In which Jill brings venture capital in-house.
“Innovation takes leaders who have a willingness to overcome historical folklore about their own organizations and who can tolerate the discomfort that inevitably accompanies change. Innovation should be encouraged up, down, and across the corporation, and everyone should be invited to the party.”
— The New IT: How Technology Leaders Are Enabling Business Strategy in the Digital Age (McGraw-Hill, 2015), page 155.
Odds are you don’t work for a company that was born digital. As your executives and board adopt an evolving vocabulary, using words like “modernization” and “transformation,” in staff meetings and employee town halls, they’re still approving huge investments in core product development and legacy systems. When the word “innovation” is mentioned, heads nod in unison but nothing seems to change.
Disruptive change is in the eye of the beholder. Effective executives are making subtle behavior shifts in order to support non-traditional ways of thinking while still supporting their companies’ fundamental business models. Many in the Fortune 500 have established innovation labs or idea incubators for this purpose.
Other companies are re-crafting funding models, ensuring that budget is set aside for unorthodox ideas, new products, or fresh business models. Google’s lauded 20 percent time policy grants employees a full day a week simply to work on ideas of their own choosing. For Google 20 percent time is less about zeroing in on the next killer app, and more about the notion that outside-of-the-box thinking fosters change readiness. It’s the promise of revenue focus ceding to the impact of cultural change, which can eventually drive, yup, renewed revenue focus.
Many established companies are embracing the “internal venture capital” model to cultivate these changes. Shark Tank-like panels like those at TechCrunch Disrupt that reward the winners with visibility and funding are being adapted and brought in-house. Executive panels evaluate submissions, entertain pitches, and carve out “Series A” rounds for employee teams with the most inventive proposals. These teams are then encouraged to realize their ideas, which often turn into new product features, adjacent capabilities, or adjacent businesses.
Companies that have embraced this Shark Tank-style approach often extend it to include the evaluation of technology vendors, external partners, or new hires. It’s collaborative, fast and democratic. It invites conversations not only about today’s strategies, but tomorrow’s vision. It can get IT leaders out of the basement and into the board room, positioning them—deep exhale—as strategic.
And, of course, it can guide your company closer to its digital future, proving that you don’t have to be born digital in order to innovate.