How a Culture of Experimentation Helped Us Survive COVID-19
COVID-19 has served as a wake-up call to leaders everywhere.
Not only has it emphasised the importance of having cash at bank, and not being leveraged to the hilt, but it has also emphasised the importance of being adaptable.
So many companies are now being forced to do something that they previously neglected — explore new business models.
This applies to small business — 50% of which in the States can’t survive more than three months — as well as large corporations like Virgin Australia which might not see the other side of this pandemic.
I discussed the value of having a portfolio of both exploration of new business models, as well as exploitation of the existing, with leading management thinker, Alex Osterwalder, for an episode of the Future Squared podcast.
Episode #381: Alex Osterwalder on Building an Invincible Company
When you’re exploiting an existing business model, uncertainty is low, and therefore returns are predictable. We implement all sorts of measures to make us more efficient at execution — such as the literal and proverbial assembly line — but when the world changes, we find ourselves holding a hot potato — efficient at doing what nobody wants or is willing to pay for anymore.
Most innovation initiatives tend to fall under the banner of what Steve Blank calls ‘innovation theatre’ — maybe a one off accelerator program, perhaps a tiny investment portfolio of a handful of startups, or perhaps a central innovation team that explores several new business ideas a year.
But here’s the thing. The typical venture capital firm tracks several thousand startups a year, meets 2,000, invests in 20, and even despite all of this diligence, only one to two of these investments is likely to bear much fruit.
In fact, only 1% of venture backed startups ever get to unicorn status, and a good 75% of Series G startups — those that have raised hundreds of millions of dollars — fail to exit.
That’s the nature of innovation — it’s inherently uncertain, there are more things that can go wrong than go right, there are many unknown unknowns, too many factors outside your control and a rapidly evolving reality to deal with that can derail even the most promising of teams with the most promising of ideas.
As Osterwalder points out it in his new book, The Invincible Company, if we invest $100,000 into 250 projects, then based on typical performance, about 162 will fail, 87 will find some success, and only one will become a new growth engine.
This is precisely why venture capitalists cast a very wide net, and precisely why startups, SMEs and large corporations need to as well if they are serious about playing the long game, and surviving inevitable shocks that characterise the rapidly evolving business world.
At Collective Campus, we’ve been working on innovation with corporate executives and startup founders for over five years.
We’ve worked with the likes of Lufthansa, BNP Paribas, MetLife and Microsoft, and incubated over 125 startups that have collectively raised more than US$30M. Our core team is based in Australia, but we have clients all over the world, and in 2018 we were named one of Australia’s fastest growing companies by the Australian Financial Review, Australia’s Financial Times.
But here’s the thing…we don’t just preach this stuff. Our business is not immune, and so we practice it as best we can.
What worked yesterday might not work tomorrow. COVID-19 is a reminder of that. Many of the assumptions that underpinned our business model(s) before COVID-19 are now false, and a number of high profile engagements we had secured have either been postponed or canceled.
And that’s okay — because we’ve built a culture of ongoing experimentation and adaptation.
We’ve run hundreds, if not thousands of experiments across both product innovation, and business model innovation — the latter extending to the testing of numerous customer segments, marketing channels, distribution channels, profit models, ways of working and so on.
To celebrate our company turning five in April, I decided to take stock of many of the larger experiments we’ve run, and figured I may as well share this with the world, as it might be inspiring or useful for some.
For context, we’re a small company — a core team of less than ten people, with a few dozen hired-gun facilitators, consultants, designers, developers in different pockets of the world — from the Philippines and Serbia, to Philadelphia and Singapore.
We started life as a General Assembly knock-off, but quickly pivoted to innovation training for large corporations on topics like the lean startup, design thinking, agile, and corporate innovation fundamentals, we’ve had to innovate in and around that. This has been our core business ever since.
This culture of experimentation has baked resilience into our business, because if some chips should fall -as has been the case with COVID-19 — then others will remain standing. Should all chips fall, then that’s fine too. We’ll create some new ones.
Here’s a snapshot of just some of our larger experiments and what came of them.
After a year of running nothing but workshops and training courses, we learned that many organisations we were pitching to either couldn’t innovate internally without going through necessary systemic and cultural changes, but still wanted exposure to emerging technology and innovation in their sector.
With that, we approached and ended up developing an accelerator program for one such company, Mills Oakley — an Australian mid-tier law firm.
Law firm Mills Oakley funds $500,000 ‘Shark Tank’-style start-up accelerator
It was Asia-Pac’s first legal-tech startup accelerator, and it generated a ton of press for us. One of participating companies, Kobi.ai, was acquired by LawAdvisor, and the accelerator won Mills Oakley the 2017 ALPMA/LexisNexis Thought Leadership Awards.
The success of this program opened the door to additional accelerator programs with the likes of Charter Hall, Microsoft and Village Roadshow. We became a preferred provider of accelerator and incubator programs for the Australian Federal Government, and earned some significant funding as a result.
This fast became a new growth engine for us, accounting for about fifty percent of our company revenues for the next three years.
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The WorkFlow podcast is hosted by Steve Glaveski with a mission to help you unlock your potential to do more great work in far less time, whether you're working as part of a team or flying solo, and to set you up for a richer life.
To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.
