McKinsey put together 3 videos where corporate CEOs shared how their companies were implementing open innovation practices and what they found exciting about open innovation. Scott Cook, Intuit’s CEO, made a comment that he thinks corporations need the lean method more than startups do. My ears piqued and thus I went on an online exploration of Cook’s thoughts on why corporations should act like lean startups. It turns out that he has been saying this for years, articles date back to 2011.
At Intuit there is a culture and system in place that fosters corporate Intrapreneurship but there are other avenues in which a corporation looks to innovate; VentureBeat recently discussed this and outlined 10 common corporate innovation programs. My question is, how can we take this lean method and this culture of innovation and extend it to the other programs? It is mentioned in the article that there is potential for some to be combined, but if we look at this graphic we see that 2 of the top 5 activities fall under a very classic definition of open innovation and that is, to look externally for solutions to problems.
Corporate innovation can occur in one of two ways:
- Technology push – driven by science, this is when a corporation has a technology where they are seeking application.
- Demand pull – driven by users, where companies take user feedback to feed their products.
Intuit has successfully (and unsuccessfully in some cases) used both methods. What is clear in Cook's comments it that he thinks corporations need to have the mindset and the ability to quickly test and iterate ideas in order to be successful in innovation. In short, they have to act like startups in that sense and keep barriers low. Yet it could be argued that startups need to act like large corporations in order to commercialize, or rather have some of the resources. So while startups show large companies a model for organizational structure, the large company has things they can bring to the startup that can help make technology transfer and commercialization successful, namely:
- R&D resources
- Access to external technologies & equipment
- Systematic technology transfer methods
When it comes to open innovation and technology transfer, there is an overarching systematic approach and behaviors that apply to both startups and corporations. There are distinct differences between startup and corporate culture and structure that present challenges for each side when it comes to the innovation framework, but the real opportunity presented is for these two to work together in order to maximize results.
Scott Cook is right; corporations do need the lean framework – and on the other side of the coin, startups require the resources of industry. In short, the strenght of industry and startup partnerships and collaborations have great reward potential.