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Andy Binns, Co-author of Corporate Explorer, on Beating Startups at the Innovation Game

Corporate Explorer

This podcast transcript is shared with permission from the Inside Outside

On this week’s episode of Inside Outside Innovation, we sit down with Andy Binns, Coauthor of the new book, Corporate Explorer. Andy and I talk about the innovation imperative facing corporations today. And what they can do to foster an entrepreneurial environment, to create corporate explorers within their companies. Let’s get started.

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Interview Transcript with Andy Binns, Coauthor of Corporate Explorer

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I’m your host Brian Ardinger. And as always, we have another amazing guest. Today, we have Andy Binns. Andy is the Cofounder of ChangeLogic and coauthor of a new book called Corporate Explorer: How Corporations Beat Startups at the Innovation Game. Welcome to the show, Andy.

Andy Binns: Hey Brian, thanks very much for the invitation. I’m delighted to be here.

Brian Ardinger: I’m excited to have you on the show. You have been in this innovation space for a while with McKinsey and IBM. Now you have a new book called corporate Explorer, which is exploring a lot of topics that I think are near and dear to the heart of a lot of our listeners is how can we, as corporations, become better at this whole innovation stuff? Why is innovation becoming so important for corporations to figure out?

Andy Binns: That is really actually the point isn’t it. And we try to open the book Corporate Explorer by saying, look, a lot of what we’re talking about is really old. It’s been around forever, right? And even the notion of a corporate explorer didn’t turn up in the last few years.

You know, one of the earliest ones that I know of is the creation of the ATM machine. The ATM machine, Della Ru a UK based currency printer literally has the license to print money. It’s like, well, surely people want to access this differently. And this guy comes up with the notion of the ATM machine somewhere in, Surry in south of London, with Barclays Bank in the 1960s. And this was a 300-year-old corporation.

This can be done by corporations, but to your point, it’s got more important. And it’s got more important because we know that digital is there. And transforming not only a business, but an industry. You cannot safely set within automotive and say, all those guys over in consumer devices no longer have anything to do with us. That’s true there, but it’s there in a dozen other industries you care to name.

And so, this notion of disruption that Clay Christiansen taught us all about. It’s kind of like it’s present. We don’t dispute it. And we certainly don’t dispute it after the last two years we’ve had. This high degree of uncertainty is present.

And so, a lot of corporations, even those who are doing really well today, I think see that the dynamics of their industry are changing at such a pace that they can’t ignore a bunch of different innovations. Either because they want new revenue streams and or they need new capability. Both of these stories are going on.

Brian Ardinger: Yeah, they’re being forced to. It’s kind of spot on. We’ve got technology advancements that are coming on and we’ve got new changes in marketplaces. We’ve got a pandemic. All these things are colliding at once requiring companies to think and act to move faster than they’ve ever had before. And yet, we still find example after example of companies that are struggling with this. And overcoming obstacles that you would think that they’d be able to overcome. Because they have quite a few advantages from a corporate perspective.

Andy Binns: Absolutely. And that’s why corporate innovations beat startups at the innovation game. Now they don’t beat them every time. They may not even beat them half the time. But they do. And the point about assets is exactly why they do that. Right. It’s when you can leverage brands customer access, technical capabilities, whatever it might be, then that’s, what’s going to bring you success.

Brian Ardinger: So, let’s dig into that a little bit more. What are the key advantages that corporations maybe aren’t recognizing or aren’t using to the fullest extent when they are wanting to do more innovation initiatives?

Andy Binns: One of the stories we tell in Corporate Explorer is that analog devices, a really strong technology innovation company, electrical engineers. Running around making phenomenal semiconductors. Worrying about the speeds and feeds of that circuits. And then they start to observe a change in the world, particularly the industrial markets where there’s this opportunity to connect their sensors, accelerometers, and various other ones to the cloud. And to use analytics, to observe the functioning of the machine.

Right. It’s a great space, a lot of startups are active in. And they build this product line around condition-based monitoring. They make some acquisitions to build it out so they can do acoustic sensing as well as motion and all the rest of it.

But if you’re a startup and you go into, tell the same solution. No one’s ever heard of you. You go into Analog Devices, you’re 60 years old, and your brand is based on never retiring a product and always meeting your supply commitments. But totally different conversation.

The market access is a real opportunity in many cases for these corporations. And also, they can access customers in different ways because they matter as a supplier to a bunch of automotive industry clients or whatever it might be. So, I think that’s a big area.

The other area is sort of some of the permission to play. So, another case that we give in Corporate Explorer is of the insurance company, Unica in Austria, where they move into sort of a digital insurance product. And again, they already have the actuaries. They can already design the insurance product. They already have the licenses from the relevant European authorities to sell insurance. So again, they can just move that a little bit faster when they are using these assets to make things happen.

Brian Ardinger: So, having said that corporations still aren’t necessarily good at innovation. They stumble on the fact that a lot of times they get focused on executing and optimizing their existing business model. For fear of messing up that apple cart, they don’t necessarily take the next steps and that. How do you create that culture of innovation such that they are willing to take risks and leverage those advantages they do have?

Andy Binns: We talk in the book about these being the silent killers of exploration. A term we borrowed from Mike Beer and the silent killers is that actually there isn’t a deliberate agenda to stop innovators. Right? Sometimes it feels that way, but it’s rarely the case. Mostly they’re on autopilot.

They’re on autopilot because they’re focused on the short term. They wanted to eliminate risk to the degree that that’s possible. They want to preserve the way they think business should be done. Right. Which is that power of sort of professional skills and identity, which has such an influence on corporations.

And so, I think what they need to do is to learn. It’s a learning agenda for them. And I think we are those teachers. You are that teacher, the listeners on the podcast are their teachers. And what they’ve got to learn about is experimentation. Moving into small increments. Rather than spending a lot that needs to spend little amounts. So that they are in a position to find out where the markets are and where the opportunities lie.

I think that they need to trust their Corporate Explorers. Get off this notion that importing people who’ve been in a series of failed startups, that they’re going to know how to get this done. It’s very disrespectful for all the many people who’ve done fabulous work in startups, and then moved to corporations. Done spectacularly well. But why would you trust them? They failed, right?

The point is that inside the company, there are Explorers, and you need to give them the space, the license. We need to talk about what license means to make that happen. And then finally, the Corporate Explorers themselves need to see themselves not simply as innovators, but also as leaders of change. Too many innovators or potential Corporate Explorers in corporations go hide their project and try to get on with it without getting too much interference.

And what they need to do is build a movement behind what they’re doing. They need to win allies and they need to win advocates. They need to figure out how to get that movement going behind what they’re doing, so that when they hit roadblocks, which we know they always will, they have people who are willing to support them and explain what it means, why this is learning. Not failure.

If I had a criticism of our colleagues in that function in organizations is that sometimes they miss that change, that human social building this network inside the company toolkit. Which is actually one of those big things that’s critical to success.

Brian Ardinger: So, let’s dig into the book a little bit. This idea of a Corporate Explorer. Can an average person within a company become a Corporate Explorer? Is there a certain skillset or knowledge or our mindset that’s required? Talk a little bit about what it means to be a Corporate Explorer and tasks behind that.

Andy Binns: To a large degree, the Corporate Explorer is exactly the Samsung Entrepreneur. They see a problem in the world. They want to solve. They’re dissatisfied with something that’s happening. We tell the story of Sara Carvalho at Bosch. That Sara is out hiking through the Andes, the lovely sounding image, right. And she gets home to the home of the people who are hosting her. And she says, I want to take a hot shower. Well, they don’t have hot water in Peru. That’s not something. Essentially then sets about how do we use Bosch’s technology to create a solution to providing hot water.

It could be Sara and these other examples I gave the same. We’ve told the story of Balaji Bondili at Deloitte. He gets involved in the tsunami relief in Asia. And he sees the power of the crowd. He’s ah, the power of the crowd. This is something that could transform consulting. And like 10 years later, he gets into it right. So there’s this passion behind something in the world you think you can fix.

And some way you think you might be able to do something about. And that’s true in entrepreneurs and in Corporate Explorers, the same. What’s different is this social ability. The corporate explorers that succeed, are those that firstly can articulate a case in wagon gets attention. They’re really good storytellers. They can bring the possibility and opportunity of what they’re proposing to attention.

And they do so not because they say, oh, we can just get a little bit better. Yeah. If you back me, it will be, yeah. There’s a small piece of revenue that I can build. Know they’ve got ambition. They said this is transformative. And the thing is that that actually gets more senior attention than the safe I can do a little bit better. Because it starts to hit the scale of what a senior manager is interested in. So, they do that really well. And then they build out this network of support around that idea so that they’re able to then execute it and sustain it.

That’s the piece of differences, is this great ambition and storytelling, combined with the social network. So that their building. And I’ll tell you, there’s another thing, Brian, I’ve learned as I’ve met these people. I hope it comes out in the book as we tell the stories, is that they’re humble. They don’t mind if other people make them successful.

You go around Vienna, and my great friends at UNIQA Insurance. And there are a dozen people who think they help make Krisztian Kurtisz successful at building this digital community insurance product Cherrisk. And he just has a way of making other people feel they played a role that also is something, again,

I think different from an Elon Musk that defines the great Corporate Explorer. It sort of takes a community of leaders around it, not just those involved in the project, or the venture themselves. But also, the people who are going to be actively engaged in supporting

Brian Ardinger: If I’m in a corporation and I’m trying to understand, and maybe even find the Corporate Explorers within my own walls and that I can nurture and build that. Are there particular techniques or things that you’ve seen to help identify those Corporate Explorers within your company? And then what number of Corporate Explorers do you really need to have an impact?

Andy Binns: I think this is sort of the proactive and reactive if you will. Right. And the reactive model is simply, are you listening? Are you actually looking out for them? I’ll tell you one of the most successful Corporate Explorers we talk about in the book is Jim Peck at LexisNexis, right?

He built a multibillion-dollar business in 10 years, inside and existing corporation, which does legal and news information. He builds this big data risk analytics business. And Jim saw the insight. He had the idea. He proposed, nobody gave him the responsibility. That this incidentally is true of Krisztian and UNIQA Insurance.

Nobody gave him, here go build me a billion-dollar business. He proposed it. So, there’s a reactive side. Now are you listening. Are you ready to cope with that? Ideally, do you have an ambition. A sort of strategic ambition that says, this is what we want to do, so that if I’m Jim or Krisztian in the business, I feel I have a license to propose those ideas.

One of the great examples is MasterCard. And they had this ambition to wage a war on cash. That’s actually a really empowering thing. That tells me I’ve got to find ways of converting this big number, like that point 85% of transactions on cash to digital. I know wow, those are the ideas, that’s how I evaluate success, right?

That reactive piece. And that inspired. The proactive thing is go looking for them. And I think there your best bet is some sort of participative competitive approach where you’re focused on solving customer problems. What are the top 10 customer problems you want to solve in the world? And invite people to come up with ideas.

And we can talk more about this. I think there’s a problem in corporations of too much idea creation. But I think the, hey, how can we solve these customer problems? How can we add more value to different customer groups? What places are there, where there are customer groups we’ve identified that may have problems we can grow into. That kind of thing is a great place to encourage people to participate and then step forward with their idea.

And then don’t spend too much on any one idea. Startups run through scarcity and so should corporate ventures. They should be, they should be begging for cash. As corporations, in some cases are, they worried much more, particularly in Europe I find, they worry much more about the size of their office. And how big the team is that they can hire. And all this kind of stuff. Which is complete nonsense in comparison to have you validated the idea. Have you done enough to prove out whether that’s a really a market for it or not?

Brian Ardinger: Following on the incentives conversation, a lot of times we think, I mean, you mentioned there’s a lot of intrinsic incentives that seem to be in play for the Corporate Explorers that actually have success within that. How does a company think about incentivizing folks to raise their hand and say, hey, I want to be an entrepreneur within the walls or, or I want to take my ideas forward? Are there things that seem to work better than others?

Andy Binns: It’s a pretty complex area for sure. And there’s a view out there, I think that what we need to do in corporations is in some way mirror the rewards of the, of a startup. So, Intel had this approach. Potentially ended after we published the book. And they said, okay, go and build a venture. We’ll give you what you need.

And if it reaches an external valuation of a billion dollars, we’ll give you 10 million or a business unit, will buy it out for 10 million. It didn’t work. And it didn’t work, also if you think about it, it introduces a perverse incentive to spin out the venture outside of the corporation. So, you don’t get the value from it because you’re going to get far more on the open market than you are in the corporation.

That’s great for the individual Corporate Explorer or entrepreneurs. It’s lousy for the corporation. It’s a flawed notion of incentives. And most of the people I’ve mentioned, who’ve done this successfully, are ones who actually have received very little additional compensation. Now that doesn’t mean that they haven’t done very well for themselves. Because this is a great way to prove your career. To prove that you’re a CEO.

Jim Peck ended up being CEO, not only of LexisNexis Risk, but also of two further corporations. He’s now CEO Nielsen IQ Market Research Fund, and Krisztian’s career has blossomed. Others have blossomed. There are real opportunities. It’s just not the same as an entrepreneur. And so, I think what we need to do is. The issue is less about what we pay them, and it’s more about the environment we create.

That accepts that explore businesses are different than the core business. That how you evaluate them, how you manage the fact that there are high degrees of uncertainty around how fast they’ll generate a return, that’s the point. And if you make it so that that’s accepted and understood and well-managed, then your corporate explorers will emerge.

If you make it, oh, you’ve got a great idea. I want to see a five-year cash projection on how you’re going to deliver the same margin as the core business, then you going to throw them out, right? You’re going to eject them over time. That’s really the area of incentive that I think we should focus on much more than the individual payment.

Brian Ardinger: So, my question I want to ask about is how do you know if you’re making progress? How do you know if your corporation is getting more innovative? What are some key measurements or ways to know if you’re making progress?

Andy Binns: You know, I think that it is for me about how many revenue generating businesses have you created. Again, there are some who would say, this is about how many billion-dollar external valuations. This is nonsense. I know the valuations matter. If I had a billion-dollar corporation and I was selling it, putting in my money in my pocket, I’d be delighted. Many people would. Of course.

But that’s not what corporate life is about. It’s something else. And so, you’ve got to understand that that you’re fulfilling different objectives. So, I want to see that I’ve got revenue generating businesses that in the markets I define on winning, we talk a lot about how, if you’re going down this path of creating new businesses, you want to have a really clear ambition. Like this way to wage a war on cash.

And then you want to know what are the hunting zones you’re going to play in. In order to achieve it. So, I want to know how many ventures have I got in my hunting zones? And how many of those are on track towards the kind of revenue goals that I have for them or the kind of milestones that I need in order to get that? Because it’s all about ideating, incubating, and scaling ventures. That’s success, you know, activity is not success. And so, I want to ultimately see that happen.

Brian Ardinger: And knowing that you can’t bet on the winners at the very beginning. You have to have a portfolio of ideas that are coming through at all times. So that you can see the progress with evidence and, and, bet on the ones that are moving forward.

Andy Binns: Absolutely. And this whole area of portfolio managing your innovation is something that I think is critical.

Brian Ardinger: So last topic I want to talk about is we are in this great resignation. And this area where people are moving around and trying different things, and the world has completely changed. What are your thoughts when it comes to retention or hiring of innovators? And these corporate explorers?

Andy Binns: I think it’s a tough moment for corporations. One where they should be fairly concerned that they’re going to lose their best talent. Because if you look at the stats, what goes side by side with great resignation is a record number of new business formations in the U.S. Some of those are going to set up coffee shops, coffee roasters, breweries, distilleries. People who are enjoying themselves, doing something different from corporate life.

But there’s a large number which are people seeking to realize their entrepreneurial ambition. And so, if I’m a manager in a corporate business or senior executive, and I’m seeing this happen, I should be asking myself, why am I losing my most entrepreneurial talent when I could be using that to sponsor growth in my business.

That’s where I think that needs it. So, all of the stuff we’ve talked about, about creating the license to explore. Giving them customer problems, to solve. Investing small amounts and making things happen, and then scaling the ones that work. I think that actually is a key part. It’s not the whole answer to this story of, of the great resignation, but it’s a piece of it.

And it also is about, you know, people want a future. They want to believe in something. They want a why. And doing new stuff, demonstrating like in sustainability. Is one of the interesting things is that most of the ideas, you know, we do a little bit work with Wazoku is one of the idea management platforms. And Simon Hill told me that more than half of the ideas on the Wazoku platform across all of their client base has to do with sustainability right now.

People want to see you’re making progress on something like. And that’s a story of innovation. How can you scale that to a level that actually has business impact? And I think again, that creates purpose, commitment, a sense of being a part of something that matters. Again, a key level of the innovation component.

Brian Ardinger: Like you said, it’s really never been a better time to tap into new and exciting projects. There are far more problems out there that people need solved. And they’re constantly changing. So, you’re in a good spot, if you, again, encourage folks to raise their hand and find those problems and have the ability to solve them.

Andy Binns: Yeah. I think that’s exactly right, Brian. Yeah. Very well said.

For More Information

Brian Ardinger: So, Andy, I want to thank you for coming on Inside Outside Innovation. If people want to find out more about yourself or about the book Corporate Explorer, what’s the best way to do that?

Andy Binns: Yeah, you could go to thecorporateexplorer.com or changelogic.com and learn about us. Learn about our research. I’ve written this book with two professors. Mike Tushman from Harvard. Charles O’Reilly from Stanford. They’ve also written some other books on the topic. Lead and Disrupt in its second edition, is another excellent text to dig into this whole area of how corporations can win and do win at innovation.

Brian Ardinger: Excellent. Well, Andy, thanks again for coming on Inside Outside Innovation. Really appreciate your time. Really appreciate your insights and look forward to continuing the conversation in the years to come.

Andy Binns: Likewise. Thanks Brian.

Brian Ardinger: That’s it for another episode of Inside Outside Innovation. If you want to learn more about our team, our content, our services, check out InsideOutside.io or follow us on Twitter @theIOpodcast or @Ardinger. Until next time, go out and innovate.

Is Culture the Silent Killer of Innovation?

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Corporate Explorers are managers who defy conventional wisdom to build disruptive innovation from inside existing corporations. They ideate, incubate, and scale new ventures, leveraging the assets of existing businesses to beat startups at their own game. This is hard work. Many corporations like Amazon, Microsoft, and LexisNexis are learning to succeed. Others struggle and fail. What explains the difference? 

I find there is a range of explanations. Leaders do not support innovation. Managers lack the skills to act as entrepreneurs. Companies push solutions inside-out, without doing proper customer discovery. These are all good explanations. However, on their own, these overt factors do not explain the difference. Another set of more covert issues lies below the surface. These “silent killers” of innovation delay, frustrate, and often defeat corporate explorers, even when they are skilled innovators with backing from the top. I believe the story of Bill Ruh at GE Digital explains why. 

Ruh was hired to reinvent GE, a 100-year-old industrial conglomerate, into a top 10 software firm. Jeff Immelt, then CEO, wanted to get ahead of the curve on emerging digital technologies to create a whole new growth trajectory for the firm. Five years later, Immelt was gone and GE was dropped from the Dow Jones Industrial Average (DJIA). Ruh had started with all the overt success factors in place: mandate from the CEO and board, budget, own unit, member of the senior team. All good, just not enough to insulate Ruh from the three silent killers that are common obstacles corporate explorers must overcome. 

 Preserve Core Professional Competence or Identity  

Every professional discipline has a set of standard ways of working that define what “good” looks like, what’s normal. When an innovation comes along that destabilizes these assumptions, it can be very uncomfortable for leaders who have grown up in the old paradigm. That tends to be why actuaries struggle with new digital insurance business models. Electrical engineers find it hard to adapt in a software-based world, where circuits are no longer king. 

 Optimize for Short-Term Gain  

Risk avoidance is a strategic default for many organizations, where the priority is to deliver in the short-term, even in the face of imminent demise. Polaroid, for example, was still defending its film business even as bankruptcy loomed. 

The managers who make these decisions are not stupid. They’re executing what they have been taught: deliver short-term success. They know their business is expecting them to keep the money flowing from the cash cows: hit your numbers; do not screw up. This can work for a stable business when we know what customers want, how fast the market will grow, and what competitors will do. 

The way I see it, Bill Ruh had none of this certainty. GE’s goal was a first-of-a-kind data analytics service to improve manufacturing productivity. There was no way to know how fast the market would evolve, what problems customers would pay to solve, which services would gain traction and at what speed. Even so, Ruh was pushed to invest in building his technology platform quickly and then monetize it to keep up with the business case. GE Digital had to run after as many opportunities as it could to drive revenue. Although the company aimed to create a disruptive business, it ended up creating a digital IT service for the traditional GE business. 

Maximize Comfort  

Many executives know their business is wedded to the past and optimized for short-term gain. They may find it harder to make it personal: “I am wedded to the past”; “Joe is risk-averse.” They do not have difficult conversations about a perceived loss of power and status. Instead, they make innovation unthreatening so that it is something everyone will support. They maximize comfort in the C-suite, but in doing so, they minimize the chances that initiatives like Ruh’s will succeed. 

From my perspective, Immelt avoided tension by allowing the traditional business to rule. Although GE Digital was nominally a separate unit, it did not have its own revenues; everything flowed through the existing business. This denied it legitimacy as an independent unit. Immelt won support to pursue the transformation and maintained harmony within the organization. The transformative strategy failed to deliver, however, because it was dependent on the traditional business. 

How can some corporate explorers overcome such insurmountable obstacles while others fail? What makes the difference is that the best corporate explorers are leaders of change, not simply transplanted entrepreneurs? They have a compelling story about the venture, why it can succeed, and what experiments will help them manage the high level of uncertainty. They have deep social capital with relationships across the organization. I find that “insiders” succeed more often than specially hired experts because they can recruit allies and advocates to support them. 

Ultimately, silent killers are formidable, but they are also dull and slow-moving. These are habits and reflex actions—not conscious efforts to undermine innovation. If you can expose them and the risks that they pose, then they can be overcome. A corporate explorer who can build a movement for change inside the organization can reset the firm’s professional identity, making innovation difficult to resist. 

 

This blog was previously published as an article in Fast Company: “Silent Killer of Innovation: How Culture Kills Innovation”. 

Is the Automotive Industry Finally Learning the Lesson of Tesla?

Innovation Disruption

This article is reprinted with permission from Automotive Fleet & Fleet Forward

Earlier this month, Ford announced that it is splitting its business in two. One unit will focus on the traditional gasoline-powered vehicles, while the other builds its future in electric vehicles. This will allow them to pursue two strategies that effectively compete with one another, at once from inside the same organization. It is a radical departure for an industry that has wrestled for over a decade with how to deal with the emergence of Tesla.

The industry’s reaction has gone through three distinct phases – disdain, mimicry, and panic. At first, Tesla was dismissed. In 2010, I heard one auto-industry executive explain in an internal company meeting how the roads would be littered with broken-down Teslas by the end of the decade. Such was the disdain for Musk’s upstart firm. Mimicry started as auto manufacturers started setting up labs in Silicon Valley, Berlin, and elsewhere. They tried to reawaken the company’s startup gene, only to find that all they had created was a series of fringe businesses. Then, as Tesla started to fix its manufacturing problem, they moved into full panic mode. Here was evidence that Tesla was going to survive and prosper.

The key thing about Tesla is that it represents more than a new type of powertrain to replace the internal combustion engine. They created a different retail experience, unburdened by the legacy of dealership networks. They hired executives from Apple and elsewhere to reinvent everything from manufacturing to marketing. They pushed the boundaries of regulatory approval by introducing over the air software updates to vehicles. This is not simply a new type of propulsion; it’s a whole new business model.

The automakers were slow to learn that this new business model would require a separate organization. The experience of watching firms like Nokia, Kodak, Blockbuster, and others become victims of disruption was not enough to convince them to do things differently. They held on to the decades old management structures and systems, believing that size alone would be enough to see off the threat from Tesla. Unfortunately for them, Tesla is now on a path to capture a quarter of the U.S. new vehicle market by 2030. Even worse, they are no longer alone, as firms like Lucid, Polestar, and Fisker emerge to challenge as well.

Ford’s announcement marks a shift and perhaps a fourth phase in the response. They have decided to pursue what Harvard Business School Professor Mike Tushman calls an “ambidextrous strategy” that allows them to exploit the gasoline business and explore into the electric market. The value of this separation is that they are able to design a business to win in electric, rather than simply exist in the shadow of the traditional unit. Take for example Ford’s deal with Sunrun, the leading U.S. solar power company. They will install an integrated system to provide solar power, car charging, and home energy via the vehicle’s battery. This is a different game from selling cars on a dealer forecourt, and this new unit will leave Ford’s electric business free to pursue a strategy to win.

Ford could have spun-out the electric business as an independent entity. This was the strategy favored by former General Motors executive Dan Ammann. He led GM’s Cruise unit responsible for autonomous vehicle strategy. In a public spat with CEO Mary Barra, Ammann believed Cruise should IPO as a separate company. Barra believed that this would rob GM of an ability to compete in the new market and prevent Cruise from using the considerable assets available to it from inside the GM family. Like Ford, GM is now pursuing its future with the ambidextrous approach. It has a pilot running in Arizona to provide Walmart with autonomous delivery vehicles and has set itself the target of selling vehicles to consumers within the decade.

The ambidextrous strategy is not new. IBM was an early proponent, enabling it to build multiple businesses alongside its historic computer franchise. Electronics retailer Best Buy has built a significant healthcare business, using some of the assets of its core business, like the Geek Squad, as well as acquiring new ones. However, not all have succeeded.

Key to success will be Ford and GM’s ability to manage the intersection points between the two units. The electric business will still need the dealer network, brand, and some of the engineering capabilities of the established company. How will that be managed? It will also be a test of leadership. The tensions of the dual strategy approach sit in the C-suite with leaders that need to stay committed to both exploiting the old and exploring into the new, without allowing either strategy to suffer. It’s a tough ask, but if they can pull it off it gives them the best chance of catching Tesla, and reinventing themselves for the next generation of mobility.

6 Ways to Shine as a Workplace Rebel—and Not Be a Jerk

Innovation Disruption

This article is reprinted with permission from Fast Company

Corporate life is known for its love of conformity. Everything gets turned into a rule. How much you can spend. What size office an employee of a certain grade is entitled to have. What computer you can use. Many of these regulations keep employees safe and the company out of court. However, the love of conformity bleeds into how we are expected to behave. We are asked to obey rules and do what we are told. Be a good corporate citizen and we will get ahead.

The trouble is that when we look at the most celebrated managers in the world, we see a different picture. Leaders like Elon Musk and Jeff Bezos are not rule followers—they bend the world to their will. They are workplace rebels. Musk has turned the rules of the automobile industry on its head. It’s almost impossible to count how many companies have suffered in competition with Amazon.

If you are building your career, this presents a problem. Employers want you to conform, but your role-models are rule breakers. What should you do? Play it safe or get ahead as a workplace rebel. Nobody wants an employee who is reckless or unethical. Musk’s dislike of rules has not always worked out for him, as he continues to battle the consequences of ill-considered Tweets. However, my research suggests that there is a path for rebels who push the rules. The secret is how you do it.

CEOs like Jim Peck at market research firm NielsenIQ show what can be achieved. Peck got his start by persuading managers at his former firm LexisNexis to back him in a bid to create one of the world’s first ‘big data’ analytics firms. This was a bold step, well outside Peck’s day-to-day responsibilities. But, having seen the opportunity, he couldn’t let it go. The business has become a multi-billion-dollar revenue firm. Peck was its first CEO and has gone on to lead two other firms since. He is not alone. There are rebels like Peck pushing the boundaries of established firms all over the world.

At European insurance company UNIQA, Krisztian Kurtisz proposed a radical new business model that his CEO said would put a “nuclear bomb” under the insurance industry. At the time, Kurtisz was a middle manager responsible for the company’s Hungarian business. He got his funding and is now rolling out his new business across central and eastern Europe. There are similar stories at Japanese firm Panasonic, where Yoky Matsuoka is creating groundbreaking new businesses, defying the norms of a hundred-year-old electronics giant.

What can we learn from these rebels? Six lessons stand out for anyone who wants to be a successful workplace rebel.

GET YOUR ENERGY FROM SOLVING A PROBLEM FOR YOUR CUSTOMERS

Corporations, like all large organizations, get comfortable. They know how to get things done. When things go wrong, it is usually easy to find out why and fix it. They are confident. Unfortunately, this makes them more internal in their thinking. Rebels point to what is happening outside the firm. What are customers talking about? What do they need? How can we do more of what they want? One of my favorite rebels is Sara Carvalho at the engineering firm, Bosch. She saw how difficult it was for people in developing countries to get access to hot water. She mobilized her company to develop a solar power solution, paid for via mobile phone, that she took into villages in Kenya. This was an insight about real people with a real problem she felt the company could solve.

SET A SCALE OF AMBITION THAT MAKES FOLLOWING YOUR IDEA WORTHWHILE

It seems natural not to set your sights too high, a small, cheap idea is surely easier to adopt than a bigger, more expensive one. The reverse is true. If you want to be a rebel who moves the needle for the team, department, or company of which you are a part, you need to solve problems that matter. Jim Peck proposed creating a new category of company. There were no ‘data-led’ businesses when he started his journey to create LexisNexis Risk Solutions in 2001. The boldness of the idea reflected the scale of the opportunity, and it was big enough to matter to his bosses.

HAVE A COMPELLING STORY WITH VIVID IMAGERY, SO THAT PEOPLE ‘GET IT’

Krisztian Kurtisz presented his vision for a new insurance business model in dramatic terms. He presented a slide with a large and densely populated office building side by side with the image of the two people he proposed to employ in his new call center. This image, comparing the cost of administration in a traditional insurance firm with that of performing the same task in the digital era, relayed a simple message: our model is broken, and we need to reinvent insurance before others do it for us.

BUILD A MOVEMENT BEHIND YOUR IDEAS

Kurtisz did not get the opportunity to present his concept on day one. He had to build a network of supporters around him. Some of these would be allies, ready to pitch-in resources to help him get started, others would be advocates, who he could persuade of the value of his idea. Rebels are not loners. Over invest your time in getting others to see the opportunity. Gather their feedback and adapt what you are saying to reflect their input.

BE HUMBLE, LETTING OTHERS FEEL THAT THEY MADE YOU SUCCESSFUL

Successful rebels are rarely egotists. They are ready to see others feel pride for what you achieved. It is not about getting the attention, but about achieving something that is new and different. This is probably a contrast to the great entrepreneurs like Elon Musk. Attention seeking behavior pushes people away and makes them feel unsafe. If you are going to build a movement behind your ideas.

DON’T WAIT TO BE ASKED

We all have a critique of what is wrong with large corporations, what senior managers need to do. Most of this is probably accurate. Rebels see it too. What’s different is that they do not waste energy on it. Nobody appointed people like Peck and Kurtisz to the job of inventing radical new business opportunities. They saw the opportunity and got started on building support for ideas to capture it.

Rebels do not always succeed. Large corporations can be tough environments. However, remember that all great new ideas face opposition at first. Even the Apollo lunar landings were not popular at first, it seemed incredible to most people that we could land a person on the Moon and return them safely to Earth. Rebels should not expect to be popular with everyone. What matters is the quality of your commitment to your purpose and willingness to stand out from the crowd.

Crossing Wires: Failing to Separate ‘Explore’ from ‘Core’ Business

Innovation Disruption

After decades of research into corporate innovation, one immutable rule stands out: never leave the business responsibility for leading today’s market in charge of disrupting tomorrow. This Core/Explore or Explore/Exploit challenge is a concept strongly championed by our founder Professor Mike Tushman from HBS. A core operating business and an exploratory venture have different business logics and rhythms. Combining them is like crossing the positive and negative wires of an electrical circuit.

The alternative is to separate out the explore ventures from the core business in a unit. We call this an ‘ambidextrous organization’, where core and explore have separate reporting lines. This is not the same as creating an innovation lab or unit. An explore business unit does not just ideate and incubate, it takes the new venture to market, and matures it to the point that it can either graduate back into the regular business or become a standalone unit.

The most successful implementation of the ambidextrous approach was at IBM in 2000-2010, when the corporation managed to scale several units to more than $1 billion revenue. However, Amazon adopts this approach to all of its new businesses, quickly separating out promising new ventures, while ensuring that they conform to corporate rules like using Amazon APIs and management system.

My colleagues Charles O’Reilly and Mike Tushman have described these cases and many more in their book, Lead and Disrupt, now in its second, expanded edition.

There are three critical enablers of Ambidextrous Organizations: Ambition, Autonomy, and Access.

  • Ambition – the most successful ambidextrous firms start with a burning ambition to do something, not just a general interest in innovation. This is more than a financial goal, it needs to define the strategic frame for the new ventures or hunting zones. For example, the technology firm Nvidia wanted to enable graphic computing to lead the AI revolution. It moved from a niche gaming player to a prime mover in autonomous vehicles, blockchain, and deep computing.
  • Autonomy – create separation organizationally with a ring-fenced budget, resources, and even a different location. That’s not because the innovation unit is special and privileged, but because it will not survive unless you do. It is rational for business leaders under pressure to perform to cut the uncertain, unproven businesses ahead of the known core. A distinct unit allows some insulation from these short-term pressures.
  • Access – the biggest advantage established firms have over the startup is the assets of the core business: customers, manufacturing, back-office processes, etc. The new ventures need to be able to leverage these assets, even as they stay separate. This is one of the most difficult things to manage. IBM’s EBOs may have done it best by creating ‘extended teams’ of managers that were tasked to be the ambassadors of the new ventures within the traditional business. This made them perfectly positioned to navigate the minutiae that is often involved. See more on how to organize Access for new ventures in our book, Corporate Explorer.

 

Getting these three success factors right – ambition, autonomy, and access – is the work of the senior team. There are always tensions between explore and exploit – contention over resources, channel conflict, strategic disagreement. That is normal. The senior team need to have the ability to manage the high-stakes, high-tension conversations about how to balance the needs of both.

See our work on Capacity to Act. Or, read more about disruptive innovation breakdowns.

Closing the Innovation Zoo: Getting and Staying Healthy with SanusX

Innovation Implementation

UNIQA is a European insurance company with a big ambition to both reinvent its insurance business for a digital future and create new businesses in healthcare.

Change Logic helped the company describe its long-term ambition in a strategy manifesto.

We applied our three-discipline (Ideate, Incubate, and Scale) approach to bring this ambition to life. First, we defined potential areas of opportunity, or Hunting Zones, that UNIQA could mine for disruptive product and service ideas.

6 Breakdowns in the process for disruptive Innovation

We investigated the size and attractiveness of the Hunting Zones and proposed a set of opportunities to explore. Then, we launched a series of agile sprints with several client teams to test their hypotheses about where UNIQA could play to win.

UNIQA created a new business unit, SanusX, to lead the firm’s emerging healthcare ventures. Change Logic helped to structure this ambidextrous unit, develop its budget, and onboard the new leadership team. We assisted SanusX as they grew into a market leader and adopted new practices of business experimentation, outside-in customer discovery, and agile innovation.

Read the case study about our work with UNIQA and SanusX.

Click here for more information about the 6 Breakdowns in the Process for Innovation.

How not to invest ahead of learning

Ambidexterity

We talk a lot of talk about creating ‘fail fast’ culture. However, the goal is not failure, it is rapid learning. When you learn you can make faster, more informed decisions, that’s what allows the startup to go faster. It is not speed, it is agility. Eager corporate executives may not always appreciate this subtly. They get restless, worrying that waiting for more evidence just risks letting the competition in and missing the market window

They get restless, worrying that waiting for more evidence just risks letting the competition in and missing the market window. This impatience drives them to make an ‘all or nothing’ bets rather than wait for the outcome of the learning experiments. As a result, they invest ahead of learning, making commitments that can become serious liabilities for the Corporate Explorer down the line.

However, getting that decision wrong means wasting resources on pivots or failed projects. The secret is to progressively de-risk an investment through a series of rapid experiments. This contains the cost of innovation and links it directly to learning. Spending levels only increase as risk is reduced and confidence builds.

Here’s how it works:

  • Project team identifies an important customer problem or underserved need in the market
  • An Innovation Board (comprised of senior executive sponsors) chooses the most promising opportunities and approves a small amount of funding so the team can validate the problem and ideate a proposed solution
  • Team identifies most important, highest risk assumptions on which solution or new business model is based
  • Team runs experiments with measurable evidence thresholds to validate or invalidate the highest risk assumptions
  • Team reports back to the Innovation Board with a pursue, pivot, or cancel decision, and a plan for investing in the next set of experiments

The Innovation Board makes small investments on short timescales at first and then as evidence reduces uncertainty, that commitment becomes longer and more financially significant.

Innovation Boards use a simple scoring model to evaluate progress, so that they can judge the quality of evidence an experiment generates. This helps them know that they have learned enough to know an innovation is desirable to customers, feasible to build, viable commercially, and can get adoption in the market. That helps them invest at the speed of learning.

 

Read more about how to invest ahead of learning here.

Andy Binns Of Change Logic On The Labor Shortage & The 5 Things We Must Do To Attract & Retain Great Talent An Interview with Phil La Duke

Corporate Explorer

This article is reprinted with permission from Medium

The pandemic has allowed people to reevaluate what they want from work. This “Great Reevaluation” has led to the “Great Resignation” which has left the US with a great big labor shortage and a supply chain crisis. What can we do to reverse this trend? What can be done to attract great talent to companies looking to hire? What must companies do to retain their great talent? If not just a paycheck, what else are employees looking for? In this interview series called “The Labor Shortage & The 5 Things We Must Do To Attract & Retain Great Talent” we are talking to successful business leaders who can share stories and ideas from their experience that can address these questions.

As a part of this interview series, we had the pleasure to interview Andy Binns.

Andy Binns is a co-founder of Change Logic, a Boston-based strategic advisory firm. He works with CEOs, boards, and senior teams as they lead significant business change. His goal is to help organizations liberate their potential to excite the world with innovation. Andy has 25 years of consulting experience as both an external and internal consultant for McKinsey & Co., the IBM Corporation, and Change Logic. At IBM, Andy was deeply involved in the Emerging Business Opportunity program, for which he received an award from IBM’s vice chairman. He is the co-author of the new book Corporate Explorer: How Corporations Beat Startups at the Innovation Game.

Thank you so much for joining us in this interview series! Our readers would like to get an idea of who you are and where you came from. Can you tell us a bit about your background? Where do you come from? What are the life experiences that most shaped your current self?

Iam a displaced Welshman living in Massachusetts. In 2007, after a career in corporate life convinced me that I am a terrible employee, I co-founded a strategic advisory firm to help corporations innovate and grow. I love helping people do things that scare them and seeing them succeed. You get so few chances to do this in a large corporation, so when it happens it generates its only special energy. I got to be a part of this at IBM from 2000 to 2005 when we created new billion-dollar businesses inside the corporation. The friends I made at this time, particularly those from IBM Life Sciences will always have a special place in my life.

Let’s jump right in. Some experts have warned of the “Great Resignation” as early as the 1980s and yet so many companies seem to have been completely unprepared when it finally happened. What do you think caused this disconnect? Why do you think the business world was caught by surprise?

One of my friends coined the phrase that ‘success is a sleeping pill’. Because big organizations have mostly succeeded, at least if you measure them by the standard of the revenues and profits that they generate, we believe that they will always work in the same way. Managers that get to the top of those companies have had the motivation of getting to the top. They did not stop to think, ‘what if other people have a different motivation?’, ‘what if they have untapped aspirations and capabilities?’. I truly believe that is what the great resignation is all about, people deciding it is time to live to the beat of their own drum, not someone else’s.

What do you think employers have to do to adapt to this new reality?

We need to create a lot more autonomy for people in corporations to act. We have got wrapped up by an ideology that companies are monoliths, that there is one truth, one strategy, one way of doing things. It is time to rethink this whole approach. Instead of departments within goals, we need to think about teams that have a unified purpose, and the freedom to make it happen.

Based on your opinion and experience, what do you think were the main pain points that caused the great resignation? Why is so much of the workforce unhappy?

The great resignation has gone side by side with a four-fold increase in new company formations, according to the US Census Bureau. These people are voting with their feet to have more control over their destinies. Some will be looking for a lifestyle business, but many others have decided it is now or never for those entrepreneurial aspirations that they have long had and failed to act on.

Many employers extoll the advantages of the entrepreneurial spirit and the possibilities of an expanded “gig economy”. But this does come with the cost of a lack of loyalty of gig workers. Is there a way to balance this? Can an employer look for single use sources of services and expect long-term loyalty? Is there a way to hire a freelancer and expect dependability and loyalty? Can you please explain what you mean?

Yes! Employers need to think about giving more managers a ‘license to explore’. Make it possible for your Corporate Explorers to emerge inside. That means creating opportunities for people to form exploratory teams that can develop new, disruptive businesses from inside the corporation. Look at Amazon. In 26 years, it has gone from 1 employee to one and a half million. It has not done that with a single strategy, it has created opportunities for managers to explore new areas with its famed ‘two pizza teams’, and then a few of them have scaled into new businesses like Amazon Web Services.

It has been said that “people don’t quit jobs, they quit bosses”. How do you think this has been true during the Great Resignation? Can you explain what you mean?

I think that applies in normal times, its not so relevant to the great resignation. This is bigger and reflects a loss of faith in the corporate structure overall. The ‘great resignation’ has not happened in isolation. We have also seen the mass adoption of virtual working, surging new company formation, and the rise of agile work practices. This is a big shift in how we think about work and the role of corporations.

I am fond of saying, “If it’s fun they charge admission. But you get a paycheck for working here.” Obviously, I am being facetious, but not entirely. Every job has its frustrations and there will be times when every job will aggravate employees. How important is it that employees enjoy their jobs?

I think talking about ‘happiness’ at work misses the point completely. Humans are social animals that are motivated by a sense of collective purpose. We will endure pain and suffering if it is for a cause that we believe in. Companies that connect purpose (what it’s for) to practice (what we do) are prospering, while those that ignore this connection start to struggle.

How do you think an unhappy workforce will impact a) company productivity b) company profitability c) and employee health and wellbeing?

These are difficult connections to make, it all depends on a company’s context. The issue is not so much profitability and productivity in the short term, it is the long-term value you create as a community. If you are in semiconductors today and you have a product to ship, then you make money regardless of the happiness of your employees. However, as you see this industry mature, and it is now more than sixty years old, then the companies that remain are those with purpose and integrity, like Analog Devices or Intel. You have to see this over decades, not quarterly results.

What are a few things that employers, managers, and executives can do to ensure that workers enjoy their jobs?

Stop pretending you are invincible. Corporate cultures have developed so that certainty and confidence are prized even when the facts don’t justify them. If managers ask more questions, open the assumptions to testing, run more experiments, then everybody learns, the environment is one of growth and exploration, not simply execution to a master plan that is later shown to be flawed.

Can you share a few things that employers, managers, and executives should be doing to improve their company work culture?

The biggest thing you can do to rejuvenate a company’s culture is to open it up to more external influences. If you are a senior manager, how many times have you sat in a call center listening to your customers in the past six months? If you are a finance administrator, when did you last go on a sales call? These are the easy steps, more adventurous is using open source or crowdsourced platforms to get ideas and input from total strangers, people with a fresh perspective. The cultures that are driven ‘outside-in’ have much greater resilience to change than those that are driven inside-out for the benefit of managers and experts whose power is based on the successes of the past.

Okay, wonderful. Here is the main question of our interview. What are your “5 things employers should do to attract and retain top talent during the labor shortage?” (Please share a story or example for each.)

  1. Turn Outside-In — it is energizing to be a part of a learning environment, it helps you feel you are pushing your boundaries, and growing as a professional. I remember the first time that I took a bunch of engineers out to do an observation of customers, watching what they do and how they behave, it created an enormous buzz.
  2. Ask questions — curiosity is infectious. If you are curious about your colleagues, this starts to affect how you treat customers, and soon you are building deeper levels of empathy and commitment to one another. Ask employees simple questions like, ‘what do you most want to achieve?’. If you learn something useful you get a chance to help create opportunities for that team member and perhaps head off their resignation, even if this is harder, they remember that you were interested in them as a person and are more committed to the team.
  3. Challenge assumptions — take what you learn to challenge assumptions, rather than just accepting how things have always been done, from that can come great insights and opportunities. In my book, Corporate Explorer, I tell the story of a manager at an insurance company in Hungary. He challenged the assumptions of the entire industry, like the one that says customers are trying to file fraudulent claims and proposed an entirely new digital business model to the company’s CEO. Seeing a leader that has the self-confidence to be challenged is tremendously motivating.
  4. License to explore — when people generate new ideas, give them the ability to explore them, and see what will happen, this license to explore should not be unconditional, people have bad ideas as well as good, but the benefit of experimentation is learning, even if you fail. My Hungarian manager, Krisztian Kurtisz, got backing for an experiment, and four years later he is rolling the new business, called Cherrisk out across a dozen countries. Everyone else in the company sees that new ideas are acted on.
  5. Autonomy for best explorers — let the best ideas flourish rather than making them beholden to the past organization. Stop trying to control how people achieve the outcomes. Say what you want people to achieve, give them the resources, and then go take a back seat. Senior managers spend too much time telling people how to achieve results, rather than giving them the space to succeed. That’s why the great resignation becomes the great rebellion!

Thank you for these fantastic insights. We greatly appreciate the time you spent on this. We wish you continued success and good health.

How to Retain Employees During the Great Resignation

Innovation Disruption

This article is reprinted with permission from SHRM

What is the Great Resignation really about? It’s about the Great Self-Evaluation, according to some workplace experts.

“The Great Resignation has been fueled by workers taking a step back to consider their worth and demand more from their work,” said Matt Hoffman, head of talent at M13, a technology venture capital firm in New York City. “Talent is not resigning from the workforce itself; people are just reconsidering what’s most important to them when presented with multiple compelling opportunities.”

The COVID-19 pandemic, in particular, caused legions of career professionals to seek opportunities to bring more meaning to their lives, which included finding more challenging and rewarding work.

“Employees want to be part of high-performing teams with healthy cultures,” Hoffman noted. “So for companies, trying to drive retention through compensation is not enough. But in a world where there is so much information out there and so many options, it will be incumbent upon employers to step up their transparency, fairness and equity to survive.”

According to the U.S. Labor Department, the quits rate—the percentage of employees leaving their jobs voluntarily—stood at 4.5 percent in November 2021.

In addition to losing employees to departures, companies are having trouble attracting replacements.

A study by WTW (formerly Willis Towers Watson) showed that 73 percent of 380 employers surveyed in 2021 were having difficulty attracting employees. Additionally, 70 percent of companies say the problem will persist in 2022.

The Way Forward for Management

How can companies keep valued and talented workers on board? Management professionals offer these tips:

Connect with staffers on a regular basis. North 6th Agency, a brand communications company based in New York City, offers an array of programs designed to recruit, retain and develop talent for the agency.

In what executive vice president of talent development Nina Velasquez describes as a “high-turnover industry,” North 6th emphasizes people-first practices. These include an employee rewards system (think spot bonuses, paid time off or donations to a staffer’s favorite charity, for example) and team performance rewards like agency-wide sabbaticals for meeting revenue goals. That’s helped the company to retain many workers.

“Now more than ever, it’s important to keep team members engaged, healthy and connected,” Velasquez said. “With some planning, executives can keep meaningful employee interactions constant, even when most are working remotely.”

One way to keep workers engaged and connected, she said, is by taking their ideas seriously.

“A collaborative work environment where everyone has a voice can lead to strategic recommendations that help move the company forward,” Velasquez said. “A team advisory board is one example of bringing together diverse perspectives inside the company. An efficient board can set up checkpoints and meetings throughout the year to vote on pressing issues across the company, advise on the company vision, and provide input on company policies and procedures.”

Velasquez also advises company managers to engage team members in other ways.

“It could be quarterly surveys, monthly suggestion boxes, or it could be revisiting the day-to-day structure of an individual’s workday,” she said. “If an employee feels connected to their company, it’s likely due to managers’ efforts to motivate, inspire and be an advocate for their career path.”

Listen to employees. One key for managers looking to retain top talent is to listen better.

“Get direct input from employees in terms of what is working and what is not,” said Gia Ganesh, vice president of people and culture at Florence Health Care, an Atlanta-based health care software company. “Address concerns with a plan of action based on the input, share the plan, and start acting on it.”

Show appreciation. Employees want to feel valued and appreciated for their contributions. In fact, 79 percent of people leave jobs because they feel unappreciated at work.

“Recognition plays a huge part in building a delightful culture,” Ganesh said. “Yet recognition does not always have to be monetary or tangible. Verbal appreciation can be equally effective.”

Ganesh said recognition can come from peers, managers or an entire team. “Simple public Slack channels where managers can share public appreciation are easy strategies to implement,” she said.

Offer growth and opportunity. Career professionals want to see a clear path for growth at their companies, so employers should clear that path as much as possible.

“What we’ve done is make it clear that our company is a place for you to start, explore and grow a career, no matter who you are,” said Claudia Ivanova, head of HR at FISPAN, a financial technology firm in Vancouver, British Columbia, Canada. “We’ve put in place programs for interns and new graduates who can start their careers at FISPAN. We’ve put in place learning and development programs for existing employees to ensure they are continually being challenged and developing their own professional paths.”

When companies ensure that an employee feels valued and sees growth possibilities at an organization, there’s little incentive for them to look elsewhere. “When they find everything they want and need at Company X, they won’t have time or the need to look or entertain other opportunities,” Ivanova said.

Encourage a “corporate explorer” mindset. Managers should create opportunities for employees to realize their entrepreneurial ambitions inside the company.

“At the same time as we are facing the Great Resignation, we have new business starts surging to four times the pre-pandemic level, according to the U.S. Census Bureau,” said Andy Binns, a management director at Change Logic, a Boston-based strategic advisory firm. “This reflects the lack of freedom [that employees feel] to innovate in corporate America.”

By unleashing a worker’s entrepreneurial spirit, companies can not only retain the best staff, but also help generate new sources of growth. “Think of these [employees] as ‘corporate explorers’ and equip them to pursue innovative business ideas inside, not outside, the corporation,” Binns said.

Provide Inspiration. Karen Cho, HR leader at Columbus, Ohio-based Designer Brands, the parent company for DSW Stores.

“It’s critical that executives inspire and communicate with top talent around three things: the future of the company, their value in the organization, and opportunities and development for growth,” Cho said. “What executives often fail to do is simply ask their top talent probing questions like, ‘What would make you consider an opportunity outside our company?’

“The answer might surprise you, and then you know what you need to do to retain each individual.”

Brian O’Connell is a freelance writer based in Bucks County, Pa. A former Wall Street trader, he is the author of the books CNBC Creating Wealth (John Wiley & Sons, 2001) and The Career Survival Guide (McGraw-Hill, 2004).

Outside In Thinking is as Important as Inside Out

Innovation Disruption

Great innovation can come from technical brilliance – Inside-Out – but without customer validation it has long-odds on success. Many firms find learning how to investigate and interpret customer’s unmet needs a hard discipline to adopt. It can mean learning a whole new way of working, particularly for firms with strong technical backgrounds.

The value of engaging customers directly is that it helps you learn which of your ‘inside-out’ assumptions are valid, and which are self- serving. Knowing what it takes to generate end-user excitement is important in any market, even highly technical ones.

Several methodologies can help to develop this capability, such as Design Thinking or Outcome Driven Innovation (ODI). ODI converts customer insight into the customer’s ‘Job To Be Done’, that is what the customer wants to do that they cannot do today. Knowing the job releases Inside-Out creativity by making it clear the problem a solution solves.

Here are six critical success factors that can guide you in applying Outside-In:

1. Know your biases

Write down your assumptions about your intended customers; what you think they need, how they buy, what they value.

2. Get out of the building

Get out of the building to interview, observe, and learn from potential customers.

3. Open wide

Find customers that you do not know, cannot usually reach, ones that challenge your understanding of the opportunity. Tap into the wisdom of the crowds by running crowdsourcing campaigns and hiring from open talent networks

4. Empathize with customers

Know your customers’ journey, how do they satisfy their needs today, what motivates their choices, what problems remain unsolved.

5. Be a skeptic

Find evidence that disproves your assumptions. If all your assumptions are confirmed, you were not really learning.

6. Find the signals from the noise

Discovery data can overwhelm, use a methodology for narrowing down the information to find the key messages from customers – what are the outcomes they seek that no one is helping them achieve today?

The innovator can never really know their market without working with, observing, and talking to them. You must learn what it means to walk in their footsteps or risk creating something that will not serve those whose lives you wish to improve.

Read more about Outside In thinking vs. Inside Out here.