Category Archives: Entrepreneurship

Why Business Transformations Fail

(and What Data Centers Can Teach Us About Getting Them Right)

Why Business Transformations Fail - Pexels

GUEST POST from Robyn Bolton

On May 6, Nvidia CEO Jensen Huang and ServiceNow CEO Bill McDermott joined CNBC’s “Power Lunch” to discuss the companies’ partnership. But something that Huang said about large-scale cloud service providers (i.e., hyperscalers) at the end of the interview stopped me in my tracks:

It’s not a data center that stores information. It’s a factory that produces intelligence. And these intelligence tokens could be reformulated into music, images, words, avatars, recommendations of music, movies, or, you know, supply chain optimization techniques.

What struck me wasn’t the claim about what data centers and AI could create — we’ve seen evidence of that already. It was the re-framing of data centers from storage solutions to “intelligence factories.”

When leaders fail to lead, or even recognize that the business they’re in is different, even the best efforts at business transformation are doomed.

Because re-framing is how Disruption begins.

Data Centers Are No Longer in the Data Business

Repositioning your company to serve a new job requires rethinking, redesigning, and rebuilding everything.

Consider the old adage that railroads failed because they thought they were in the railroad business. By defining themselves by their offering (railroad transportation) rather than the Jobs to be Done they solve (move people and cargo from A to B), railroads struggled to adapt as automobiles became common and infrastructure investments shifted from railroads to highways.

Data centers have similarly defined themselves by their offering (data storage). However, Huang’s reframing signals a critical shift in thinking about the Jobs that data centers solve: “provide intelligence when I need it” and “create X using this intelligence.”

Intelligence Factories Require a New Business Model

This shift—from providing infrastructure for storing data to producing intelligence, strategic analysis, and creative output—will impact business models dramatically.

Current pricing models based on power consumption or physical space will fail to capture the full value created. Capabilities mustexpand beyond building infrastructure to include machine learning and AI partnerships.

But Intelligence Factories are Just the Beginning

While Intelligence Factories will require data centers to rethink their business models and may even introduce a new basis of competition (a requirement for Disruption), they’re only a stepping-stone to something far more disruptive: Dream Factories.

While the term “Dream Factory” was coined to describe movie studios during Golden Era, the phrase is starting to be used to describe the next iteration of data centers and AI. Today’s AI is limited to existing data and machine learning capabilities, but we’re approaching the day when it can create wholly new music, images, words, avatars, recommendations, and optimization techniques.

This Is Happening to Your Business, Too

This progression will transform industries far beyond technology. Here’s what the evolution from data storage to Intelligence Factory to Dream Factory could look like for you:

Healthcare: From storing medical records to diagnosing conditions to creating novel treatments
Financial Services: From tracking transactions to predicting market movements to designing new financial instruments
Manufacturing: From inventory management to process optimization to inventing new materials
Retail: From cataloging products to personalizing recommendations to generating products that don’t yet exist

How to prepare for your Dream Factory Era

Ask yourself and your team these three questions:

Is my company defining itself by what it produces today or by the evolving needs it serves?
What is our industry’s version of the shift from data storage to dream factory?
What happens to our competitive advantage if someone else creates our industry’s dream factory before we do?

If you’re serious about transformation, take a cue from the data centers: redefine what business you’re in—before someone else does.

After all, the key to success isn’t trying to stay a data center. It’s recognizing you’ve become an intelligence factory, and your long-term success depends on becoming a dream factory.

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Three Ways Strategic Idleness Accelerates Innovation and Growth

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Three Ways Strategic Idleness Accelerates Innovation and Growth

GUEST POST from Robyn Bolton

“What will you do on vacation?” a colleague asked.

“Nothing,” I replied.

The uncomfortable silence that followed spoke volumes. In boardrooms and during quarterly reviews, we celebrate constant motion and back-to-back calendars. Yet, study after study shows that the most successful leaders embrace a counterintuitive edge: strategic idleness.

While your competitors exhaust themselves in perpetual busyness, research shows that deliberate mental downtime activates the brain networks responsible for strategic foresight, innovative solutions, and clear decision-making.

The Status Trap of Busy-ness

At one company I worked with, there was only one acceptable answer to “How are you doing?” “Busy.” The answer wasn’t a way to avoid an awkward hallway conversation. It was social currency. If you’re busy, you’re valuable. If you’re fine, you’re expendable.

A 2017 study published in the Journal of Consumer Research confirmed what Columbia, Georgetown, and Harvard researchers discovered: being busy is now a status symbol, signaling “competence, ambition, and scarcity in the market.”

But here’s the uncomfortable truth: your packed schedule is undermining the very outcomes you’re accountable for delivering.

Your Brain’s Innovation Engine

Neuroscience has confirmed what innovators have long practiced: Strategic Idleness. While you consciously “do nothing,” your default mode network (DMN) engages, making unexpected connections across stored information and experiences.

Recent research published in the journal Brain demonstrates that the DMN is activated during creative thinking, with a specific pattern of neural activity occurring during the search for novel ideas. This network is essential for both spontaneous thought and divergent thinking, core elements of innovation.

So if you’ve always wondered why you get your best ideas in the shower, it’s because your DMN is powered all the way up.

Three Ways to Power-Up Your Engine

Here are three executive-grade approaches to strategic idleness without more showers or productivity sacrifices:

Pause for 10 Minutes Before Making a Decision
Before making high-stakes decisions, implement a mandatory 10-minute idleness period. No email, no conversation—just sitting. Research on cognitive recovery suggests that this brief reset activates your DMN, allowing for a more comprehensive consideration of variables and strategic implications.
Take a Walking Meeting with Yourself
Block 20 minutes in your calendar each week for a solo walking meeting (and then take the walk!). No other attendees, no agenda, just walking. Researchers at Stanford University found that walking increases creative output by an average of 60% compared to sitting. The combination of physical movement and mental space creates ideal conditions for your brain to generate solutions to problems you didn’t know you had.
Schedule 3-5 minutes of Strategic Silence before key discussions
Research on group dynamics shows that silent reflection before discussion can reduce groupthink and increase the quality of ideas by helping team members process information more deeply. Before you dive into a critical topic at your next leadership meeting, schedule 3-5 minutes of silence. Explain that this silence is for individual reflection and planning for the upcoming discussion, not for checking email or taking bathroom breaks. Acknowledge that it will feel awkward, but that it’s critical for the upcoming discussion and decision.

Remember, You’re Not Doing Nothing If You’re being Strategically Idle

The most valuable asset in your organization isn’t technology, capital, or even the products you sell. It’s the quality of thinking that goes into critical decisions. Strategic idleness isn’t inaction; it’s the deliberate cultivation of conditions that foster innovation, clear judgment, and strategic foresight.

While your competitors remain trapped in perpetual busyness, by using executive advantage of strategic idleness, your next breakthrough will present itself.

This is an updated version of the June 9, 2019, post, “Do More Nothing.”

Image credit: Unsplash, Laura Weiss

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Transform Your Innovation Approach with One Word

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Transform Your Innovation Approach with One Word

GUEST POST from Robyn Bolton

Have you heard any of these sentences recently?

“We don’t have time”

“Our people don’t have the skills”

“We don’t have the budget”

“That’s not what we do”

I hear them all the time.

Sometimes they’re said when a company is starting to invest in building their innovation capabilities, sometimes during one-on-one stakeholder interviews when people feel freer to share their honest opinions, and sometimes well after investments are made.

Every single time, they are the beginning of the end for innovation.

But one word that can change that.

“We don’t have time – yet.”

“Our people don’t have the skills – yet.”

“We don’t have the budget – yet.”

“That’s not what we do – yet.”

Yet.

Yet creates space for change. It acknowledges that you’re in the middle of a journey, not the end. It encourages conversation.

“We don’t have time – yet.”

“OK, I know the team is busy and that what they’re working on is important. Let’s look at what people are working on and see if there are things we can delay or stop to create room for this.”

“Our people don’t have the skills – yet.”

“Understand, we’re all building new skills when it comes to innovation. Good news, skills can be learned. Let’s discuss what we need to teach people and the best way to do that.”

“We don’t have the budget – yet.”

“I get it. Things are tight. We know this is a priority so let’s look at the budget and see if there’s a way to free up some cash. If there’s not, then we’ll go back to leadership and ask for guidance.”

“That’s not what we do – yet.”

“I know. Remember, we’re not doing this on a whim, we’re doing this because (fill in reason), and we have a right to do it because of (fill in past success, current strength, or competitive advantage.”

You need to introduce the Yet.

It is very rare for people to add “yet” to their statements. But you can.

When someone utters an innovation-killing statement, respond with “Yet.” Maybe smile mischievously and then repeat their statement with “yet” added to the end.

After all, you’re not disagreeing with them. You’re simply qualifying what they’re saying. Their statement is true now, but that doesn’t mean it will be true forever. By restating their assertion and adding “yet,” you’re inviting them to be part of the change, to take an active role in creating the new future state.

There’s a tremendous amount of research about the massive impact of this little word. It helps underperforming students overachieve and is closely associated with Dr. Carol Dweck’s research into fixed and learning mindsets.

The bottom line is that “yet” works.

Put Yet to work for you, your organization, and your efforts to innovate and grow.

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Three Practical Keys to Managing Uncertainty

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Three Practical Keys to Managing Uncertainty

GUEST POST from Robyn Bolton

“A Few Good Men” is one of my favorite movies. As much as I love Jack Nicholson’s classic line, “You can’t handle the truth!” lately, I’ve been thinking more about a line delivered by Lt. Daniel Kaffee, played by Tom Cruise – “And the hits just keep on comin’.”

But, just like Lt. Kaffee had to make peace with Lt. Cdr JoAnne Galloway joining his Cuba trip, we must make peace with uncertainty and find the guts to move forward.

This is much easier said than done, but these three steps make it possible. Even profitable.

Where We Begin

Imagine you’re the CEO of Midwest Precision Components (MPW), a $75 million manufacturer of specialized valves and fittings. Forty percent of your components come from suppliers now subject to new tariffs, which, if they stay in effect, threaten an increase of 15% in material costs. This increase would devastate your margins and could require you to reduce staff.

Your competitors are scrambling to replace foreign suppliers with domestic ones. But you know that such rapid changes are also risky since higher domestic prices eat into your margins (though hopefully less than 15%), and insufficient time to quality test new parts could lead to product issues and lost customers. And all this activity assumes that the tariffs stay in place and aren’t suddenly paused or withdrawn.

Three Steps Forward

Entering the boardroom, you notice that the CFO looks more nervous than usual, and your head of Supply Chain is fighting a losing battle with a giant stack of catalogs. Taking a deep breath, you resolve to be creative, not reactive (same letters, different outcomes), and get to work.

Step 1: Start with the goal and work backward. The goal isn’t changing suppliers to reduce tariff impact. It’s maintaining profit margins without reducing headcount or product quality. With your CFO, you whiteboard a Reverse Income Statement, a tool that starts with required (not desired) profits to calculate necessary revenues and allowable costs. After running several scenarios, you land on believable assumptions that result in no more than a 4% increase in costs.

Step 2: Identify and prioritize assumptions. With the financial assumptions identified, you ask the leadership team to list everything that must be true to deliver the financial assumptions, their confidence that each of their assumptions is true, and the impact on the business and its bottom line if the assumption is wrong.

Knowing that your head of Sales is an unrelenting optimist and your Supply Chain head is mired in a world of doom and gloom, you set a standard scale: High confidence means betting your annual salary, medium is a team dinner at a Michelin-starred restaurant, and low is a cup of coffee. High impact puts the company out of business, medium requires major shifts, and low means extra work but nothing crazy.

Step 3: Attack the deal killers. Going around the room, each person lists their “Deal Killers,” the Low Confidence – High Impact assumptions that pose the highest risk to the business. After some discussion to determine the primary assumptions at the beginning of causal chains, you select two for immediate action: (1) Alternative domestic suppliers can be found for the two highest-cost components, and (2) Current manufacturing processes can be quickly adapted to accommodate parts from new suppliers.

A Plan. A Timeline. A Sense of Calm.

With this new narrowed focus, your team sets a shared goal of resolving these two assumptions within 30 days. Together, they set clear weekly deliverables and reallocate time and people to help meet deadlines.

A sense of calm settles on the team. Not because they have everything figured out, but because they know exactly what the most important things to be done are, that those things are doable, and they are working together to do them.

How could you use these three steps to help you move forward through uncertainty?

Image credit: Pixabay

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ChatGPT Blew My Mind with its Strategy Development

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ChatGPT Blew My Mind with its Strategy Development

GUEST POST from Robyn Bolton

It’s easy to get complacent about your strategy skills. After all, our yearly “strategic planning” processes result in quarterly “strategic priorities” that require daily “strategic decisions.” So, it’s reasonable to assume that we know what we’re doing when it comes to strategy development.

I’ll admit I did. After all, I’ve written strategic plans for major brands, developed strategies for billion-dollar businesses, and teach strategy in a Masters program.

I thought I knew what I was doing.

Then ChatGPT proved me wrong.

How it Began

My student’s Midterm assignment for this semester is to develop, recommend, and support a strategy for the companies they’ve studied for the past seven weeks. Each week, we apply a different framework – Strategy Kernel, SWOT, Business Model Canvas, Porter’s 5 Forces, PESTLE, Value Chain – to a case study. Then, for homework, they apply the framework to the company they are analyzing.

Now, it’s time to roll up all that analysis and turn it into strategic insights and a recommended strategy.

Naturally, they asked me for examples.

I don’t have a whole lot of examples, and I have precisely none that I can share with them.

I quickly fed The LEGO Group’s Annual Report, Sustainability Report, and Modern Slavery and Transparency Statements into ChatGPT and went to work.

Two hours later, I had everything needed to make a solid case that LEGO needs to change its strategy due to risks with consumers, partners, and retailers. Not only that, the strategy was concise and memorable, with only 34 carefully chosen words waiting to be brought to life through the execution of seven initiatives.

Two hours after that, all of my genius strategic analysis had been poured into a beautifully designed and perfectly LEGO-branded presentation that, in a mere six slides, laid out the entire case for change (which was, of course, supported by a 10-page appendix).

The Moment

As I gazed lovingly at my work, I felt pretty proud of myself. I even toyed with the idea of dropping a copy off at LEGO’s Back Bay headquarters in case they needed some help.

I chuckled at my little daydream, knowing no one would look at it because no one asked for it, and no implementers were involved in creating it.

That’s when it hit me.

All the reasons my daydream would never become a reality also applied to every strategy effort I’ve ever been part of.

No one looks at your strategy because it’s just a box to check to get next year’s budget.
No one asks for it because they’re already working hard to maintain the status quo. They don’t have the time or energy to imagine a better future when they’re just trying to get through today.
No one responsible for implementing it was involved in creating it because strategy is created at high levels of the organization or outsourced to consultants.

What the strategy is doesn’t matter.*

What matters is how the strategy was created.

Conversation is the only way to create a successful, actionable, and impactful strategy.

Conversation with the people responsible for implementing it, they people on the ground and the front lines, the people dealing with the ripple effects of all those “strategic” decisions.

How It’s Going

Today, I’m challenging myself—and you—to make strategy a dialogue, not a monologue. To value participation over presentation. Because strategy without conversation isn’t strategy at all—it’s just a beautiful document waiting to be forgotten.

Who are you inviting into your next strategy conversation that isn’t usually there but should be? Share in the comments below.

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Focus your Emotional Energy Purposefully

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Focus your Emotional Energy Purposefully

GUEST POST from Janet Sernack

When I exited my corporate career more than thirty-five years ago, I was privileged to be regarded and respected as the Fashion Direction Manager for the Grace Bros Department Store group, one of Australia’s most senior women in retail management. This launched my global reputation as a fashion and lifestyle marketing innovator. In this exciting role, I was responsible for designing and implementing a company-wide fashion information system for apparel, accessories, homeware, merchandising, and advertising. This required me to focus my emotional energy on researching, analyzing, and conceptualizing global fashion and lifestyle trends and adapting them to suit the Australian consumer lifestyle.

It was a dream role before the invention of the Internet, the implosion of the mass media, and the dominance of fast fashion. It required our team to focus their emotional energy on intensively researching different global and diverse media sources, including yarn, textile, couture, designer, ready-to-wear shows, trade journals, magazines, and seasonal sales data.

Generating creative thinking

Creativity is about connecting things, and in the fashion world, the best designers make the most unlikely connections to produce novel and wondrous creations. As my professional background included graphic and fashion design and marketing, I could further hone my associative (lateral and connective) thinking skills to think creatively and critically in this role. To focus my emotional energy and attention on guiding my intuition, values, and decisions on the needs and wants of buyers, merchandisers, marketers, and customers. To emerge, diverge and converge the key connections and patterns occurring globally in the fashion world and external complex fashion systems. I also learned the importance of being customer-focused and the value and role of being empathic with customers, manufacturers’ value chains and fashion information system users.

It was an incredibly emotional, physical, and stressful role, which required me to travel overseas four times a year to stay current on the different global fashion streams.

This caused my life to melt into being at work, the gym, or the airport.

Stress-induced exhaustion and burnout

This resulted in my first profound encounter with stress-induced exhaustion and burnout, which hit me right in the face one morning when my body refused to move, and I was unable to get out of bed.

I have also noticed that many of my global coaching clients have faced a similar challenge: stress-induced exhaustion and burnout. Fortunately, they can use the coaching partnership to unearth their particular pattern and unresourceful ways of being and learn how to focus their emotional energy to disrupt, dispute, and deviate from it into a more resourceful way of being and acting. However, it has shifted the coach’s role as a healer, making it even more critical in our current environment.

Focusing emotional energy on pursuing mattering, meaning and purposeful work

This ultimately manifests as a crisis and becomes a defining moment. In my case, I made a fundamental choice to focus emotional energy on pursuing meaning, mattering, and purposeful work, which still focuses my full attention and drives me today.

It created a “crack, “or an opening and threshold for making two fundamental choices: to embark on a healing journey to become the kind of person I wanted to be and to find a way to focus my emotional energy on making the difference I wanted to make in the world.

This enabled me to use my knowledge, experience, and skills to establish Australia’s first design management consultancy.

What is emotional energy?

Emotional energy is the catalyst that fuels creativity, invention, and innovation.

Understanding and harnessing this energy inspires and motivates individuals to explore and embrace creative and critical thinking strategies, now in partnership with AI.

When a person’s emotional energy has contracted, it results in constrained, negative, pessimistic, and even catastrophic thinking habits, which have a toxic impact on the person’s identity and emotional and physical well-being.

This means there is no space, doorway, or threshold to take on anything new, novel, or different. Nor can they imagine what might be possible to evolve, advance, or transform their personal or professional lives in an uncertain future.

Emotional energy catalyses and directs your intrinsic motivation, conviction, hope, positivity, and optimism to approach your world purposefully, meaningfully, and differently.

When you are true to your calling or purpose, you will make extra efforts to be healthier, positively impact your well-being, and improve your resilience.

How does this apply to leadership in uncertain times?

“I think leaders need to remember that they are in the energy management business,” says Halsey. “Their role is to keep people focused, energized, and positive about themselves and their work. They may be unable to change external circumstances, but they can create a safe, nurturing, and empowering work environment. By setting clear goals, diagnosing individual needs, and providing the right leadership style, leaders can help their teams thrive—even in uncertain times.”

People want work to be less of a job and more of a calling.

According to Martin Seligman and Gabriella Rosen Kellerman in their book Tomorrowmind, a US-based research study that included two thousand employees of all ages, industries, tenures, and incomes, revealed that people craved more meaning at work regardless of sector or position. Everyone wanted work to be less of a job and more of a calling and gave their current jobs a rating of 49, which suggests that their “meaning cups” are only half full.

This search for meaning, mattering, and being of service to humanity in a different and value-adding way enables innovators, entrepreneurs and intrapreneurs to cultivate the emotional energy and develop the agility required to drive their creativity, invention and innovation endeavors.

It is the most critical ingredient that motivates, empowers, enables, fuels and sustains innovators, entrepreneurs, and intrapreneurs to adapt, survive and thrive on the innovation roller coaster.

Channeling emotional energy meaningfully and purposefully

From my leadership training and coaching experience, I have learned that most people desperately want their lives to make sense and be meaningful and to know that who they are and what they do matters. It is possible to link meaning and mattering to being intentionally motivated and directed by your core values to make a difference and a contribution that provides value and significance to someone, a community, or society.

Being purposeful

Being purposeful focuses your emotional energy, guides your life decisions influences your behaviors, shapes your goals, offers a sense of direction, and creates meaning. Rather than engaging in shallow, empty, or pointless activities, it gives you agency.

In our uncertain, volatile and disruptive world, it is crucial to think about your “purpose in life.” Be like an Entrepreneur and link your purpose as a guidepost to help you deal with uncertainty, navigate it better, mitigate the damaging effects of long-term stress, and become psychologically resilient.

People with a strong sense of purpose direct and focus their emotional energy on what really matters to them. They tend to be more agile and adaptive, hardier and resilient, and more able to refocus and recover quickly from adverse and catastrophic events.

According to McKinsey & Co.’s article “Igniting individual purpose in times of crisis,” purposeful people also live longer and healthier lives and are essential to employee experience. This results in higher levels of employee engagement, more substantial organizational commitment, and increased feelings of well-being. Like many entrepreneurs, people who find their purpose congruent with their jobs tend to get more meaning from their roles, making them more productive and more likely to outperform their peers.

How can you add more meaning, mattering and purpose?

Meaning is an outcome of purpose, and many people, due to their experience of the pandemic and hybrid workplace in a chaotic and uncertain world, are seeking to re-engage with their work and workplaces by focusing their emotional energy on improving their well-being and creating more purposeful, balanced, and meaningful lives.

This is a short section from our new book, “Conscious Innovation – Activating the Heart, Mind and Soul of Innovation”, which will be published in 2025.

Please find out more about our work at ImagineNation™.

Please find out about our collective learning products and tools, including The Coach for Innovators, Leaders, and Teams Certified Program, presented by Janet Sernack. It is a collaborative, intimate, and profoundly personalized innovation coaching and learning program supported by a global group of peers over 9-weeks. It can be customized as a bespoke corporate learning program.

It is a blended and transformational change and learning program that will give you a deep understanding of the language, principles, and applications of an ecosystem-focused, human-centric approach and emergent structure (Theory U) to innovation. It will also up-skill people and teams and develop their future fitness within your unique innovation context. Please find out more about our products and tools.

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Getting Buy-In for Change Now That Innovation is Dead

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Getting Buy-In for Change Now That Innovation is Dead

GUEST POST from Robyn Bolton

Innovation is undergoing a metamorphosis, and while it may seem like the current goo-stage is the hard part (it’s certainly not easy!), our greatest challenge is still ahead. Because while we may emerge as beautiful butterflies, we still need to get buy-in for change from a colony of skeptical caterpillars who’ve grown weary of transformation talk.

The Old Playbook Is Dead, Too

Picture this: A butterfly lands, armed with PowerPoint slides about “The Future of Leaf-Eating” and projections showing “10x Nectar Collection Potential.” The caterpillars stare blankly, having seen this show before.

The old approach – big presentations, executive sponsorship, and promises of massive returns within 24 months – isn’t just ineffective. It’s harmful. Each failed transformation makes the next one harder, turning your caterpillars more cynical and more determined to cling to their leaves.

The Secret Most Change Experts Miss

Butterflies don’t convince caterpillars to transform by showing off their wings. They create conditions where transformation feels possible, necessary, and safe. Your job isn’t to sell the end state – it’s to help others see their own potential for change.

Here’s how:

Start With the Hungriest Caterpillars

Find those who feel the limitations of their current state most acutely. They’re not satisfied with their current leaf, and they’re curious about what lies beyond. These early adopters become your first chrysalis cohort.

Make it About Their Problems, Not Your Vision

Instead of talking about transformation, focus on specific pain points. “Wouldn’t it be easier to reach that juicy leaf if you could fly?” is more compelling than “Flying represents a paradigm shift in leaf acquisition strategy.”

Build a Network of Proof

Every successful mini-transformation creates evidence that change is possible. When one caterpillar successfully navigates their chrysalis phase, others pay attention. Let your transformed allies tell their stories.

Set Realistic Expectations

Metamorphosis takes time and isn’t always pretty. Be honest about the goo phase – that messy middle where things fall apart before they come together. This builds trust and prepares people for the real journey, not the sanitized version.

Where to Start

Identify your first chrysalis cohort – the people already feeling the limits of their current state
Focus on solving immediate problems that showcase the benefits of change
Document and share small victories, letting others tell their transformation stories
Create realistic timelines that acknowledge both quick wins and longer-term metamorphosis

What’s your experience? Have you successfully guided a transformation without relying on buzzwords and fancy presentations? Drop your stories in the comments.

After all, we’re all just caterpillars and butterflies helping each other find our wings.

Image credit: misterinnovation.com

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Your Innovation Team Doesn’t Have to be Dead

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Your Innovation Team Doesn't Have to be Dead

GUEST POST from Robyn Bolton

When times get tough, the first things most companies cut are the “luxuries.” That includes their innovation teams. But as companies dismantle their labs, teams, and other structures, a crucial question emerges: Who’s working on growth?

Cutting innovation teams doesn’t just cut a branch off the org chart, it eliminates capabilities that are fundamental to sustaining and growing a business and culture.

So why throw the baby out with the bathwater? Here’s a scenario that might sound familiar: Your innovation team created something brilliant. The prototype works, early users love it, and the business case is solid. But six months later, its gathering dust because no one in the core business knew how to – or wanted to – take it forward.

This isn’t a failure of innovation. It’s a failure of integration.

Wait, I thought integrating innovation with the core business was bad

The traditional innovation team structure – a separate unit with its own space, processes, and culture – solved one problem but created another.

As innovation teams were given the freedom to think differently, they were also given shiny, new, fun, and amenity filled spaces cordoned off from everyone else. Meanwhile, “everyone else” was stuck in their usual offices and doing the usual things that keep the business running and, apparently, fund the innovation team’s luxe life.

The resulting Us vs. Them mentality fueled resentment that made it easy for “everyone else” to stonewall the innovation team’s efforts by pointing out flaws, uncertainties, and risks.

To be fair, they weren’t doing this to be mean – they were protecting the business. The innovators, meanwhile, grew frustrated, sought help from higher-ups who were happy to help until times got tough and cuts had to be made.

So, one team should work on both innovation and the core business?

Just like we need multiple words to describe the what and why of innovation, we need different operating models that embed innovation capabilities across the organization while protecting the space for them to flourish.

Here’s what it looks like:

For Core Improvements: Let your operational teams lead. They know the problems best, but give them innovation tools and methods. Think of it as equipping your existing workforce with new superpowers, not replacing them with superheroes.
For Adjacent Expansions: Create hybrid teams that mix operational experience with innovation expertise. When expanding into new markets or launching new products, you need both the innovative mindset and the operational know-how. Neither alone is sufficient.
For Radical Reinvention: You still need dedicated teams – but not isolated ones. Their job is to create offerings that reinvent the company and the culture that enables everyone to be part of the reinvention. Establish bridges that connect them with business units and enforce quarterly meetings to share progress, insights, and tools.

This isn’t theory.

Companies like Amazon have been doing this for years with their “working backwards” innovation process that’s used by all teams, not just a special innovation unit. When I worked at P&G, the brand teams worked on core improvements, the New Business Development teams (where I worked) physically sat next to the brand teams and worked on Adjacent expansion, and the radical reinvention teams were co-located with R&D at the technical centers.

Put it into practice

Here’s where to start:

Map your innovation portfolio to understand what types of innovation you need to hit your goals
Match your team structures to your innovation types
Start embedding innovation capabilities across the organization
Create clear paths for innovations to move from idea to implementation

The transition isn’t easy. It requires rethinking roles and reimagining how innovation happens in your organization. But the alternative – watching your innovation investments evaporate because they can’t cross the bridge back to the core business – is far more painful.

What’s your experience? Drop your stories and strategies in the comments. Let’s figure this out together.

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When Scaling Innovation Backfires

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How One Company Became the Theranos of Marshmallows

When Scaling Innovation Backfires

GUEST POST from Robyn Bolton

Here’s a head-scratcher when it comes to scaling innovation: What happens when your innovative product is a hit with customers, but you still fail spectacularly? Just ask the folks behind Smashmallow, the gourmet marshmallow company that went from sweet success to sticky situation faster than you can say “s’mores.”

The Recipe for Initial Success

Jon Sebastiani sold his premium jerky company Krave to Hershey for $240 million and thought he’d found his next billion-dollar idea in fancy French marshmallows. And initially, it looked like he had.

Smashmallow’s artisanal, flavor-packed treats weren’t just another fluffy, tasteless sugar puff – they created an entirely new snack category. Customers couldn’t get enough of their handcrafted, churro-dusted, chocolate-chip-studded clouds of happiness. The company hit $5 million in sales in its first year, doubled that the next, and was available in 15,000 stores nationwide in only its third year.

Sounds like a startup fairy tale, right? Right! If we’re talking about the original Brothers Grimm versions. Corporate innovators start taking notes.

The Candy-coated Vision

Sebastiani and his investors weren’t content with building a successful premium regional brand. They wanted to become the Kraft of craft marshmallows, scaling from artisanal to industrial without losing what made the product special. It’s a story that plays out in corporations every day: the pressure to turn every successful pilot into a billion-dollar business.

So, they invested. Big time.

They signed a contract with “an internationally respected builder of candy-making machines” to design and build a $3 million custom-built machine and another with a copacker to build an entirely new facility to accommodate the custom machine.

Bold visions require bold moves, and Sebastiani was a bold guy.

The Scale-up Meltdown

But boldness can’t overcome reality, and the custom machine couldn’t replicate the magic of handmade marshmallows. It couldn’t even make the marshmallows.

Starch dust created explosion hazards. Cinnamon wouldn’t stick. Workers couldn’t breathe through spice clouds. The handmade ethos of imperfect squares gave way to industrialized perfection. Each attempt to solve one problem created three more, like a game of confectionery whack-a-mole.

By 2022, Smashmallow was gone, leaving behind a cautionary tale about the gap between what customers value and what executives and investors want. The irony? They succeeded in their mission to disrupt the market – by 2028, the North American marshmallow market is projected to more than double its 2019 size, largely thanks to the premium category Smashmallow created. They just won’t be around to enjoy it.

A Bittersweet Paradox

For so many corporate innovators, this story hits close to home. How many promising projects died not because customers didn’t love them but because they couldn’t scale to “move the needle” for a multi-billion dollar corporation? A $15 million business might be a champagne-popping moment for an entrepreneur, but it barely registers as a rounding error on a Fortune 500 income statement.

This is the innovation paradox facing corporate innovators: The very pressure to go big or go home often destroys what makes an innovation special in the first place. It’s not enough to create something customers love – you must create something that can scale to satisfy the corporate appetite for growth.

Finding the Sweet Spot

The lesson isn’t that we should abandon ambitious scaling plans. Instead, we must be brutally honest about whether our drive for scale aligns with what makes our innovation valuable to customers. If it doesn’t, we must choose whether to scale back our ambitions (unlikely) or let go of our successful-but-small idea.

After all, not every marshmallow needs to be a mountain, but every mountain climber (that’s you) needs a mountain.

Image credit: Unsplash

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Startups, Companies, Acquisitions and Hurricanes

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Startups, Companies, Acquisitions and Hurricanes

GUEST POST from Mike Shipulski

If you run a company, the most important thing you can control is how you allocate your resources. You can’t control how the people in your company will respond to input, but you can choose the projects they work on. You can’t control which features and functions your customers will like, but you can choose which features and functions become part of the next product. And you can’t control if a new technology will work, but you can choose the design space to investigate. The open question – How to choose in a way that increases your probability of success?

If you want to buy a company, the most important thing you can control is how you allocate your resources. In this case, the resources are your hard-earned money and your choice is which company to buy. The open question – How to choose in a way that increases your probability of success?

If you want to invest in a startup company, the most important thing you can control is how you allocate your resources. This case is the same as the previous one – your money is the resource and the company you choose defines how you allocate your resources. This one is a little different in that the uncertainty is greater, but so is the potential reward. Again, the same open question – How to choose in a way that increases your probability of success?

Taking a step back, the three scenarios can be generalized into a category called a “system.” And the question becomes – how to understand the system in a way that improves resource allocation and increases your probability of success?

These people systems aren’t predictable in an if-A-then-B way. But they do have personalities or dispositions. They’ve got characteristics similar to hurricanes. A hurricane’s exact path cannot be forecasted, the meteorologist can use history and environmental conditions to broadly define regions where the probability of danger is higher. The meteorologist continually monitors the current state of the hurricane (the system as it is) and tracks its position over time to get an idea of its trajectory (a system’s momentum). The key to understanding where the hurricane could go next: where it is right now (current state), how it got there (how it has behaved over time), and how have other hurricanes tracked under similar conditions (its disposition). And it’s the same for systems.

To improve your understanding of how your system may respond, understand it as it is. Define the elements and how those elements interact. Then, work backward in time to understand previous generations of the system. Which elements were improved? Which ones were added? Then, like the meteorologist, start at the system’s genesis and move forward to the present to understand its path. Use the knowledge of its path and the knowledge of systems (it’s important to be the one that improves the immature elements of the system and systems follow S-curves until the S-curve flattens) to broadly define regions where the probability of success is higher.

These methods won’t guarantee success. But, they will help you choose projects, choose acquisitions, choose technologies, and choose startups in a way that increases your probability of success.

Image credits: Pexels

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