Last summer, I was invited to spend half a day with approximately 40 Fortune 500 Chief Innovation Officers at Xerox PARC, and discuss our experience with corporate innovation methodology through the 1M/1M Incubator In A Box program.
A few months later, Jim Euchner, the CIO of Goodyear, interviewed me for the Research-Technology Management journal. It’s a comprehensive discussion that those of you thinking about corporate innovation may find interesting. For the month of May, the interview is accessible free of charge at the journal’s website. [Business Acceleration at Scale: An Interview with Sramana Mitra]
Here, I will summarize some key excerpts from the discussion:
JE: How can large, established companies incorporate some of the ideas from One Million by One Million in their new-business innovation space?
SM: This is an area where we have done a significant amount of work for about four years now. I hadn’t started One Million by One Million with this direction in mind, but I was approached by Oracle in 2011 or 2012—a vice president had read about me or listened to one of my speeches at a conference and he called me with essentially the same question. He was interested in how he might create excitement in the Oracle workforce, how he might get the employee base to think about innovation. I designed a custom program for Oracle, and today, it is one of our largest deployments. We have been running there for several years now, very successfully, but it was born out of that catalytic conversation. The program is open to over 10,000 employees at Oracle now. We started with only about 700.
Now we’ve productized that approach. Let me explain to you how we have evolved that and how that program runs. Two to three times a year, we run a contest; we call it the Oracle One Million by One Million Challenge. We invite people to participate in this challenge with their innovation agenda. So all the employees, of whatever division or group, are encouraged to start attending our free roundtables—these Thursday-morning roundtables. Once a week, at least, they are spending an hour and a half just thinking about new ideas, how new ideas are presented, how new ideas are dissected and strategized upon, and so forth. They are simmering in the atmosphere and ambiance of innovation.
This goes on for several weeks. In parallel, we ask the employees to start thinking about what they would like to create. We have come to the conclusion, after several years, that most employees in large organizations don’t have enough background, enough methodology knowledge, to be able to develop and present an idea in a way that makes a lot of business sense. They need more methodology guidance before even coming up with the idea—things like how ideas are framed, how ideas are validated, and so forth.
What we ask for is a kind of college essay in which they explain why they want to participate in One Million by One Million, why they want to learn about the process of bringing a product to market, and why they want to learn about entrepreneurship. The essays tend to be quite elaborate. We also ask whether they are comfortable with online learning, because the program is pure online learning. There’s not going to be a classroom teacher who’s going to sit and do any one-on-one coaching or anything; you’re going to have to be able to learn using the framework, using the online curriculum, participating in the online roundtables, discussing your ideas, and so forth. You need to be a self-motivated person and you need to be comfortable with online learning.
We select a group of winners from among these essays, who receive a scholarship to the One Million by One Million premium program, funded by the corporation. These scholarships cover the $1,000 annual membership fee.
JE: Do the corporations also grant the time to work on the idea? Or do the participants still bootstrap that?
SM: It depends on the policy in the organization, but it’s generally considered extracurricular. It’s similar to other development programs. If you’re going to do an MBA on the side, for example, the company may pay for the MBA, but they’re not going to let you ignore your day job; that’s not how corporate learning works. It’s the same philosophy here. This is essentially an entrepreneurship MBA. That’s the spirit of the program.
JE: How successful has the program been in getting ideas that the company can adopt?
SM: It’s been very successful. Let me give you a flavor of the kinds of successes that come out of a program like this. if
If you look at the whole community of people who learn from our free content, follow our methodology, read our books, we are touching over a quarter million people.
When you think of entrepreneurship outside of a corporation, often business ideas with a total available market of $200 million, $300 million will get ignored. It may not be possible to bootstrap them, but venture capitalists will not fund them. These are ideal for corporate innovation.
Let’s say you have a product line and you have a customer base for that product line. Perhaps there are opportunities to innovate in that same general space. You have customers who are giving you input, you have engineers and product marketers inside the organization who have perspective and who have ideas, people who have domain knowledge and ideas. They might come up with a proposal for a new product or an adjacent product that could result in a couple of hundred million dollars in revenue.
That is very, very worth doing for the corporation. It may require a $5 million investment that could yield a $200 million or $300 million business. If you train your workforce in being able to identify such opportunities, if you teach them how to validate the opportunities and frame them in the same way that an entrepreneur would, you make it possible for them to clearly present their ideas to management to consider for investment. One Million by One Million can train these people to develop and present these ideas.
You’re getting well-analyzed, well-articulated ideas, and you can look at the market and the investment required and make a very good, informed decision on whether this is a go or a no go.
JE: Are these same people, if it’s a go, charged with trying to make it work?
SM: We’re seeing multiple permutations and combinations on that. Sometimes the company gives the originators the project lead and lets them run with it. Sometimes the ideas get plugged into a product group that already has that kind of activity going on, and then it’s a side project in that product group, with additional resources. Sometimes—and this is a lot more rare—the business can be spun out and set up as a separate company. It really depends on the project, depends on the market size, depends on the investment required, depends on the resources required. But all of those permutations are success stories, as far as the program is concerned.
JE: You get much better, more-qualified ideas in the portfolio. I assume there’s a lot of work with customers
This is essentially an entrepreneurship MBA. That’s the spirit of the program.
And prototyping during those early stages. Or is it all analytics?
SM: This is a very good question. My philosophy, at least in the IT space, is that we can safely assume that people will be able to build their products. Prototyping is not what we emphasize until later in the process. The first thing—the first order of business—is answering the question as to whether there is a business case for doing the project. Prototyping will come later, if we decide that the business case is sound and warrants investment.
Let me be clear. You need to understand the customer value proposition to create the business case, but you don’t need to write a single line of code to do this. You can understand whether there is value in what you are proposing to do by talking to customers. We encourage people to get an immense amount of customer immersion before actually developing their products. Product development is an expensive process, and we want to get business case validation before investing in product development.
JE: Can we look at things through the other end of the telescope? We’ve seen how education in entrepreneurship can help small entrepreneurs and can help companies energize their employees. Suppose you’re a company like Goodyear or Oracle, how do you make the connection to the right entrepreneurs in order to help them succeed and help your company succeed?
SM: Corporations can use our Incubator in a Box, which is what we call the product we’ve developed based on the Oracle experience, to do both intrapreneur development and ecosystem development around entrepreneurs in whatever domain they’re interested in. The organizing principle around which a Goodyear or an Oracle or an SAP wants to engage with the entrepreneurial community needs to be determined.
We’ve worked with SAP around their HANA ecosystem. HANA is SAP’s big data platform. They’ve tried to encourage entrepreneurs to build products on top of that platform. This is true about many, many companies, at least in the IT industry. One Million by One Million is basically an incubation and acceleration partner to help these entrepreneurs develop their ideas and their businesses.
As with internal programs, the corporation offers scholarships to the entrepreneurs. They run contests and offer scholarships to groups of entrepreneurs that they want to be close to and support. It helps energize the innovation community around whatever it is that the company is trying to do. There are a lot of permutations. We’ve seen incubation to develop a platform ecosystem for large companies. We’ve also seen geographical models. We helped Britain’s largest media company, the DMGT Group, to pull together a community of entrepreneurs around its innovation agenda. We also worked with an online brokerage firm to encourage financial technology–oriented innovation work. So we’ve seen all kinds of permutations. It could be domain, it could be geography, it could be platforms; it could be all sorts of things.
Photo credit: tec_estromberg/Flickr.com.
This segment is a part in the series : Corporate Innovation Management