Business Cannibalism, Intrapreneurship and Innovation Colonies – Webinar Q&A Follow-up

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I had such a great time in Wednesday’s webinar and was happy to have some questions to ponder on and share with the wider community. Here they are in no particular order:

Q1: How do you prevent the colony from generating businesses that the enterprise doesn’t want to be in or that are not part of its core strength or interests?

A1: One thing we didn’t cover in the webinar is a concept called an Innovation Thesis, which is a tool that provides a vision for the range of ideas your Innovation Colony is interested in supporting. The Innovation Thesis describes an area of the market that you’ve identified as having growth potential over a particular time period (e.g., the next 5 years) and summarizes the beliefs that drive your decisions to incubate a particular idea, invest in a certain company, or acquire a certain startup. Your Innovation Thesis is a filter for opportunities; without it, your portfolio risks drifting out of alignment from your target market. A solid thesis can also inspire people to generate ideas that you want to capitalize on.

Many investors use a similar tool known as an investment thesis, which is essentially the same thing. For example, Union Square Ventures states it invests in “large networks of engaged users, differentiated through user experience, and defensible through network effects.”

Q2: What if the innovations that come out of the colony cannibalizes your core business?

A2: First, consider that disruptive innovation doesn’t start out as a competition for an existing market. Disruptive innovations tends to start with an ignored or non-existent new market. It’s not until this new market becomes more developed that today’s customers may abandon an existing solution for the new solution.

Secondly, and more importantly no business survives the long term without reinventing itself. If you don’t disrupt your own business, someone else will, eventually. You have to be open to disrupting yourself before the competition does it for you.

Q3: What about Intraprenuership programs? Can they work as an alternative to creating a whole other department?

A3: No, not for the sort of disruptive innovation the Innovation Colony is designed to generate. Typically, Intraprenuership programs only offer a portion of an employee’s time (for example, 10%), which is enough to get new ideas started and perhaps portions of the business model validated, but not enough find true product-market fit and grow a successful new business. Often an intrapreneur has to “sell” any new products ideas to heads of existing business units, and these managers aren’t motivated to do what it take for them to succeed, they don’t have much skin in the game, and often suffer from the “Not created in my backyard” syndrome.

Q4: Can’t the disruptive innovation happen inside the existing org?

A4: No, most enterprises are filled with antibodies that prevent disruption from within. They are not geared to rapidly “search” for and discover new viable business models, let alone allow them the space and time to gain any legs to actually succeed. Enterprise product development functions are geared to keep resources focused on “execution” and growth of the existing products and business models, and the protect from disruption. The “search” vs “execution” modes are fundamentally at odds with one another, so the environment of the Innovation Colony provides must be completely separate from the product development organization.

Missed the Webinar?

If you missed Jeff’s webinar “Innovation Colonies: Cultivating the Future of Your Business”, you can still watch it. Click the link below to learn all about the business benefits of establishing a healthy innovation colony and what makes them so powerful in driving disruptive innovation.

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