Who says innovation is only for startups? Zooming out, middle-market and fortune 500 companies alike want to innovate like start-ups, and start-ups want to commercialize like large companies. Enter Venture Design, a design discipline to help clients innovate and commercialize when it is not a part of their core competency.
But the unpleasant truth is that most companies don’t possess the conditions necessary to empower internal teams to behave like startups. The genetic makeup of a large, established business looks vastly different than that of a creatively confident startup company. And just like with actual startups, designing new ventures is hard, risky, and rarely a straight line.
So how, precisely, can Mileage help companies create new ventures?
If you have the makeup of a large company, Mileage can help activate strategic changes—small modifications that make it possible for a startup mindset to thrive inside a much different ecosystem. Sometimes, it occurs naturally. If a legacy company meets an intense adapt-or-die moment, there’s no choice but to evolve (à la Disney or Microsoft). For companies where change is inevitable but not immediate, Mileage can help create the conditions that generate positive pressure for a controlled shift. Here are a couple of ways that Mileage will provoke the conditions for success.
We will question your business model
Many legacy companies have seen sustainable growth because they’ve focused on their core lines of business, while many startups have flourished by routinely pivoting from theirs. The key is to do both: Keep the core lines of business running while a new venture pursues something entirely different.
Think about Starbucks back in the 80’s. While the beverage industry was struggling to find sustainable growth, many beverage companies were trying to reinvent the cup of coffee—traveling to exotic locales, bring back the world’s most rare coffee beans—resulting in maybe 55 cents worth of margin. Then someone came along and thought; I am not going to reinvent coffee, I am going to reimagine the coffee drinking experience, a now earns $7.00 for a latte.
We will help your team become an early adapters
It’s challenging for an entire corporate organization to pivot rapidly in response to what’s happening around them. Still, startups have the skill and mindset to move fast and get in early. When an emerging need or trend emerges on the horizon, they can leap to create new products or services far more quickly than large companies. To achieve speed and adaptability, the new venture must be carved out and treated as its own autonomous, responsive unit. When it was still somewhat easy to identify unmet needs in the marketplace, companies could launch products and services to meet them with every expectation. Today, however, many such top-of-mind markets have become saturated and unable to experience additional sustained growth.
For over 30 years, 3M has fundamentally based its steady growth in size and profitability on new businesses developed through internal venture design. More than most other large corporations, it has wholly organized itself to encourage and support new ideas and ventures. Its long-term story of success—return on investment increasing at nearly 16% compounded annually—tells the real story, but wonder just how 3M goes about venturing so successfully. Although there are many reasons, one may suggest that 3M has created a culture of creative confidence and empowered it’s people to use venture design as a core competency. In 3M, a new venture is defined as one that has not yet attained critical mass in the marketplace, although it could have as much as $20 million in annual gross sales. From the top-down, 3M’s management has an intense passion for venture design. Many employess often speak of a of a unique 11th commandment: “Thou shalt not kill a new product idea.” And they follow it sincerely in practice. Unlike many other companies, those in 3M who want to stop the development of a new product are saddled with the responsibility of proof. The benefit of the doubt goes right to those who propose projects, not those who oppose them. Companies that embrace venture design don’t simply announce a new division or task an existing team with creating something new. Instead, they design a small team tasked with designing and bringing the new idea to market.
They build a company and a culture that is independent of their parent company’s offering, allowing the venture to take risks, prototype early and often, and above all, move fast. Throughout the venture’s development, the team continuously evolves the experience and business model by pushing prototypes to potential customers, adapting, and pivoting until they reached product-market fit. By creating a team with the purpose and the culture to hit the ground running, the venture can launch quickly—and put its product in the hands of its consumers before its competitors.
If you want to innovate, maintain relevance, and grow, the advice goes something like this, take risks, be nimble, and invest in potential solutions.
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