One of the most common complaints senior executives have about disruptive innovation is its seemingly snail-like pace. How is it, they wonder, that it takes us forever to pursue ideas that promise to create new markets when the world seems to be innovating at a dizzying pace?
This frustration is compounded by the fact that the usual levers senior executives use to get things to go faster — creating tight deadlines, flooding the project with resources, checking in more frequently — don’t seem to work, and in many cases cause teams working on disruptive ideas to actually go slower.
Why is that? Tight deadlines, frequent check-ins, and additional resources indeed help to accelerate execution of a strategic plan. But succeeding with disruption first requires developing a strategic plan that can be executed. As innovation thought leader Steve Blank notes, a startup is a temporary organization searching for a scalable business model. Accelerating the search for a strategy is a very different challange than executing that strategy.
There are five ways to accelerate the search for a viable new-growth model:
- Form small, focused teams. Small teams almost always move faster than large teams. One of Jeff Bezos’s rules of thumb inside Amazon.com is that teams should be able to be fed by no more than two pizzas. The mistake many large companies make is that they think a new venture is like a mini-version of the core business, one that needs to be staffed with representatives from corporate functions like legal, quality assurance, and so on. Bloated teams are ill-equipped to rapidly search for a compelling model; small, nimble teams maximize flexibility and the speed of learning. Ideally the entire team should be fully dedicated and located together so they can make real-time decisions, but at the very least the project leader should be full time to minimize time-sucking distractions.
- Push to learn in market. The epigraph in Blank’s latest book (with Bob Dorf), The Startup Owner’s Manual, says it all: “Get out of the building!” Large companies are used to relying on desk research and consultants to size markets and sharpen strategy, but the search for tomorrow’s business has to be conducted in or close to the market. Remember, markets that don’t yet exist are notoriously difficult to measure and analyze, so the team should spend as much time as possible with prospective customers, partners, and suppliers. Even richer lessons come when a team goes beyond talking, to actually attempting to produce, sell, and support its offering, even if it is that offering has some limitations.
- Measure learning, not results. It’s hard to set precise operational milestones when you don’t know what the business model is going to be. And in search mode financial forecasts are unreliable.
Scott Anthony is the managing partner of Innosight.