr. William Souder spent ten years studying 289 innovations in 53 different companies hoping to
discover a process that could drive innovation success. He could not find one. Instead his
primary conclusion was, “The intrapreneur is an essential ingredient in every innovation.” The
system inevitably resists innovations that take resources from or threaten to replace the existing
ways of delivering value to customers. Significant innovation only happens when a committed
team of intrapreneurs drives the innovation though all the barriers, failures, mistakes and seizing
of emerging opportunities that mark the intrapreneurial journey.

It is not the right process that makes an organization innovative. It’s the close and trusting
relationships between self-motivated intrapreneurs and their management sponsors that moves
innovations forward through the inevitable resistance of any corporate system. Sponsors coach
the intrapreneurial teams, protect them and help them access resources. Good sponsors can
recognize the real intrapreneurs from the “promoters,” who look and sound good, but don’t get
the job done.

Creating an intrapreneurial organization will not only give you a major competitive advantage and
profitable growth, it will also create the legacy of happy, deeply engaged employees, suppliers
and partners committed to your company’s well being. As a side benefit it will also make a large
positive impact on society’s major problems. In total, this is a legacy that Wall Street will celebrate
and, at the same time one you can be proud to explain to your grandchildren.

So, who is an Intrapreneur?
Intrapreneurs are employees who do for corporate
innovation what an entrepreneur does for his or her start-
up.

Intrapreneurs are the dreamers that do.

Intrapreneurs are self-appointed general managers of a
new idea.

Intrapreneurs are drivers of change to make business a
force for good.
http://intrapreneur.com/four-deﬁnitions-for-the-intrapreneur/

http://www.pinchot.com/2011/11/the-intrapreneurs-ten-commandments.html
1. Ask for advice before asking for
resources.

2. Express gratitude.

3. Build your team; intrapreneuring
is not a solo activity.

4. Share credit widely.

5. Keep the best interests of the
company and its customers in
mind, especially when you have
to bend the rules or circumvent
the bureaucracy.

6. Don't ask to be ﬁred; even as
you bend the rules and act
without permission, use all the
political skill you and your
sponsors can muster to move
the project forward without
making waves.

KODAK
Kodak had a long history of cultivating and
embracing risky innovations. George Eastman,
the company’s founder, recognised this when he
pivoted Kodak’s core business from dry-plates
to ﬁlm, and from black and white to colour,
despite hitting proﬁtable product lines in the
short-term.

KODAK, 1974
In 1974, Sasson was a junior engineer at Kodak's Applied Electronics Research Centre in
Rochester, NewYork, when his supervisor gave him an assignment. It loosely involved devising an
all-electronic still camera.
"It was a 15-second conversation. It was just a small, open-ended project. I turned it into a project
to come up with a self-contained camera."
Sasson wanted to build a camera with no moving parts and one that didn't consume anything, not
even ﬁlm.
"I decided to do it digitally because my training was biased that way and because this was a very
small project and if I were to do it magnetically like aVCR does, I would've required a much bigger
and expensive team."
With one technician and lots of borrowed equipment including Kodak XL movie camera lenses,
Sasson cobbled together a camera roughly the size of a shoe box (pictured), weighing 3.9kg and
powered by 16 AA batteries. It included a cassette tape to store the images.

THE FIRST DIGITAL
CAMERA, 1975
• 1975: Steve Sasoon invents digital
camera.
• His device had a resolution of 0.01
megapixels, weighed 8 pounds, and
took 23 seconds to record a single
image to a cassette tape.
• “It was ﬁlmless photography, so
management’s reaction was,‘that’s cute
— but don’t tell anyone about it.”
• They did ﬁle for the patent in 1977,
though!

THE FIRST DSLR, 1989
In 1989 Sasson and Robert Hills made the ﬁrst DSLR camera, which wasn't a jury-
rigged prototype, but one similar to the ones on the market today. It used memory
cards and compressed the image.
Kodak's marketing department, however, resisted it, according to theTimes. Sasson was
told they "could" sell the camera, but that they wouldn't, for fear it would cannibalize
ﬁlm sales.At the time, Kodak made money off of every step of the photography
business.Why give that up?
"When we built that camera, the argument was over," Sasson toldThe NewYorkTimes.
"It was just a matter of time, and yet Kodak didn't really embrace any of it.That camera
never saw the light of day."
Kodak did make money off of the digital camera patent - billions in fact - until it ran out
in 2007. But by the time the company embraced digital, it was too late.

THEY DIDN’T JUST KILL THE
IDEA…THEY KILLED
THEMSELVES!
Kodak’s management also focused on the flaws of early
digital cameras, with their great weight, slow processing
times and low resolutions.They could not see the utility to
millions of potential consumers of “good enough” digital
camera technology.
Kodak’s rivals seized the opportunity, leaving the incumbent
flailing in pursuit of patent royalties. Sasson’s Kodak digital
camera patent expired in 2007. Kodak filed for bankruptcy
in 2012.

KODAK’S STEEP
DECLINE!
• 1975: Steven Sasoon invents digital camera! Toaster-size prototype
captures B/W images at .01 megapixels!

• 1976: Commanded 90% of ﬁlm sales and 85% of camera sales in the US

• 1988: Employed 145,000 workers worldwide

• 1996: The peak year! It held more than 2/3rds of global ﬁlm and camera
market, and company was worth $31 Billion. Kodak brand was the 5th
most valuable global brand.

• 2012: Declared bankruptcy! Workforce shrunk to 13,000

• Kodak had “Systems Concept Center” to develop new businesses
reporting into CTO
https://www.photosecrets.com/the-rise-and-fall-of-kodak

CHALLENGES FOR
INTRAPRENEURS
• “Corporate Immune System”
• Fear of failure / risk averse / penalize failure
• Fear of Ridicule
• Bureaucracy
• Lack of rewards for risk-takers
• Constant criticism
• Frequent setbacks
• Operational constraints (resources, day job)
• Unlike entrepreneurs, no incubators / accelerators
• Often not the traditional “HiPo /Talent”
• Can be seen as bit “rough”
• No dedicated team / function for innovation, or too siloed (if at all)
• …

8 Primary Elements of Company-
wide Innovation System
It starts at the top with
1. leadership and an innovation culture willing to commit
2. system-wide resources and
3. a governance process that can deliver on a clearly articulated
4. mandate and scope for breakthrough innovation.An inclusive
5. organizational structure with interfaces between different parts of the
company incorporates the
6. processes and tools and
7. metrics and rewards required for an innovation cycles that takes longer than
incremental product innovation. Lastly, companies need
8. skills and talent that are differentiated from traditional R&D or new product
development roles.
https://hbr.org/2018/06/the-myth-of-the-intrapreneur

Deloitte’s 5 Insights
• Intrapreneurship describes a people-centric, bottom-up
approach to developing radical innovations in-house.

• Intrapreneurship pays off many times over in terms of
company growth, culture and talent.

• It’s not about creating entrepreneurs, it’s about finding and
recognizing them.

• Intrapreneurs know the rules and break them effectively.

• Intrapreneurship requires a different management
approach.

REFLECTION TIME
• Individual:Think of the challenges faced by
intrapreneurs in your team / org (5min)
• Table: Discuss org support required to
foster intraprenership in your team / org
(10min)

What is Creativity?
• the state or quality of being creative.
• the ability to transcend traditional ideas,
rules, patterns, relationships, or the like,
and to create meaningful new ideas, forms,
methods, interpretations, etc.
• originality, progressiveness, or imagination
• the process by which one utilizes creative
ability

Steve Jobs
“Creativity is just connecting things. When
you ask creative people how they did
something, they feel a little guilty because
they didn't really do it, they just saw
something. It seemed obvious to them
after a while. That's because they were
able to connect experiences they've had
and synthesize new things.”

Edward do Bono
“Creativity involves
breaking out of established
patterns in order to look at
things in a different way.”

Ken Robinson
“Creativity is putting your
imagination to work, and
it's produced the most
extraordinary results in
human culture.”

Edwin Land
“An essential aspect
of creativity is not
being afraid to fail.”

Wikipedia
“Creativity is a
phenomenon whereby
something new and
somehow valuable is
formed.”

So, when is something
creative?
http://vandewerk.nl/boost-creative-thinking/#more-2336

What Creativity is NOT!
Creativity is NOT offensive
Creativity is NOT abrasive
Creativity is NOT complicated
Creativity is NOT easy
Creativity is NOT meaningless
http://www.thecreativealliance.com/creativity/5-things-creativity-not/#

Creative Process?
1940: A Technique for Producing
Ideas: the simple ﬁve-step formula
anyone can use to be more creative
in business and in life! – James
Webb Young

Young
“An idea, I thought, has some of that mysterious quality
which romance lends to tales of the sudden appearance of
islands in the South Seas.
There, according to ancient mariners, in spots where the
charts showed only blue-deep sea – there would suddenly
appear a lovely atoll above the surface of the waters. The air
of magic hung about it.
And so it is, I thought, with ideas. They appear just as
suddenly above the surface of the mind; and with that same
air of magic and unaccountability.”

Young
But the scientist knows that the South Sea
atoll is the work of countless, unseen coral
builders, working below the surface of the sea.
And so I asked myself: “Is an idea, too, like
this? Is it only, the ﬁnal result of a long series
of unseen idea-building processes which go
on beneath the surface of the conscious
mind?

Young
This has brought me to the conclusion that the
production of ideas is as deﬁnite process as the
production of Fords; that the production of ideas,
too, runs on an assembly line; that in this
production the mind follows an operative
technique which can be learned and controlled;
and that its effective use is just as much a matter
of practice in the technique as is the effective
use of any tool.

Young
In learning any art, the important things to learn
are, ﬁrst, Principles; and second, Method. This is
true for the art of producing ideas.
So with the art of producing ideas. What is most
valuable know is not where to look for a
particular idea, but how to train the mind in the
method by which the ideas are produced; and
how to grasp the principles which are source of
all ideas.

A Creative Process
• Gather raw materials
• Two kinds: specific and general
• In advertising, an idea result from a new combination of specific knowledge about the
products and people, and with general knowledge about life and events.
• Masticating the raw materials
• Bring facts together and see how they fit
• Mental digestive process
• Take a break!
• Put the problem away, sleep over it, do something else…
• Let your unconscious kind work on it
• Idea emerges out of nowhere!
• Just when or where you least expect it
• Shaping and polishing into a practical idea
• Share it with the world, submit to criticism
• Work like inventor to go through with applying this adapting path of the process.

But, how to streamline
“creativity”?
• Hire creative people?

• Deﬁne a creative process?

• Establish a culture of creativity?

Fostering a Culture of
Creativity
• Recognise your responsibilities as a cultural leader
• Take the bureaucracy off the people at the sharp end of the creative process
• Cheer the creative process not just the results
• Not punish failure and remember that carrot works better than stick
• Use intrinsic reward for creative people
• Celebrate and foster diversity in all its forms
• Encourage autonomy through setting output expectations for performance
whilst allowing creative people to decide the means of delivery
• Encourage free flow of information both within and into the organisation
• Ensure that healthy competitive rivalry is harnessed into collaborative
endeavour that delivers better creative solutions quicker
• Remember that your competitors are working away to be more creative than
you; thus a culture of creativity is a ‘must do’ not a ‘nice-to-have’.
http://www.normanbroadbent.com/AppContent/Defining%20Creativity%20and%20How%20to%20Develop%20a%20Creative%20Culture.pdf

What is Innovation?
• Merriam-Webster: the introduction of something new, a
new idea, method, or device

• Cambridge: (the use of) a new idea or method

• OECD: Innovation is: production or adoption,
assimilation, and exploitation of a value-added novelty in
economic and social spheres; renewal and enlargement
of products, services, and markets; development of new
methods of production; and establishment of new
management systems. It is both a process and an
outcome.

From Creativity to
Innovation…

Innovation Spectrum
https://hbr.org/2017/06/the-4-types-of-innovation-and-the-problems-they-solve

Sustaining Innovation
Most innovation happens here, because most of the time we are
seeking to get better at what we’re already doing. We want to
improve existing capabilities in existing markets, and we have a
pretty clear idea of what problems need to be solved and what
skill domains are required to solve them.

For these types of problems, conventional strategies like strategic
roadmapping, traditional R&D labs, and using acquisitions to bring
new resources and skill sets into the organization are usually
eﬀective. Design thinking methods, such as those championed
by David Kelley, founder of the design ﬁrm IDEO and Stanford’s
d.school, can also be enormously helpful if both the problem and
the skills needed to solve it are well understood.

Breakthrough Innovation
Sometimes, as was the case with the example of detecting
pollutants underwater, we run into a well-defined problem that’s
just devilishly hard to solve. In cases like these, we need to
explore unconventional skill domains, such as adding a marine
biologist to a team of chip designers. Open innovation strategies
can be highly effective in this regard, because they help to
expose the problem to diverse skill domains.

As Thomas Kuhn explained in the The Structure of Scientific
Revolutions, we advance in specific fields by creating paradigms,
which sometimes can make it very difficult to solve a problem
within the domain in which it arose — but the problem may be
resolved fairly easily within the paradigm of an adjacent domain.

Disruptive Innovation
When HBS professor Clayton Christensen introduced the concept of disruptive
innovation in his book The Innovator’s Dilemma, it was a revelation. In his study of
why good firms fail, he found that what is normally considered best practice —
listening to customers, investing in continuous improvement, and focusing on the
bottom line — can be lethal in some situations.

In a nutshell, what he discovered is that when the basis of competition changes,
because of technological shifts or other changes in the marketplace, companies
can find themselves getting better and better at things people want less and less.
When that happens, innovating your products won’t help — you have to innovate
your business model.

More recently, Steve Blank has developed lean startup methods and Alex
Osterwalder has created tools like the business model canvas and value
proposition canvas. These are all essential assets for anyone who finds themselves
in the situation Christensen described, and they are proving to be effective in a
wide variety of contexts.

Basic Research
Pathbreaking innovations never arrive fully formed. They always begin
with the discovery of some new phenomenon. No one could guess how
Einstein’s discoveries would shape the world, or that Alan
Turing’s universal computer would someday become a real thing. As Neil
deGrasse Tyson said when asked about the impact of a major discovery,
“I don’t know, but we’ll probably tax it.” To his point, Einstein’s
discoveries now play essential roles in technologies ranging from nuclear
energy to computer technologies and GPS satellites.

Some large enterprises, like IBM and Procter & Gamble, have the
resources to invest in labs to pursue basic research. Others,
like Experian’s DataLabs, encourage researchers and engineers to go to
conferences and hold internal seminars on what they learn.
Google invites about 30 top researchers to spend a sabbatical year at
the company and funds 250 academic projects annually.

Is Innovation…
• A concept…?

• A formula…?

• A process…?

• A method…?

• A culture…?

• A state of mind…?

Innovation as a Method?
https://www.slideshare.net/karangirotra/the-renaissance-innovation-method-mba-class

Innovation as a Culture?
http://www.ntti3.com/pursuit-innovation-curating-culture-ambitious-ideas-rebellious-talent-hidden-opportunities-part-2/

Evolution of Corporate
Innovation
https://steveblank.com/2015/11/21/at-the-center-of-the-frenzy-innovation-outposts-and-the-evolution-of-corporate-rd/

Why corporate innovation
fails to deliver?
• Why some corporate innovation programs succeed, while
many (most?) other fail?

• Why individual innovators are frustrated, and why
entrepreneurial success requires heroics?

• Why innovation activities have generated “innovation
theater”, but few deliverables?

• Why innovation in large organizations looks nothing like
startups?
https://steveblank.com/2018/06/05/whats-next-for-getting-stuﬀ-done-in-large-organizations-the-innovation-stack/

Innovation Stack
• It starts by understanding the “Innovation Stack” – the
hierarchy of innovation eﬀorts that have emerged in large
organizations.

• The stack consists of:

• Individual Innovation,

• Innovation Tools and Activities,

• Team-based Innovation and

• Operational Innovation.
https://steveblank.com/2018/06/05/whats-next-for-getting-stuﬀ-done-in-large-organizations-the-innovation-stack/

Individual Innovation
• Process: Heroic

• We describe their efforts as “heroic” because all the established procedures and processes in a
large company are primarily designed to execute and support the current business model. From
the point of view of someone managing an engineering, manufacturing or operations
organization, new, unplanned and unscheduled innovations are a distraction and a drag on
existing resources. (The best description I’ve heard is that, “Unfettered innovation is a denial of
service attack on core capabilities.”) That’s because until now, we hadn’t levied any requirements,
rigor or evidence on the innovator to understand what it would take to integrate, scale and deploy
products/services.

• Examples: Innovators Alliance

• In some companies and government agencies, innovators even have informal groups, i.e. an
Innovators Alliance, where they can exchange best practices and workarounds to the system.
(Think of this as the innovator’s support group.) But these innovation activities are ad hoc, and the
innovators lack authority, resources and formal process to make innovation programs an integral
part of their departments or agencies.

• Deliverables: One-off successes, Frustration with systems

• most corporate/agency innovation processes funnel “innovations” into “demo days” or “shark
tanks” where they face an approval/funding committee that decides which innovation ideas are
worth pursuing. However, without any measurable milestones to show evidence of the evolution
of what the team has learned about validity of the problem, customer needs, pivots, etc., the best
presenter and flashiest demo usually win.

Innovators vs.
Entrepreneurs
There are two types of people who engage in large company/agency innovation:

• Innovators – those who invent new technology, product, service or processes;
and

• Entrepreneurs – those who’ve ﬁgured out how to get innovation adopted and
delivered through the existing company/agency procedures and processes.

Although some individuals operate as both innovator and entrepreneur, any successful
innovation program requires an individual or a team with at least these two skill sets.

Innovation Tools and
Activities

Innovation Tools and
Activities
• Some examples of innovation tools are Customer Development, Design Thinking, User-
Centric Design, Business Model Canvas, Storytelling, etc. Companies/agencies have also
co-opted innovation activities developed for startups such as Hackathons, Incubators,
internal Kickstarters, as well as Open Innovation programs and Maker Spaces that give
individual innovators a physical space and dedicated time to build prototypes and demos.
In addition, companies and agencies have set up Innovation Outposts (most often located
in Silicon Valley) to be closer to relevant technology and then to invest, partner or buy.

• These activities make sense in a startup ecosystem (where 100% of the company is
focused on innovation,) however they generate disappointing results inside companies/
agencies (when 98% of the organization is focused on executing the existing business/
mission model.) While these tools and activities educated innovators and generated
demos and prototypes, they lacked an end-to-end process that focused on delivery/
deployment. So it should be no surprise that very few contributed to the company’s top or
bottom line (or an agency’s mission).

• One of the ironies of the tools/activities groups is rather than talking about the results of
using the tools – i.e. the ability to rapidly deliver new products/services that are wanted
and needed – their passion has them evangelizing the features of the tools and activities.
This means that senior leadership has pigeonholed most of these groups as extensions of
corporate training departments and skeptics view this as the “latest fad.”

Team-based Innovation
Rather than just teaching innovators how to use new tools or having them build
demos, we recognized that there was a need for a process that taught all the
components of a business/mission model (who are the customers, what product/
service solves their problem, how do we get it to them, support it, etc.) The next
step in entrepreneurial education was to teach teams a formal innovation process
for how to gather evidence that lets them test if their idea is feasible, desirable
and viable. Examples of team-based innovation programs are the National
Science Foundation Innovation Corps (I-Corps @ NSF), for the Intelligence
Community I‑Corps@ NSA, and for the Department of Defense, Hacking for
Defense (H4D).

In contrast to single-purpose activities like Incubators, Hackathons, Kickstarters,
etc., these curricula teach what it takes to turn an idea into a deliverable product/
service by using the scientiﬁc method of hypothesis testing and experimentation
outside the building. This process emphasizes rapid learning cycles with speed,
urgency, accepting failure as learning, and innovation metrics.

Limitations of Team-based
Innovation
The good news – I-Corps, Hacking for Defense and other innovation programs that focus on training
single teams have raised the innovation bar. These programs have taught thousands of teams of federally
funded scientists as well as innovators in corporations, the Department of Defense and intelligence
community. However, over time we’ve seen teams that completed these programs run into scaling
challenges. Even with great evidence-based minimal viable products (prototypes), teams struggled to get
these innovations deployed at scale and in the field. Or a team that achieved product-market fit building a
non-standard architecture could find no way to maintain it at scale within the parent organization.

Upon reflection we identified two root causes. The first is a lack of connection between innovation teams
and their parent organization. Teams form/and are taught outside of their parent organization because
innovation is disconnected from other activities. This meant that when teams went back to their home
organization, they found that execution of existing priorities took precedence. They returned speaking a
foreign language (What’s a pivot? Minimum viable what?) to their colleagues and bosses who are
rewarded on execution-based metrics. Further, as budgets are planned out years in advance, their
organization had no slack for “good ideas.” As a result, there was no way to finish and deploy whatever
innovative prototypes the innovators had developed – even ones that have been validated.

The second root cause emerged because neither the innovator’s teams nor their organizations had the
mandate, budget or people to build an end-to-end innovation pipeline process, one that started with
innovation sourcing funnel (both internal and external sources) all the way to integrating their prototypes
into mainstream engineering production. (see below and this HBR article on the innovation pipeline.)

Operational Innovation
Having skills/tools and activities are critical building blocks but by themselves are
insufficient to build a program that delivers results that matter to leadership. It’s only when
senior leaders see how an innovation process can deliver stuff that matters – at speed—
that they take action to change the processes and procedures that get in the way.

We believe that the next big step is to get teams and leaders to think about the innovation
process from end-to-end – that is to visualize the entire flow of how and from where an idea
is generated (the source) all the way to deployment (how it gets into users’ hands).

Second, we’ve realized that while individual initiatives won “awards,” and Incubators and
Hackathons got coffee cups and posters, senior leadership sat up and took notice
when operating groups transformed how they work in the service of a critical product or
mission. When teams in operating groups adopted the innovation pipeline, it made an
immediate impact on delivering products/services at speed.

An operating group can be a corporate profit and loss center or anything that affects
revenue, profit, users, market share, etc. In a government agency it can be something that
allows a group to execute mission more effectively or in a new disruptive way. Operating
groups have visibility, credibility and most importantly direct relevance to mission.

ALIGNMENT WITH
BUSINESS GOALS
• Three Horizons Model
• BCG Matrix

Three Horizons Model
• Horizon one represents those core businesses
most readily identified with the company name
and those that provide the greatest profits and
cash flow. Here the focus is on improving
performance to maximize the remaining value.

• Horizon two encompasses emerging
opportunities, including rising entrepreneurial
ventures likely to generate substantial profits
in the future but that could require
considerable investment.

• Horizon three contains ideas for profitable
growth down the road—for instance, small
ventures such as research projects, pilot
programs, or minority stakes in new
businesses.
https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/enduring-ideas-the-three-horizons-of-growth

http://timkastelle.org/blog/2010/08/innovation-for-now-and-for-the-future/

The BCG Growth-Share
Matrix
https://www.bcg.com/en-in/publications/1970/strategy-the-product-portfolio.aspx

IDENTIFY & CREATE
OPPORTUNITIES
• SCAMPER:Applying creativity to innovation!
• Customer Chains
• …

http://rarerthan.com/journal/scamper-problem-solving

CUSTOMER CHAIN
• Not just users, but focus on entire “Customer Chain”
• Users: E.g. by shifting focus from purchasers (IT managers) to users (traders
and analysts), Bloomberg developed better systems that made the overall
product more efficient and user-friendly, and became one of the largest
providers of financial information in just 15 years.
• Purchasers: might be parents (B2C games for children) or a CIO / CFO
(B2B software).
• Influencers: E.g. by shifting focus from users to influencers (collaborations,
micro-communities), makers of multi-player game World of Warcraft, the
gaming company Blizzard developed over 7.5M active players that pay $15
monthly!
http://www.innovationmanagement.se/imtool-articles/to-identify-opportunities-for-innovation-focus-on-the-customer-chain/

RECAP
• Individual level: hire, groom and support
individuals with growth / entrepreneurial / beginner
mindset
• Organization level: develop innovation systems to
foster intrapreneurial culture and guardrail the process
• Business level: strategic innovation to ensure
alignment

REFERENCES
• https://www.entrepreneur.com/article/224855
• https://www.dyson.com.au/community/about-james-dyson.aspx
• http://nymag.com/vindicated/2016/11/james-dyson-on-5-126-vacuums-that-didnt-work-and-1-that-did.html
• https://www.wired.com/2011/04/in-praise-of-failure/
• https://www.inc.com/magazine/201203/burt-helm/how-i-did-it-james-dyson.html
• https://www.curious.team/blog/2017/6/27/behavioural-science-and-how-it-can-influence-children-and-
education
• https://www.inc.com/nicolas-cole/the-1-trait-all-successful-people-have-in-common.html
• http://toolhelps.com/vacuum-cleaner-history/
• The Entrepreneurial Mindset - Rita Gunther McGrath and Ian MacMillan, 2000
• https://hbr.org/2008/10/how-to-spot-disruptive-innovat
• https://www.weforum.org/agenda/2016/06/leading-innovation-through-the-chicanes/
• https://fstoppers.com/education/story-worlds-first-digital-camera-told-its-inventor-215236
• https://www.smh.com.au/technology/kodak-moment-file-interview-with-steven-sasson-20120123-1qdk0.html
• https://www.businessinsider.in/This-man-invented-the-digital-camera-in-1975-and-his-bosses-at-Kodak-never-
let-it-see-the-light-of-day/articleshow/48520882.cms

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