Insights for product managers on fostering innovation in corporate environments

Today we are talking about how established organizations can innovate, resulting in new products and ventures. Most of us who have been in established organizations, know this can be challenging as a culture of innovation is often lacking.

Joining us is Andy Binns, a management advisor, award-winning author, and speaker on innovation and change. He has over twenty-five years’ experience helping companies make and execute strategic choices to support business growth. He has been at the coalface of innovation, working alongside the leaders of IBM’s “Emerging Business Opportunity” program. He now leads Change Logic, a strategic advisory firm, which takes a hands-on approach to enabling firms to build new businesses. He has numerous articles published about his insights and his recent book he co-authored is Corporate Explorer Fieldbook: How to Build New Ventures in Established Companies.

Summary of some concepts discussed for product managers
[2:42] Why is your book, The Corporate Explorer Fieldbook: How to Build New Ventures In Established Companies, needed?

Our first book was Corporate Explorer: How Corporations Beat Startups at Innovation. This sounds outrageous, but although it is challenging for corporations to innovate and get into a market ahead of a startup, it does happen far more often than we realize. It’s hiding in plain sight. For example, Microsoft’s 365 is just a product extension for them.

When you look inside these stories, you often find a corporate explorer at the center of them—someone who has the vision, commitment, and passion to drive it through.

Our second book, Corporate Explorer Handbook, says that as management consultants and academics we don’t know all the answers. Most of the answers are in the field with the people doing this. Lots of little micro practices and activities together make you more about to fulfill that function of being a corporate explorer successfully. We wanted to make some of those tools more available to people.

[7:22] What does a corporate explorer do?

I endorse the view that to get better corporate innovation outcomes, you need good processes, good practices, and an enabling culture. There’s a chapter in the book about how to create innovation culture.

However, when we look at venture-backed startups and entrepreneurs, we don’t say, “Oh that Musk guy, what a great process he has. Let’s get after that process.” We look at them and say, “They’re extraordinary leaders. They’re people who believe in something, and they follow it with a passion.” That’s what a corporate explorer does. We need a little bit more balance in how we think about corporate innovation.

In Corporate Explorer, we tell the story of Christian Kurtisch at Unica Insurance, a firm founded in Vienna, Austria, around 1800. Fast forward 200 years and Kurtisch, a middle manager in Unica’s Hungarian business, builds a first-of-a-kind digital-only insurance business for this company. He does this because he is incredibly passionate about not his idea but the problem he’s solving; he builds support around him in the organization; and he gets really into experimentation in a big way. This is the corporate explorer recipe.

[12:24] What tools have you seen resonant with organizations because they help them innovate better?

The tool that gets the most attention is hunting zones. Part of the challenge is that large organizations wonder if innovation should be a top-down or bottom-up approach. Do they need a strong direction or do they need to gather lots of ideas?

Hunting zones allow them to put boundaries around where they want to generate new ideas. They can use analytical techniques to describe the areas of greatest opportunity and then invite corporate explorers to step forward with ideas that might generate value within those zones.

It’s important to have lots of ideas, and then you might find a good one. It’s tough to select the best idea. Putting boundaries around your ideas helps you pre-filter.

[14:28] Can you share an example of using hunting zones?

In 2012, Jensen Huang at NVIDIA was leading a GPU firm that was doing marvellously in gaming, but he found that Intel was incorporating the GPU into the CPU and sucking value out of his entire business. He decided to find the areas in the world where we can solve problems better than anybody else. He looked at problems in science, automotive, cryptocurrency, and gaming consoles.

Once he understood science was a key area, he looked at where the biggest problems in science were. He got really involved in scientific communities. Because he had bounded the area he was interested in, he could engage in learning much more deeply. This allowed him to build a software platform that drove a 6000% improvement in stock prices.

[19:16] What’s another tool that organizations resonate with?

In the innovation world, we know most of the key tools around ideation and experimentation, but we have fewer tools for scaling. The chapter in our book on scaling and ecosystems gets a lot of attention. We talk about the need to build out a scaling path for your innovation that says how you will assemble your assets, capabilities, and capacity.

LexisNexis Risk Solutions, which is now a multi-billion dollar information platform, grew out of LexisNexis’s legal information service. Successful scaleups build a certain amount of stuff but they also buy a good deal as well. They bolt together assets and they leverage something they already have in the core business.

LexisNexis started with a lot of information that they were using to help organizations assess risk. They upscaled that by making a really large acquisition and building out a high-performance computing platform.

How you combine assets is what gets you to scale.

To scale, you need a plan for exactly what you are going to do to create a business. You still need to do hypothesis testing, but you need a plan for distribution channels and routes to market.

[25:13] Where should innovation live in organizations?

I’ve got the research answer and the personal answer. The research answer is if you tuck innovation down into the organization too low, it will get squeezed out by short-term pressure. It has to be one or two levels about what seems reasonable according to its revenue or expenditure. The manager who cuts innovation is usually making an entirely rational choice, so you’ve got to take it up a little bit and give it to somebody who has a big enough P&L where they can keep innovation going even though times area difficult. You’ve got to separate the core and the explorer.

The personal answer is I find that most of these innovation episodes start because an individual is really committed, passionate, and stubborn. At LexisNexis, Jim Peck was the manager responsible for the risk information business. In the 1990s, he was three levels below the CEO when he realized how important big data was going to be. Nobody listened to him, so he left and went to a startup. After a year, he came back and got some attention. Ultimately his boss came in and the corporation committed, but that spark came because an individual stepped forward. You need that fire of an individual. Sometimes corporate innovation doesn’t work because it’s done without those people. It’s only done with structure or process, not with leadership or culture.

Action Guide: Put the information Andy shared into action. Click here to download the Action Guide.
Useful links:

• Check out the Corporate Explorer Fieldbook on Amazon or Porchlight
  
• Visit ChangeLogic.com
  

Innovation Quotes

“Information reduces uncertainty.” – Claude Shannon

“I never deny anything I don’t know.” – Mozart, The Marriage of Figaro

Thanks!

Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.