Corporate customer development model: oxymoron?

It is definitely the fad du jour in the field of innovation: customer development model (if you look it up on google today you will find 322,000 results). People ‘in the know’ are throwing left and right its signature terms: customer discovery, pivoting, minimum viable product, lean startup, etc. And it is not just start-ups, consultants, tech visionaries, and VCs the people who are talking about it. People in big companies as well! (especially the ones in the Silicon Valley). Corporations want the cool factor as well and to be perceived as relevant actors in the valley, they have to claim they are also innovating. And how are they backing their statement? They will confidently tell you they have a handful special crack teams that ‘operate like a start-up’ right inside their headquarters.

Just for the record, I have nothing against applying a start-up mentality to traditional product development. In fact quite the opposite. I am a total believer of Steve Blank's model. I even read his book “the four steps to the epiphany” and I was ecstatic to discover he managed to write the book many people in the design field have tried to write for years but have failed miserably: a book that defines a needs and customer-driven product development process (which not surprisingly shares many customer-centric principles of the design thinking process) in a way that anyone can understand. Along the way, the author, with his clear and well-defined process, manages to demystify the ‘secret sauce that can’t be taught’ in the innovation process that many innovation and design consultancies are happy to charge a premium for when passing the bill to their clients.

Perfect then. Corporations now have a roadmap for how to increase the chances of success when innovating. The rest should be easy, correct? Just a matter of highlighting the interesting parts of the book, evangelizing them to the whole team, and following them step by step, right?

Well, not quite. Reality is that as much as maverick product managers would like, they will never be able to operate as a start-up inside a big company. Why? It could be because any or a combination of this factors:

• Internal Politics: executives/founders making undebatable decisions that affect your product
• Dependencies with the larger organization: product/technology platform related, budget decisions, shared supporting processes, etc.
• and probably most important, the rewards and risks involved in operating as a start-up: why would someone in a big corporation work 80 hours a week if the upside is maybe a 10-15% extra bonus compared to working at a start-up where you can make 200-300%?

The only way large organizations can successfully apply customer development model is by funding truly independent startups inside the company: no strings attached to the mother ship, no interference whatsoever, and all the incentives in place for its founders to do what is necessary. These companies should feel comfortable giving shareholders money to a group of 4-5 employees and invite them one year later to see what they have come up with. For the rest who are not brave enough, the highest they can aim is to foster a culture of customer-centeredness, comfortable with chaos and change, and most importantly willing to learn from failure.

[Photo: Dawn Endico]