• Ferhan Bulca

    I am an executive leader and a serial intrapreneur focused on innovation and design thinking. My purpose in life is to create products and services that make the world a better place to live in.

    In the course of my career, I have developed a deep understanding and expertise on all aspects of technology commercialization and product/service development. As a result, I have built multi-million dollar businesses from the ground up.

    I am the creator and the Lead Instructor for Business Innovation Certificate Program at University of Toronto, School of Continuing Studies.

    I offer business consulting services and I am available as a speaker for private and public events.

    Watch my recent talk at Ashoka Canada's Changemakers event at University of Toronto on YouTube.

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Encouraging Innovative Behaviour in Large Organizations

Recently, I asked for input on blog topics and received this request: Interested in your thoughts on how to encourage employees to be innovative/entrepreneurial in large organizations, when the organization’s structure & measures encourage different behaviours. Also, interested in your thoughts on Gary Hamel’s hypothesis that management (i.e. the structures & principles invented by Taylor, Smith, Ford et al) needs to be re-invented.

This request came at an interesting time for me as I was re-reading Hamel’s book titled The Future of Management. So, here are my thoughts, for whatever they are worth…

First, let’s tackle the question about how to encourage innovative/entrepreneurial behaviour in large organizations when the organization’s structure and measures encourage different (typically, the opposite) behaviour. Until recently, my typical response to this question would go along the lines of creating a separate team culture inside the organization, a la Skunkworks, and protecting the team from the damaging effects of its established (sometimes for a good reason) execution-focused culture. However, a speech by a friend, Edwin Jansen (@EdwinJnsn, www.mouvment.com) made me give it a deeper thought. My realization was that, in fact, there need not be two cultures and an execution-focused culture is not necessarily the obstacle.

Inspired by Simon Sinek and Dan Pink, Edwin summarized three most important attributes for leading innovation:

  • Meaningful work
  • Passion and dedication
  • Willingness to fail (and, learn from it)

Let me pause here and blend in the second part of the question: do I agree with Hamel that management needs to be re-defined? Short answer: YES!!!! Did I say that loudly enough? And, this is where Edwin’s three attributes come into picture. Management principles and techniques developed by Ford, Taylor et al were relevant when industrial revolution happened. It somewhat worked as we transitioned from a labor-based workforce to an information-based work force. The “somewhat” part became the focus of many patchwork adjustments to those management principles that “stood the test of time.” In my opinion, they are antiquated and they have gone way past their useful lives. The fact that we still see innovation and effectiveness as a dichotomy in business supports this hypothesis. Innovation and effectiveness are not two separate, conflicting concepts. Businesses that cannot combine these two concepts in one way or another are destined to disappear from the map, sooner or later.

This blog posting is running the risk of being too long already. So, I will summarize my theory: Management practices have to change to support and encourage the three attributes mentioned above for successful innovation. This means management exposing itself, taking more risk and learning to fail themselves. The desire to introduce tighter controls on the workforce only backfires. For example, how many of those companies initially blocked Facebook still continue to block them? If you company is one of them, keep dreaming that your employees are more efficient because of the block. On the other hand, how many companies that trusted their employees to do the right thing came up with ground-breaking innovation. A bunch come to my mind, what about you?

As a parting teaser, I will also throw in this: Similar to the management principles and techniques, our education system needs a fundamental overhaul to deal with the challenges of future. The teacher (who, supposedly knows it all) and student (who, supposedly knows nothing) model is no longer valid. Nobody needs a repository of knowledge to pull from any more. Knowledge and information are readily available when one needs it. The skills that need development through our education systems are:

  • Ability to simplify complex matters
  • Ability to make meaningful connections
  • Ability to create social and material outputs

Let’s stop here and leave the topic of education to a later posting.

I welcome your comments on my blog. Please feel free to contact me at ferhan [at] ferhanbulca.com with relevant comments, ideas and thoughts.

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Which One Has Priority: Strategy or Execution? How About Both?

An article I read in strategy+business prompted me to write on a topic I have been sitting on for some time. The article I am referring to is titled “Strategy or Execution: Which One is More Important? (http://www.strategy-business.com/article/cs00005?gko=733e9&cid=20121009enews&utm_campaign=20121009enews).

In a nutshell, the authors heard from business leaders that “execution is more important than strategy.” The authors’ response to this input is that “you cannot have good execution without good strategy.” First, let me state that I fully agree with the arguments of the authors. I guess I fall into the category of “seasoned strategists” they refer to.

Having said this, the authors’ observation and, possibly, frustration are no different from what I feel when I discuss innovation with business leaders. A critical component of designing an innovation program for an organization is to understand and articulate its business strategy. And, articulating a strategy goes beyond slogans and animated speeches. Enough has been said about what strategy is and how to build one. Just like everything else, building a solid strategy is lots of hard work. But, I am not going to dwell on strategy-building in this posting. Instead, I want to discuss the fact that business leaders think that they have to make a choice between strategy and execution. In fact, they have no choice. If they take their fiduciary responsibility seriously, that is.

Business leaders have two distinct responsibilities:
1) Successfully compete today (i.e., make money today)
2) Position the organization for future success (i.e., make money tomorrow)

Focus on execution means business leaders clearly understand the importance of (1) but leaving strategy behind means they do not get the importance of (2). The typical defence is “if the business does not survive today, there is no tomorrow.” I think this thinking is the kiss of death for businesses. Unfortunately, businesses build their organizations around execution and they keep perfecting it. It is tangible, gives immediate results and makes the leaders look good. The problem arises when the concept of strategic innovation comes to picture.

First, unclear or poorly articulated strategies result in disjointed innovation attempts. These initiatives are typically misguided and produce very poor results. In some cases, they may even hurt the business.

Second, trying to perform strategic innovation in an execution-minded environment and organization is doomed for failure. And, these are not the learn-from-your-failures type of failures one would expect to have in innovation initiatives. These are “I told you to not mess with my department” type of failures, which only create frustration and animosity. In my experience so far, execution and strategic innovation do not mix. Until a level of market success delivered by the innovation initiative, it should be kept outside the execution engine of an organization. Unfortunately, my experience is in line with the authors of the article I mentioned above. Organizations know how to build execution excellence but they do a very poor job in building strategic innovation excellence. In fact, it is not a choice between the two. Great organizations have to do both equally well.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

More Thoughts on Large Companies and Innovation – An Oxymoron?

A few days ago, I posted a blog article on how large companies can (and should) leverage their strengths to create innovative solutions to problems. I was happy to see comments and two other posts in response, one in agreement, the other opposing my thoughts. I think it is fantastic to have differing opinions and wanted to share my follow-up thoughts on the topic.

Jennaromeo agrees with me in her post at  http://bizgovsoc4.wordpress.com/2012/09/11/innovation-at-large-companies-is-it-possible/. On the other hand, nyeinzawko thinks differently in http://bizgovsoc4.wordpress.com/2012/09/11/are-giant-corporations-really-a-place-for-great-innovations/#more-701.

I should clarify one of my points: I don’t make a broad arguement that large organizations are the catalysts for innovation. In fact, I don’t think that they are. My point is that large organizations have certain strengths that could make them catalysts if they learn how to leverage those strengths. Some organizations have figured out how to leverage their strengths. However, such organizations are more of an exception than the norm. I argue that all large organizations can and should create innovative arms as a way to secure future growth and, more importantly, relevance to customers.

As Drucker said “the purpose of a business is to create a customer.” Creation of customers only happen if an organization makes a concious effort, understand the evolving needs of current customers and unmet needs of non-customers. This is not business as usual.

In closing, I will emphasize the work done by intrapreneurs at organizations across the globe. While entrepreneurs get (well-deserved) recognition for their hard work, intrapreneurs in organizations are not well-understood nor appreciated. Large organizations that recognize the value of intrapreneurs and allow them to leverage the strengths of the organization can become the catalysts of innovation.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

 

Large Companies and Innovation – An Oxymoron?

For long, innovative and new products are associated with entrepreneurs who pursue their passion and succeed. Many think that large companies get caught up in their routine operations and are not good sources of innovative solutions.

In fact, large companies have a few advantages over their start-up counterparts to create innovation. Scott Anthony published an article to “…call to arms for corporate innovators to seize the opportunities that only a big company can realize” (http://blogs.hbr.org/anthony/2012/09/how_big_companies_can_save_inn.html?awid=6166991183274468738-3271). Scott discusses three questions companies should be asking themselves to remain active in the innovation playground. In addition to asking these questions, companies should leverage the strengths that only large companies have:

1. Access to resources

Large companies have the most important resource for innovation: cash. Many entrepreneurial activities never come to fruition because of cash-flow issues. This is less of an issue in a large organization, where mature financial management is the norm.

Large companies have people, tools, facilities and partners that are difficult for start-ups to establish. In addition, international networks of large organizations enable them to quickly and effectively assess the value of their innovations, which again is a luxury for entrepreneurs.

Finally, large companies can get the attention of distribution channels much more easily than a start-up can.

2. Established brand

Think of the difference between Google introducing a social interaction medium versus a No-Name start-up doing the same. Even if Google+ is not much of a success so far, it still has attracted a number of users, who are trying it only because it is from Google. On the other hand, we have never heard of many Facebook-like tools being created by start-ups.

A large company can put its existing brand power behind a new product or service it is introducing. An established brand does not make a sloppy product successful but it certainly ensures that the new product gets some much needed air time with potential customers.

3. Talent acquisition

I recently worked with a client, which was struggling to attract talent to a new business they wanted to introduce. While the client had a viable product, they were having difficulty convincing top-talent join their ranks because the company was not known as a development company. In contrast, IBM, for example, would have no difficulty attracting the top talent for new business ideas they are working on.

4. Create and maintain momentum

Large organizations can dedicate resources to new development while start-up entrepreneurs struggle with basic needs of life. For example, an aspiring entrepreneur I know had to pause pursuing his passion in commercializing a medical device in order to focus on making some money to be able to pay his mortgage and put food on the table. By the time he secures sufficient savings to go back to his passion, he will have lost his momentum. In the worst-case scenario, he may even lose all his progress if a competitor beats him to market.

In closing, I echo Scott’s appeal to large organizations. There is tremendous opportunity to take the center-stage in innovation by learning from successful entrepreneurial practices and executing them in large organizations by leveraging above strengths.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Intrapreneur? You mean “entrepreneur?” What is an intrapreneur?

Lately, I am going through this questioning quite a bit mainly because I am looking for my next engagement either as a full-time leadership role or as a consultant to help an organization create something new. While everybody has an idea (albeit somewhat distorted from reality) about what an “entrepreneur” does, very few understand the role of an intrapreneur. Therefore, I decided to write about it with examples from my own experience.

First, let me explain what I do for organizations: I help them enter a new business area (new market, new product, new service, new P&L), which is typically outside of their knowledge and expertise area.

Now, let’s talk about what my engagements look like. With almost no exception, I am brought in by top executives of the company. This relationship is critical to obtain and maintain sponsorship for the initiative. I dedicate a significant portion of my effort to ensure that the initiative is strongly supported by top executives and the board.

Once in the company, the first thing I assess is its culture and how it sees new initiatives. Culture, in my opinion, is the one factor that can make or break an initiative. The fact that any new initiative requires partnerships, both internally and externally, understanding the internal dynamics is crucial to success. In order to do this, I embed myself into the organization’s development group(s). From here, I reach out to all critical players (at this point, they may not even know that they are players): marketing, sales, finance, research, development, service, support, list goes on. I form a very small (3-5 people) team to work together at this phase.

The next step is to clearly identify the pain point(s) of customers. In almost all cases, the organization thinks heavily in the solution domain but it is critical to articulate the problem(s) of the customers. What would make them running to our doors if they hear that we solve a major problem for them? Christensen calls it the “job to be done” for the customers. If we cannot articulate what that job is, the sexiest technology in the world is useless to most (technology junkies excepted).

Once the problem is defined, the skills required to solve the problem start to shape up. At this point, the team is supplemented with subject matter experts in critical areas.

Then comes the ideation step, where solution concepts to the problem are created. Most people are familiar with this step. Unfortunately, also most people think that this is where innovation starts. In fact, ideation is where solutions are sought to a problem. Problem definition is the first step and it takes inputs from many participants, including existing and potential customers. Ideation involves internal and external participation. At this point, the team may expand if external partnerships are required.

Next is transition to solution development and testing (validating) the solution against the problem. Almost always we find about things we missed at the first validation cycle and feel like idiots. Unearthing facts and requirements is the whole purpose of early validation. Quite a bit of effort goes into creating that “just enough” prototype (Eric Ries calls it “minimum viable product”) and validate it. There is always a struggle where the product appears too raw to the development team and they want to implement just one more thing before they put it in front of a critic (not always the customer). My effort goes into ensuring that the prototype has sufficient features to collect valuable feedback but it does not take forever to get there. Also, the team has to be managed to receive the feedback positively and not be discouraged by it. Otherwise, the team easily gets into “we knew it was too early. Next time, we need more time.” mindset.

This is a highly iterative process and requires a certain type of team to execute. Building, leading and motivating that team is what I do. The team has to be protected from and integrated with the rest of the organization. This seemingly conflicting task is tricky and requires finesse. An isolated “innovation” team, contrary to popular belief, will not be productive. They need to understand what the rest of the organization can do, how much it can evolve, and what their appetite for change is. On the other hand, the main reason the new team exists is because the organization could not do the same job in its routine business. Unfortunately, there is no recipe for the right amount of separation and integration. It depends on the team members, the phase of the project, the culture of the organization, among other things.

If I summarize under a few bullets, here is an overview of the job description of an intrapreneur:

  • Build relations with the exec team and maintain information flow
  • Facilitate the articulation of the problem to be solved
  • Build, lead and motivate a team to make it happen
  • Manage the interactions between the team and the rest of the organization
  • Establish a disciplined innovation culture in the team and maintain it
  • Build and manage internal and external partnerships

I hope I shed some light to what an intrapreneur does.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Similarities and Differences Between Entrepreneurial and Intrapreneurial Initiatives

In the past few months, I have spent considerable time with entrepreneurs who are trying to take their concepts off the ground and build businesses. Although my previous experience is mostly in intrapreneurial initiatives, I am happy to be able to help the people I interact with. In return, these interactions are helping me identify similarities and differences between entrepreneurial and intrapreneurial initiatives.

Fundamental characteristics of intrapreneurs and entrepreneurs are very similar, if not identical. Personal and professional characteristics of entrepreneurs are frequently covered in traditional and digital media. In contrast, intrapreneurs attract less attention. While some simply define intrapreneurs as “entrepreneurs who work in a larger organization”, I think the differences are more pronounced. In an earlier blog post, I discussed the characteristics of intrapreneurs (https://ferhanbulca.com/2012/07/06/is-your-skin-thick-enough-to-be-an-intrapreneur/).

The main difference between intrapreneurs and entrepreneurs is in the way they practice their skills and where they put most effort. The following diagram shows my take on the relative weight of the effort by intrapreneurs and entrepreneurs.

Effort comparison for Intrapreneurs and Entrepreneurs

Intrapreneurs’ Effort Goes to Culture, Agility, Accountability and Communications

An intrapreneur’s biggest challenge is to create a new way of doing business in an existing organization. Clayton Christensen famously called it the “innovator’s dilemma” where new ideas get shot down to protect existing, albeit sometimes declining, businesses.

An intrapreneur’s largest effort goes into building agility and accountability in a culture built around an existing business. As Jim Collins stated in Good to Great, this effort increases if the existing business is successful. Collins summarized it as “… good is the enemy of great.” A well-functioning business will be more protective than one that is experiencing difficulties and challenges.

Once an intrapreneur establishes an agile, responsive and accountability-driven team, one of her main tasks become communications. In a larger organization, the number of stakeholders is much larger than the number of stakeholders an entrepreneur needs to interact with.

In comparison, an intrapreneur has it easier in a couple of areas: Access to resources and business savvy. Typically, a company that decides to undertake an initiative is prepared to provide necessary resources. In addition, larger organizations typically have easier access to internal and external business thinkers and leaders.

Entrepreneurs’ Effort Goes to Access to Resources, Business Savvy, Communications and Time & Financial Management

Entrepreneurs typically struggle to attract attention to their ideas and convert them to revenue-generating businesses. The chicken-and-egg issue arises at earlier stages where investment, and hence, resources, is only available if tangible results exist. However, producing tangible results require resources (money, skills, time, facilities, materials) that the entrepreneurs do not have.

Most entrepreneurs operate in a small circle of friends and like-minded individuals. They tend to be passionate about a topic. This passion brings extreme focus and motivation but may result in irrational dedication to a dead-end cause. We have all heard about or met an entrepreneur who has spent their life savings on a product that nobody wants. Knowing what ideas to pursue and how far to take them require a level of business savvy, which may be blinded by the passion and motivation of an entrepreneur.

Time and financial management is another challenge area for entrepreneurs. Guy Kawasaki states, “As a rule of thumb, when I see a projection, I add one year to delivery time and multiply revenues by 0.1.” (Ref. http://blogs.hbr.org/anthony/2012/08/the_planning_fallacy_and_the_i.html). Many great ideas never make it to market or lose out to competition due to poor time and financial management.

Entrepreneurs have it easier when it comes to culture, agility and accountability. Passion, motivation and size of entrepreneurial teams are conducive to the positive cultural attributes many larger organizations would love to duplicate. A committed team, where job descriptions, unions, structures, hierarchies do not exist, is capable of creating miracles.

I welcome your comments on my blog. Please feel free to contact me at ferhan@ferhanbulca.com with relevant comments, ideas and thoughts.

Business Innovation Certificate Program at University of Toronto, School of Continuing Studies

Business Innovation Certificate Program at University of Toronto, School of Continuing Studies is ready for the Fall 2012 semester with a strong group of instructors. Please check out our program brochure for more information and to register: Business Innovation Certificate 2012 Program Brochure

Hope to meet with passionate innovators in the program in September.

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