The Best Description Of Corporate Innovation I’ve Ever Read

Defining a Day 1 Company

In Jeff Bezos’s most recent letter to shareholders he goes into great detail about being a Day 1 company (If you have not read it please take 5 minutes and do so). It quickly becomes clear how import speed of action, or as he calls it “High velocity decision making” is to Amazon’s success. As he weaves this trait throughout his letter a broader theme begins to emerge. He is outlining not just his definition of a Day 1 company but what should be the mission statement of nearly every “Innovation Team” at large organizations. The ability to act with pace is not just how you stay a Day 1 company but also the playbook for how to rediscover your Day 1 roots.

As I migrate from corporate venture capital to an innovation and product role, I have been working on ways to best leverage those skills. Not just insights into emerging trends but the ability to move fast. In VC, if you can’t make a decision with 70% of the information needed you are going to miss out or most likely never invest. High risk and high reward. The goal is to offset that risk by knowing as much as possible about the market, the customer, and the problem that particular startup was looking to serve.

For Bezos, the customer is the core focus and the customer demands something better at all times. To make them happy you must be able to act with pace. Innovation teams need to enable this trait.

Obsessive customer focus is by far the most protective of Day 1 vitality.

The Process Trap

He goes on to emphasize how organizations fall into the trap of measuring success based on if the process was followed correctly rather than if the outcome was a success.

The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp. It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.”

This statement could not be more timely as we analyze the fallout from the recent United Airlines disaster. The process was followed but the outcome was a disaster. In this instance the junior leader Bezos mentions was the United Airlines CEO… United is a Day 2 company.

In Bezos’s view, high velocity decision making can and will be depressed by a rigid process. He demands creativity, trial and error, and outside the box thinking, which a process can inadvertently suppress. Or at a minimum act as a crutch within a large organization.

Innovation teams should be actively working to eliminate and streamline processes. A process is developed to avoid mistakes where an innovation team should embrace mistakes and learn from them. A process is almost always an excuse for why something did not happen rather than a means to make something happen.

If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.

Embrace External Trends

For many companies, embracing trends is having a Forrester subscription, or emailing around the latest Gartner Hype Cycle. Few have the ability to act on these trends and many will move to defend against them.

If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.

This is only possible if you have a culture of speed and of pace. Analysis paralysis is real. For many companies “no decision” is the decision. Often it is easier to let something die by committee than it is to force something through.

This is where most innovation teams tend to focus. However, they often struggle to gain momentum. They are hindered by the processes defined above and tend to focus exclusively on bringing a new product to market rather than utilizing new technologies for internal improvement. For many innovation teams this may be the better path. Can you make your organization more efficient through internal innovation? What processes and tasks can be removed or made better? How can you help your org go from a Day 2 company to a Day 1 company?

We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it.

Look Inward

Goal 1 should be to prove that you can act with speed. Goal 2 should be to enable the org to act with speed. When there is inevitable push-back to Goal 2, simply point to the success of Goal 1.

Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations.

Build not just innovative new products but build tools that can remove processes that make the organization as a whole more efficient. Ask why things take so long to develop or why decisions never got made and come up with something better. Innovation is as much about bringing new and innovative products to the market as it is about innovating the way the company operates.