Is Your Innovation Program A Failure Because It Didn’t Produce a Unicorn?
I was at an innovation outpost event (innovation “outposts”, in their definition, are offices which companies who are not based in Silicon Valley have in Silicon Valley, so that they can breathe the heady, heady vapors of the innovation brewing out here) a few weeks ago where the presenter made a very interesting remark. That remark stayed with me, and now I seem to be hearing references to it over and over, with regards to the expected outcome of an enterprise innovation program, which I’ve blogged about before. I think that he made up the remark on the fly, during his talk, and at first I thought he might be just be being facetious, but as I hear more and more people use it, I’m thinking that may not be the case.
That remark was:
It’s not innovation unless it’s a billion dollar business.
He was referring, I thought jokingly, to the output of an internal innovation initiative. A billion dollar business, otherwise known as a “unicorn“, is called a that simply because its typically pretty rare, although if you read the startup news, seems like there’s a new one born every minute, and they are being born faster and faster. Of the last few unicorns, (the ecommerce site Jet.com among them) some made it to billion-dollar status within 4 months! But that’s the startup world.
So now it sounds like leaders of enterprises are now looking at those companies and using that as a yardstick for the success (or failure) of their internal innovation initiatives. I’ve heard a number of times now, that when leaders launch internal crowdsourced innovation programs, not only do they ask for the the employees to come up with the enterprise’s next “billion dollar business”, they expect it. Apparently, even large enterprises think that innovation needs to be insanely profitable (although not particularly massively huge, game-changing or disruptive since that may be a threat to the business) – even enterprise leaders want unicorns to call their own. (Why not, they are so cute, aren’t they?)
In all seriousness, if the yardstick of success for an innovation program is a nothing less than a billion dollar business, then what kinds of innovation are you really going to see? If we only look at the pure bottom line, how are we going to get out from under the “how can we make things way more profitable” mindset. Sure, the business of business is making money – however if you focus on that above all, who knows what amazing innovations you are going to leave on the table. Who knows what incremental products, process improvements, and other micro innovations are just being tossed by the wayside because they are too small. A thousand incremental innovations could lead to multiple unicorns, but if you only go for hitting it out of the park, you’ll forget that base hits and walks count too.
Sure – set your sights high. But don’t expect every idea to be a hit. You’ll probably never know which one will. Like a good VC, play a lot of small bets, and if you get lucky, and let your people be as innovative as they can be, then the home runs will come.