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November 08, 2013

How to staff innovation teams in your company

Throughout the time I was running Hashrocket, we constantly entertained innovative ideas that might allow us to evolve into a product shop, ala 37signals. Actually, we didn't just entertain those ideas, I also tried to set them in motion by tasking people in my organization to execute them. In doing so, I learned first-hand about the motivations that drive normal employees and how they differ (dramatically) from entrepreneurs.

Risk is everything.

It doesn't make sense to throw people who aren't entrepreneurially minded into innovation efforts and expect them to come up with new products. Innovation teams should be made up of employees who have agreed to take on personal financial risk in the interest of reaping financial rewards. The most independent and creatively driven employees will gravitate there naturally. Would-be startup founders who are considering leaving to launch their own business will have an attractive alternative — and the company not only avoids losing capable, ambitious employees but increases the profit in retaining them.

It takes only one person to leave and found a successful startup for your company to lose out on a huge growth opportunity. If they leave anyway, you should consider investing in their startup. But this all assumes that you employ entrepreneurial people in the first place!

Once a company leaves high growth behind and matures, the way that we did at Hashrocket, it forms an implicit social contract with its employees, a promise to provide them with stability over the long term. At that point, much to my frustration, the risk-takers are long gone. They've either gotten out of the building, permanently, or they have evolved along with the company by putting down stable roots of their own. At Hashrocket, I witnessed singles couple up and get married, and childless couples begin having one, two or more babies. We began hiring more and more people with families. Not that there's anything wrong with that, but their priorities are completely different. Those people might entertain entrepreneurial fantasies, but their chances of following through on them are very slim.

Therefore, I had a really hard time finding anyone willing to take on personal financial risk in new innovative ventures. It just wasn't feasible for them, and at some point, you need to bring in other entrepreneurs to lead those efforts. The CEO can't be responsible for all innovation.

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Like this topic? I’m writing a book with my co-author, Trevor Owens, on corporate entrepreneurship called The Lean Enterprise. 


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