Uncertainty is an Innovator Superpower

Uncertainty is kryptonite for corporate managers, however, and that needs to be addressed.

In this, the buzzword apocalypse, we’re all innovating, being disrupted, and boldly marching into a future where everything will be new, different, and better. Except that we’re not. CEOs may be talking the talk, but most organizations aren’t ready to risk walking the walk. This, unfortunately, makes sense.

There are two key barriers: a lack of training and an aversion to risk. Career success in a big organization is usually tied to performing clearly defined tasks well. Successful innovation is often random and messy.

The future is hard to predict and there are a lot of things that can go wrong. Too many folks think working with innovation is either a matter of trying hard enough – or something to be avoided. It is hard to blame them.

The “trying to plan your way out of uncertainty” trap

A big corporate recently announced the launch of a startup accelerator with a difference. Their innovation: they will choose the participating companies carefully. They will devote all of 2018 to selecting the right handful of startups so they can avoid picking the wrong ones.

Any intern at an accelerator could tell the corporate in question that they’re wasting their time, but the trap they’ve fallen into is difficult for many corporates to avoid. The media make it sound like there are great startups everywhere, but startups are really hard to build. My guess is that there are more startup accelerators than great startups.

The gap between the C-Suite and middle management

The brave speeches CEOs give about innovation often mention the need to push decision-making further down into the organization. But their employees aren’t stupid. They know how big companies work. They know that innovation is a risky business with plenty of opportunities to guess wrong. They also know that mistakes get punished.

Did you really say Steve Jobs?

Poor Steve Jobs gets named over and over in these speeches, but no one ever talks about the Newton. (The what? Exactly. Go Google it.) They seldom mention that his own board of directors fired him. They assume that no one in the audience has read how he could be a nightmare as a boss.

Acknowledge the lack of incentives for the people taking the risks

Middle managers aren’t stupid. They know the odds of hitting a homerun like the iPod are absurdly long. They know innovation often requires working in a minefield of conflicting stakeholder interests. They know success takes time – and that any success produced by the risks they take likely will come on their successor’s watch.

Acknowledge their fear that innovation is dangerous for their career prospects. Give them room to make mistakes. Praise them publicly for taking risks.

Train them

Teach your middle managers to make decisions on the basis of imperfect data. Few of the people who will have to do the innovating have any training in innovation beyond the occasional magazine article. Send them to hands-on workshops. Have them work with actual startups.

Network them

Expand their personal networks to include people who effectively manage uncertainty. Most of the people they know work at the same company. Startups and innovators are used to uncertainty, to not having all the answers. Have your middle managers work with them as mentors, startup competition judges, and at corporate-startup matchmaking events to familiarize them with uncertainty – at a safe arm’s distance.

Let them self-select

Let your innovators volunteer. According to the Kauffmann Foundation, the most successful entrepreneurs are over 40. Every firm has a few risk takers hidden amongst the risk-averse majority. They often leave big corporations that can’t or won’t innovate to create the innovation they wanted to see.

If you train them, network them, and give them the opportunity, they may turn uncertainty into a superpower for you, instead watching them walk away to use their superpowers for themselves or someone else.

Penetrating The Corporate Immune System

Startup mentors can be great executive educators

I was on a mentor panel at a big event once with a corporate executive who was really organized. Unlike the rest of us, he’d actually read the startup profiles. He had a tidy list of questions. The questions were mostly common to all and were along the lines of ‘Do you have a patent?’ and ‘What are your profit margins?’

He quickly caught on that many of his questions weren’t relevant in the given context and that he was applying big company, established product KPIs to products and services that were only just being developed. As the day progressed, he discretely put a line through one question after the next. He probably learned more than any of us that day.

What matters and what does not

We didn’t care about patents. (One question crossed out). We talked to customers before we had a finished product. (Another question crossed out). We didn’t worry if all the bugs were fixed before showing a product to customers. (Another question crossed out). We didn’t put much weight on projections that went past two years. (Another…).

Learning effect

The panel was a great example of the power of peer teaching. Our corporate panelist was obviously competent. His insights on how big businesses work were concise and crystal clear. At the same time, his shrinking list of stock questions was clear proof that he was learning plenty about startups and innovation from us.

Having trouble embracing failure?

CEOs who want their managers to use failure productively first need to help them learn when and how to accept failure. A day on a panel of peers who accept that some failures are inevitable, and even laugh as they tell stories about their own failures, can do more to change perceptions than a lifetime subscription to the Harvard Business Review.

Even experienced managers hate mistakes

They usually focus on efficiently doing something they already know how to do. They’re used to incrementally improving performance. Step change improvements require bold experiments whose outcomes cannot be known with certitude beforehand. Mistakes are common in rapidly iterating startups because they focus learning by experimentation.

Like scientists, startups do experiments to create the data they need to find the answers they need. A negative result is just as important as a positive result. Mistakes that teach you something are valuable. Alexander Fleming’s failure to keep a tidy laboratory gave us penicillin. In most firms, he would have been fired.

This makes perfect sense

You can read about the benefits of learning from mistakes, but a career in a climate that punishes mistakes makes it hard to accept them in practice. Companies that want to change their view of failure need to help their leaders’ change their view of failure. We can’t expect people to learn this on their own.

Mentoring can take the edge off learning hard lessons

Entrepreneurs, investors, and startup mentors appeal to corporate types for a number of reasons: the dynamism, the perceived freedom of action, the innovation, and the hoodies. It’s also a world where, for once, they’re not expected to have all of the answers. They can lower their guard and be open to suggestion.

Like a lot of corporate people new to startups, he wasn’t used to being in a stuation where he didn’t have all the answers. Unlike some, however, it didn’t take him long to see what he had to offer startups and how to present it. Our panel’s corporate guy was a quick learner – and it turned out he also had a lot to teach the rest of us mentors.

Give Me Three Good Reasons

Scaling things is hard and ideas matter less than execution

”By the end of dinner, I want you to give me three good reasons why you’re building someone else’s brand instead of your own.”

The challenge came from Mikkel as we walked to a late dinner at Tommi’s Burger Joint. It was one of those questions. The kind you knew had been on the way for a long time and that once asked really needed no answer. We all need friends like Mikkel.

“I can’t think of a single one.”

I launched my last business in a niche that I knew well, tech and startup events, doing a variation of something I’ve done for years. I decided to work with a guy who developed a concept I really liked. I’d open it in my city and together we would see how far we could scale the concept. Over coffee, it looked like a great plan, but everyone knows the proof is in the execution.

Execution is hard

For years, I’ve told startups that execution has value, but concepts are worthless. A patent is only one piece of a business model for turning an idea into money. There are a lot of good reasons why repeatable success is so highly valued and one is it’s really, really hard. What works in one place often doesn’t work in another.

Don’t love your idea, love the results

Things didn’t work out. Mapping the concept to Copenhagen took a lot of adjusting. This took time and effort that we couldn’t spend on things like sales. I loved the idea, but making it happen sucked up huge amounts of time. The more we had to invent solutions that didn’t exist to deal with situations that didn’t exist, the less it looked like the original concept.

Franchising looks simple. So does golf.

Franchising only looks simple to those who’ve never tried it. It’s really hard if the concept is new and the product is new. It’s harder still, if the brand is new to the market as well. It takes a lot of support, great tools, great marketing, and a really clear road map to roll out a new franchise. As a mentor, I now give much more specific feedback on franchising.

The concept is dead. Long live the concept.

Eventually, I realized we were working in parallel instead of together. The synergies we had hoped for didn’t appear. Discussions turned into criticism and the criticism got personal. Cultural note: if a Swede curses at you, things are really, really bad.

Sometimes you need a push

I know I do. Hindsight is a clear, but distorted lens. Some things you know at the time and some things you don’t. I’m not going to beat myself up about the mistakes I made. I’m trying to learn from them. I overlooked things I shouldn’t have. Luckily my friends pushed me.

 

Mentor Match Is Overrated

Sometimes You Don’t Need To Be Understood

Storm 4

I find fashion startups hard to work with because there are so many ways to fail. Do everything right and somehow something bad always seems to trip you up. They also attract hard-to-work-with personalities. Burned fingers make me wary.

This goes part way to explaining why one of my favorite startups spent the first four weeks of an accelerator learning to tell me – and eventually themselves – that they weren’t a fashion startup. They’re an e-commerce logistics startup, a sector I like.

Four years later they’re doing quite well. Their customers are happy. Their investors are happy. They’re happy, and so am I. They’re not a fashion startup.

Avoid startup huggers, unless a hug is what you need

Your time is painfully short and you need to cover ground as quickly as possible. A lot of mentors are in the game because it’s exciting and fun and that’s fine – as long as they add value. Their support needs to help you move forward.

Some days are harder than others and a pat on the back or thumbs up can really help. Accept a hug when you need a hug, but don’t be needy. If they want to hear your pitch just to hear your pitch, consider moving on. Get stuff done. It’ll make you feel better.

Resistance can be good

Sometimes what you need is a grumpy, old mentor who doesn’t get you or your idea. Maybe you’re like the sensor company I worked with recently, that couldn’t understand the pushback to their contactless payment technology.

I told them what others wouldn’t. The common perception is that the breakthrough for their technology has been ‘right around the corner’ for twenty years. We don’t care that it’s big in Japan. Now they start their conversations by addressing the elephant on the table. It seems to be working for them.

Not everyone will get you – and that’s good

I’ve pitched a concept for the last year that people either get or don’t get. Buy-in seems to be immediate and intuitive – or not at all. Convincing people who don’t get it right away is hard, but I’m closer than I was three months ago. My message is sharper now.

Sometimes you need to be forced to explain yourself until the person across the table understands. People who’ve drunk the Kool-Aid aren’t always the ones who can help most. Sometimes you need to be misunderstood, if only because resistance can make you stronger.

Is Your Mentor Program More Than Pictures on a Website?

ØresundsbroenHow does your mentor program actually use mentors?

There’s a temptation to put air quotes around the words mentor and program, because very few mentor programs are more than a list of people who may or may not stop by once or twice a year. Perhaps the proper thing is to segment mentor programs to make it possible to identify how they use mentors – and how they reward them.

What does it take to be part of your program?

Predicting the future is a hard business, so focus on performance instead of selection. Pay close attention to how often your mentors show up and how they do with the startups. If they do well, keep them.

If you’re just starting your program, don’t sweat mentor selection. Know that rules and pre-requisites can be a poor way to pick mentors. They may make it easier to make the list of potential candidates smaller, but you should be looking for effective mentors – and they come in many sizes. Recommendations work well as do instincts.

How do you manage your mentors?

You shouldn’t have to think about this one. The results matter more than the tools you use. What you’re looking for here is clarity. How active are your mentors? Who is meeting with whom? What is everyone getting out of it? If you want to do it with index cards instead of an app, be my guest, but make sure you’re capturing the data.

What is your churn?

Mentors come and mentors go. Sometimes they’re active and sometimes they’re not. How do you measure their activity? How do you segment them?

Do you keep inactive mentors on your list to make the list look pretty? Do you have a plan for activating inactive mentors? Do you strike them off if they haven’t been coming to your events or meeting with your startups?

What is your mentor cost of acquisition? What is your mentor ROI? How many hours of mentoring does your program provide your startups? Can you answer these types of questions or are there different rules for you and the startups you advise?

Why do the numbers matter?

Your mentors can add absurd amounts of value if used properly. Gathered and used properly, your data can tell you a lot about your program. Does it make a difference to star mentor retention whether your startups visit the mentor’s office or your mentors have to come to you? Ask your numbers.

Your data can show which mentors are good at making introductions and which are good at making teams work better together. It can show your investors how much value the mentor network you built has created. The numbers can prove or disprove your assumptions. And as long as it’s effective, it doesn’t matter whether the data is collected on index cards or an app.

Assumptions vs. Facts

Most of you have assumptions about these questions, but no formal data. You have assumptions about how to attract and keep the best mentors. You’re not alone. Most mentor programs prioritize differently from the startups they work with because no one demands they do what their startups do: test their assumptions. Ask yourself whether that makes sense.

Who Are These Mentors?

Four questions to ask yourself about your mentors

Mentors do not come in one-size-fits-all packaging. Our backgrounds vary, our skills vary, and, quite naturally, our motivations vary. Understanding us, your mentors, requires looking past the standard answers and asking yourself:

  • Who are we?
  • What can we add?
  • What do we want?
  • What can you give us?

Archetypes are key to understanding mentors

The answers to these questions come easier if you categorize your mentors. The individual mentor often falls into more than one category. There is plenty of overlap, but the differences between us are often key. We include investors, service providers, corporates, consultants, and academics, to name just a few.

Match the mentor to the task

Of these, the serial entrepreneur is often the most coveted, but mentoring is very individual. Success depends on the challenge, the situation, the circumstances, and not least, the match. Sometimes the perfect mentor is who you initially least expect it be.

It’s not a task, it’s a tool

Taking the time to analyze your mentors often ranks low. The big list of ‘Must-Do-Tasks’ doesn’t leave a lot of room for ‘Nice-to-Do-Tasks’. This brings up one of the nice things about this job: it falls into the ‘Something-That-Makes-My-Life-Easier’ category. Figuring out who can help you with what saves you time so you can go faster.

Don’t do what mentors can do better, faster

To those who would say they’re too busy trying to grow great companies, the answer is simple. If you’re not giving mentors the attention we deserve, you’re not just missing out on something that could help you grow faster. You’re slowing yourself down by spending time on things that we could be doing for you. Mentoring is a very effective way to get what you want. We’re flexible. We scale.

What next?

How to do it, you ask? I’m going to examine that in greater depth. I’ve been doing this for a while, and I’ve seen it done a lot of ways. There’s data, my opinions, other people’s opinions, and all sorts of war stories. It’s going to be fun.