The Black Holes of Innovation

Astrophysicists spend a lot of time studying Black Holes, a region of space time which gravity prevents anything from being emitted.  Black Holes are powerful enough to prevent light escaping, thus they are hard to detect. They form when massive stars collapse at the end of their life cycles and the power of their gravitational field sucks in anything within range.  Corporate innovation has a lot in common with Black Holes.

Over the past few years, companies let go large numbers of research scientists, middle management and other staff.   It made the balance sheets look rosier, which combined with hundreds of billions of dollars in quantitative easing, that is cheap money, has resulted in companies with trillions of dollars of ready-to-spend cash on the books today. However, they did not invest in innovation, like Black Holes little or no capital emitted from these companies; instead, they sucked in all the smaller profitable companies within range. It may cheer investors and stockbrokers, but it left entrepreneurs and promising early start-ups without funds to develop their companies. It has to change.

There are moves within corporate culture to create ‘intrapreneurs.‘  In a recent article here on Innovation Excellence, John Webb wrote, “One of the biggest challenges for any intrapreneur or intrapreneurial venture is to navigate the idea or initiative through the maize of corporate decision making to get to the ultimate sources of power that can actually sanction the project or provide allocation of resources.”

There is an obvious contradiction here. Companies are downsizing staff and at the same time want to create a culture of internal entrepreneurship. From a psychological point of view, why would any employee risk association with failure when he or she sees colleagues fired?   The internal politics of corporations operates as fiefdoms, freewheeling entities threaten the internal power of managers. Further, large corporations operate as a series of internal profit centers for products and services.

As much as Richard Branson believes “everyone becomes so immersed in what they’re doing that they feel like they own their companies,” the reality is that employees have little or no say over their future.

A practical alternative one that will emit capital from the corporate Black Holes is to invest some of those trillions of dollars in promising start-ups. This does not mean that companies dole out money to every good idea and just let them go one their merry way. Within companies, there are many talented middle managers; most hit a glass ceiling in their career path.  As they get older, many with mortgages and children heading to college keep a low profile. Not rocking the boat is a preferred option. Internal politics becomes more important than enterprising ideas. However, there is another approach.

• What if companies funded promising start-ups?
• What if middle managers oversee the investment?
• What if companies pay their salaries for a guaranteed period of five years?
• What if these middle managers were only answerable to one executive in charge of these investments?

The benefits are manifold, if the investment succeeds then the middle manager is now an executive of a small growing company, in charge of his or her destiny.  He or she gained hands on experience in being an entrepreneur. The large company has a stake in a profitable new venture. Within the “mother” company, young up and coming talent moves up and sees there is a future nirvana beckoning in the form of a possible “Intrapreneurship.” There is no threat to existing fiefdoms, no risk to profit centers.  Corporations cease to be Black Holes.

Just one other point, it is worth noting what happens eventually to Black Holes, they keep sucking in mass and energy until they explode and become insignificant white dwarfs and neutron stars.

image credit:  bullet holes isolated on black from bigstock

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Peter Doyle is an award winning media marketing, news and documentary producer using rich media to accelerate innovation and commercialization. Check me out at https://www.linkedin.com/in/peterjdoyle