Discover what fundamental operational approach differentiates startups from large organisations, and how to succeed at corporate innovation in a VUCA environment. Harness the power of intrapreneurship with Studio Zao.
Whether established organisations choose a build, buy or partner approach to corporate innovation, none of the options is likely to successfully deliver the expected outcomes unless internal culture is aligned with the latest innovation practices and methods, and crucially, to how entrepreneurs work. This is due to the very nature of innovation projects, and their peculiar, ambiguous and uncertain nature.
Whether organisations are integrating the team of a recently acquired company now part of the group or collaborating with a startup, team members may find themselves in the uncomfortable position of speaking completely different languages than entrepreneurs.
The situation will be even worse if internal teams are asked to come up with innovative services or products, or even new business models.
This is because of one essential difference between the way large organisations and startups operate.
Large organisations tend to work in what we call “EXECUTION MODE”, whereas entrepreneurs and innovators adopt a “SEARCH MODE”.
Execution mode is how we have been told projects work
Execution mode is an approach to work that you adopt when you have a clear and watertight end-to-end plan, which is not likely to change.
It works for projects that don’t really have any ambiguous or uncertain elements. You have a plan, a budget, and you execute.
Established organisations tend to be set up for execution mode.
They have structures, processes and frameworks in place to make execution mode work efficiently. And that’s great because our world runs on being able to execute at scale.
On reflection, this is probably how most of us have been trained to work.
We are given a task, or an objective, assigned resources and teams, and we are expected to deliver in time and budget following specific processes set in place to protect the established business model that generates the organisation’s profits or guarantees the expected results.
Search mode is how entrepreneurs innovate successfully
However, entrepreneurs and innovators face ambiguous or uncertain problems to solve, or even just unfamiliar tasks because the context in which the business operates has changed, and are forced to adopt a different approach.
When the plan isn’t set in stone, “SEARCH MODE” can be more appropriate, at least in the early stages.
SEARCH MODE is designed to help us systematically deal with ambiguous, complicated, unfamiliar and unpredictable contexts by using more of an exploratory approach.
Over the years, entrepreneurs and innovators have been adopting methodologies such as Lean Startup, Design Thinking and Speculative Design, and have been using them to de-risk the extremely ambiguous quest for launching a new venture from scratch, essentially democratising innovation.
Search mode is the same kind of down-to-earth approach that entrepreneurs use when they’re launching a new business.
How can you unlock your internal entrepreneurial talent to drive higher Return On Innovation?
Why established organisations might benefit from applying a search, entrepreneurial approach
Entrepreneurs are masters in dealing with uncertainty.
Reid Hoffman, the American internet entrepreneur and venture capitalist co-founder of the social network LinkedIn once famously said: “Starting a company is like jumping off a cliff and assembling a plane on the way down”.
The parallel between the quests of an entrepreneur and the task being faced by organisational leaders in a Volatile, Uncertain, Complex and Ambiguous, or VUCA, business environment is evident.
As technological advancements, geo-political instability, climate change and the recent Covid-19 pandemic have accelerated the pace of unpredictable change across industries, developing an approach enabling team members to develop the capability to deal with ambiguity and uncertainty is what enables an organisation to drive innovation to remain competitive and profitable.
A faster pace of working, respectful of team members health and wellbeing, a more agile process focused on gathering evidence from the market, a customer-centric approach geared towards maximising the value output, an experimentative culture embraced to validate assumptions through quick and cheap tests on the market are going to equip the entire organisation to respond proactively and flexibly to challenges and opportunities.
This doesn’t necessarily mean revolutionising the hierarchical structure of the organisation, or unleashing individual initiatives out of control and lacking coordination towards a common objective. There is a middle ground between a bureaucratic top-down approach and the anarchy of thousands of self-directed entrepreneurs – between search and execute.
How successful organisations are innovating in a VUCA business environment
The effort of an organisation willing to thrive and grow in a VUCA environment is to identify the sweet spot in which the core business will still thrive, finding a balance between search and execute – the execution part of the company will be safeguarded, while at the same time fostering a search approach to innovate at scale.
The ultimate goal of successful organisations is to embed entrepreneurial capabilities so that they will become part of the way the organisation works, eventually making innovation a sustainable activity.
If innovation is driven internally, and teams are able to equally succeed at incorporating external ventures being acquired, or partner with startups bringing onboard new technologies or opening up new markets, or build innovation internally because they have developed the resilient mindset of an entrepreneur, the organisation will succeed at innovation at a scale and with an efficiency never experienced before.
Multiple variables will still come into play to define the success of an innovation initiative. However, if internal teams are trained, encouraged and rewarded to rethink what appears to be a negative event and transform it into a seed for future growth and success because they are willing to stick it out in the smartest way, the path to success will be achieved with overall less investment and so more efficiently and sustainably over time.
We call “intrapreneurship” this skill of applying the entrepreneurial “search” approach within a large organisation to drive growth and resilience.
At Studio Zao, we specialise in assisting organisations to execute innovation and transformation by empowering intrapreneurs and internal teams to master innovation and entrepreneurial culture. In this way, activating intrapreneurial talent and initiating transformational cultural change will ensure a meaningful impact on your organisations’ growth.