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Interview with Dr. Markus Anding, co-founder and Managing Director at Excubate Corporate Startups
In our highly competitive world, companies need to innovate in order to survive. Easy to say, not that easy to implement. Even less so to implement successfully. The two mainstream approaches to corporate innovation – intrapreneurship and incubation – have their Achilles’ heel and may not deliver expected results. Thus, Dr. Markus Anding, co-founder and Managing Director at Excubate Corporate Startups, insists that corporate innovation needs to be reconsidered. His answer to the challenge of a new approach to corporate innovation: Excubation.
PARK INNOVAARE: You have over 12 years of hands-on experience working with both big corporations and start-ups. What made you think that the corporate approach to innovation needs a make-over?
Dr. Markus Anding: Big corporations and start-ups are quite different in nature. While the former focus on executing the current business and developing it via incremental innovation, the latter create value via more disruptive innovation with a messier process. This division of responsibilities worked well in a world that was focused more on physical products. Digitalization is changing that now. Start-ups are now able to disrupt a corporate’s existing business models even faster and replace them with digitally-enabled services, globally and quickly (again, think of Uber or Airbnb). For corporations to sustain their role, they need to speed up their innovation activities, take more risk, be more aggressive – by learning from start-ups.
The Excubation approach seems to be opening up new perspectives for corporate innovation. What theory does it draw on?
We see big companies making two fundamental mistakes in trying out start-up-like innovation. They either push it too far out with accelerators or incubators completely remote from the core business (organizationally, physically and process-wise) that try to find external start-ups and tie them to the business. And/or they keep it too close to themselves with intrapreneurship programs that are not able to leave the corporate boundaries. We believe there is a middle ground that builds on the people, ideas and capabilities that come from inside the corporation and intelligently separates corporate start-up activities from the core business. Deliberately leveraging the company’s resources (customer access, technology, etc.) while giving freedom where needed. This approach we call excubation.
Often incumbent companies struggle to achieve real breakthroughs because they concentrate their efforts on the processes or, best-case scenario, on the incremental improvements. How can Excubation help them?
Excubation per se takes a more radical approach to innovation by broadening the idea generation process and then taking business-building activities somewhat out of the building and giving the innovation team mental and physical space. It’s still considerate of the corporate need for process by running the team through a well-orchestrated business building approach with defined sprints and deliverables.
What are the top three industrial showcases to convince people about Excubation?
Let me try to take a little different angle here. There are more than 7500 incubators and accelerators worldwide, and most of them fail. Failing in this context means they don’t deliver significant new business but mostly deliver some marketing impact and help recruit young talent. We’ve seen many companies swinging the pendulum too far towards external startups and back too far towards internal intrapreneurship activities. Excubation by definition has a higher likelihood of success, since it follows a best-of-breed approach, leveraging internal and external best practices. One good example of corporates taking a more excubation-like approach is Microsoft, running a team challenge with internal teams to develop new Xbox features and incentivizing those teams like real entrepreneurs. Another, almost historic, example is IBM with its EBO (emerging business opportunities) unit, that was set up with autonomy, reporting directly to the CEO and delivering substantial new business like the IBM service business or open source business.
Would you call yourself an innovator, and if so, why?
Well, essentially we are trying to find innovative ways to innovate. I perceive innovation as a mindset and way of thinking and working. Besides the creative process of coming up with new ideas, the actual ability to innovate lies in the ability to create and build something real out of these ideas. This is what I focus on with an innovative, i.e. non-traditional, approach. So, yes, I would call myself an innovator in the sense of making innovative ideas real, not only dreaming them up.