‘This fake innovation makes everyone feel warm and fuzzy’ why the big business and start-up relationship is broken

In his new book ‘Pioneers Wanted’, Innovation Consultant Philip J.A Clarke has laid out his blueprint for how leaders in the business world can think like pioneers.

In doing so, Clarke is challenging on how he currently sees the leadership and the corporate space.

He says that pandering to shareholders is stifling innovation.

Clarke says: “I attribute these evolutions to the unchallenged preference for comfort that has taken hold in our business culture. Leaders stuck in incremental innovation soothe themselves with the idea that the future is unpredictable and unknowable.

“Their internal culture emphasises stability over disruption, catering to the external pressures of shareholders or investors; meanwhile, the company internally promotes those individuals up the corporate ladder who are a ‘safe pair of hands’, thus reinforcing the risk-averse atmosphere. The resulting mindset ensures that these organisations receive change as disruption.

“The rush to create corporate innovation functions over the last decade has been remarkable. In an environment of low returns and high disruption, large institutions knew they must do something. Corporate innovation functions are the natural entry point for the start-up community and give the incumbent visibility of emerging threats or partners.

“They are safe sandpits to develop flashy and futuristic fakeware. They showcase what the legacy organisation and a cool start-up could do together in a superficial digital experience, without ever plugging into the commercial reality of the legacy business.

Clarke continues: “This fake innovation makes everyone feel warm and fuzzy. The start-up feels like it has access to decision-makers and a far larger customer base. The incumbent feels young and dynamic – playful even. In fact, play is perhaps the best way to describe this generation of innovation that rarely matures to become relevant to anyone, especially the legacy business. It’s simply theatre.

“The illusion of safety in size and the mistaken belief that ‘strategy is dead’ encourages big businesses to leave proper innovation to the start-ups. The great irony, of course, is that the course of action that feels most comfortable to these businesses – staying within the herd and accessorising with fake innovation – is actually the most dangerous. By receiving change rather than leading it, they leave themselves entirely exposed.”

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