This article was written by Duarte Abrantes da Fonseca - Beta-innovation Project Manager. Duarte is a proactive and highly organized worker. Is a project manager of open innovation and accelerator projects of Beta-i. He has more than 3 years of professional experience in many different areas, such as health care, hospitality, social entrepreneurship and management. Is areas of expertise and interest are leadership skills, public speaking, and human relationships inside organizations. Duarte’s aim is to help entrepreneurs and companies to reach their goals.

What do Kodac (1892 – 2012), Nokia (1865 – 2013) & Blockbuster (1985 – 2013) have in common?

All were giants in their sector, and the three of them collapsed. Why?

Several theories have been developed around bankruptcy, from mismanagement to lack of ability to innovate. Many are the factors that influence each of these theories. Although it is somewhat narrow to focus in only one of them, we will only focus in the lack of ability to innovate.

The ability to innovate, to find new markets and new opportunities, is directly linked to the survivability of a company in the long run. In fact, the capability of continuing to be market leaders is not possible without a continuing innovation within the company. This need of being market leader is not only beneficial for the shareholders, who become happier to be richer, but also for managers and employees of the organization. By managing such companies, directors can offer their employees the chance to grow within the company, to develop their talent and skills, and to feel that they can make a difference, rather than “just” being one more employee amid many others. In the end, we are talking about a big struggle, because the aim is not only to be a market leader in the short run, but to attract and retain the best talent that is available in the market, so that success persists endlessly.

What do Pinterest (2010), Twitter (2006) & Instagram (2010) have in common?

All were founded by ex-googles.

Google (1998) in the last eight years has lost over $ 40 billion to companies founded by its own talents, who “ran away” from the company. Google is still considered an example when talking about intrapreneurship. In fact, although it is easy to look at the $ 40 billion that Google lost, it is not easy to quantify how much of the $ 378 billion that Google is now worth (November 2014) came from the talent that this giant managed to retain, always providing answers to the market with new products and services. However, we know that there are some products that came from Google’s engineers and employees and not from Larry or Sergey, but we do not know how much is worth this intellectual talent.

I believe the major structural change that must be implemented in our organizations is the incentives policy to retain talent. The aim is not only to be more efficient, but also define the vision and the strategy of the organization, change it and prepare it for the future, thus avoiding new Kodacs and Nokias. This means that the strategic decision makers need to give more freedom, and to trust more, in the talent inside the company, and, of course, to simplify processes that facilitate designing new business opportunities.

Having the best ideas, being market leaders and retaining the best talent will actually attract even more and better talent. This is the kind of virtuous cycles that only innovative and disruptive companies have. However, not even Google nor Apple have managed to avoid losing talent (and some billions), because the massive talent and human capital within these companies is enough to feed the external and internal ecosystem of such organizations.

Steve Blank describes very well the difference between Startups and Corporations, and why companies are not startups and how every time another execution process is added, corporate innovation dies a little more. As you become bigger, you cannot stop running the business because you are dependent on your customers and suppliers to survive. At the same time you know that it is just a matter of time until some good startup, with a disruptive technology, pull you over outside the market. Look at the hard disk drive industry, perfectly explained in “The Innovator’s Dilemma” of Clayton Christensen. Therefore, the question is: how can you create processes inside your company that will not kill innovation, allowing you to create new business units, new markets and spinoffs that will expand the business, thus allowing the survival of the organization in the long term?

Beta-i developed a methodology, called Lean Innovation, whose mission is to bring back entrepreneurial culture and mindset to organizations, giving them the ability to have speed, risk mitigation and some very good tools to validate and test the market and your product/service. Yet, the coolest thing about Lean Innovation is the learning process that you get and which allows you to expand the business by developing your knowledge. From our experience, the time this process takes depends on the maturity that already exists within the company.

Lean Innovation, as the name suggests, takes companies throughout the methodology created by Eric Ries, The Lean Startup, but it also gives you much more. The process allows you to create this entrepreneurial mindset in your company, by getting close to startups and by creating a really entrepreneurial hub around your company. Along with the Lean Startup, Beta-i uses Design Thinking, Business Model Innovation, Blue Ocean Strategy, Parallel Thinking, Pretotyping and other methodologies, in order to create an innovative culture and entrepreneurial process.

If you want to know more about this methodology and how this works for your company, don’t hesitate to contact us and let’s learn together by making it happen side by side.