How To Drive Corporate Innovation And Outpace Startups

Startups are often considered the natural wellspring of industrial innovation. Many are founded on a new concept, and the very reason they exist is usually to bring a new idea into reality.

But as innovation increasingly acts as the fuel for digital transformation and growth, traditional corporations and incumbents are flipping this on its head, according to the authors of a book.

‘Corporate Explorers: How Corporations Beat Startups at the Innovation Game’ tells the story of a new breed of entrepreneurs. These are people who have developed the capability to drive new thinking and, crucially, business opportunities from within corporations and global enterprises. These “intrapreneurs” do this by combining the vast resources of established companies with the agile thinking and fail-fast mentality of the startup CEO – turning the process of technological disruption on its head.

I had the chance to speak to Andrew Binns, one of the co-authors, to learn more about this new breed of corporate leader, including where businesses can find them and how they can ensure they have the tools and support they need in order to be successful.

What is a corporate explorer?

Binns tells me that corporate explorers is the term the trio of authors – which also includes Stanford Professor Charles O’Reilly and Harvard Professor Michael Tushman – has come up with for people with the ability to drive this change.

Within corporations, he tells me, leaders often have the urge to implement processes and systems. “That’s good; you should do that. But that alone doesn't get you anywhere. No one looks at Steve Jobs or Jeff Bezos and says, ‘boy, they create a lovely process.’ They look at their passion and their commitment … and that's what corporate explorers are like.

“If you want to drive innovation within a corporation, you need to be looking for those people who are probably a little bit of an outlier – they may have alternative perspectives on things and be rule breakers to a degree.”

So that describes what we might think of as a corporate maverick – someone who does things differently. One other tendency identified by the authors is that they tend to be longer-term employees, often people who may have been at the company for a decade or more. This makes sense to me – after all, if you want to break things into pieces to make them into something new, it’s easier if you have a good sense of what you’re working with in the first place.

Another important factor is that they need to be able to generate buy-in: "They need that capacity to build a movement of support around them … they are people who create support. It's about being able to get people onside to do whatever it is that they see as being an opportunity."

An example the book returns to time and again is Kristian Kurtisz, who was behind the launch of the disruptive, ultra-lean insurance product Cherrisk – sometimes called the “Spotify of Insurance” launched in 2018 by the 200-year-old Austrian insurer UNIQA.

Binns tells me, “He realizes insurance doesn’t do what it used to do, it used to be about a community of risk-sharing … and it’s become a policy admin machine, optimized to catch out thieves among its customer.

"He asked himself what Spotify would do. How would an online platform reimagine the value proposition of insurance?

"And he proposes this to his managers, and over many months and many conversations, he builds support so that he gets in front of the board and the CEO, and says to them, 'I want to have an online platform, with a monthly subscription, I want to pay claims in two days without any questions asked’ …and this is now scaling across nine countries in Europe.”

How do corporations identify and support corporate explorers?

The first thing to do, explains Binns, is to ensure that your corporate culture is inviting to explorers. Not necessarily to attract them there – as we’ve covered, it will often transpire that they are already there and have been for some time. Instead, the idea is to ensure that they have the confidence and support to speak out and establish that they intend to cause disruption and upheaval.

Egos, multiple layers of middle management, and an expectation that workers simply “do their job” and avoid disruptive thinking can all be barriers in the path of potential explorers.

"Is there an invitation to the explorer to step forward, or do they have to battle their way and then give up?"

After that, it requires patience and discipline, as ideas may not come to fruition right away and may require several layers of design, testing, and proof-of-concept before value becomes apparent.

Explorers also need space. "You've got to give them enough separation from the core business to make sure they're autonomous without denying them the access they might need to scale the venture,” Binns says.

The book tells how when Kurtisz was ready to present his idea to the senior management team, their immediate response was that they would have to give him a lot of money right away to get started.

“He told them, ‘no, give me a little bit of money, and I'll come back in six months and show you what I've learned'," says Binns.

“So he teaches them what it means to be involved in an experiment, which is little amounts of money to de-risk the investment before you commit. Too often corporations either under or over-commit before they understand where the market is.”

What challenges come with empowering corporate explorers?

Some of the key challenges facing organizations as they attempt to adopt a culture of innovation include rigid organizational structures and the fact that everyone already has a job they’re expected to do and not much time to spend on other things.

“A big organization … has inertia,” says Binns, “and inertia means it continues to do the things that have made it successful. It doesn’t frustrate innovation out of ill-will, or skullduggery, or sabotage … it just simply does what it’s always done.”

Overcoming these issues is often an organizational challenge that requires established practices to be upset and traditional chains of command to be broken.

Binns tells me, "I think there's a need for creating space for a lot of employees to think about how they can do their work better – how they can innovate.

"It doesn't need a lot of time, and there are a lot of benefits. It's often a way of reconnecting them with the customer and helping them think about how they really add value … that has goodness in itself.”

It’s beyond doubt that innovation is more important now than ever. With business, society, and the world as a whole facing unprecedented economic, political, and environmental challenges, it’s clear that new thinking is needed to drive change in a way that’s sustainable without repeating the mistakes of the past.

While we have become used to seeing great things from startups – not least of which is a new ethos focused on sustainability and social justice – it’s obvious that multi-national enterprises and corporate giants have the resources needed to make a difference.

Whether or not they have the will to bring it about remains to be seen, but books like this are important to illustrate the steps that need to be taken, and I would recommend it to anyone interested in the future of business and industry.

You can click here to see my entire webinar conversation with Andrew Binns where we cover many more aspects of corporate explorers and driving innovation within large corporations.