Jeff Bezos likes to say, “Big winners pay for thousands of failed experiments,” as he mentioned last month at The Economic Club of Washington, where he detailed his endeavors across various industries like Amazon, The Washington Post and Blue Origin. You can watch his full interview with David Rubenstein here
Bezos’s message stood out to me because I see a clear dividing line with mid-market companies. There are those who recognize industry disruption and focus heavily on innovating their business offerings, and there are those who are complacent. Odds are we won’t be discussing the complacent companies 10 years from now. This is why it is critical to embody this mentality to not only survive, but become an industry leader.
Technology, specifically A.I., has catapulted mid-market companies into levels of industry disruption that were unimaginable at the turn of millennium. With this wave of disruption comes an accelerated cycle of innovation, and with innovation comes failures.
While failure can be discouraging, it only takes one idea, big or small, to set the stage to build a very valuable company or turn just another company into an industry leader. Our work with corporate boards is centered on identifying and measuring innovation. We do this by starting with one project or use case to understand the costs incurred as the technology matures. The value of an innovation investment can’t simply be measured by net sales or increased revenue streams. Odds are there will be mistakes along the way. The value gained from these mistakes in terms of proprietary knowledge and experience can be immeasurable.
Another way we help our clients think about innovation is to have them experience disruption first hand. We do this by taking them out of the board room and out of their comfort zones. How? By hosting curated innovation immersion tours at some of the largest technology companies in Silicon Valley, by giving them behind-the-scenes access to disruptors at major conferences like CES, and by facilitating peer-to-peer exchange networks through our support of organizations like NACD and Gartner. This helps our clients not only experience innovation and disruption first hand, but it helps challenge their thinking and the questions they need to be asking regarding strategy when they return to their board rooms.
Risk taking should be embedded in a board’s bloodline, but that doesn’t equate to being reckless. It means taking calculated risks when the opportunity presents itself and justifies the R.O.I. Take the outside view to heart by joining peer exchange networks, connecting with venture capitalists and industry analysts and staying up to date on the latest news through a variety of publications and podcasts (e.g. WSJ Future of Everything, Recode Decode and Masters of Scale).
To take another page out of Mr. Bezos’s playbook, imagine the wildest success that could occur in a few years as a result of innovation today – then write a mock press release, creating a narrative and addressing expected FAQs. Whether implementing new ideas or planning for regulatory changes, this exercise helps anticipate questions from shareholders and answers their most common question, “Why are we doing this?” No company is invincible, no matter how much of a head start you have on the next game-changing idea. Wherever your business is in its growth cycle, our experience and insight can help chart and guide your business’ path to the next big win.
About the author
National Managing Partner, Markets, Clients & Industry