- The first of our principles, grant and defend autonomy,
speaks to the value of the independence of new ventures.
And the need to structure and lead them accordingly.
As we saw with the design collaborative created by
Frog and Pfizer, new ventures thrive when provided
the freedom and agency to continually shape their own
best practices, unencumbered by organizational history,
politics, or legacy systems.
New ventures are inherently high risk,
as a result of the high number of unknowns involved
in building products and services that are new to the
organization or even entirely new to the world.
Our objective is to tip the scales as far as possible
in their favor to offer them the highest likelihood
of success.
They need the leeway to adapt to their risky circumstances
and we need to provide them with room to maneuver.
When it comes to leeway, start ups have a head start
on large organizations.
Start ups are inherently autonomous and exceedingly,
or even dangerously lean.
By contrast, though ventures launched by larger
organizations are often intended to innovate like a
start up, they are rarely provided the freedom typically
afforded to start ups.
And can be burdened by the inertia of the massive
progenitors.
This is what we're talking about when we say it take
a lot time to turn a big ship around.
By comparison, a start up is like a jet ski,
fast off the starting line and very easy to turn.
A start up is able to surge ahead and maneuver nimbly
to explore regions inaccessible to the ship.
Without being given agency and autonomy,
a corporate venture can be like a life boat that is
dropped into the water, but never untethered from the
ship that launched it.
This isn't to say that large organizations are inherently
dysfunctional.
Quite the contrary, they're simply optimized to a very
different set of objectives.
A large company will typically be focused on playing
not to lose so will operate with an exploitative
mindset and spend the bulk of it's energy on exploitative
activities.
A new venture typically doesn't yet have a significant
profitable core business, so playing not to lose isn't
really an option.
Instead the team is focused on discovering it's opportunity
and advantage than structuring a business to address it.
A start up or other new venture operates in an
explorative mindset and spends it's energy on explorative
activities.
Comparing the attributes of exploitative and explorative
business side by side, you'll see that they are
markedly different.
In the explorative business of the new venture,
the strategic intent is more future-focused,
with an emphasis on discontinuous innovation and growth.
This promotes entrepreneurial competencies within
the organization and aligns with a culture of speed,
flexibility, experimentation and risk taking.
The leadership approach for the explorative business
tends to be more visionary and flat.
Guiding an overall structure that is informal and
adaptive.
The critical task to be performed center on new products,
adaptability, and break-through innovation.
And success is measured by growth and the achievement
of milestones.
With our recurring themes of speed, flexibility,
adaptability, and risk taking in new ventures,
it's clear that autonomy will be an important enabler
as we look to leverage venture design as a driver
of explorative business.
I'd like to call out five degrees of freedom that stem
from the attributes of explorative business and support
the autonomy that it requires.
First, the freedom to fail.
If we're unable to fail, we're unable to take risks.
If we're unable to take risks, we can't innovate.
In a new venture, risk taking is a job requirement.
Second, the freedom to act.
The team needs to be able to make bold calls fast
and to make those calls from close to the action,
not from a distance through a tall hierarchy.
The leadership of a new venture must be trusted and
accordingly empowered.
Third, the freedom to organize and reorganize.
A dynamic rapidly evolving business requires the ability
to organize and reorganize it's structure and team
optimally with regard only to it's own best functioning
for it's current stage of development.
Each team member will wear many hats and the assignment
of these will be both dynamic and often non-conforming
wit the structures and roles typical of exploitative
business.
Fourth, the freedom to operate.
The needs of the explorative business differ greatly
from those of the exploitative business so it should
come as no surprise that the tools, infrastructure,
partnerships, and other operational matters may differ
significantly, as well.
We need to avoid burdening a new venture with legacy
systems, policies, and procedures that may impede it's
progress and limit it's likelihood of success.
Fifth, and finally, the freedom to attack.
Successful new ventures pursue their success veraciously
and without much regard for externalities.
Likewise, a corporate venture should be empowered to take
an approach that is orthogonal or even directly antagonistic
to the current core business.
Better to self-disrupt than to have an outsider take us
out at the knees.
These five degrees of freedom are useful to keep in mind
when establishing a new venture and defining it's
relationships to it's parent organization and key
stakeholders.
They help in determining to what extent we are truly
granting and defending autonomy to enforce the independence
of a venture and provided the adaptability required
for success.
Take a moment now and refer to your exercise handout.
I've included a worksheet that'll help you to review the
differences between exploitative and explorative
business, as well as assess your own organization's
readiness to grant and defend autonomy.