The Lean Startup and Corporate Innovation

McKinsey put together 3 videos in which corporate CEOs share how their companies implement 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. It turns out that he has been saying this for years, starting in 2011.

At Intuit there is a culture and system in place that fosters corporate “Intrapreneurship”, but there are other avenues by which a corporation looks to innovate. VentureBeat recently discussed this and outlined 10 common corporate innovation programs. But how can we take the lean method and culture of innovation and extend it to the other programs? In this article, we see that 2 of the top 5 activities fall under a classic definition of open innovation: to look externally for solutions.

Corporate innovation can occur in one of two ways:

  1. Technology push – driven by science, when a corporation has a technology and seeks commercial applications.
  2. Demand pull – driven by users, when companies take user feedback to feed their product development pipeline.

Intuit has successfully (and unsuccessfully in some cases) used both methods. It’s clear from Cook’s comments that he thinks corporations need to have the mindset and the ability to quickly test and iterate ideas in order to be innovative. In short, they have to act like startups and keep barriers low. But startups need to have some of the resources of large corporations in order to commercialize – a large company can bring a lot to the table to assist with technology transfer and commercialization for the startup, 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 strength of industry and startup partnerships and collaborations have great reward potential.

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