A Peek At The Difficulties of Incubating New Initiatives Within Large Companies

11 Aug

Entrepreneurial situations in large companies differ from that of startups, yet one thing that they seem to share is that they often represent “hope” in one way or another. In the case of large corporations, these new initiatives can not only turn out to be profitable “ventures” but also boost morale and reward key employees through growth opportunities. Yet many of these new initiatives have difficulty getting off the ground. Frustration is common. This post provides a peek at some of the situations, complexities, and steps to resolution that I have seen.

First, here’s a picture of a common situation in a large company faced with the prospect of starting a new initiative or business line:

  • Perceivably significant yet amorphous business opportunity
  • No money committed / no budget
  • No or limited organizational resources
  • Established products and sales & marketing channels
  • Mature and complex business and product approval processes.

What adds a level of complexity to the situation (and sometimes leads to insanity for those working directly within the environment) is that:

  • Venture requires substantial investment to ultimately succeed
  • Finance cycle of start-up opportunities (opportunity timing) does not align well with the long, finance planning cycles of large companies (sometimes can be 14+ month delays!)
  • Star players in the current organization have limited availability for the new organization
  • Articulating and aligning on a business opportunity requires collaboration by many functions, and these functions are separate and overloaded in the current organization
  • Sales and product development processes often need to be understood at more than the surface-level.

Here are some ideas for addressing many of the above issues:

  • Recognize that it’s not usually possible or desirable to speed up the process by cutting corners
  • Break the process into smaller pieces to get rolling
  • Search for the right sponsor and core team
  • Secure a portion of time for each of the star players
  • Give the employees a real chance to make things work 
  • Consider getting a commitment for small amount of money to get rolling
  • Start to articulate what the business opportunity looks like and document it
  • Consider using a facilitator that can pull the pieces together, help layout program plan, and frame strategic issues and options
  • Paint the vision for the org structure and build emotional attachment to the cause
  • Involve those from sales and product development that will be eager to provide input and testing grounds
  • Aim for pioneer sales and business development deals with lighthouse accounts (concrete wins)
  • Rinse, refine, increase committment, and repeat.

It may take a leap of faith to get things started. But the leap of faith can be smaller than the temptation of the opportunity as a whole. Sometimes the keys are to look for forward motion and to take some initial steps as opposed to wanting to knock it out of the park too soon.

Let me know your thoughts and experiences!

2 thoughts on “A Peek At The Difficulties of Incubating New Initiatives Within Large Companies

  1. I really like your site Steve. The trade-offs you point out above ae indeed true. What about the flip-sideof this? What about start-ups trying to do things better which large companies have always done. In management consulting, I think Gazhoo.com and Lillilooloo.com are tyring to do this. What are your thoughts on this?

  2. Gazhoo and Lillilooloo are definitely interesting sites for management consultants to be knowledgeable about. On first blush, what struck me about Gazhoo was that there seemed to be somewhat sophisticated topic areas being addressed. As for Lillilooloo, the add-on services of getting documents revised, “beautified”, etc. … well I have started to hear more annecdotally about other small consulting firms using similar types of outsourced services as part of their backoffice operations. Docstoc is another portal, community, document store thats strikes me as targeting a similar market demographic, e.g., mass-market SMB and individual professionals.

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