Deathcycle of Traditional Corporate Incubation

Alex was asked to build an “innovation capability” for her business.  She’d been at the company sixteen years and was previously at a startup that got acquired.  MBA.  Undergrad from Harvard.  Alex was bright, fun to work with and well respected.  So… she brainstormed with other company “innovators.”  Got their advice.  Chatted with Ivy League professors.  Hired consultants.  Convinced key coworkers to join her team.  Pulling it all together, they produced a “pipeline funnel” with “stage gates” and a “milestone-based funding” process.  They called the group BID (Breakthrough Innovation Division).

BID solicited ideas from around the company, industry visionaries, consultants and did vast ethnographic research to gather user insights.  They went to TED.  They took an executive education seminar at the Harvard Business School.  They read Fast Company, Entrepreneur, Wired, Inc., Good to Great, The Innovator’s Dilemma, Innovation and Entrepreneurship, Crossing the Chasm, How to Get Ideas, The Art of Innovation, Blueprint to a Billion, The Art of the Start, Ten Rules for Strategic Innovators and more.

The goal was to find big new ideas with “billion dollar potential,” give them resources and shelter from mainstream “core” company processes and then “graduate” the best opportunities into business units once they’d proven themselves in the marketplace and were on track to success.  This was going to be awesome!

Several years later Alex looked tattered around the edges. Almost all the ventures BID had funded were either shut down or on their last legs. She’d always known there would be attrition – heck, it had been part of the “funnel” design from the onset. The whole point was to narrow down ideas to the very best businesses and “graduate” them at a cadence of one or two a year. Problem was, she hadn’t been able to put enough “wins” on the board and people were asking hard questions about BID’s accomplishments (or lack thereof). Several of her most promising businesses had been orphaned (i.e. shut down or spun out in a fire sale because no mainstream business unit would take them) and some that actually found homes were later discontinued. Just five businesses survived their graduations, at least for now, but they were all meager “incremental” innovations for existing businesses – not the big, huge, diversifying growth blockbusters BID had been formed to create. Alex kept being asked "where are all those billion dollar businesses you promised us?" Eventually BID’s funding petered out.

Two years later Ron, a rising star, was asked to build an “innovation capability” for the company.  He’d been there twenty one years and had previously helped launch three company growth initiatives.  MBA.  Undergrad from Stanford.  Ron was bright, fun to work with and well respected.  So… he brainstormed with other company “innovators.”  Got their advice.  Chatted with Ivy League professors.  Hired consultants.  Convinced key coworkers to join his team.  Pulling it all together, they produced a “pipeline funnel” with “stage gates” and a “milestone-based funding” process.  They called the group MIIG (Market Innovation and Incubation Group).

The goal was to find big new ideas with “billion dollar potential,” give them resources and shelter from mainstream “core” company processes and then “graduate” the best opportunities into business units once they’d proven themselves in the marketplace and were on track to success.  This was going to be awesome!