Ditching the startup mentality and adopting a venture capitalist mentality implies that instead of cultivating a great idea, you should bet on as many as possible.
In other words, CEOs should think of themselves as funders, not startup founders within their own companies. This involves thinking big, taking risks, and taking a broader, more objective view of opportunities based on insights from data.
The venture capitalist mindset, itself, is to foster a forward-thinking investment culture, rather than just foster the culture of innovation.
What's more: the role as an executive is not to run the startups. Its role is to allocate resources for the things that are most likely to create value.
This requires investing in a range of ideas based on key insights into opportunities and needs. The benefit of this strategy is that it allows companies to go beyond incremental growth.
In fact, many of the world's most successful companies, like Amazon , employ a version of the venture capital mindset. That is, they invest in a series of risky but exciting ideas, hoping that one of them will lead to a breakthrough.
But not only large companies can afford to make these types of bets.
This can generate reluctance in corporate boards, especially in the most conservative. Therefore, focus must be taken when presenting new ideas. For example, instead of going to your meeting and saying "We are going to promote ten initiatives," announce, "We are going to start an innovation group."
It is therefore convenient to partialize resources: Put small amounts of money in XYZ. By thinking like a venture capitalist, only the portfolio is reported, rather than the success or failure of each initiative.
When designing an innovation portfolio, for example, it is a good idea to do a thorough assessment of the weaknesses and opportunities in your industry. This involves talking to stakeholders from across the spectrum of the customer journey and anyone else involved in providing or receiving care.
Then identify the bets that are more incremental and the bets that can be disruptive. Wherever possible, organizations should find a way to quantify the risks and rewards associated with each potential bet.
Once a range of potential innovation opportunities are identified and analyzed, leaders must be aware of how they allocate risk through ongoing investment. Each company will have its own margin for risk, but you should always be explicit about the balance.
Building a balanced and quantified portfolio is important in helping leaders pursue big ideas in changing industries. In other words, playing it safe is not the best strategy. But when deciding which high-risk opportunities to invest in, it's important to look at the organization's strengths, priorities, and values for guidance.
Now, while larger organizations have some inherent advantages in many areas of contemporary innovation, it is possible for small startups to learn from the bigger strategies of the larger ones.