Steve Blank on Maintaining a Culture of Innovation, Part II

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OV: So what does a growing business need to do to make sure it fosters a culture of continuous innovation?

steveblankSB: The biggest mistake is thinking that the title CEO means “Chief Execution Officer.” Yes, execution and efficiency are keys to profitability, but focusing just on those metrics is a Faustian bargain with Wall Street.

It’s not much different than what a startup does to foster that culture. At its core, corporate innovation has three components:

Unfortunately for some companies, innovation — particularly the first and third components — is too dependent on a founding CEO or a well-liked leader. When that leader leaves the company or passes away, innovation usually leaves with them. Polaroid and Disney are great examples of that. Disney almost tanked when Walt Disney died.

Growing companies must find a way to sew a culture of innovation into the essence of their business. That way, it’s not dependent on one person or a small group of people. It’s supported by the entire organization, from entry-level employees and managers, to senior executives and board members.

OV: You’ve described the inability of some companies to “grow up” and get to that point as “Peter Pan Syndrome”. Can you explain what you mean?

SB: One of the ironies of being a startup is that when you are small no one can put you out of business but you. Paradoxically, as your revenues and market share increase the risk of competitors damaging your company increases.

Often, the cause is the inability to grow the startup past the worldview of its founders.

Once larger competitors begin discovering your market, your company really needs to grow up – not in a way that changes your entire company culture, but enough to realize that the way things actually operate and the way you believe they should operate aren’t always the same thing.

You’ve got to be able to adapt and develop a strategy that lets you compete.

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