Valiant efforts have been made by several large corporations to adopt agile and lean methodologies. A large number of these efforts have failed or struggled significantly. In order to succeed at adopting agile and lean, large organizations need to change how they operate. The challenge is most large organisations have tried to adapt these innovation methods to suit their corporate structures. In our work, The Corporate Startup, we explore the changes that large enterprises need to make with regards to people, processes, KPIs and structures. We argue that large corporations cannot successfully innovate like startups unless they become ambidextrous. The structures that are put in place to support the adoption of agile and lean have to reflect the maturity stage of the business models that are being incubated by the enterprise. In other words, a new type of corporation needs to emerge.

1. Strategic Innovation Management
In Mature Enterprises
Tendayi Viki Dan Toma

2. Digital Disruption
● Blockbuster has now disappeared
from our shopping malls.
● It failed to respond to the threat from
Netflix, Lovefilm and Redbox.
● Similar stories can be told of several
other companies including Kodak,
HMV, Borders and Nokia.

3. Entrants &
Upstarts
● The ongoing narrative about how corporations
cannot innovate like startups do.
● It appears that as corporations grow, they
become more bureaucratic and slow moving.
● In contrast, startups are generally smaller, less
bureaucratic and fast moving.

4. A Paradigm
Shift
This challenge is accentuated when there is a
significant paradigm shift in technology and
ways of doing business.
The rapid change from analog to digital
caught most large enterprise by surprise, and
left them unsure of how to respond.
Why is this the case?

5. Climate Change
Deniers
● In most companies, there are people in
management who will deny that an important
change is happening.
● Disruption on day one always looks like a toy.
● The very nature of Black Swan events is that
they often blindside companies with traditional
business models.

7. Don’t Kill The
Cash Cow
● Most companies will apply their efforts to
milking their cash-cow legacy products.
● Kodak invented the digital camera in 1975,
but failed to benefit from the technology.
● The irony of this particular story is that the
cash-cow business was killed anyway.
● By the very digital camera Kodak invented
being exploited by other companies!

9. Misreading
Signals
● There will be managers that will recognize the
changes in technology that are happening
● But will misread what the change represents for
their organization.
● Many large enterprises misread the digital
revolution as simply a change in the means of
production and marketing channels.

10. New Business Models
● Significant paradigm shifts often represent a change in
business models and innovation principles.
● It is much more than just transforming analog products to
digital products.
● The ITunes store was not just about turning CDs, tapes and
vinyl into digital music.
● When paradigms shift, business models matter.
Tristan Kromer, 2014
http://grasshopperherder.com/lean-enterprise-innovation-ecosystems/

11. Competing &
Staying
Relevant
● So how can large enterprises compete in
this ever-changing environment?
● Is it possible to be a large enterprise that
executes well operationally; and a nimble
innovation machine at the same time?
● What are the characteristics of an
ambidextrous organization?

12. The Right Lens
● Large enterprises are not startups.
● A startup is a temporary organizations set up to
search for a sustainable business model.
● Large enterprises focus on executing known
successful business models.
● This distinction between searching and
executing was first highlighted by Steve Blank.

13. On the one hand we don’t want to kill
the cash cows providing important
resources; so execution and
operational excellence are important.
On the other hand, we want to keep the
organization nimble and responsive by
continually searching for innovative
new products and business models.
A War on Two
Fronts
Executing Searching
Searching and executing require
different cultures, behaviours,
resources, KPIs and governance.

14. In other words,
large enterprises
have to develop
ambidextrous
capabilities,
resources, KPIs and
governance tools

15. Nagji & Tuff, 2012
Transformational
Products
These represent breakthrough
innovation in which the company
develops new products for new markets
Adjacent Products
These represent incremental innovation
targeted at adjacent markets
Core Products
These are existing
products that are optimized
for existing customers
An Ecosystem
of Products
● Rather than view themselves
as startups:
○ It is better for large
organizations to view themselves
as ecosystems containing
different types of products and
innovation.

16. Managing The Core
Product Portfolio
● The key focus when managing the core product portfolio is
execution and operational excellence.
● Remember that a product enters the core portfolio after a
sustainable and profitable business model has been found.
● There is also some trading history which allows for reliable
financial projections to be made.
● Revenues, Profit-Margins, ROI, ARR, NPV, Market Size,
Entry Barriers, PESTLE.

17. The Bed of
Procrustes
● Revenues, Profits, ROI, ARR, NPV
● These are the wrong metrics for
managing innovation.

18. “
For every one of
our failures, we had
spreadsheets that
looked awesome.
”

19. Making Little Bets
● With transformational innovation it is impossible to predict
which ideas are going to win on day one.
● As such, the culture, processes and KPIs used for core
product management do not apply.
● Large enterprises need to fill their innovation funnel with a lot
of small bets and search for sustainable business models.
● Innovation Accounting, Customer Discovery, Lean
Analytics, Pirate Metrics, Mom Test, Lean UX, Design
Thinking, Lean Startup, Agile Development.

20. Innovation
Accounting
● * Innovation Accounting system should be flexible
● * 2 degrees of flexibility:
ii.business model maturity (p-s fit, p-m
fit, scalability)
ii. use (reporting, governance, global)

21. Reporting KPIs
● Designed to communicate the day-to-day
progress of the incubated ventures from
ideation to prod market fit
● Mainly used as communication tool between
product team and 'sandbox manager'
● Example: knowledge-to-assumption ration,
cost per learning, experimenting velocity.

22. Governance
KPIs
● Designed to ensure the right ideas get
adequate financing.
● Used as diagnostic tool for investment
boards.
● Example: BareBones NPV, knowledge to
assumption ration

23. Global KPIs
● Need to ensure transparency of sandbox's
profitability
● Used in shareholder communication & help to
make mid course corrections in correlation with
the global corporate strategy
● Example: cohort performance, innovation
contribution, innovation conversion

24. The combination of
these metrics can
then be used by an
ambidextrous
organization
to manage a product
portfolio through the
entire lifecycle

25. Thank You