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INNOVATE

Want Your Employees to Innovate? Split Them Up
 

More raw brainpower isn't always the answer. In order for your company to innovate, create divisions.

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If you want to take your company to the next level, making some divisions within your walls may be the best way to innovate and grow--almost like the start-up within. I've seen this work over and over again: A smaller group or division feels freer make dramatic changes and think in new ways.

Here are three approaches:

Hire an Intrapreneur

One of my current projects is with the company PossibleNOW, a software-as-a-service company. Being an intrapreneur is exactly my charge--an entrepreneur within an established company. I am building a professional services organization that helps install PossibleNOW's MyPreferences solution in enterprise customers' locations. MyPreferences provides a centralized collection of preference data and keeps all of the other enterprise systems up to date on the latest preference changes. If it sounds complex, that's because it is.

PossibleNOW understands complex because they have traditionally worked with compliance and information technology departments within large organizations. They are experts with a deep understanding of system knowledge and ensuring data is safe. But they needed help appealing to a new audience.

Preference management is now on the top of many CMOs' minds, and they think very differently than IT or compliance professionals.  My background working with CMOs, strong understanding of consumers' needs and entrepreneurial spirit makes me the perfect candidate for embedding new DNA into PossibleNOW that will help take MyPreferences to the next level with this different decision-maker audience.

Set Up a Separate Division

In the 90's, I worked for a group called The Internet Studio that was a small division of Information America, a subsidiary of West Publishing (Did you catch that? They're all now owned by Thomson Reuters). Our job was to experiment with potential products that could be rolled out onto the new medium of the Internet. We were a small nimble group of  about 30 that was established 900 miles from the core development group of about 600.  This separation and agility let us live in a world of possibility and kept us out of the distractions the primary development group had maintaining the current products.

If the project we released worked, like www.knowx.com, the company would absorb the product back in and make it part of their portfolio. If it didn't, the project was killed off--which happened with a product we were building to compete with a Lexis Nexis offering that was just too far ahead. Either way, we were free of the daily constraints of the company and felt we had the freedom to think in new and different ways, without penalty.

Take a Failing Product and Incubate It

In doing research for my upcoming book, Laddering, I interviewed executives at vacuum company Bissell for a case study about the marketing approach called "word of mouth marketing."

I am used to seeing an incubator created around a new product, but Bissell did this to allow one of their older products some breathing room to be innovative. They took one of their legacy products, the Bissell Sweeper that's been around for over a century, and put it into its own separate group. This separation allowed the Bissell Sweeper group to take a chance, break from the traditional advertising approach and experiment with word of mouth marketing, which ultimately helped them grow sales.

Separation often doesn't come naturally, especially with an established product. But thinking outside the box and determining ways to grow your company by some separation is a great approach. The new groups can focus on their core mission and rely on the company's core functions--human resources, finance and legal, for example--that don't make sense to replicate or recreate.

IMAGE: ekai/Flickr
Last updated: May 15, 2013

ERIC V. HOLTZCLAW is a serial entrepreneur who has founded multiple startup companies, including one of the first profitable Internet enterprises. His last company appeared on the Inc. 5000 three years in a row. Holtzclaw advises clients on the whys of business--why customers buy, why teams work, and the all-important "entrepreneurial" why. He is the author of Laddering, and his weekly radio show, The "Better You" Project, shines a spotlight on entrepreneurs' individual business journeys and successes. To learn more about Holtzclaw, visit ladderingworks.com or e-mail eholtzclaw@ladderingworks.com.
@eholtzclaw




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