How to Prevent Fear from Stifling Innovation

“There is no such thing as a failed experiment, only experiments with unexpected outcomes”

- Richard Buckminster Fuller

In the world of business, it is often challenging to step out of your comfort zone and into a new method of business operations. Startups are less afraid of the unknown, which is why they seem to succeed in launching new business models more often. Why is that? Because startups have finite time and resources, making them more willing to trade certainty for speed. This means they can adopt decision-making traits to pivot quickly as they test their hypotheses. Well-established businesses, however, face different challenges.

Without the same limitations that startups experience, larger corporations are more likely to treat innovation as a typical execution project, which has a defined budget, deadlines, deliverables, and measurable ROI at the end of it. The problem, however, is that true innovation rarely succeeds after the first execution and within the initial expectations of budget, deadline, and deliverables.

The process takes testing, learning, and adjusting – often requiring direction changes multiple times over an extended period. The thought of doing something new or out of the norm that poses the risk of failure is almost mind-numbing in itself. Combine this with telling your manager you want to ‘pivot’ yet again? That would be unthinkable in any corporation.

So, how does a corporation face its fears and accept the unknowns of innovation not as failures but as a step forward?

Think about it this way: A startup succeeds due to fear of failure, because the fear itself creates a sense of urgency, allowing them to be quick to test, and quick to change – whereas large companies have pre-defined roadblocks that make innovation difficult because of its fear of uncertainty and potential risks.

Companies and management are often not operationally setup to embrace the reality that the process requires this type of initial failure and continuous attempts. It doesn’t have to be like this, though. There are many ways in which corporations can take the leap and embrace the innovation process, instead of missing opportunities as a result of the fear of failure.

Being Flexible in Adopting Technology Outside of the Current Tech Stack

 

Though corporations have all the means to incorporate various different technologies, they still hesitate to give new technology a try – especially when they’re locked into a particular “tech stack”. However, think of startups: When it comes to product and platform development and business growth, they basically start with no “tech stack” and are quick to adopt solutions that can test their theory to drive market infiltration right off the bat…

Innovation is, after all, about testing hypotheses. The idea isn’t to incorporate innovation into the technology ecosystem, but to instead spend the time testing and determining whether it’s the most effective course of action. Only then should you consider how to best incorporate it into the ecosystem and scale the product. In other words, you wouldn’t purchase a house before having the income to afford it. You have to take the first steps in order to reach your desired destination.

The fact is this: It takes time to integrate new technology into a given ecosystem, even with an agile team at the helm. It requires cross-functional team collaboration, privacy, cyber, and architectural reviews, as well as the planning needed for support – all of which may not be necessary should the hypothesis test prove unsuccessful. You can’t expect your entire corporation to immediately adapt to a new business model that fast-tracks processes, when you don’t even know whether it will suit your customers’ specific needs.

Don’t let the “tech stack” of your organization drive your innovation, because the point of innovation is to test the business model first and, if successful, assess it to determine how it could be internally scaled accordingly. 

Adapting and Separating Processes and Procedures from the Corporation’s Standard

One of the critical differences between startups and corporations, is that existing companies have a successful business model whereas startups are only in the process of creating one. So, after a while, corporations feel safe and secure knowing they have processes in place to sustain their model. But that’s where they’re going wrong – they’re assuming that innovation can follow the same processes and procedures as the rest of the company’s operations, when in fact, it may not be able to at first.

For example, let’s say someone in an organization is trying to test a new business model. With an inflexible structure, they’re likely assessing a project based on the same financial, legal, compliance, security, and technological requirements and only moving forward when all parties agree.

Continuing like this will ultimately result in “paralysis by analysis”. It would also be a waste of time trying to tick every box “before” launching, rather than quickly testing whether the theory is viable or not. After months of trying to find the right cross-functional teams to agree on a path forward, competitors and customers have already moved a step ahead.

For years, corporations have grappled with trying to implement a structure for innovation, including hosting hackathons and innovation labs, all of which could be construed as “innovation theater”. They should have, in fact, been looking at how startups operate using a new business model. Innovation processes and metrics need to be different from other operations within or outside of the organization.

Implementing new processes and procedures to advance innovation can be a fearful experience – especially if you expect all of these processes to showcase instant successful results. Sure, innovation carries risk – but the risk of doing nothing is higher. Blockbuster learned that lesson all too well.

Try Separating it Out!

In most well-established corporations, innovation is spread across departments, which have different teams and limited budgets. Oftentimes, the person responsible for leading innovation has other responsibilities.

In fact, it is not uncommon for innovation to be little more than the latest “trend”. With regards to startups, there is little to no chance of survival when the founder plays multiple roles, or team members focus on similar or competing business models. On top of that, following standard operating procedures to test or integrate to an inflexible tech stack or operating model doesn’t help.

 The secret to being a good entrepreneur is to be unafraid of being disruptive, maintaining extreme focus, and breaking a rule or two along the way to build something incredible.

So, how can large corporations adopt this type of mindset as well?

Consider building new business models separate from the rest of the company, where tech stacks, legal, financial, and technical processes would be less of a concern. From here, place a single focus on testing and learning about a new business model that has the potential to thrive.

Once proven, bring it into the fold.

You could also consider a Chief Entrepreneur Officer (reporting to the CEO) who is directly responsible for the success of new business models, without restrictions on how they lead. Let the CEO keep focusing on the here-and-now, while the Chief Entrepreneur Officer figures out where the here-and-now should be going – therefore working regardless of the fears.

Implementing innovation and driving new business models isn’t an overnight fix. It takes time to explore and embrace new technology, processes, and resources, and most importantly, you need to test to ensure the risk makes sense for your business. Don’t expect the ROI to appear instantly, because it’s not a realistic expectation when trying something new.