Tips for Established Companies to Keep Innovating
Skip to content
Innovation Entrepreneurship Nov 8, 2017

Tips for Established Companies to Keep Innovating

Intrapreneurship requires you to “think like a disruptor.”

An intrapreneur shows his CEO a plan.

Yevgenia Nayberg

Based on insights from

Paul Earle Jr.

How does a company fail? To borrow a phrase from Hemmingway, two ways: “gradually and then suddenly.”

Add Insight
to your inbox.

For example, established companies often focus on short-term financial and business objectives, overlooking fledgling competitors until they are no longer fledgling and ignoring small market trends until they represent seismic shifts.

This is the opposite of what successful disruptors do. Those companies are sniffing out any small, potentially market-changing trend they can find in order to establish themselves and take on the bigger players.

“Established companies have to start thinking like disruptors,” says Paul Earle, an adjunct lecturer on innovation and entrepreneurship at the Kellogg School. “It’s not a choice. Their entire existence is at risk.”

Earle has seen the struggle to innovate from both sides: he has helped found startups like the brand acquirer River West Brands and the spirits company Angel’s Envy, which Bacardi bought in 2015, and has worked as an intrapreneur within global corporations. His current endeavor, Paul Earle & Company, advises corporations on innovation and new ventures. Drawing from these experiences, he offers tips for established companies to remain one step ahead of the disruptors.

Build—and Advertise—a Culture of Intrapreneurship

Company leaders looking to bolster intrapreneurship need to build a culture in which employees are given the latitude and support to experiment—a straightforward process that Earle says doesn’t require any tricks.

“I see it as binary: companies that value intrapreneurship will succeed, and the ones that don’t will be left behind,” Earle says. “You empower people by being a champion for their ideas and removing corporate red tape.”

Managers and innovation leaders ought to have broad purview to green-light interesting and quickly executable ideas, to allow for an authoritative sign-off instead of a byzantine approval process that ladders up to senior leadership. Earle acknowledges that giving up control is not always easy, but it is necessary to keep up with scrappier competition.

It is also important for large companies to advertise their intrapreneurial spirit to the world. Recruitment is a serious and growing challenge for more established companies, which are often pigeonholed as staid or antiquated. So Earle advises turning the freedom to experiment into a recruitment tool.

“They need to show the best and the brightest that, yes, you can create new businesses here, and yes, you will get the support of management if your ideas are good enough,” Earle says.

Embrace Fresh Scenery and Role Playing

Established companies setting the stage for their intrapreneurship need to shake themselves out of their usual ways of thinking. Earle recommends a change of scenery and a bit of role-playing.

“Companies need to step away from their corporate cubicle farm,” he says. “If you want to learn how to play baseball, it’d be a pretty good idea to go to a baseball field.”

“Companies need to step away from their corporate cubicle farm. If you want to learn how to play baseball, it’d be a pretty good idea to go to a baseball field.”  

This means more than touring a local incubator. It means establishing working groups within those incubators, like Procter & Gamble did while working to develop novel products and business models.

“P&G went completely out of their own comfort zone and geography,” Earle says, by sending a team from corporate headquarters in Cincinnati to the 1871 incubator in Chicago. The result of the experiment was Tide Spin, an on-demand laundry and dry-cleaning service now being piloted in Chicago.

An equally valuable practice that Earle often encourages innovators to try is to imagine how you might tackle a problem if you were Sara Blakely, or Richard Branson, or Tony Hsieh.

“This kind of role-play can lead to decisions that would have been inaccessible if you’d stayed in corporate mode,” he says. “Asking yourself ‘what would Branson do?’ can spark divergent ideas.”

Think Simple Prototypes and Small Markets

Big companies, by default, tend to think big. “But these companies need to start behaving like startups, and that means launching concepts that may be small at first,” says Earle. For that to happen, they should follow two central principles: prototype quickly and think small.

“A good prototype is manifestation of strategy; it’s strategy made real,” Earle says. “But prototyping often goes wrong because companies wait too long and work too slowly.”

Today’s technology makes building a prototype—be it digital or physical—relatively easy and inexpensive. But don’t get hung up on finding the perfect technology right away. Use aluminum foil and duct tape for a physical object, or draw out the details of an app with pencil. In the end, timeliness rules in innovation. “If you wait until your product is perfect, you’re too late,” says Earle.

And while prototypes should not be developed without consideration for their future commercialization, that does not necessarily mean every internal innovation needs to hold out for a national launch at Walmart. Think and work small—in the same way that actual startups do.

“All the sexy companies that corporates are buying now? They all started small and none of them would have survived the corporate review process had they been pitched as an internal idea,” says Earle. And yet corporations pay “wild multiples” to acquire these companies later.

Not every great innovation is a billion-dollar business in three years; in fact, few of them are. Earle points to Nestle’s recent $425 million purchase of a majority stake in Blue Bottle Coffee, which started out using a six-pound roaster and delivering to a few residential customers. What major coffee company would ever think that small?

“If you’re completely absent smaller market experiments, that’s a sign you’re in trouble,” he says. “You should have lots of little bets going on at any given moment; you should not be sitting in a conference room waiting for the big bet to pay out.”

Featured Faculty

Adjunct Lecturer of Innovation & Entrepreneurship

About the Writer
Dylan Walsh is a freelance writer based in Chicago.
Most Popular This Week
  1. What Happens to Worker Productivity after a Minimum Wage Increase?
    A pay raise boosts productivity for some—but the impact on the bottom line is more complicated.
    employees unload pallets from a truck using hand carts
  2. How to Get the Ear of Your CEO—And What to Say When You Have It
    Every interaction with the top boss is an audition for senior leadership.
    employee presents to CEO in elevator
  3. 6 Takeaways on Inflation and the Economy Right Now
    Are we headed into a recession? Kellogg’s Sergio Rebelo breaks down the latest trends.
    inflatable dollar sign tied down with mountains in background
  4. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  5. When Do Open Borders Make Economic Sense?
    A new study provides a window into the logic behind various immigration policies.
    How immigration affects the economy depends on taxation and worker skills.
  6. How Offering a Product for Free Can Backfire
    It seems counterintuitive, but there are times customers would rather pay a small amount than get something for free.
    people in grocery store aisle choosing cheap over free option of same product.
  7. How Has Marketing Changed over the Past Half-Century?
    Phil Kotler’s groundbreaking textbook came out 55 years ago. Sixteen editions later, he and coauthor Alexander Chernev discuss how big data, social media, and purpose-driven branding are moving the field forward.
    people in 1967 and 2022 react to advertising
  8. Why Do Some People Succeed after Failing, While Others Continue to Flounder?
    A new study dispels some of the mystery behind success after failure.
    Scientists build a staircase from paper
  9. How Much Do Boycotts Affect a Company’s Bottom Line?
    There’s often an opposing camp pushing for a “buycott” to support the company. New research shows which group has more sway.
    grocery store aisle where two groups of people protest. One group is boycotting, while the other is buycotting
  10. 5 Takeaways on the State of ESG Investing
    ESG investing is hot. But what does it actually deliver for society and for shareholders?
    watering can pouring over windmills
  11. Could Bringing Your "Whole Self" to Work Curb Unethical Behavior?
    Organizations would be wise to help employees avoid compartmentalizing their personal and professional identities.
    A star employee brings her whole self to work.
  12. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  13. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  14. Why Well-Meaning NGOs Sometimes Do More Harm than Good
    Studies of aid groups in Ghana and Uganda show why it’s so important to coordinate with local governments and institutions.
    To succeed, foreign aid and health programs need buy-in and coordination with local partners.
  15. 3 Tips for Reinventing Your Career After a Layoff
    It’s crucial to reassess what you want to be doing instead of jumping at the first opportunity.
    woman standing confidently
  16. Immigrants to the U.S. Create More Jobs than They Take
    A new study finds that immigrants are far more likely to found companies—both large and small—than native-born Americans.
    Immigrant CEO welcomes new hires
  17. Podcast: Does Your Life Reflect What You Value?
    On this episode of The Insightful Leader, a former CEO explains how to organize your life around what really matters—instead of trying to do it all.
More in Innovation