Why the most innovative enterprises think like startups

Companies pour more money into generating ideas and then end up frustrated when the innovations don't develop. Fact is, innovation doesn’t work in isolation; doing things differently won't be valued by an organisation unless it can be harnessed and connected to business goals. To lay the groundwork for innovation, business leaders must make it easy for their employees to build networks – to talk to their peers, share ideas and collaborate. This means creating a work environment where free thinking and creativity are encouraged.

Think like a startup

Innovation and agility go hand in hand, but for larger enterprises that typically have complicated governance processes, this can be a challenge. Some of the most well-known corporates however are managing to fuel innovation-oriented cultures by adopting an ‘entrepreneurial spirit’. Amazon, for example, has a ‘two-pizza team’ rule – the idea that teams shouldn’t be larger than what two pizzas can feed. CEO Jeff Bezos implemented the two-pizza concept to create a decentralised and innovative workplace environment when Amazon was a startup, and it is still in practice today. Despite growing into a huge multinational company, Amazon has not lost its entrepreneurial flair.

A Forbes article titled ‘5 ways leaders enable innovation in their teams’ highlighted the benefits of cultivating an entrepreneurial spirit in the organisation. It says: “Innovation and workplace transformation represent two-sides of the same coin. Enable employees to adopt an ‘entrepreneurial mindset’ to showcase their ideas and ideals and they become the foundation for organisational growth and sustainability. Allowing them to propel innovation and show initiative is the key to successful workplace revival and an opportunity to re-energise individual and organic organisational growth.”

Other big corporates are even partnering with startups as a way of learning about new technologies and jump-starting innovation. Major Australian companies Telstra, Optus and ANZ bank have all tapped into the startup ecosystem. Telstra CIO Patrick Eltridge said working with startups was a “strategic necessity” after coming to the realisation that its business model wasn’t a good fit for an all-IP, post-NBN world. Transforming from a giant incumbent into an agile business became critical to Telstra’s survival. From a cultural perspective, this means promoting greater collaboration, transparency and risk-taking throughout the organisation.

Don’t fear failure

One of the greatest culture-related innovation killers is a fear of failure. Continuing with the startup theme, organisations can learn from the ‘lean startup method’, which encourages entrepreneurs to ‘fail fast’ and quickly abandon ideas that aren’t working. Failure must be accepted as an inevitable part of the innovation process.

In a recent video interview with the Enterprisers Project, CIO of the US Tennis Association Larry Bonfante explained that eliminating a culture of blame is the key to creating a culture of innovation. He said, “A lot of companies talk about having a culture of innovation and allowing people to innovate, but the first time someone ‘fails’ they are punished for it. There is no failure. If you learn from something and you move on and are better reformed from that experience, then you have learned something from that experience and you can innovate better moving forward. [At USTA], we don't punish people, we actually reward people for trying things, taking risks, and going out of their comfort zone.”

Investments in innovation can fall flat if organisations fail to first build a culture that breeds success. And as it turns out, it takes a little innovation to create an innovation culture. To truly be innovative, business leaders and CIOs should look to startups for inspiration – or better yet, work alongside them.

To learn more about the importance of innovation and how your organisation can become more agile, download our complimentary how-to guide, ‘The age of innovation: When change is no longer an option’, here.

Tags business success, CIO, Innovation, CIO Leadership, barriers to innovation, business executives, CIO role


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