Synopsis

It has become a statement of the obvious to remark that the modern economy has presented significant challenges to established companies. Over the last four decades, the pace of change in technology and the economy has increased. Software has eaten the world and digital darwinism has resulted in previously dominant large companies going out of business. The main disrupters have been startups that have been much more nimble and better at coming up with innovative business models that leverage developments in technology. 

Innovation is now the main strategic priority, with a large majority of global executives indicating a need for their companies to develop sustainable innovation processes. However, when seeking advice on what to do, managers are often told to have their companies start "acting like startups". This 'sage' advice has resulted in the proliferation of idea competitions and innovation labs, where innovation theatre rather real innovation takes places. The success of these innovation labs has been patchy at best, with very few successful new products.  

The Corporate Startup begins from the premise that large companies are not startups, nor should they strive to be. While startups focus on searching for profitable business models, most large companies are executing on an already successful business model that is generating revenues and profits. This means that large companies are faced with the perennial question of how to execute or exploit the currently successful business model, while simultaneously searching or exploring for new opportunities for future growth. This has always been a challenge for established companies, but the pace of change in the modern economy now makes these challenges even more pressing. 

So rather than acting like startups, we strongly feel that large companies need to build innovation ecosystems. These ecosystems will contain core products currently generating revenues; and innovative new products that are aimed at the future. The company has to be world class at managing both types of products and using the right methods for innovation. This means that companies need to understand the elements that are involved in creating an innovation ecosystem; from the strategic lens, to incremental investing and day to day product development best practices. 

The goal of this book is to provide frameworks, methods and tools that help established companies to build innovation ecosystems. In Part I of the book, we present the principles that underlie the creation of a corporate startup innovation ecosystem. In Part II, we present how this ecosystem can be brought to life through various methods, tools, guides and case studies. Our hope is that our book can help established companies adapt and thrive in the modern economy.

Outline

INTRODUCTION: INNOVATION PARADOX

We are living in an era where innovation is imperative. Historically, managers have been taught that business strategy is about finding a competitive advantage in a profitable industry; and protecting this advantage for as long as possible. Innovation was often treated as a sideshow to the core business which was the profit generating machine. Using case studies, this chapter sets the contemporary context in which established companies have to be world class at both running their core business and coming up with innovative new products. 

Part I: Ecosystem

CHAPTER 1: INNOVATION ECOSYSTEM

This chapter sets the context for the framework and principles that will be presented throughout the book. We define innovation and also set out our thoughts about how innovation can be done within large organizations. We end the chapter by presenting our model for innovation ecosystems. 

CHAPTER 2: INNOVATION THESIS

All innovation projects must be aligned with the overall strategic goals of the organization. This is important when it comes to later transitioning innovation projects into the core product portfolio. Just like venture capitalists have investment theses, every large company must have an innovation thesis which clearly sets out the strategic objectives of innovation. The thesis also sets the boundaries concerning which innovation projects the company will or will not consider.

CHAPTER 3: INNOVATION PORTFOLIO

To achieve its strategic goals, a large company should set itself up as a portfolio of products and services. This portfolio should contain products that cover the whole spectrum of innovation; core, adjacent and transformational. The goal is to have a balanced portfolio in which the company is managing various business models that are at different stages of their life. This balanced portfolio will be an expression of the company's innovation thesis.

CHAPTER 4: INNOVATION FRAMEWORK 

The innovation portfolio must be managed via an innovation framework. Based on the ideas of innovation and startup thought leaders, we believe that innovation moves through the following stages; creating ideas, testing ideas and scaling ideas. Every now and again, a company may decide to refresh the business models of existing products through renewing ideas. Having an innovation framework is critical for the company. Not only does it provide a unifying language, it also provides a lens for managing investments and product development.

CHAPTER 5: INNOVATION ACCOUNTING

With our innovation framework in place, we need to make sure we are using the right tools to measure success. Traditional accounting methods are great for managing core products. However, when managing innovation a different set of tools are needed. In this chapter, we propose that companies should use the right investment management principles depending on the innovation stages of their products. Companies also need the right  tools and metrics to manage and track the success of their innovation business units.  

Part II:  Practice
CHAPTER 6: CREATING IDEAS 

This chapters focuses on how a company can create an environment in which great ideas percolate. It is about inspiring innovation through serendipity. The organization needs to build cross-functional teams with various skills and knowledge. It must allow opportunities for interaction, networking and co-working among the various functions within the business. It is also important to create a process for capturing and tracking the sparks of creative ideas.

CHAPTER 7: TESTING IDEAS

The sparks generated by serendipity must be transformed into successful products. The company has to create and support the capacity to innovate. They must give teams and individuals sufficient time, freedom and resources to work on new ideas. The company has to create a culture that is tolerant and rewarding of failure during the early stages of innovation. Teams must also receive sufficient support, training and coaching on the best practices for innovation. While working on their ideas, teams must use startup methods; making sure they building products people want and validating business models for sustainable profitability.

CHAPTER 8: SCALING IDEAS

The success of every innovative product depends on the capacity of the company to take it to scale and grow customer numbers, revenues and profits. After validating their business models, this transition to growth has to be managed well. A lot of companies struggle with this transition even with the startups that they acquire. In this chapter, we provide the tools to manage the transition from searching to executing well, through using the right people, management processes and KPIs. 

CHAPTER 9: RENEWING IDEAS

The innovation process does not come to an end once you have achieved scale. We believe that innovation within the enterprise should be an ongoing process. Even with successful products, enterprise executives must continually scan the business environment for important changes that have serious implications for their current business model. This chapter discusses the methods for renewing and refreshing currently successful business models. 

CHAPTER 10: START TODAY

The final chapter of the our book, provides a guide on how any company can institute the principles of the corporate startup straight away. Starting with minimum viable innovation, any company can choose from a toolbox of different approaches which it can systematically implement. These approaches, as well as their strengths and weakness are described in this chapter.

Audience

The publication of the Lean Startup created a global movement that is interested in startup methods and tools. As this movement has grown, management in medium sized and large established companies have wondered how these methods could be applied in their context. Innovation has become strategically important, with the vast majority of established companies feeling pressure to innovate. 

As these managers are looking for solutions, there are not many books that are specifically written for them. Our book specifically tackles how startup methods such as design thinking, customer development, business model design, experimentation and iteration can be applied to medium sized and large company contexts. We connect all these startup methods to strategy and investment management as well. 

As such, our audience are executives and managers that are interested in innovation or are managing innovation projects within their companies. Our primary audience are people working in innovation labs, RD;, product managers, chief innovation officers and other executives managing innovation. Our secondary audience are folks that are not in management positions, but would like to use startup methods within their companies.  A final audience will be lean startup enthusiasts that are keen to learn how these methods can be applied in large corporates. 

The success of the lean startup movement, provides a great platform for this book to build on. Beyond startups, we feel that there is a much bigger audience of innovators working in established companies across the globe.

Promotion

Both Tendayi Viki and Dan Toma are well regarded within the lean startup and corporate innovation space.  Tendayi Viki has over 10 400 followers on Twitter. He and Dan also have a successful blog publication on Medium, The Corporate Startup,  with over 3000 followers. Tendayi Viki also has over 2000 connections and followers on Linkedin. We have been writing posts almost every week through these channels which have been well received. These channels will all be used to promote the book.

A bigger reflection of our reputation is the fact that we are often requested to speak at innovation and startup conferences (e.g. LeanConf, Lean Event, Intrapreneurship etc) and to run internal workshops for large companies. We have several of these events coming up and we will use these as a platform to promote the book.

Competition

1. The Lean Startup by Eric Ries: This is an important book that started the movement that we are leveraging for this book. The book is a foundational text that focuses on the methods of applying lean within startups. It is a complementary book that focuses mostly on startups rather than large companies. Our book focuses on how these methods can be used within a corporate environment.

2. Running Lean by Ash Maurya: This is a great book that provides a detailed step by step guide on how to use lean startup methods in practice. It is also a complementary book that focuses mostly on startups rather than large companies.  The second part of our book provides a relatively detailed guide but with an exclusive focus on using these methods in corporate environments.

3. The Innovator's Dilemma by Clayton Christensen: This is a best selling book that we make reference to throughout our book. It is a foundational text that has informed a lot of the thinking in this space. This book, and its follow-up books such as The Innovator's Solution, are complementary books to our book as they focus mainly on a disruptive innovation. However, our book focuses on other types of innovation as well as providing an integrated methodology for managing these.

4. Lean Enterprise by Trevor Owens and Obie Fernandez: This could be regarded as a competitor book. However, the title is misleading as the whole books focuses exclusively on one method, the innovation colony. They recommend that rather than try to build innovation capacity within the company, management should set up external colonies where innovation happens.  Our book proposes the opposite of this and provides tools for companies to build an internal innovation capacity. 

5. Lean Enterprise by Barry O'Reilly, Jez Humble and Joanne Molesky: This is a competitor book that is much more similar to our book in terms of its focus on building an internal capacity for innovation. However, this book focuses mostly on software development at scale. It does not tackle the main topic of our book which is how companies can build an innovation ecosystem. 

6. The Innovator's Method by Nathan Furr and Jeff Dyer: This book is both a competitor and a complementary text. It is a great book that goes into the details of how large companies can apply lean startup methods to their product development process. However, it also does not cover how a company can build an innovation ecosystem. For example, the book does not cover innovation portfolios or innovation accounting which are key chapters in our book. 
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There are several other books on the shelves and coming up such as Corporate Effectuation by Thomas Blekman, Sense and Respond by Jeff Gothelf Josh Seiden, Scaling Lean by Ash Maurya, and Innovation Wars by Scott Bales. All of these are great books that tackle specific aspects of innovation. However, our book will be the first book to take an ecosystems approach to innovation in large companies. We connect ideation and great product development to innovation strategy and investment governance. Our framework provides a platform for companies to take a wholistic approach to innovation rather than managing it in isolated pockets.