The Challenges and Strengths of Corporate Incubation

If you’re responsible for innovating and establishing incubation within large organizations, this article is for you.

It’s essential.

It’s challenging.

You can do it.

Here’s how. This article identifies the emotional underpinnings of common challenges, and presents somewhat counter-intuitive ways to address each of them, and then how to put it all together.

Need: Organizational Ambidexterity

As I cover in Ambidexterity: Zone to Create Breakthroughs and Growth, large orgs need to be ambidextrous to survive.

On one hand, they must relentlessly execute on known business models and on the other hand they must find and achieve breakthrough successes in new business models. And, if that wasn’t difficult enough, they need the ability to transfer the new ideas from one hand to the other when they’re ready.

These turn out to be very difficult things to do in organizations for a lot of reasons. Before we get into that, there’s good news.

Large Organizations Have Many Advantages

Fortunately, large organizations have many advantages, and they can leverage these to overcome the challenges.

They have lots of resources, including funding, tools, and the ability to hire people.

They also already have great people who can be brought to bear on the project and enough credibility to bring more great people in.

They usually have a leadership position in the industry that they can leverage for speed, credibility, and scale.

And they have world-class know-how to take an idea, professionalize it, and land it in the market.

Those are just a few of the many great things that the organization has to its advantage. So the question is: Why is Innovation So Hard for big companies?

There are three things at the root.

#1: Fear

The first reason is Fear. Maybe you’ve already heard of FUD: Fear, Uncertainty, and Doubt. This is especially gnarly in established organizations. Risk adverse folks in an organization fear the new idea.

So, how does this play out?

It begins from the light bulb moment, when an innovator has a brilliant idea.

At this point, a veteran innovation leader already foresees the many ways that this idea will die. As Safi Bahcall writes in Loonshots, innovations tend to die three deaths before succeeding. Experienced innovation leaders immediately start to anticipate these deaths and worry how to set the project team up to prepare for them. This is a trick in its own right: how to prepare the teams to be cautious and prepare without shaking their confidence too badly. This is an art to coaching them.

And this is so important, because of how the powers that be can react. The people entrusted with protecting the big org may fear that the liability of this new idea could wipe out everything that they have built, like an atom bomb detonating the known businesses to a pile of rubble. And, this absolutely cannot happen.

So, what can we do about fear?

The solution is to put the brilliant and risky idea in a box. Though, this is not what most innovation leaders think. The point is to project the protect businesses from the liability of the crazy idea. This mitigates the fear in the org and will allow the team to operate freely. More on this later.

For now, the second reason that there’s a challenge.

#2: Low Odds

Most new ideas fail–and there’s so much already written on this that I won’t bore you with the stats–but large orgs can beat the odds.

They can meet the odds because their position of abundance affords them 4 major tools:

1. Funnel – Create an incubation pipeline with multiple merit-based stages to meter funding and increase the odds of success.
2. Selection – Undertake a rigorous selection process to optimize for projects with the most potential in people, opportunity, and alignment.
3. Method – Apply a method that works with the strengths of the organization to increase the odds–I particular like to translate a blend of lean startup, agile, and design thinking into the best practices and policies of the company.
4. Resources – Provide a known process to secure resources that anybody in the company can apply for based on their merit. And determine merit based on de-risking and market traction.

Those are techniques for beating the second challenge. The third challenge is even trickier to address.

#3: Rejection

The third challenges is another of the common deaths that a new project faces.

This is particularly disheartening for those within enterprises, and as seen from the outside, perplexing. That is when an idea that has been de-risked and developed to traction is still rejected by the rest of the company upon re-entry.

At the end of the process, when you’re ready to open the box and transition this into the company, it is common for the idea to get blocked.

This makes sense when you think from the receiving leader’s perspective.

Bringing a new project to somebody is like showing up at a stranger’s house to give them a puppy. They never asked for the puppy, there’s so much care and feeding that goes into it, and they will naturally be distrustful, even if they wanted a puppy.

Instead, the antidote to NIH (Not Invented Here) Syndrome is transparency + data. It’s so much more effective to make this a collaboration from the very start, and keep the potential leader apprised of the plan. This becomes very similar to the incremental improvements type of innovation pathway, and it is necessary for finding a Receiver type sponsor.

I’ll treat this more thoroughly in a future post on hustling your project within an organization.

That’s the third of the major challenges. So, let’s recep.

Summary so Far

The three challenges identified here are fear, which you can address by creating a safe box for new ideas; low odds, which you can mitigate with a funnel, selection process, effective methods, and a know path to resources; and rejection, which we treat with an effective dose of transparency and data.

So, let’s put all of this together.

Address this with an Incubation Zone

You can address all of this by creating an Incubation Zone (ala Geofrrey Moore in Zone to Win) and surrounding it with the right pieces for it to succeed. You can read about this in depth in the How the Incubation Zone Fits article.

If you’re been reading my other posts, you probably saw this coming from quite a distance ahead. In those articles, you can learn about how to set this up. In this one, you learn why do it and why it works.

So, I wish you all of the support that you need to address this in your organization. Please let me know in the comments if there’s a way that I can help you set this up.

***

Coming Soon

This post was originally developed for a keynote for an internal event at a large and prominent organization that I was invited to speak at. And I’m planning to speak on it at the Innov8ors event next week.

Other topics coming up include things touched on here:

A. How to introduce new project teams to the incubation zone.

B. What happens in the incubation zone

C. How to move projects out of the incubation zone

If you have other questions in mind, please share with me or in the comments.

If You Found This Useful

You can engage in the following ways:

• Subscribe to receive follow-ups.
• Share if you know someone else who will benefit.
• Comment with questions and stories so that others can benefit from your thoughts.

We’re all in this together!

Keep growing what matters the most to you!