Intrepreneurism: Innovating a Large Legacy Organization

Funding

Startups initially have no financial stability or backing—most of them are bootstrapped or operating on the good graces of friends, family, and maybe a few brave private investors. This "no strings" funding model allows them utmost freedom in the beginning stages, and they can develop their "passion project" with few other obligations or distractions. However, eventually most startups will need to raise funding rounds to continue to innovate on their idea and achieve product-market fit, and those stakeholders' priorities may interfere with progress. The founders want the thing to work, while the backers want the thing to sell.

Additionally, innovation often fails many times (by necessity) before succeeding, which to the backers can seem lengthy and costly. Most legacy companies have the financial stability to withstand a few iterations of "failing to success" before hitting that home run.

Long-Term Agility

This goes hand in hand with funding. The more independent a startup is, then the more agile the developers can be in their product development, which is a good thing because it allows fast iteration and speed to market. However, once they see some success, they'll need funding to expand. The further into the funding round a startup gets, then the more cooks are in the kitchen (so to speak), and the startup's initial agility becomes inversely proportional to the number of stakeholders involved. Legacy companies can maintain agility (as long as the culture supports it) because they are internally funded and resourced.

Data

While data is the best way to measure, quantify, and achieve "success," the newer an innovative idea is then inherently the less volume and maturity of data there is to support its use case. Most legacy companies have a tremendous amount of data, although admittedly the quality and usability may be questionable due to poor data hygiene from legacy systems, but the data exists.

Brand Reputation

Suppose the solution works like a charm from a technical perspective, then the hard work begins for the startup to convince potential customers that their product is the solution to a prevalent problem. They'll need to nail product-market fit, pricing, exposure, competitive advantage, and more, while also overcoming the background noise that saturates the consumer market these days, such as fake news, scams, for-sale reviews, click bots, etc.

When no one's ever heard of your solution (or worse, they don't even recognize the problem you're solving), it's an uphill battle to educate the masses that (1) there is a problem to solve, (2) it's worth spending money to solve this problem, (3) you have a solution, and finally, (4) that your solution is better than everyone else's solution.

Legacy companies by their nature already have brand recognition and market traction. They even have what I would consider a captive audience (no pun intended for the insurance readers), meaning that their current clientele who already trust their brand and their products are likely to trust a new product more quickly from a known entity than an unknown one.

Formally Engage Senior Stakeholders

Start a steering committee with a mix of senior leaders. Include some leaders who are already big believers in your project (for obvious reasons), some who are merely interested (aim to convert into believers), and—most importantly—remember to add some that are against it! The naysayers sometimes bring the most to the table as they are more likely to challenge in a constructive way rather than a combative way if they share ownership by being on the committee. Once you've brought them into the circle, there will be no one left to resist a full-scale launch once it's fully baked.

Engage a Volunteer Network of Ambassadors

Develop a team of volunteer ambassadors who believe in your passion project and its mission. These are your innovators, first-movers, and disrupters within the organization; the ones who deliver their day job superbly and also are always looking for a side project to keep them intellectually stimulated. They will carry the momentum from all angles so that it permeates the organization and converts the next layer of on-the-fence colleagues into believers and ultimately into ambassadors.

The less senior colleagues can be even more influential than the senior leaders because they are closest to the clients and are the ones who have to believe in it to bring it to market. This organic growth can often be more effective in changing a culture than a top-down mandate. It provides colleagues with leadership opportunities, encourages cross-business collaboration, and ensures that the mission remains aligned with client needs and the market as it iterates.

They will pilot ideas with clients and bring valuable feedback and direction to the work. Also, give the group a cool name (e.g., "Ambassadors") that they can put in their email signature line, some company swag identifying their role, and formally recognize their participation and volunteerism to the senior leaders and the company at large. These seemingly small gestures of gratitude are well-deserved, go a long way with colleagues, and also drive the visibility for the project itself.

Move Fast and Break Things

Don't be afraid to fail; in fact, you should expect to fail to reach success. The household project WD-40 was the fortieth iteration of an attempt to displace water and prevent rust on rockets. It was named as such: water displacement (WD) and 40th trial. I would contend that there hardly has ever been a successful innovation without finding thousands of ways something won't work. Look for it, expect it, and embrace it.

Avoid Silos

There's a very fine line between confidential intellectual capital and first-mover advantage (aka "stealth mode") and being so siloed that, by the time you go to market, the solution is irrelevant to the problem you're trying to solve or rendered obsolete by a competing product.

There are plenty of problems to solve in the world, and we're all better when we get there together. So, collaborate and share as much as possible with clients, peers, and market stakeholders to innovate the best solution possible. In 1959, Volvo shared its patent for the three-point seat belt because the Volvo executives felt that this life-saving invention was too important not to share. That's the type of societal good that comes from great innovation.

Mind the Culture Gap

Can you think of a single company that has publicly announced, "We are the least innovative company you know!"? Nope, neither can I. This is because everyone wants to appear innovative. Notice that I said appear innovative, not be innovative. The truth is not every company is innovative, and that's okay. Just make sure that your words and your actions as an organization are aligned.

Change isn't hard; change management is hard. If you're trying to innovate in a company that says it's innovative, but you're hitting roadblocks at every turn, maybe that company is in need of an innovation self-audit and identity calibration.

A few weeks ago, I saw a treadmill for sale on the Facebook Marketplace. The caption read, "Brand new treadmill for sale. We bought this for the people we wanted to be, not the people we are." That's some sobering self-awareness that we could learn a lesson from.