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  • Writer's pictureHugo Pinto

Eureka: 3 insights large companies need to understand to succeed at innovation

Innovation is a hot topic and every Fortune 500 wants to boost it’s innovative stance and highlight how they’re investing in it. But most large companies keep falling in the same traps while failing to understand what the key learnings from the new digital giants – Facebook, Google, Amazon – are. This scenario won’t change until they get a few things clear.


Set up separate companies, with separate priorities, objectives and ring-fenced budgets.

A separate identity means the possibility to mitigate risks in a different way, a more flexible, agile and efficient one. The forgiveness in a research or experimental project is much higher than in a declared business venture. It also allows you to have all the advantages of a nimble startup without all of the (reputational, legal) implications of mistakes and hiccups any new ventures are bound to have.

The goals established should also have a different focus than the traditional/core business: prototype, end-user trial, client trial, user interface, MVP (minimum viable product) are some of the goals most startups go through, so no need to re-invent a performance system. Enough of the “reach a million in contracts” or “succeed in at least one sector” type goals – that’s just corporate tomfoolery.

The budget issue is at the same level that marketing, training and travelling are – if you need to make budget cuts, these are the first ones to get the chop. Innovation must be left out of the pot, and if it is placed in a priorities list it always loses against core business – it becomes more important to pay client meals than spend 5K in developing a working prototype.


Allow the creation of their own work culture by removing legacy systems, processes and allowing for new talent to lead – maybe they will use some of them, but only if it serves their purpose.

If you set up a new company with new offices and new business (innovation) goals you also need to inject fresh talent with fresh ideas. You cannot expect car pilots to design the best spaceship controls – they would probably insist on having a steering wheel and stick shift, and the spaceship would only run on the ground, which kills the purpose of building a spaceshift, and just makes it a very expensive and weird-looking car.

Using talent that is been in the organization for too long means they are domesticated and compliant (Read more about HR and risk taking in Large companies here) and will not really add anything new. It is important to have a corporate hacker that can navigate the organization and open doors, but probably not leading the effort.

Legacy systems and processes are usually used as a contract – they are there to help you navigate the unknown and minimize risks. If minimizing risk is one of the key guidelines in your startup, then you should be in accounting, because to make something new you have to try and make bold decisions – and that’s not saying yes we will be just a little bit disruptive but not enough to cause any waves. Go big or go home!

Check out Google’s principles of innovation for a few great tips on building an innovation culture.


Enable direct access to any part of the business and even clients/users, and ensure senior leadership supports it.

The biggest advantage most of the large corporates have difficulty leveraging is how much should you intervene and/or merge with this new cutting edge idea? The answer is usually black or white – absorb and drown in legacy, bureaucracy and lack of decision making or isolating them, leaving them exactly how they were before, and without access to a huge potential market that justified the purchase/venture at first.

A few simple examples come to mind.

  1. The newly started or bought business provides something the large company spends millions in every year. Why not set up a staggered adoption programme to all internal verticals/business units of the company? Get real experiences and build a business case, enabling your new businesses revenue from within!

  2. The newly started or bought business delivers new added value to existing company’s customers. Define test groups and get end-user feedback and even do some A/B testing. If it works you potentially have something you can deploy to at lest a few clusters of clients!

Many times middle management is the bottle neck of the organization when it comes to enablement, so making sure senior leadership empowers and mandates innovation initiatives is key to making sure they are on time, on budget and without any deformities which turn these futuristic inventions into Frankensteins.

The Frankenstein

Most of us are familiar with Mary Shelley’s classic, and have probably seen a real one in a corporate environment, even if it was disguised as superman.

A popular one, happened when Homer Simpson got an invite from an automaker to help design the perfect car for a family – the result is on the left…

Innovation always starts with a vision, and there’s usually a visionary aiming for a moonshot project (check out Google’s latest one BTW), trying to create a market changing solution, but a number of things happen, some of which I will list bellow:

  1. Starts off with a 10 Million budget, which then gets cut into 500K but still wants to build a platform, launch in 3 countries and achieve X Million in revenues

  2. Begins operating independently but is then absorbed to the operations, finance and HR legacy systems and processes, drastically reducing flexibility

  3. Starts being imposed to other parts of the business which generates friction and retaliation from middle management, stopping it from achieving it’s goals, and instead becomes an adapted version that fits with the demands of all stakeholders but does nothing

  4. It never gets to be the best at doing a simple task which means that just like Frankenstein, it either dies on its own or gets killed by the angry crowd that spent money and didn’t get anything in return

The naked truth

Launching new businesses is not what it was 20 years ago: you (usually) cannot pull a switch and deploy a product to millions of users – adoption and acquisition are new concepts you need to think about.

Persistency and objectivity are the two biggest weapons – do not demand business results before getting your hands dirty, and keep following clear (non-corporate) milestones to make that persistency pay off.

If you want different results, change the way you do things, otherwise it is just more of the same.

And finally, get the right people in and trust them! Do not try making decisions you do not understand – micro-management is the innovator’s greatest strength but it’s also its greatest threat.

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