Sohrab: Hello, and welcome to our next episode of the "Agile Insights Conversation." Today I'm hosting a good friend, Tendayi Viki. He's based out of Zimbabwe. And Tendayi and I met four years ago, before COVID, at a Strategyzer Bootcamp, and I was fascinated by the session he ran at the boot camp, the conversations we had around brunch. And ever since then, we've stayed in touch, and I was very delighted to host him for today's conversation. So, Tendayi, welcome to the show.
Tendayi: Yeah, thank you for having me, man. Really appreciate. Yeah, and it was great to hang out at the boot camp, back when people were allowed to get together. Now that boot camp is completely virtual, right? It's a virtual boot camp now.
Sohrab: Yeah, I can imagine. And, I mean, people have seen that it can work out virtual, but I'd still, I mean, if I could choose, I probably would want that boot camp to be onsite, in person again, because...
Sohrab: ...I think in the virtual space, you and I wouldn't have connected the way we connected. It was like, those lunches that we had, and so on, and so forth.
Tendayi: Yeah. [crosstalk 00:01:01]
Sohrab: Now, Tendayi, as I usually do at the start of the show, I would like to give you the stage, to briefly present what you've done so far, who you are. I know you are the author of many books, so walk us through that.
Tendayi: Yeah. So, yeah, Tendayi Viki. At the moment, associate partner at Strategyzer. So, I work with Alex Osterwalder and team there, and we help large companies implement their innovation systems, processes, culture. We coach teams to work on their innovation projects. I've also written three books, "The Corporate Startup," which has won several awards. Then I wrote "The Lean Product Lifecycle," which is based off work that I did at Pearson, working with the team there to implement their product lifecycle to the framework. That actually won a couple of awards, that framework too, in terms of, like, best innovation process, best innovation culture. And then, my latest book, "Pirates In The Navy," which is a play on Steve Jobs, "It's more fun to be a pirate than to join the navy," but if you're thinking about being a corporate innovator, then you kind of have to be a pirate in the navy to make that work. And so, I kind of think of the chief innovation officer, the innovation lead, the innovation teams inside large organizations as my tribe. Those are my people. And so, that's who I try and serve in the work that I do, and in the thinking and writing, and yeah, and workshops and consulting, etc.
Sohrab: Yeah. And over the past years, you have worked with companies, if I'm informed correctly, out of many different industries, like pharmaceuticals, and so on, and so forth. And throughout this conversation, hopefully, we can get some of those insights from you. And I know you have NDAs with many of those companies, so the people that are watching the show, don't be mad if we cannot name the company, but we'll definitely name the industry, because sometimes the challenges are very industry-specific. In other cases, many organizations are facing the same challenges.
So, Tendayi, as you mentioned, the three books that you wrote, "The Lean Product Lifecycle," "The Corporate Startup," and then finally, "Pirates In The Navy," which was also illustrated by a shared friend of ours, Holger Nils Pohl. All of them are around the topic of corporate innovation. You yourself worked at Pearson at some point, were part of the internal innovation team, and what made you focus on this particular topic? Because so many other people in this space talk about innovation holistically, or in general, or sometimes even with a clear focus on startups, but corporate innovation is different from that. What made you focus on that?
Tendayi: Yeah, it's interesting, right? It's not something I intended. It was more by accident. It was never a deliberate choice that I was gonna work on corporate innovation. I thought I was gonna be advising startup accelerators, and that was my intended career. Like, I started working with... Because I'm a former academic, right? I used to teach at university. And then I got a fellowship to go work at Stanford in Silicon Valley for a while. And it was in 2009, 2010, around the time "The Lean Startup" book was about to come out, the "Business Model Generation" book had just come out, by Alex Osterwalder, Steve Blank was running classes at Stanford, and I used to go to all those classes, and I used to hang out at the Facebook accelerator, where...Lyft was actually part of that Facebook accelerator, the ride-sharing company. And back then they were called Zimride.
And I remember approaching the founder, going, "Why do you call your company Zimride?" And he goes, "Because I was in Zimbabwe," which is where I'm from, "and I saw how, like, there's these cars that pick up people along the way, these taxis that pick up people along the way. People share the ride all the way into the city," and so he named the company Zimride. They then changed it to Lyft later. But again, it was interesting just to see those themes sort of show up. So, that was, like, my first exposure to startup culture, lean startup methodologies, etc. And then I just started hanging out at startup accelerators. That's where I used to spend most of my time, and teach, hang out, do lean startup methods, talk about lean startup. I did a lot of work at Rockstart Accelerator, which is in Amsterdam, and I would support Lean Startup Machine. Like, that's what I used to do.
And then at one of those times when I was talking about lean startup, there was a character in the audience by the name of Craig Strong, and Craig Strong was part of the Pearson's innovation team, where they were trying to set up innovation practices at Pearson, and they wanted to use lean startup and Agile. So, he invited me, in the first instance, just to give a keynote at Pearson, on lean startup. And that's what I did. I went over there and I gave a keynote. And in the audience of that keynote was Sonja Kresojevic, who was leading that innovation team. And then, she was like, "Well, come work with us for a little while. Just give us advice on, like, what we're thinking about doing." And then, like, it turned out we collaborated so well that I ended up joining them. I took a sabbatical from my university and I joined them, and ended up quitting my job and joining Pearson. And then I ended up working there for, like, five years, helping implement this sort of process.
But because I come from an academic background, everything we did there, I would think about how is this repeatable elsewhere? Like, is there, like, a
pattern here in there? And that's what led to "The Corporate Startup" book, right, which I was working on with Dan Toma, who was in a similar kind of situation at Deutsche Telekom, where he was working on innovation too.
And so, because I enjoyed the work so much... I didn't go looking for it. I ended up enjoying it so much at Pearson, then advising other companies, did some work for Standard Bank in South Africa... Because I enjoyed it so much, that's how the choice was made, to then go deeper into this practice, rather than just skim the surface and then go do something else. Yeah.
Sohrab: Okay. So, more or less by accident, you stumbled into Pearson. [00:07:10]
Sohrab: Now, when you joined Pearson, what was the challenge that they wanted to solve? What kind of pattern did you recognize there, as a scientist, basically, as an academic, that you later also saw at many other organizations?
Tendayi: Yeah. So, at first, when I first joined, I was confused. Like, I was completely lost. Like, I didn't quite get, like, where I was. We were just figuring it out. But what we were trying to solve for was that the way companies make investment decisions, and plan to execute on innovations, is exactly the same methodology and toolbox they use to run their core business. So, if you're working on something new, you have to write a 30-page business case, and then convince the company to give you millions of dollars, and then you go off and you execute against the roadmap that you stated. And what we were saying was, is there a way to...? What do you call it when you're sticking something in front of something, like, a...? To rig, or gerrymander, or, like, I don't know, like, stick at the front of that, a testing process, so that before you have to make the big investment decision, is there a way of, like, learning what customers need, creating prototypes, testing those prototypes, learning whether the business model has got legs, and then you can double down investment.
So, we were, like, figuring that out, like, what would that look like? And we didn't even have, at Pearson, a distinct "innovation unit." So, what we were doing was we were convincing, business unit by business unit by business unit, to take up this methodology we were calling the lean product lifecycle. And the reason we called it the product lifecycle was because we had idea, explore, validate, and then we would cut it off, and then we'd go, now you can go into
growth, which is what you do after you launch, sustaining, and retiring. So, the growth, sustain, retire is what the core business does anyway, and so we had added this left side to the lifecycle, to see whether or not this was actually gonna work. And because there was no innovation function, we were working quite hard to convince already-existing decision-making bodies and leadership and product teams to adopt this methodology and add this new toolbox to the way that they were already working. And it was hard, but we had quite a bit of success, you know, to the extent that we won a couple of awards. And a couple of folks that used to work at Pearson that now work in other businesses keep calling me in to help them in those businesses, to bring the same methodology that we did at Pearson. So, it had some impact there, and that's where I figured out that kind of pattern recognition thing.
Sohrab: Yeah. Now, I mean, you started off with talking about investment decisions, right? And corporations usually looking at, "Oh, you need to present a business case, that needs to be a big one, and then we commit a high, like a huge amount of budget to that initiative. And because it's a huge amount of budget, we cannot do that many of this." Now, I remember from what you mentioned earlier, you used to hang out at the startup accelerators. Their approach is completely different, right? And I assume now, you were able to connect some of those things, and try to convince people within Pearson to adopt those principles of, like, investing smaller amounts to test ideas, like David Bland has a whole book around testing business ideas, reduce uncertainty around value, viability, etc. And then based on that, go into grow, sustain, and ultimately retire. Is that where you took a lot of inspiration from?
Tendayi: So, here's the funny thing about it, right? All these words you're using and all this language that you have now, that didn't exist eight, nine years ago when we were working on this. Like, there was no David Bland writing books on testing business ideas. The lean startup methodology was just emerging. We used to call them MVPs, right? But nobody really had a 44-experiment toolbox. The only thing we knew was people should be testing their ideas before they scale their ideas. And what we thought is, like, "Okay, well, what should they be testing?" Then we started coming up with these, like, thoughts around, "Well, they should be testing whether there's a customer need. They should be testing whether or not the price point resonates. They should be testing..." And it was all around the business model, the work that Alex had done. That's where we kind of got the inspiration from, to say what should they be testing?
And then of course, you're right, looking at the startup ecosystem gave us this idea that rather than make one big bet, you should be making incremental bets.
Something that Eric Ries later called metered funding. When we were at Pearson, four or five years earlier, we were just calling it incremental funding. We didn't have a language for it. And so, we then got into, like, thinking, "Okay, well, if we're saying incremental funding like startups, what does that look like from a finance standpoint?" And Sonja Kresojevic was leading the team. She was remarkable in the sense of her tenacity in never, like, bending, trying to make sure that we do the right things consistently. And she set up a process where we engaged with finance, the senior vice presidents of finance, the CFO, etc. And we came to this agreement that maybe in the early stages we should be spending £50,000 on customer discovery, and maybe another £150,000 on business model, prototype, product discovery, or whatever, and 0 in the idea stage. And that became the agreement that we made, that was then publicized company-wide through this.
And from that, I learned this principle that a corporate innovator cannot succeed if they don't collaborate quite closely with the key functions that are gonna be involved in making decisions about the innovation. How much money should it get? Should it be allowed to scale, etc.? To such an extent that there was an insight that Craig Strong, who was part of the team there, came up with this concept of creating what he called a knowledge network, where colleagues from different functions would make a contribution to the design of the product life cycle. So, legal and compliance, security. At Pearson, it was an education company, so we had, you know, a feasibility test around the quality of the pedagogy of the product. Like, does really deliver the value? So, there was a team there that was part of that. And so, how do we measure all those things as we develop the product, and what are the criteria for each one of those stages that we have in the product life cycle?
And that knowledge network, Craig ended up calling it Pi, was again, another principle that I took away from the experience to say, "Oh, okay, so you can bring all these people together as a corporate innovator. You don't have to hide away and run a guerilla movement, and try and duck and dive. You can actually really build a collaborative thing, which, you know, 8 years, 10 years later, Alex Osterwalder and I now call it the bridge to the core, the bridge between the innovation team and the core business. And it's an assessment that we have, and a tool, but again, it's all built up of these small experiences that we were having of having to solve problems as they emerged, and try to be as creative as possible in a corporate innovation practice that wasn't really well-developed at the time.
Sohrab: Yeah. Now, you also mentioned that you had to, like, convince a lot of people, because you didn't have a distinct innovation unit back then at Pearson.
And you used a lot of, like, "Hey, you already know growth, sustain, and retire, but we're adding something to that." How important was it, from your perspective, now in hindsight, that you use terminology and concepts that they were familiar with, and build on top of that?
Tendayi: Yes. No, absolutely. And that's something that I keep doing, right? So, recently we were working with a large American manufacturing company, their package manufacturer, and they had a really clear process, because they're an R&D-driven organization. So, they had a real clear process for, like, when something emerges from R&D and we think we wanna scale it, then we have a commercialization path, right? And the commercialization path is make the business case, create the roadmap, we approve the roadmap, you start executing on the roadmap, then we have checkpoints, and then we launch, right? And then we said, "Okay, you can keep that, but let's take that process that you already have, and all the things you want in the business case," because in the business case they wanted to know the customers, how much they're willing to pay. They wanted to know all this information before they would make the decision, but the team that was completing the business case was doing it all based on assumptions.
Sohrab: Yes, of course.
Tendayi: They never got a chance to go and find out. So, like, rather than just ask the questions on the final day, where you have to make decisions, is there a way of stretching out the decision-making process, so you're making smaller and smaller decisions? So, we take the same things you wanna ask, and we just say, "These three things are part of an earlier phase. These other five things are part of a later phase." And in the end, the team is building that final business case systematically over time, and you get a chance to stop things before they spend too much. So, we ended up showing them almost, like, a puzzle that ends up with this exact same business case that they want, but it's a validated business case, not a made-up business case. And then the team can move into roadmap execution. We didn't change much of that later process, because it's a validated business case.
And so, that really matters because I think one of the earliest mistakes I made in my career when I first started was to trash what people are doing, to say, "Nah, man, you need to be more like Facebook. Can't you see what Google is doing?" and all of these things. But actually, a lot of the processes that exist inside large organizations are usually there for a reason. There've been some experiences
that have led them to create those boundaries. And to honor that, and then create a process that collaborates well, is the best way for a corporate intrapreneur to really operate. Yeah.
Sohrab: Yeah. You mentioned, too, to honor that. I also agree. Like, you need to appreciate what these organizations have done in order to stay in business for that period of time, or growth, tremendously. Last week, I was working with a company that is 403 years old.
Sohrab: I mean, of course they can learn a lot from Amazon and Google and Apple, etc., but none of these companies that I just mentioned is 403 years old. So, this company has had to do a lot of things right in order to stay in business for such a long period of time, and stay in business as, like, an independent company. They're still family-owned, right? It's not like they've been passed from one company to the other and one different owner. Like, still family-owned, continuous growth over many decades, even centuries. So, I think appreciating what they've done and then building on top of that is really important.
And to add to the other thing that you mentioned, I used to do the same thing, right? Come in and use a lot of terminology that these companies were not familiar with. But what I realized is that just creates confusion. And if there is confusion, it's very difficult to take people along on this journey. And without buy-in from the key functions, and support from the key functions, as you mentioned, right, if you can't bridge this gap to the core, you're not gonna get very far, even if you have a distinct innovation unit.
Now, let's move from your time at Pearson and some of the patterns that you recognized back then, to the work that you've done in the past five, six, seven years, where you worked with many different organizations. And I want to now go back to the initial question. What are some of the biggest challenges that you have seen at organizations in various industries? And maybe if there is an industry-specific challenge, for example, in pharma or med tech, because they're so highly-regulated, I'd also like to explore that w ith you.
Tendayi: Yeah. So, there's a couple of things that are almost, like, first-principle philosophy, that are kinda universally true. And the first thing that's universally
true is that, like, companies don't run themselves, right? It's the people in the companies that run those companies. And it's how they view the world that impacts the decisions that they make. And then, of course, how they view the world is usually informed by the successes that they've had. It's very difficult to tell an individual who's had repeated success doing a particular thing that somewhere in that success hides their future failure. Like, that's a hard thing to wrap your head around. So, that's the first, like, almost, like, the human condition of complacency after success, you know? It's, you're kind of grappling with leaders that make 20 times my annual income in just their bonus, and I'm trying to convince them that they just made $10 million last year personally, and somehow they're looking at failure. It's a hard psychological leap to take people along to.
So, that's already, like, sitting there in the background. Feeding that is the existing rituals and practices that the company already has, that people are used to using to do their work. So, the cadence of meetings they have, how the board works, how investment decision-making is done, how products are created, how they deal with manufacturers, how they deal with their value chain, how legal and compliance is really paying attention, to make sure the brand doesn't get damaged or nobody sues them, or no customer gets hurt. Like, all of those things that they have in place. The sales director, who's running a large sales team and doesn't want anybody else to talk to customers but them, because they're protecting those relationships. And so, all of those things are there, in an institutional form, as practices that are reinforcing the human condition for never seeing failure hidden in the success. And so, when you're stepping into that environment, where the context is feeding the psychology, and you're trying to introduce a new tool, it is really difficult, right? It's a hard conversation to have.
And another thing that made it difficult in the early stages was that innovation people, or innovators, or intrapreneurs, we spoke a lot about mindset, and we really focused on convincing people to change their mindsets, without giving
them a toolbox with which to practice those mindset changes. And so, you're in there, and you do your business model workshop or whatever, and then when the person goes back to their company, they can't do any of those things because when they sit at their desk, the tools that they have to do the work are core business tools.
So, it's a mixture of all of those things, which ultimately results in this outcome, which is the third first principle, which is, the tools, practices, mindsets, behaviors for running the core business are what is being used to launch new products and services, because those are easy things to reach for and use. Easy to reach for and use. Which typically results in an organization never being able to really do breakthrough innovation which is too far away from their business
model, because if you have to write a business case, it starts to bring you back to the things you already know. So, most companies are really great at incremental innovations, kind of just tinkering around the edges of what they already do. And so, it's just, it's a self-reinforcing thing, right? Incremental innovations are much more likely to produce immediate results. Transformative innovations are 5-year, 10-year plays, with no revenue. And so, it's a completely different way of thinking.
And I just wanna wrap up by saying that if you're a corporate innovator and a corporate intrapreneur, you run into certain stumbling blocks. So, you say, "Ah, the sales guy won't let me do this," or, "Legal and compliance won't approve my experiment." And for you, those individual things are example... Those are symptoms. The bigger thing is that the engine that's sitting behind there, from the mindsets of the leaders, experiences they have, the human complacency and then the cultural practices, rituals, and artifacts that the organization uses to run itself. And so, the things you then stumble into are just outcomes of those. And if you just try and deal with each individual outcome by itself, without really thinking about all these bigger-picture things, you'll keep running into different things every time you try and launch a new innovation project.
Sohrab: Yeah. And this is really deep. And if I remember correctly, you're a psychologist by background, right?
Tendayi: Yes. Yes. That's what my PhD is, yeah.
Sohrab: Because, like, if I would talk to Alex, and he goes deep on these things too, I don't think he would have this, the psychologist's view on this topic, or many other people. Now, you mentioned a few things that I wrote down immediately. You talked about mindset, and that people go out, like, innovation consultants, like you and I, right? We go out and we talk a lot about mindset, and, "This needs to be changed," but it is super hard to change it. But what I usually do is before I talk about how to change mindset, I try to really get a, or create a shared understanding with my clients what mindset actually is. What is mindset for you, Tendayi?
Tendayi: Yeah. So, for me, and this is the first time I've been asked this question, so I'm having to formulate an answer on the spot. But for me, I think mindsets are all the frameworks, assumptions, archetypes that sit in our head,
that are the filter for reality. So, as reality comes to us, it's... Because perception is different from, right? So, the way we perceive the world is filtered through these mindsets, which are these archetypes, these prototypes, these assumptions, everything we think we know about the world. And so, we wanna challenge people in terms of everything they think they know about the world and how the world works. And a lot of the time, I've actually discovered that there's very few people that disagree with me when I challenge the idea that you can't scale something without knowing what the customer wants. Like, that makes sense to a lot of people.
And I've never met a single leader that goes, "I don't care what the customer want. I'm gonna just give them anything," right? People [inaudible 00:26:50] that would just sound absurd. You can't really set the pricing without testing the customer sensitivity to the price. You can't build the product. Like, all these things make sense, and people agree with you. And then, they turn around to start to try and do the work, and there's no tool in the environment that is an expression of that mindset. So, they end up stuck using tools... So, even if they agree with you, they end up stuck using tools that are still an instantiation of the previous mindset. Yeah.
Sohrab: Yeah. So, I agree with almost everything that you mentioned. I would add on top of that, I think, so, usually when I ask my workshop participants, right, what is mindset? Because they bring up, like, "Oh, this person, they don't have an Agile mindset." And then, "So, what is mindset?" They're like, "Yeah, that's how people think." "Okay. So, how do you judge someone's mindset, right? Even with the best medical devices, we cannot assess what that person is thinking." And they're like, "Yeah, I judge their actions." I'm like, "Okay." So, right, at least one part of mindset is how do people behave. And I think what you mentioned, right? These frameworks that we have in our mind, how we perceive the world, and based on that, how we act, is then ultimately the mindset that we have.
And I think, now, when we talk about changing this mindset, you mentioned earlier, people didn't have the tools, etc., available to do things differently. Now, if we want them to do things differently, we need to provide concrete ideas, concrete tools, concrete ways of doing things differently. And the better we package those things, I think the easier we make it for those people that we want to help, to change their mindset by doing things now differently. And I think one of the values that Strategyzer and many of the other people, like David Bland and etc. add, is making those tools so simple to use that it becomes something, even if they're not that familiar with, that they can start experimenting with. And by going through the Business Model Canvas, you start thinking about all
of these different building blocks, and then you realize, "Oh, all of these things that I put in here are assumptions." And now you're like, "Okay, what I've learned is I have to test my assumptions. So, what is the next step? And by the way, here is a 44-toolbox book with all the things that I can do to test the different assumptions out of those different building blocks." So, providing those things is really a catalyst in helping people to change their mindsets.
Tendayi: Yeah. No, absolutely.
Sohrab: Go ahead.
Tendayi: And just remember this, right, that the human mind is fungible in terms of how it makes connections. But the human mind cannot make those connections and strengthen those connections without embodying, like, actually embodying, and acting out the thinking, right? So, I agree, completely, that a person needs to be physically fit, and I can agree on a whole bunch of stuff, but if I don't embody it and manifest it, it doesn't become a habit of work. What you don't want to do, as you become an expert or a practitioner of a certain thing, is have to think too hard about something before you do it. And the only way you don't have to think too hard about something before you do it is repetitions, where you're embodying that practice. And the way to embody something is to take the mindset and turn it into rituals and artifacts.
So, when we say in Agile, "Let's have a 50-minute standup, where we talk about the specific things," it's a ritual. We're embodying something. If we say, "Let's have a demo day," it's a ritual. We're embodying something. If we say... All of those things become expressions of the manifesto. But if all we had was the manifesto, it would be really hard to get the practice into the organization. And so, it's a really important part of creating, creating change in an organization, because a lot of the assumptions that underlie the tools that we traditionally use, people have already forgotten what the assumptions are that underlie those traditions, those tools. We now just use them out of habit, but actually as we use them, we're expressing assumptions that the person who created the tool had, or philosophies and beliefs they had, and we don't even know that that's what we're doing. And so, you wanna change people's behavior, give them a way that's easy to do that.
Sohrab: Yeah. And, I mean, to build on top of that, I usually mention to my clients that the beauty of Scrum as an example is that it's a habit-building framework, right? It helps you embody a lot of the things that will help you ultimately reduce your uncertainty in a more systematic way, in a faster way. Other than that, you can change everything around it, right? But embody, start embodying those things, start building those habits.
The other thing I picked up as you were speaking earlier was the topic of culture. You were referring to if you were, like, a corporate innovator, and you're trying to, like, deal with, like, individual things, but if you are not addressing the culture of the organization, probably, and this is what I'm saying or what I perceive, a lot of the energy that you're putting in will ultimately go to waste. So, let's talk a bit about culture, because this is now looking at the broader thing, like corporate innovation. What are some of the cultural elements in many organizations other than, like, the investment philosophy, etc., that make it difficult for breakthrough innovations to happen?
Tendayi: Yeah. No, absolutely. And well, one of my favorite things to say is, like, when people talk about innovation culture, or they talk about culture in general, they talk about culture as if it's, like, some sort of mysterious vibe that comes down from the mountains to bless the people. So, it's like, "Hey, man, the vibe in here is off." You know, it's like... But it's not a mysterious vibe that comes down from the mountains to bless the people. A culture of any community, any organization, is really the things we celebrate, reward, or punish, and kind of block.
And so, the fundamental question is, like, what's in the soil of this organization, right? You want innovation as the plants to kinda come out. So, when a flower fails to bloom, there's a quote from someone, I forget who, you don't start shouting at the flower. You say, "Bloom, bloom, bloom. What's wrong with you? Change your mindset," right? You start thinking about, is there something wrong with the soil, and are the nutrients in the soil off? And so, culture is really the things that enable or block the behaviors that we wanna see. So, if I won't give you any money until you promise me a return, that's a blocker for innovation, because a person really doing breakthrough innovation doesn't know the return, doesn't even know the customer.
Sohrab: They can't promise anything.
Tendayi: They can't promise anything. But if the rule is you have to promise, then I'll give you funding, then the culture in that organization is we celebrate people that make promises, by giving them funding. And we celebrate even more with bonuses people that then deliver on those promises. Whereas in innovation, failure is part of the process. And so, we don't celebrate people who fail, because, first of all, we won't even... Like, you made a promise and then you broke it. So you're not a great corporate citizen. But, so, I can't make the promise, and if I make it, I might break it. So, now the enablement of my behavior is different.
I was once working for a large, sort of, FTSE 100 organization where someone, some intern person was working on some lean startup future lab thing, and they created a landing page to test whether customers liked the value proposition. And they put an email to say, "If you're interested, like, email us," or whatever. And then they sent it out to all the customers on the database. And they didn't have the product or anything. But what happened was the customers that received this, they didn't use the email on the landing page. They called their salesperson who they deal with every day, to say, "I want this thing. It's cool." And the sales director didn't know that this experiment was going to happen. So, you can imagine this poor intern. Like, the weight of the company came down on them, like, from the head of sales, to the head of marketing, to the legal and compliance, like, "How can you promise a value proposition we don't have to customers, to the CEO?" And you're, like, this small person in the corner of a future lab, and everybody wants to know your name, and, like, what you're doing. And so, like, and then everybody can see the trouble you got in, and that's our culture.
Great. And so, the job of the innovation team or the innovation lead is to protect that small person in the corner of the future lab, not by fighting for them when things go wrong, but by creating pre-agreements with all these functions that, when we're running experiments, you can anticipate that customers might call you. Just ask the customers to use the email on the thing, right? And then everything is okay, because that's the way you start evolving the culture. So it's really the things that enable or block the behaviors we wanna see within the innovation teams that we have.
Sohrab: And I think this is a great example that you also provided, and it also shows where working on innovation in corporations is fundamentally different than in a startup. Because in a startup, I mean, if people start calling, everyone's like, "Yes. We have people's interest, right? Lets go and build something around it." It might even be the CEO's idea to, like, email random people, like, "This is our value proposition." But in an existing business, where you have this
reputation risk, and not everybody has that mindset, right, or is involved in this innovation, and is also not incentivized by this innovation, right, this is another topic, then you can run into a lot of resistance.
Tendayi: Exactly. Exactly.
Sohrab: Now, as we've covered, I mean, there're so many other probably challenges and patterns that we can analyze and diagnose, but let's go into the solution space. How do you usually start your engagements with organizations that reach out and say, "Hey, Strategyzer, Tendayi, we want to become more innovative because, as we can see, right, we really believe in what Alex is saying. Every business model is like yogurt in a fridge. At some point it will expire. The difference is, on the yogurt, there's an expiration date. On our business model, there's not. But we know it will expire at some point. Where do we start?"
Tendayi: Yeah. So, that's interesting, right? I have two thoughts in the back of my mind that I don't say them explicitly always, but I use those two thoughts to gauge where the company is just early. And the first thought is, to what extent do they understand that innovation is different from creativity, or invention? To what extent do they understand that a successful innovation, we judge something as a successful innovation to the extent that it's figured out the right customer, it's figured out the right business model, and is now out in the world having an impact? To what extent are they committed to the notion that you navigate concepts from idea to scalable, profitable business model? To what extent are they committed to that journey?
Because sometimes, we engage with organizations that are not committed to that journey. They're more committed to the "innovation theater" aspects. They want an idea jam, a hackathon, a lab where people hang out, and there're speeches and pizza nights and all this stuff. But there's no real mandate for creating value at the end of the journey of these ideas. And so, if I pick up that there is no commitment, we then have the discussion of trying to agree that there should be that commitment, right? That's kind of like the initial conversation, because there's, just as an ethics thing, it doesn't really work for us to get involved in, like, non-authentic practices of innovation. It's not a good thing for my brand or your brand, right? Or any of the practitioners that we know. And so...
Sohrab: It's also not a good investment of our time, right?
Sohrab: Because in addition to making money, we want to have an impact... [00:40:05]
Sohrab: ...to have something that we can show and be proud of. Yeah. [00:40:08]
Tendayi: Exactly. So, that's the first commitment. And then there's a second one, which a lot of people don't think about, which we think about a lot, which is, to what extent... So, let's say we agree they're committed to going from idea to this
model that works. Then the second question is, to what extent are they committed to making that process repeatable? Versus having each idea navigate its own path, and nurse itself through all the obstacles by itself? And I'll give you an example of that. Let's say, for example, in one idea, the team wants to run an experiment with customers, but legal and compliance won't approve the experiment. Let's say the landing page that that kid launched.
There's two things you can do. One is you can negotiate as much as possible to get the legal and compliance folks to approve this one idea and help it pass through. You can do things like political influence, an ambassador, connections, meetings, whatever it is. And you have this idea go through, and then you can run experiments with it, etc., and then progress. And then that's it. You can leave it at that, right? The idea has gone through. Or you can ask yourself a question, which is the second path, which is, what do we now need to put in place so that the next idea that comes behind this idea doesn't have to answer this question again, or suffer the same struggle? And that's the repeatable process.
And so, is it innovation as one-off projects, that are nursed through all the obstacles whenever necessary? Or is it innovation as the early innovations are almost like explorers creating the roads that future innovation teams are gonna walk on through the agreements, practices, tools, that you've already made with all these key functions that these innovations run into as they're moving through the organization? So, those are the two commitments. Are you committed to
innovation authentically, as idea to business? And are you committed to creating a repeatable process?
Sohrab: Which goes back to what you were early on looking at at Pearson, right?
Sohrab: [inaudible 00:42:18]
Tendayi: And that's where it was from. Yeah. That's where I learned all of this from.
Sohrab: Yeah. Is that repeatable? Is that repeatable? So, this is interesting. Go on. Sorry.
Tendayi: Exactly. So, then we go, and then if we understand that those are the commitments we agreed on, those two principles, then the question then becomes, okay, well, what are the obstacles? What are the things we need to lower down, accentuate, increase, etc., etc.? And so, there's two ways to do that, I often say, in organizations. There's two ways to do it. We can do an official audit, where we go through and we have a process. One question in the audit is a question we call "the hero innovator," where we just find a young person in the organization and go, "Listen, if you had a breakthrough innovation that you needed to get started in this organization, what would you do?" And then they start umming and ahing, and telling us, like, all the hoops they have to jump through. "Well, first I'd have to get my line manager to give me permission to get this form filled in for this." And so then we can say, "Okay, so those are the obstacles." And then we do a whole bunch of other forms of assessment. And so, that's an official audit.
In other organizations, the innovation team is under pressure to produce results, from a product standpoint, a product/services standpoint. So, we say to them, "Okay. Let's run innovation sprints, but use them as Trojan horses to surface the blockers." So, let's collect 10 to 12 teams, put them in a cohort, launch them in the organization and see what happens. But, every time they run into an
obstacle, we need to document that, instead of thinking about ways of how to lower that. And so, you get the benefit of both. You get the double whammy of running a proper idea through, but also learning about how your organization responds to innovations, and starting to create a path for creating that repeatable process. So, your question was how do you start? So, that's how we typically start working within the company.
Sohrab: Now, when you do that, you mentioned already, like, innovation department, etc. Who are the key people, especially in larger organizations, that you need to get on board?
Tendayi: Oh, man. So, the ones that are...
Sohrab: Because you talked about the key functions earlier, right? [00:44:39]
Tendayi: Exactly. So, I do a survey when I'm doing keynotes, and one of my questions is, which functions in your organizations are the hardest to work with when it comes to innovation? And the top three are finance, legal and compliance, and believe it or not, IT. It's very strange. I find IT very strange. But actually, IT is, like, with the backlogs and all these things that they make people wait. So, finance, legal, IT, HR. But yeah, finance is a really big one. Legal and compliance is a really big one. Then sales, because sometimes you need access to customers, right? And you need them to help you get access to customers. So, sales is a good one. And then later on, like, later in the innovation process, you might need marketing and HR to help you hire. But early on, finance, legal and compliance, IT maybe, to create prototypes. Sometimes, like, I remember at Pearson we also had to do a lot of work with branding. Like, how do you use the logo, and how do you represent the company outside and all that. So, we did need to get some sign-offs from there. But those are typical, the ones that come to mind, you know, straight away.
Sohrab: Now, Tendayi, with regards to time, I could go on and go on, but before we end this conversation, I have one question. Now, there is one person in a big corporation. They have an idea for a breakthrough innovation. Why should they do this within their corporation, and don't leave because of all the obstacles you just talked about, and try to make it as their own startup?
Tendayi: Yes. So, I'm actually working on an article, because I've just... This is just a plug, if you don't mind, sir.
Sohrab: Go ahead.
Tendayi: I've just got my first official masterclass, my personal masterclass that I'm running on the Strategyzer platform. It's the "Pirates in the Navy" masterclass. And it's a masterclass for corporate innovators that are wanting to navigate the environment. Like, how do they change the environment? You know, heads of innovation, innovation leads, innovation teams. And I'm writing a piece right now to try and promote that masterclass. And the first section of the piece I'm writing is, "Why it's better to be a pirate in the navy rather than just a pirate," right? And I think that in our culture, we celebrate entrepreneurs a lot. You know, these guys are iconic, Bill Gates, Steve Jobs, all these people, right? And everybody, it's cooler to be a startup founder than it is to be a corporate innovator.
Tendayi: It's so different, right? And, but what I often say to people is that, like, the easiest thing for a startup is starting. Getting started. Because you're the founder. You don't have to get your line manager to approve. You don't have to get funding from finance or whatever. You can just get started. Like, there's no restrictions in terms of starting. So, as a startup founder, the early stages of startups are much better for the startup than they are for the corporate startup, right? But, if the corporate startup can survive the early stages, they have more advantages at the scaling phase than the startup does, right? Because, at the scaling phase, they've got access to customers, access to brand, access to marketing, access to talent, access to global networks. If it's a manufacturing idea, they have access to value chains that a startup can only dream of, right? And so, the job of the corporate startup is to survive the early stages, and then they can get access to all of the benefits of being a corporate innovator. And these are things that startups can only... That startups would pay money for the access to customers that corporate startups have.
And so, then the question is what's the price to pay for the corporate startup? The price to pay is relationship-building. That's the price you pay. And if you
don't want to pay that price, then Alex Osterwalder calls you a startup in chains, i.e., you're acting as if you're outside when you're inside, so you don't have the benefits of an actual startup, but you also don't have access to the advantages of being in a large company. And so, you're just like a startup in chains. If you're not that kind of person...
Sohrab: [inaudible 00:48:56]
Tendayi: Yeah. If you're not that kind of person, then you might as well go out and do your own startup, and then be ready for the scaling struggle. Embrace it, and say, "That's what I want." Or you say, "You know what? I'm happy with the early-stage struggle, because I'm getting my salary paid, and then later on, at the scaling phase, I can leverage the startup."
I wanna say something that's a first principle, because it just landed in my head. You know how, like, things sound paradoxical sometimes, like, how can you hold two opinions that are different at the same time? The way you do that is understanding when what applies.
Tendayi: When does the startup have advantages, and when does the corporate startup have advantages? And then you start navigating and living in the world that you are, with the right behaviors and practices that are important for being where you are.
Sohrab: Yeah, absolutely. It is context-specific, right?
Sohrab: And now, I think one thing that would be also interesting is whether organizations manage to create the incentives, financially, for those corporate innovators to stay, and scale those ideas. Now, Tendayi...
Tendayi: So, [crosstalk 00:50:05] that before you [crosstalk 00:50:07] [00:50:09]
Sohrab: Yeah, go ahead. Go ahead. I have time. I want to be mindful of your time.
Tendayi: So, there's a bank in the Netherlands, one of the four, five large banks in the Netherlands. And for their innovation lab, they would...this was the incentives that they did was, if you applied to join the lab, you would get seconded from your job, as a team, to join this innovation lab for three, six months, whatever. And you would take a 50% pay cut in exchange for staking your idea.
Sohrab: That's good.
Tendayi: If your idea succeeded. So now, it's almost like an entrepreneurial incentive system, where you've got skin in the game...
Sohrab: You take a risk.
Tendayi: Yeah. And in exchange for that, the organization gives you a stake in your idea. Now, of course, it's not real skin in the game because if the idea fails, you can still go back to your job, but, you know, it's at least something, in terms of trying to incentivize the innovator.
Sohrab: Yeah, I think that's something to explore. Now, Tendayi, maybe we can get some time on your calendar, at another point in time, and continue this conversation. You don't have to commit right now in front of everyone, but I really want to thank you for taking the time today. I learned so much again, and I'm sure the people watching this live, or also later, when we share the recording, will definitely benefit a lot from your experience and from your insights. Thank you so much, Tendayi.
Tendayi: Cool, man. Thank you. Thank you.