How to accelerate business innovation in externally funded scalable start-ups?
“Given enough time and money, your competitors can duplicate almost everything you’ve got working for you. They can hire away some of your best people. They can reverse-engineer your processes. The only thing they can’t duplicate is your culture… Do you know the difference between strategy and culture? Well, when Napoleon was in Paris in a room with all his generals around a table, discussing how to attack Russia, that’s strategy.
But what makes a million men march to Moscow that is culture!” Herb Kelleher Southwest Airlines
This article draws on my previous experiences as a business innovation coach, coaching some of the top HPSUs (High Potential Start-Up) in Europe and the past 10 years as an executive coach working with CEOs and senior leaders in international corporations and large public sector organisations.
I have the privilege of working with some of the most innovative start-ups through the H2020 Phase 2 programme managed by the European Commission and as part of this very competitive programme (<6% success rate) I coach clients from their concept to market maturity. The main coaching outcome is aimed at bringing their innovation to investment readiness and maturity for market take-up.
I love these coaching engagements because I can prototype some of my own concepts around systems thinking, psycho-dynamic analysis using OD/team coaching as a conversational leadership tool for change with firms ranging from 20-70 employees; moving from seed funding to round A of venture capital financing; where the main working styles are about innovating, researching, exploring, exploiting opportunities, pushing for change….
I love these coaching engagements because of the buzz, energy, passion, fire element, post-modernist worldview of ‘making a difference’ - working with the oldest and youngest millennials – the generation Y as oppose to the other side of my coaching practice working with the traditional (i.e. fulfilling duties, preserving tradition) large public sector organisations and modern worldviews (i.e. appealing to status) of the Fortune 1000.
In every Phase 2 engagements it’s clear that the means to address key strategic challenges, mainly scaling the HPSU, already exist within the organisation. However invariably there are factors which get in the way – such as next round of funding or hiring functional experts but the main one I found is the ‘professionalising of the organisation’ – the upgrade of its operating system led by the Senior Management Team (SMT). Many of these issues are solvable but not by individuals on their own.
It’s widely accepted that the biggest barrier to innovation in companies is the suppressive effect of culture and leadership but by taking a more strategic approach to coaching and mentoring, it’s much more likely that they will address these difficult challenges.
For example, the majority of the Senior Management Teams I coach see themselves as a – pseudo or potential team on the Katzenbach team performance curve (see Phase 2 client examples from pic). Katzenbach and Smith define a Real Team as “a small group of people with complementary skills who are committed to a common purpose, performance goals and approach for which they are mutually accountable”.
A Pseudo Team doesn’t want to take the risk of committing to a common purpose and the mutual accountability that this entails and a Potential Team are working towards a higher level of performance and must agree on mutual accountability.
I should have added that the main thrust of Organisational Psycho-dynamic Analysis is action research which surfaces the unseen, the invisible, the sub-conscious in order to accompany senior managers to the place for transformational change to begin. For this reason this approach is deeper than most business coaching or change management engagements. It does this by getting the senior management talking about what is actually happening compared to their aspirations. The crux point is the extent to which the HPSU is ready to enter the “dark night of transformation” (extreme disequilibrium) when they are ready to suspend their current attitudes, judgements, fears, habits practices…….
Only 3% of start-ups go on to scale-up (EU Start-up and Scale-up Initiative) and the most impactful way to coach a HPSU is through actively surfacing the conversations about what is happening in the SMT in order to get collective buy in. Their reactions and resistances to this, and to naming or seeing the unspoken, will inform much about their readiness to scale. The other aspect is to coach each leaders on their leadership skills such as influence, resilience and strength to lead others into and through this extreme disequilibrium – first they, themselves have to be fit for the journey.
Deep change that generates ongoing adaptiveness is a phenomenon with exterior and interior dimensions and by working from the inside-out as oppose to the common outside-in approach I listen for a lack of alignment between purpose-vision-mission and strategy – the process of leadership (interior culture of SMT).
This miss-alignment will usually highlight gaps between structure and processes within the collective and by identifying these gaps early on; it helps me to adjust the learning outcomes of the coaching process.
By linking this alignment together and using a proven goal setting and achievement coaching process allows for sustainability leading to Kirkpatrick's 4th level and generating a significant return on investment.
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