Startups are often seen as a natural source of industrial innovation. Many are based on a new concept, and the real reason they exist is usually to bring a new idea to reality.
However, as innovation increasingly acts as the fuel for digital transformation and growth, traditional businesses and incumbents are turning this on its head, according to a book’s authors.
‘Corporate Explorers: How companies beat startups in the innovation game’ tells the story of a new generation of entrepreneurs. These are people who have developed the ability to drive new thinking and, more importantly, business opportunities within corporations and global companies. These “intrapreneurs” do this by combining the vast resources of established companies with the agile thinking and fail-fast mentality of the startup CEO – turning the process of technological disruption on its head.
I had the opportunity to speak with Andrew Binns, one of the co-authors, to learn more about this new generation of business leaders, including where companies can find them and how to ensure they have the tools and support that they need for this to be successful.
What is a corporate explorer?
Binns tells me that the trio of authors — which also includes Stanford professor Charles O’Reilly and Harvard professor Michael Tushman — coined the term “corporate explorers” for people with the ability to drive that change.
In companies, he tells me, leaders often have an urge to implement processes and systems. “That’s good; you should be doing that. But that alone won’t get you anywhere. No one looks at Steve Jobs or Jeff Bezos and says, ‘Boy, they’re making a beautiful process.’ They look at their passion and dedication… and stuff like that are corporate explorers.
“If you want to drive innovation within a company, you have to look for the people who are likely to be a bit of an outlier – they can have alternative ways of looking at things and can be rule breakers to some degree.”
So that describes what we might imagine as a corporate maverick – someone who does things differently. Another trend the authors identified is that they tend to be longer-term employees, often people who have been with the company for a decade or more. That makes sense to me – because when you want to break things down into pieces to make something new out of them, it’s easier if you have a good sense of what you’re working with up front.
Another important factor is that they need to be able to generate support: “You need this ability to build a movement of support around you…they are people who create support.” It’s about getting people to do whatever it is that they see as an opportunity.”
One example the book keeps coming back to is Kristian Kurtisz, who was behind the launch of disruptive, ultra-lightweight insurance product Cherrisk — sometimes dubbed the “Spotify of Insurance,” launched in 2018 by 200-year-old Austrian insurer UNIQA.
Binns tells me, “He realized that insurance companies aren’t doing what they used to do, it used to be a risk-sharing community… and it’s become a policy administration machine optimized to catch thieves among its customers.”
“He wondered what Spotify would do. How would an online platform reinvent the value proposition of insurance?
“And he’s proposing that to his managers, and over many months and many conversations, he’s building support so that he comes up to the board and the CEO and says to them, ‘I want to have an online platform, with a monthly subscription, I would like to pay claims within two days, no questions asked.
How do companies identify and support corporate explorers?
The first thing you need to do, Binns explains, is make sure your company culture is welcoming of explorers. Not necessarily to lure them there – as we mentioned, it often turns out that they are already there and have been for some time. Instead, it aims to ensure they have the confidence and support to speak up and state that they intend to cause disruption and upheaval.
Egos, multiple layers of middle management, and the expectation that employees will simply “do their job” and avoid distracting thinking can all be roadblocks in the path of potential explorers.
“Is there an invitation for the explorer to step forward, or do they have to fight their way and then surrender?”
After that, it takes patience and discipline, as ideas may not materialize immediately and may require multiple layers of design, testing, and proof-of-concept before the value becomes apparent.
Explorers also need space. “You have to give them enough detachment from the core business to make sure they’re autonomous without denying them access that they might need to scale the business,” says Binns.
The book tells how when Kurtisz was ready to pitch his idea to the senior management team, their immediate reaction was that they needed to give him a lot of money right away to get started.
“He told them, ‘No, give me some money and I’ll come back in six months and show you what I’ve learned,'” says Binns.
“So he teaches them what it means to be involved in an experiment, which is small amounts of money to reduce the risk of the investment, before you commit. Too often companies either under-commit or over-commit before understanding where the market is.”
What challenges arise from empowering corporate researchers?
Some of the biggest challenges companies face when trying to create a culture of innovation are rigid organizational structures and the fact that everyone already has a job to do and not spending a lot of time on other things.
“A great organization … has inertia,” says Binns, “and inertia means they keep doing the things that made them successful. It doesn’t thwart innovation out of malice, insidiousness, or sabotage…it just does what it’s always done.”
Overcoming these problems is often an organizational challenge that requires disrupting established practices and breaking traditional chains of command.
Binns tells me: “I think there is a need to create space for many employees to think about how they can do their jobs better – how they can innovate.
“It doesn’t take much time and has many advantages. It’s often a way of getting them back in touch with the customer and helping them think about how they’re really adding value… that’s a good thing in itself.”
There is no doubt that innovation is more important now than ever. With the economy, society and the world at large facing unprecedented economic, political and environmental challenges, it is clear that new thinking is needed to drive change in a sustainable way without repeating the mistakes of the past.
While we’ve grown accustomed to seeing great things from startups – not least a new ethos centered on sustainability and social justice – it’s evident that multinationals and corporate giants have the resources needed to to move something.
Whether or not they have the will to do so remains to be seen, but books like this are important in illustrating the steps to be taken and I would recommend them to anyone interested in the future of business and industry.
You can Click here to see my full webinar conversation with Andrew Binns, in which we cover many more aspects of Corporate Explorers and driving innovation at large companies.
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