The Corporate Startup
Creating an innovative ecosystem in a well-established company
In a world that is changing increasingly rapidly, the challenge that many large companies face is to develop new products for new markets, while managing their core business. The principles and practices outlined in this book provide a model for businesses to manage this process. Thanks to a proven methodology that applies the principles of the lean business approach, The Corporate Startup aims to help companies to create an ecosystem that feeds innovation while maintaining a successful core business.
Many useful tips to:
- Develop an ecosystem of innovation within established companies.
- Enable companies to develop new products for new markets, while continuing to manage their core business.
- Implement startup practices in corporate companies.
The paradox of innovation for “ambidextrous” corporate companies: excelling in both the search for something new and carrying out their consolidated business
In a world that is rapidly changing, only companies that are able to respond to change can survive and thrive. The challenge that established companies face is how to develop new products for new markets, while maintaining the management of their core business. Innovation can no longer be seen as something secondary. Yet, in most large, successful companies, the focus is on high-income products - the so-called high-profit “cash cow products”. If a company is making large profits from these products, it may risk finding itself blind to the need for innovation imposed by technological, social and cultural changes. In addition, there is further pressure on executives for publicly traded companies to meet the market’s short-term financial expectations.
However, it is too simplistic to advise established companies to behave as if they were startups. Big companies are not startups and neither should they try to be. On the other hand, the aspiration of every startup is to become a successful company! For a corporate company, the expectation of acting like a startup is not realistic, for one simple reason: the daily work of an established company involves running an already successful and profitable business, while startups can generally focus on an innovative idea without having the added burden of keeping the older company going. So the real challenge for a large company today is how to commit to maintaining profitability, while at the same time dedicating enough energy to exploration and innovation to ensure future profitability. Entrepreneur Steve Blank distinguished research versus execution as the key difference between startups and large corporations. A startup is a temporary organisation whose goal is to seek a sustainable and profitable business model, while an established company primarily executes an established business model that meets the identified needs of specific market segments. So how can we get out of this stalemate? Large companies should stop thinking and acting as if they were single monolithic organisations with only one business model, and should instead adopt an ecosystem approach to their operations. Every modern company must be a balanced mix of established “cash cow” products and new products in the search for profitable business models. This ability to seek and pursue innovation during the execution of its consolidated business model is the hallmark of an "ambidextrous" company, i.e. excelling in both research and execution. This is the paradox of innovation.
The key ideas of "The Corporate Startup"
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