Shoel Perelman, Vice President at IBM Commerce, writes about how big companies are able to continuously create new innovations through meaningful partnerships with the customer. Read the article and watch his TED@IBM talk on how established companies can maintain a startup mentality.
I accepted my first professional job without realizing that I was being hired onto a rebel team to build a rogue product. The CEO of the five-year-old company feared his company wouldn’t innovate again so he launched a rival development team to build a new product without knowing exactly what it would be.
Traditional wisdom says this is bad idea: you should always have a deep understanding of what you’re building, and for whom, before you start. In practice, this seems hard to do in a big established company because the people recruited to work on the new project didn’t come from a place where they felt the pain of the problem to be solved. Yet, big companies do launch new products, often as adjacencies to what they already do well.
Big companies face a special challenge in bringing a new product to market because, unlike a startup, customers don’t expect minimal viable products from big companies: they expect new products to come out of the chute fully polished, rock solid, and ready to perform as if they have already had 10 years of battle scars. Of course, infant code is never born with battle scars. The first time we set it loose, we know we’re in for pain.
The only thing worse than walking into battle with infant code is cooking code that nobody eats. It is demotivating for developers to get excited about their code working only to find that they’ve built something that doesn’t scratch a real itch. As more of our software becomes data-centric in nature, it becomes increasingly clear that it’s a sham to think we can write software that does something intelligent with data when the very data we are coding and testing against is conjured up.
So, does this mean big companies are destined to succeed at nothing other than sustaining innovations that came in from acquisitions? Nope. In my experience spending 10 years in a smaller company and 10 years in a big one, it is indeed possible to create brand new products in established companies – but only by getting into the right kind of trouble.
What is the right kind of trouble?
First, let’s discuss the wrong kind of trouble — it is when we find ourselves committed to making code work to solve an imagined problem. This rarely happens in startups because the money runs out and they’re forced to pivot to where the money is in order to make the case for a Series B.
Now the right kind of trouble is when we find an innovation partner (the customer) where we each have something the other needs. The innovation partner has a real-life problem they need solved and we have access to some specialized skill or knowledge that we can bring to the table. I think of this as an “Innovation Mate Match”. The reason this scenario tends to lead to trouble (albeit the good kind of trouble) is invariably, our sponsor has to make the case inside their organization to engage with us. Often, this is to get clearance to share data, or get IT folks involved to tap into existing systems.
The real trouble starts when our sponsor has to show return on the favors or real money they asked for. The laws of physics still apply: young, happy-go-lucky code needs to be thrust into the real world to grow up. It is the strength of the mutual attraction between innovation mates during the innovation ‘dating’ phase that holds both parties through the difficult time of making the idea come to life in a robust way.
Check out my TED Talk about “Nurturing Your Rebels” if you’re interested in the topic of Intrapreneurship – building new products in established companies.
How can an established company maintain a startup mentality? Intrapreneur Shoel Perelman argues that first it must retain its internal rebels. To do so, Perelman suggests a system inspired by online dating that matches rebels from big companies with small companies that need their skills. And keeps the entrepreneurial spirit alive in the biggest organizations.
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