Our businesses are designed to reject new ideas for all of the right reasons—often it makes no sense to throw sand in the gears of the well-oiled machines we call companies. Yet to remain competitive, to grow revenue in a substantial way, we MUST do better. That starts with recognizing that our best path to organic growth is the creative ideas that are trapped within our companies with little hope of escape.
How does innovation get trapped within our companies in the first place? Most companies, once they have a proven business model, most correctly identify their first priority as optimization of that business model. This entails the creation of processes by which employees can ensure effective management of the business. After effectively scaling, when companies begin to experience a slowdown in growth, the natural remedy is to turn to innovation. What happens next is an unfortunate, but all-too-common, error: Companies employ the same processes they have been using to optimize the existing business to evaluate the innovative business opportunity. The problem? The most promising ideas, viewed through the lens of optimization, usually look uncertain at best—if not outright foolish. there is a movement emerging, even among today’s most staid companies, to adopt a new set of principles for product launches with a high level of perceived risk. This movement rips a page from the startup playbook, looking back to the entrepreneurial roots of the company itself. This movement values speed of learning over confidentiality; starting small over building for audacious scale; running sequential market tests over intense upfront financial analyses. Designed to reduce the risky downsides of innovation at every step, companies who adopt this new set of values prioritize real market feedback on products or services sold over focus groups and powerpoint decks, which consistently fail to produce an objective assessment of new opportunities.
You CAN create an escape valve for creative products. Back at GE Appliances, Alan and his team understood that, at the end of the day, the only way to truly convince the business that “nugget ice” was worth the investment was to prove that consumers were willing to pay a significant price premium for the feature. So GE Appliances, through its FirstBuild product incubator, turned around a new prototype and a product video in 90 days, offering nugget ice enthusiasts the chance to buy a countertop version of the product on Indiegogo (a crowdfunding platform like Kickstarter) at $500 a pop—$400 more than the price of standard ice makers on Amazon. Within 30 days, the product idea had garnered nearly $3 million in pre-sales, convincing the GE Appliances team to invest in the development of nugget ice products while launching one of many highly profitable new product lines.
True, these results may not be typical. Many new ideas require years of market development to reach the million dollar mark. Yet even if the same project had resulted in no sales whatsoever, the outcome would have been considered a success: a clear signal, from the actual market, that priorities should be placed elsewhere. FirstBuild has since launched dozens of products for GE Appliances in a rapid, risk-reduced way—demonstrating that the scrappy tactics born in garages with startups can become a potent tool in the innovation holster of big enterprises.
If you are ready to rev up your innovation engine and launch your team’s creative products, reach out to me at email@example.com. Giddy’s team of intrapreneurs started GE’s FirstBuild, and we help companies like yours launch new products and services in 90 days or less.