As a kid, everyone loves to go fast. You want to pedal faster on your bike. Run faster across the field. Pass that car ahead.
Sometimes you fall and skin your knee, get a bump on the head or fall out of the tree. It happens. You cry. You get back on your bike and go fast again.
As kids become teenagers, they sometimes learn there is a cost to going too fast. Tickets for going too fast. Bad report cards for not thinking test questions through. Brain freeze for eating ice cream too quickly.
These lessons get stuck in your head as you move through life – and you forget what it’s like to go fast because the risk is too high.
As we become adults, we often slow down. Work teaches us mistakes are bad, and fear of failure creeps into our psyche. Sore muscles take longer to heal. We wake up with stiff legs and shuffle out of bed to walk the dog. Take your time. Don’t fall.
Big organizations need to learn how to be kids again. They need to learn to fall, get up, and go fast. To feel like they are on the edge of control because that’s where the cool kids are. Now, enterprise companies can’t risk it all for the sake of a thrill, but without risk, there is no reward.
Where is the balance between speed and responsibility? Between risk and reward? Between existing customers and the new ones that don’t exist yet?
This week, the Nimble Hippo races through the need for big companies to find that balance between going fast and experimenting, and responsibility and risk avoidance. Buckle up.
Fact: A company’s ability to rapidly translate ideas into action is the ultimate competitive advantage.
Large companies have been successful because they have learned how to efficiently and effectively execute a known business model. Over many years and through many iterations, big successful organizations have learned how to earn great profits, scale their business, defend against competitors and manage the markets. In most cases there are ups and downs, but through discipline and diligence, they weather the storms, make incremental changes and continue on. Meeting budget numbers, plans and expectations are how people get ‘pulled’ through organizations and have successful careers.
Speed, learning and calculated risk have rarely been rewarded, and are often dissuaded. Why has speed suddenly become so important for companies of every size? The reason is that the customer has never been so in control and so demanding.
When customers have options for everything and lots of information at their fingertips, then the balance tips in their favour. They can demand new products. They can communicate directly to the companies they buy from and articulate what new problems need to be solved. Never in our history has this happened at such scale, and large companies are struggling to figure out how to respond.
So how do companies begin to move fast and live on the edge, yet respect what has gotten them to where they are today? They set up new teams with new people who think differently.
The Nimble Hippo has previously mentioned the importance of hiring outsiders to run innovation outposts. The teams that these outsiders lead need to be unhinged from the large companies they serve. They need to be aligned to the big companies’ problems, but unencumbered by the processes and technology that have made the company successful to date. What has made a global retailer successful over the past 50 years will not ensure success in the next 50 … in fact, clinging to past practice can inhibit them.
The new teams need to be free to solve problems customers want solved using the appropriate technology. Here at Communitech, we often find that if our outposts’ innovation teams aren’t using existing enterprise technology stacks, then they can’t integrate their work back into the company.
The goal, however, is to solve problems in the best way, using the most appropriate technology for the problem. Important customer problems demand quick and efficient solutions, and if the problem is big enough, and customers are willing to pay, then it is up to the enterprise organization to figure out how to integrate the new technology to solve it. By holding innovation teams back with technology and system requirements, they are slowing them down and allowing others to take the lead.
Choosing projects with which to experiment is an important step for big companies. The first step is for innovation teams to build prototypes and minimum viable products (MVPs) to be tested with real customers/prospects, to get some data on what customers want. Leadership teams then use this data to make informed decisions on beta versions of the most successful MVPs.
Continuing to experiment to generate real data points, the innovation team builds a more scalable version that is tested with more customers to understand the finer points of the products they are willing to pay for. Finally, using all the data captured, investment decisions are made quickly to build that final version of the product that eventually will be released to all customers.
By leveraging existing customers and data, the decision as to which projects to invest in and build is less about trying to guess the market, and more about leveraging data to make decisions quickly and decisively, eliminating biases and over-analysis.
Finally, big companies need to be able to experiment with the processes and products they already sell. This is where they have such a huge advantage over startups. Enterprises have customers, sales channels, R&D budgets, market research information and so much more at their disposal to be able to make informed decisions about products and processes to invest in or avoid. The biggest challenge is that the data generated does not always match the expectations of the company’s leaders.
The world’s most successful and innovative companies set aside their biases and leverage their customers, stakeholders, partners, and market information to make informed decisions around the future. The decisions must be data-informed, but not fully data-driven. Use the experience that exists in large companies, combined with data from experiments and channels, to build a decision matrix that can be acted on quickly, and modified if early assumptions prove incorrect.
Lessons here for global organizations looking to move faster are:
- Build new teams offsite who are built for speed and customer-focused.
- Solve customer problems quickly and efficiently with the right technology.
- Find projects that generate data quickly to gain real-time feedback and build your feedback loop.
- Leverage existing data and channels to make informed decisions quickly and decisively.
It is a different mental model for big companies to move quickly, take calculated risks, and keep talking to customers throughout the innovation journey. If enterprises are not moving to an agile model of innovation development, they risk being left behind by the customer for another company that listens better and responds more quickly.
