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A former founder’s rules for bringing a startup mentality to a big company

Achieving startup-style businesses within a corporate environment requires a dual approach to “intrapreneurship.”

By Savi Baveja, Chief Strategy and Incubation Officer, HP — January 4, 2023

When you think of “corporate incubation,” do you picture suits sitting around a conference table planning the “next big thing?” Or a collection of science-y types tinkering in a lab? In fact, developing an internal hub for innovation is as much a cultural mindset as it is a space to create. Corporate incubation produces a dynamic “intrapreneurial” ecosystem that funds and develops its entrepreneurial talent, offering the agility and vitality of a startup while drawing on the existing knowledge, resources, and capabilities of the larger organization.

In today’s challenging environment, the majority of executive leaders will cautiously hunker down, focusing on addressing near-term threats while anticipating and planning for future scenarios. However, there is an alternative approach: embracing uncertainty as a motivator to aggressively pursue new business opportunities. That is the difference between deciding to look through the microscope (near term) versus looking through a telescope (long term). 

Savi Baveja, Chief Strategy and Incubation Officer at HP.

Savi Baveja, Chief Strategy and Incubation Officer at HP.

Growing new businesses within a large corporation requires time and space to flourish. Day to day, that looks like fostering the right talent and mindset; allowing the freedom to experiment with agility and speed; and providing protection from the heavy procedural expectations of a large company. 

 

RELATED: Becoming a digital-first company

 

Unleashing the incubated business

Businesses must exercise their “unleash” muscles and allow the imagination and experimentation needed to incubate a startup-like business within a bigger parent company. Companies can strengthen the flexible capabilities required to innovate quickly and enable employees’ intrapreneurial spirit by implementing five simple rules.

Make it a muscle, not just an organization

Creating a rigid structure to house all incubation businesses tends to breed antibodies and pushback from other parts of the company. While we have several businesses housed within incubation, we also open up incubation processes and tools to any business housed anywhere within the company. This eases tensions and fosters more open innovation. 

Establish clear criteria for the businesses you want to incubate

We defined a set of simple questions that the founding team must answer before we begin the incubation process. “Who is the target customer?” is one of these questions. “What is the burning pain point for this customer that must be urgently addressed? How is our potential solution ten times better than existing alternatives? What distinct HP capabilities are you leveraging? Is there an entrepreneurial and domain-expert team working on this?”  

 

Anthony Gerace

Manage resource allocation with agility

Rather than tying funding to budgets, we define specific milestones and stage gates of progress for each business and tie funding to achievement of these milestones. If a business fails to meet its milestones twice in a row, we initiate a conversation called “Persevere, Pivot, or Perish,” in which we attempt to course correct quickly. This process has already resulted in the closure of three businesses that were unable to provide viable solutions to large enough problems. 

Separate talent from the business

This may be controversial, but we discovered that it was critical to help talent understand that even if a business fails, they do not lose their jobs. This straightforward message encourages talent to be willing to label a failure as such and to proactively address challenges. It has proven to be critical for course correction and failing fast. 

Create community

Intrapreneurship is challenging and often quixotic for the teams involved in new businesses. We work hard across the businesses to foster mutual support, idea exchange, and shared learning. Morale and a sense of community have benefited as a result. 

Enable the muscles that drive progress 

While “unleash” muscles are necessary, they are far from enough to grow successful new businesses within a company. In fact, there is an entire second category of muscles that we call “enable” muscles, which focus on how to effectively and efficiently leverage the resources of the parent company to accelerate progress. Many companies place insufficient emphasis on developing and strengthening these steps to drive corporate incubation. At HP we believe we must allow simplified access to the required core assets of our company as a recognized brand with a broad customer base, such as extensive IP and technologies and expertise in business scale-up.

Define the critical few

We work with new businesses to clearly define the most important and differentiated parent company capabilities that must be leveraged. This simplifies and sharpens engagement with core functions, preventing new businesses from becoming overwhelmed by the parent company processes. Furthermore, if many capabilities must be leveraged, then the new business should most likely be integrated rather than separated from the core. 

Define clear boundary conditions

We create a simple list of “must-dos” and “do-nots” for each incubated business in critical areas such as compliance, cybersecurity, and values. This list clarifies the nonnegotiable guardrails within which incubated businesses must operate and prevents the need for exceptions to be approved on a regular basis.

“Companies can strengthen the flexible capabilities required to innovate quickly and enable employees’ intrapreneurial spirit.”

— Savi Baveja, Chief Strategy and Incubation Officer at HP

Maintain senior leadership engagement

Keeping senior business and functional leaders interested and supportive is obviously important, but difficult to achieve. We establish “incubation boards” made up of senior executives who engage with and advise incubated businesses. This engagement is critical for maintaining air cover for incubation. 

Provide shared operational support 

We form a small and low-cost shared “operational concierge” team to assist new businesses, so that business teams can focus on their core competencies rather than expend a lot of time navigating the parent company teams and processes. These operational concierges are extremely knowledgeable about the parent company’s functions, tools, and processes, and incubated businesses regard them as a valuable resource. 

Simplify core business processes

We collaborate with many core functions, such as IT, finance, and human resources, to define simplified approval and integration processes for new businesses. In IT, for example, we established a small New Business Incubation team that developed a simple IT stack to help businesses get off the ground quickly. 

With this ambidextrous approach, HP has been experimenting and innovating, resulting in several potentially major initiatives. We’re pursuing unmet needs in industries ripe for disruption and creating an environment in which to innovate, experiment, and eventually fill the needs we’ve identified. 

HP is disrupting multiple industries with this strategy. For example, it’s helping to produce the first fully compostable, plastic-free paper bottles with Choose Packaging. And HP is poised to significantly expand access to customized orthotics using 3D printing with the Arize solution, while the new Metal Jet S100 solution is delivering high-quality final parts at scale across industrial, consumer, healthcare, and automotive markets.

By incubating these and other disruptive businesses within HP, we’ve discovered specific capabilities in both the “unleash” muscle and the “enable” muscle that are absolutely critical to success — and which will create lasting value for our customers, shareholders, people, and planet.

 

READ MORE: In the world of remote and hybrid work, mentorship matters
Tags
Leadership / Innovation / Corporate
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Business

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