Page 179 - HBR Leader's Handbook: Make an Impact, Inspire Your Organization, and Get to the Next Level

168 HBR Leader’s Handbook

To make corporate venturing or acquisition work a source of future
growth, leaders need to guide each investment so it prioritizes intelligence
gathering and learning over immediate operating returns, though finan-
cial rewards may also accrue over time. Nike, for example, developed a
venture-investing group that specifically looked for new technologies,
startups, or small companies that were pioneering new approaches to sus-
tainable (environmentally sound) manufacturing. When it found a com-
pany that was attractive, it made a small, minority investment that allowed
it to have a seat on the board (or advisory group) and learn about the tech-
nology. Once the technology matured, so that it was worthy of incorpora-
tion into Nike’s manufacturing approach, it would either cut a licensing or
partnership deal with the company or buy it outright. You might not be in
a position to create a corporate venture investment group or make acqui-
sitions, but you should always be looking for startups and new technolo-
gies that might have an impact on your business. And if you are leading a
startup, you can identify corporate venture or acquisition groups that
might be worth approaching too.

Lean innovation
A second approach to innovation that is important for building a sustain-
able enterprise is the “lean startup” model described in Steve Blank’s HBR
article, “Why the Lean Start-Up Changes Everything,” which we first ref-
erenced in our discussion of strategy. While Christensen’s approach fo-
cuses on the outside threat of disruption, the lean approach focuses on the
process for advancing, changing, or discarding innovative ideas: it is an
approach for systematically testing and developing a new business model
for a new feature, product, startup, or unit. It may be part of developing a
new strategy, simply exploring and refining sources of potential innova-
tion, or both.
The core of the approach is rapid experimentation with real customers.
Blank observes that creating detailed theoretical business plans for a new
venture is often a waste, since those plans usually reflect a number of un-
tested and usually false assumptions about customer behavior and desires.
It’s better to spend your time rigorously and quickly testing those assump-