Can giants be taught to dance?
Ricardo Dos Santos, who ran a corporate entrepreneurship program for wireless networking giant Qualcomm, recently shared some of the lessons he learned in getting a giant to dance.
“I earnestly believe that large corporations should emulate ‘Lean startups’ — business model design, customer development and agile engineering,” Dos Santos writes at Steve Blank’s website.
Dos Santos helped launch Qualcomm’s corporate entrepreneurship program with the idea that achieving breakthrough innovation meant more than a suggestion box; it sought to encourage employees to think and act like entrepreneurs, and their managers as enablers.
The challenge was to provide education, training and encouragement to employees across all business units to “turn their ideas into fundable experiments,” as well as take ownership of their ideas. “In corporations, there is no magic innovation leprechaun at the end of the rainbow that turns their unsolicited suggestions into pots of gold,” he adds. On top of that, employees needed to be able to find the time to pursue and fight to push new ideas through, while holding down their day jobs.
The solution was a program called VentureFest, which was staged as a competition in which employees were encouraged to form into teams to submit their ideas. The effort would launch an idea management system that would “collect a large number of competing entries then ultimately down-selected to the top 10-20 concepts with the most breakthrough potential, according to peer and expert reviews.”
Once the ideas were developed and approved, the employees would take part in a three-month “bootcamp” that would prepare the idea creators to fight the internal funding battle to get their innovations into the corporate flow. The bootcamp requested that participants do what entrepreneurs do before requesting seed funding… get out of the building to talk to customers, build prototypes and generate partner interest.”
Finally, the teams would then pitch their ideas to “the C-level executive team, which determined the competition winners, prize money and directed other promising teams to target business unit sponsors.”
The program attracted 82 submissions in the first year, to more than 500 in its fifth and final year, Dos Santos reports. “Several ideas were fully or partially implemented — with hundreds of millions of dollars invested — with a couple of genuine breakthrough successes, and hundreds of related patents were filed. Employees reported noticeable gains in entrepreneurial skills and attitude, and the CEO seemed happy with how his baby was being raised.”
Dos Santos says Qualcomm gained the tools to build successful corporate entrepreneurship programs. There were also a number of lessons he learned along the way as well:
- Cast a wide net, and get as many top executives involved as possible: “We should have recruited high-level executive champions for the program besides the CEO,” says Dos Santos. “They could have helped us anticipate and solve organizational challenges and agree on how we planned to manage the risks.”
- Introduce a structure that can digest new innovations: “We unknowingly set up an organizational conflict on day one. The VentureFest program didn’t fit smoothly with the business units’ readiness for dealing with unexpected ‘bottoms up’ innovation, in a quarterly-centric, execution environment.” In addition, Dos Santos says, there was confusion and uncertainty about which business units would be evaluating or sponsoring the new ideas coming out of the bootcamps.
- Don’t let the effort be a threat to existing R&D departments: “Our largest customer should have been the R&D units, but the reality was that we never sold them that the company could benefit by exploring multiple innovation models to reduce the risks of disruption. We had taken this for granted and met resistance we were unprepared to handle.”
- Find long-term homes for the new entrepreneurial ventures: Dos Santos reports that “Qualcomm’s existing innovation model – wireless products were created in the R&D lab and then handed over to existing business units for commercialization – was wildly successful in the existing wireless and mobile space.” However, VentureFest itself was not integral to the company’s success, since it proposed new ventures that were “sometimes outside the wireless realm,” and stressed new business models. As a result, many of the new ideas “ran counter to the company’s existing R&D, lab-to-market model that built on top of our internally generated intellectual property. The result was that we couldn’t find internal homes for what would have been great projects or spin outs.”
(Photo credit: U.S. Bureau of Labor Statistics, Occupational Outlook Handbook.)