This is the fourth installment of our ‘EXCUBATION explained’ series, covering the basic concept and our core set of excubation rules one by one. We suggest you start with part 1 for the full picture.

As a recap, we are covering the seven rules of corporate entrepreneurship:

Rule #1: Separate innovation from execution

Rule #2: Attract entrepreneurial talent

Rule #3: Facilitate innovation flow

Rule #4: Manage innovation portfolio

Rule #5: Inspire employees in the core business

Rule #6: Educate employees

Rule #7: Support idea flow

RULE #3: FACILITATE INNOVATION FLOW

Having the right ideas and right teams are certainly crucial success criteria for a corporate startup. But without the right and effective process and approach to actually deliver innovation and the right support and resources from the execution organization, this endeavour can quickly end as most of today’s startup endeavours end.

We believe for a corporate entrepreneurship approach to be successful, the innovation flow and the innovation development process need to be thoroughly facilitated, not just left to its own fate with some coaching along the way. We see it just too often that startups or corporate entrepreneurship programs define start and end point of an innovation process, but are not clear and disciplined enough on the process, go/no-go milestones, activities and deliverables inbetween. Thus, the third excubation rule “Facilitate Innovation Flow” addresses this critical element and defines best practices for running the innovation process within a corporate innovation company, sufficiently facilitated by the execution organization.

The objective of this rule is to enable the innovation company and the startup projects therein to be more effective than greenfield startups outside of a corporate and generate a competitive advantage via providing ideal conditions for the startup to move faster and more effectively than others.
Key questions that need to be addressed by both the execution and innovation company:

• How can innovation teams be supported most effectively to enable a quick development and validation of their business models?
• How can mentoring and support models be defined along all stages of the innovation process (we mean real mentoring and coaching, not just a low touch model with once a week check-in points)?
• How can fast track mechanisms be established for fast decision making, access to core business strengths, access to networks, access to sales/delivery resources and empowerment of corporate entrepreneurs?
• How can time to market ultimately be reduced and competitiveness of innovation development be maximited?

An effective facilitation of the innovation flow happens on two levels:

• The Macro level: Basic enablement factors for the innovation company as a whole and all startup activities therein, driven by the execution company
• The Micro level: Specific execution support and effective process for individual corporate innovations and startups within the innovation company

THE MACRO LEVEL: Support from the execution company

Facilitating the innovation flow on the macro level is all about accelerating access to resources which the innovation company and individual startup teams need in order to be successful. The execution company needs to remove roadblocks and eliminate challenges, that are not directly related to the business model itself, such as:

• Access to employees, materials, experts, technologies, customers and intellectual property
• Access to support functions like HR, finance, legal for basic support of the new ventures such that they don’t need to source these externally
• Freedom to decide how to use budgets, branding, company know-how and customer relationships by easing typical regulations and alignment requirements
• Mentoring from senior players in the corporate that have a vested interest in the startup to be successful and provide real coaching along dimensions like networking, tech and management know-how, access to resources all the way to techniques like lean startup or design thinking

The startup team (i.e. CEO, CSO, CIO, etc.) of individual startups need to be supported by different roles, convering the above topics:

A potential pragmatic way to establish this is to assign individual people within the execution company’s support functions HR, finance, legal departments to quickly and pragmatically support the new ventures in an “innovation ambassador” role within these departments. For example: Defining a contract with a new customer might require a few hours support from a lawyer who typically needs up to a few weeks notice to spend some time. We would need a lawyer right away and someone who understands the startup way of doing things. The innovation ambassador would be a dedicated lawyer who only/primarily supports new ventures.

Based on this, a growing support system within the execution company will emerge, knowing, understanding and supporting the new venture activities of the innovation company and facilitating the innovation flow in a best possible way. Over time, a learning effect will emerge in addition, making this support system even more effective and paving the way for educating employees in the execution company with regards to innovative and entrepreneurial thinking.

To complement the macro level support, the execution company should provide access to a broader network of entrepreneurs, startups, investors/ venture capitalists, communities, academics, other corporates and build an ecosystem that fosters effective innovation development.

THE MICRO LEVEL: Effective process within the innovation company

On the micro level, a pragmatic, quick and output-oriented process to develop individual innovations and business models is required. This is significantly different from existing product development processes within corporates and follows a few key paradigms, which at first sight are straightforward, but are really hard to implement in a corporate setup:

• Fail fast, fail cheap: Focus on most critical success factors (e.g. relevance of addressed problem for your customer segments; market size profitability) first and try to validate them, kill quickly if they are not met, no holy cows
• Trial-and-error: Try things out in practice via preto-/prototypes and real customer interactions, not theoretically for 12 months before first front line contact
• Fake it before you make it: Validate as much as possible without spending lots of time and money on developing working solutions – use pretotypes instead
• What’s good enough: Don’t strive for 100%, build 80% with 20% of the time
• Two steps forward – one back: iteratively develop core elements of your value proposition in direct interaction with your early adopters – there is no linear way to innovation!
• Start qualitative, end quantitative: start with a handful of early adopters to qualitatively validate your problem/solution fit before building and testing something on a quantitative basis

Excubate has summarized our experience with building startups and running projects for large corporates into an effective corporate startup development process, the “Excubate startup campus” approach.  It combines the need (and capability) of a corporate to follow a clearly defined process with plannable deliverables with the agile, creative and less plannable startup approach and leverages best elements of both worlds. The process follows a clear set of development stages (three sprints) along a clearly defined set of deliverables (key questions) across – typically – a 12 weeks timeframe. Each sprint leverages established creative, agile startup methodologies (design thinking, lean startup, business model canvas, personas, etc.) effectively and is designed to drive the business model (represented by an evolving business model canvas) a significant step forward. At the same time, each sprint provides an option to stop the overall process if the team realizes must-have-criteria (such as customer willingness to pay, sufficient market size or technical feasibility) are not longer fulfilled. The picture below highlights the three major sprints within the startup campus process, including preparation and scale-up phases before and after.

Organizationally, we typically run this process in a campus setting, with the future C-level startup team and the most critical support resources spending at least 60% of their time (e.g. Tuesday through Thursday each week) on the ground in the “startup campus”, a dedicated offsite location, fitted out with workshop equipment. During this phase they will be part of multiple sub-teams, covering key elements of the business model, and coached through a series of orchestrated workshops every day to deliver on the requirements in each sprint. For example, the 3-people market team, including the future “chief product officer (CPO)” spends two hours on preparing customer interviews before the CPO together with the future CIO (both are the prototype team) run a 2 hour workshop on cornerstones of the prototype. Mondays and Fridays can either be used for line job activities or additional startup work/ desk work that doesn’t require intense team interaction. In this newsletter we can provide only a short glimpse into the excubate startup campus process and suggest you get in touch for a more thorough discussion.

Excubate helps clients of different sizes across all kinds of industries create excubation organizations by specifying, implementing and piloting them on both levels: The macro and the micro level. To make this more tangible, two case studies highlight typical approaches and outcomes:

• Digital acceleration program to establish a repeatable startup development process for a life sciences company
• Excubation of a digital innovation development unit and facilitation approach for a traditional transportation company

CASE STUDY 1: Digital Acceleration Program

Our client, a global leader in life sciences, decided to move more strongly into developing digital business models and has set up a unit tasked to help develop digital businesses based off of business ideas from current business units. To effectively and recurringly develop digital business model of varying maturity in a repeatable model, excubate helped specify and pilot a tailored version of the excubate startup campus process.
Three main adjustments were made

• Extension of the process in the front and the back end to fit with existing corporate processes for idea generation and scale-up & execution
• Modularization of the process for different needs of different project archetypes (which have been classified by different criteria such as maturity, complexity and business impact)
• Complementation of each process step by tools, role description and KPIs and agile partnering approach

Part of the results created for the client were detailed descriptions of the daily activities and tasks along each process steps, including key questions that need to be answered, methods (e.g. personas, empathy maps, interviews, MVP types) to be applied and deliverables to be tied into the business model canvas.
After the initial definition of the process and methodology, a pilot phase has been started to run selected business ideas across the spectrum of archetypes through the blueprint process and continuously finetune it.

CASE STUDY 2: Excubation of a Digital Development Unit – Facilitation through Execution Company

Our client, a transportation company with typical innovation cycles in the range of decades realized the need for digitizing their business model and had set up a small team to outline an approach and future organizational model for this endeavour. Given the lack of innovation experience, capabilities and capacities in the past, the digital innovation approach needed to be built end-to-end, including the organizational setup, processes and team as well as a way forward to implement within a reasonable timeframe. The need was to define cornerstones of the macro level of “facilitate innovation flow”.
Excubate started off with a series of client workshops to define requirements, vision and role of the future innovation organization and identify bottlenecks in the current setup, such as missing internal capabilities in digital technologies and startup methodologies to get clarity on what kind of facilitation will be needed. Future activities of the target innovation organization, relative to the existing execution organization and external partners were defined along a standard innovation process model (discovery, opportunity framing, ideation, validation, generation & launch/scale), including a clear definition of which support and facilitation would be needed from the execution company as well as from external partners. Three of the seven Excubate rules of corporate entrepreneurship were prioritized for the client situation and defined for the future state: Attract entrepreneurial talent (rule #2), facilitate innovation flow (#3) and manage innovation portfolio (#4) and given the very early stage starting point, rule #2 was most focused on to ensure sufficient talent inflow into the innovation organization as key part of the execution company’s facilitation activities. This rule was also the one with most change requirements, given incentives, working modes and roles had to be defined structurally very different from the existing, very traditional organization, to facilitate the build-up of the required talent base. Outcome of this initial part of the program was a clear target picture of the future digital innovation organization, including an initial implementation plan that has then been aligned with the management team for sign-off and funding.

Excubate has experience along the above lines in each area and typically starts off with a workshop series to help you define your individual approach to facilitating the innovation flow. We determine the status quo along the lines highlighted below and define an action plan to build the right macro and micro setup.

We are pleased to discuss the above topics in more detail with you, share more of our experience and spend time on the phone or in person to help you run successful corporate entrepreneurship initiatives!

Please get in touch with us:

excubate® corporate startups
Dr. Markus Anding and Tammo Ganders, MBA
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