I deeply believe there is a fundamental difference between the way entrepreneurs, and the people who work for large companies, see the world. As I said last time, entrepreneurs, innovators and inventors have “abundant thinking”—they see opportunity where others see obstacles and stop signs.
Those “others” tend to be in charge of large companies, or at the very least set the tones at those places. Years of expertly operating the company has trained them to mitigate risk and be wary of anything that looks like a threat to the current, historically proven model of making money. The result is what I call “scarcity thinking.” Scarcity thinking is incredibly valuable and necessary in large organizations. It is also what keeps you from taking the chances you need to win.
Despite that, some enlightened leaders of large firms have accepted this premise about scarcity and are still managing to drive innovation. Here’s how:
- They establish a case for change. They lay out in detail the pros and cons, putting particular emphasis on what bad things will happen if the company sticks with the status quo. Those who do not go through a disciplined exercise like this at the executive level of the organization will have neither the hope nor fear required to engage.
- They are insight driven. A disciplined insight process helps your customers tell you what is missing from your offering. Without this process, your team will spend years inventing solutions that don’t matter or doubling down on services that are no longer relevant. It is always better to fill an unaddressed need than it is to create a new product or service and then go looking for customers…who might not need what you’ve created.
- They manage their portfolio creatively. What do you think of when you hear the word investing? Stocks? Real estate? Bonds? All these answers are absolutely correct but absolutely different. They require different skills, processes and people to execute correctly. The same is true with innovation. This is why the best companies teach and employ a portfolio model when it comes to innovation. There is a difference between evolutionary and revolutionary innovation. Your team must understand how to manage each.
- They measure innovation success appropriately. Is success about bottom line profits or new customer adoption rates? Is success about how quickly your team iterates new solutions or fully understanding acquisition costs? The correct answer is “yes.” Sophisticated innovators learn to justify innovation through the correct measures at the correct time. Profits are a lagging indicator but a perfect excuse for your CFO to kill an innovation program if you are not measuring other things.
- They outsource disruption (and optimism). At the end of the day, it is nearly impossible for a well-run, mature company to function unless it is built on a mindset of scarcity because the most disruptive ideas are the ones that appear to be the most risky and will always be killed or stalled in favor of more incremental (read: boring and safe) ideas. Therefore, these companies have learned to outsource their revolutionary mandate through venturing, incubators or consultants who are literally paid to put them out of business.
Why Speed Backfires
Agile, lean, hackathons and sprints…large corporations are dumping money into practices designed to help their people act more like the crazy entrepreneurs with their even crazier abundance mindset. That, at least, gets the organization to move faster.
Here’s the problem: When you are afraid––when you live in scarcity––speed just helps you to confirm what you already “know” even faster. (“It will never work.” “We cannot afford to take that kind of risk.” Or worse, move more quickly into a solution that you know how to do but your customers don’t want.
There are two axioms that are equally true and conflicting. The first is that people support what they create. Large companies must create an environment in which their people can optimize their current offering. You hired them to do a specific thing for a specific customer. Terrific. Help them serve that customer more quickly and with more empathy and you’ll beat your current competition next year.
The second axiom is that business cultures kill what they fear. Let’s face it; if you help build a large company, you created something that is expert at mitigating risk. There are antibodies in place that are designed to attack anything that puts the current product or service at risk.
So expecting your people to be able to invent revolutionary, disruptive (read: scary) new offerings is expecting the impossible.
The answer is simple. Outsource the need for revolutionary thinking to a culture grown from abundance.
A Final Thought
I was thinking about abundance and scarcity this week when I met with a really smart college senior to discuss his future. He’s had a job offer from a Fortune 100 company that has guaranteed to put him through the management rotation they give all “high potentials”—an offer that included paying for his MBA.
But he’s also an entrepreneur, having started a small business during school in which he created, sourced manufacturing and distributed a new product. He wanted to know if he should go the big company 100 route or set out on his own.
My suggestion was to do both. It’s his best chance to learn how big company leaders think while keeping his beautifully abundant mindset alive.