How Corporate Antibodies Destroy Innovation

A Horror Story from the Beverage Industry

“Intrapreneurship” as they call it, is an oxymoron. You see, the more entrepreneurial you are as an employee, and the bigger you dream, the more likely you are to get shut-down.

I would know, because not so long ago I was tasked on a breakthrough innovation project to save a $50 Billion global brewer from its contracting and increasingly regulated market.

From the beginning we identified a broad & untapped opportunity that we had the technical capability to succeed in. We found a space bigger than the market our company already played in and one where all potential sales were complementary to our existing business. After a lengthy exploration process, we were ready to give this project a go.

We did everything right from the start. First we invested time to understand our internal capabilities. We did internal interviews not only to understand what our company was good at, but also to sound out internal politics. Our executive sponsor was a brilliant, motivated, and experienced intrapreneur.

Much of our internal marketing was successful. But even early on there were some warning signs. Specifically when we spoke to marketing directors who would have to launch our product.

“I’ve already got production capacity issues, I can’t turn my lines over to produce something with such small initial volumes.”

“My sales team are swamped with handling their current customers and you want us to go into completely new channels? No chance.”

Understandably they were doing what they have been trained to do; protect their resources and defend their revenue streams. At the time, we wrote they’re reaction off as short-sightedness and assumed further development would allow them to see the product’s potential and get behind it.

Next we set off on several rounds of intensive research. We used consumer diaries and focus groups to get a deep understanding of customer needs. We pitched imaginary drink concepts to see which ones customers rejected and which ones excited them. We even mixed prototype versions of the drink to understand reactions to taste, texture, and color.

It was so exciting. We successfully uncovered strong unmet needs and new occasions during the day for the product to target. After spending nearly $500,000 on research and 8 months of our team’s blood, sweat, and tears, we matched a lead consumer need to a brilliant product and brand concept.

In addition, our R&D teams told us they could make the product and it would be nearly impossible for competitors to copy. Market conditions could not be more perfect and we all believed we were onto something big. I couldn’t wait to become a customer of the product myself.

And then it all came falling down. We designed an iconic piece of packaging to grab consumer’s attention but were told we had to work with the existing bottles our company produced.

Innovation budgets were tightened and we were asked to rush through the refinements on packaging design, diluting what we knew excited the consumer. Then everything went quiet as our executive sponsor worked the corridors, trying to get support for the new brand and product.

Our product couldn’t have been positioned better strategically—it was in a totally new category and answered an unmet customer need with a solution we could do better than anyone else. And best of all—it would not take away any sales from our existing business.

And yet a few months later—the corporate antibodies killed it. All we got after pouring nearly a year of our careers into this endeavor was a brief email stating the need to “renew our strategic focus on our core business.”

Companies are designed to see breakthrough innovations as viruses—things so different from the body that they must be eliminated. The biggest thing I learned is that intrapreneurs can never dream big—because the bigger the idea the more threatening it is to those who rely on the success of yesterday’s business.

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Over a beer a few months later, and following my experience at Lean Startup Machine, I suggested to this executive sponsor perhaps we should have taken a Lean Startup approach. The money we spent on research could have been spent putting the product in the market and “iterating.” Instead we could have come back to the business with a product people were already buying. Perhaps the antibodies would be less likely to shut it down. Oh well, next time!

About the Author

Luke Vincent is a winner of Lean Startup Machine London in 2013. He has 15 years experience in brand strategy and innovation. He is happiest helping startups craft brands that turn customers into raving fans and shaking up the way corporates do innovation. Learn more at his website.

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