By Javi Creus, founder of Ideas for Change, and Santi Echazú, Co-Founder at Paisanos (Original publication in Spanish)

Organizational leaders face this problem daily, it is evident that they have to act and make decisions to advance in innovation but do not know how to do it. How to combine co-creation processes to obtain disruptive solutions with the current culture of the organization? How to validate disruptive ideas without generating large investment projects that do not have the certainty of succeeding? How to manage innovation while managing the current business?

Existing companies have a dual challenge: to innovate continuously in the businesses they already know to survive in the current competitive environment, and at the same time, to explore new business models that will drive their growth in the next cycle. This well-known article (“Managing Your Innovation Portfolio”, Bansi Nagji and Geoff Tuff, HBR May 2012) proposes dedicating 10% of the effort in innovation to transformative innovation with the goal of providing 70% of the margin in the long term.

The first type of innovation is embedded in the DNA of companies that compete successfully. In contrast, disruptive innovation is harder to integrate into the business dynamic, requiring alternative KPIs and a culture different from the dominant one. 

That is why many organizations choose to outsource their participation in future business models: they make direct investments or participate in incubation and acceleration processes. The difficulty here is not only to achieve financial return but also to align with the purpose and produce an internal cultural change.

On the other end is intrapreneurship, giving internal talent space for disruptive innovation. While alignment with purpose and cultural transformation is easier, the challenge in this case is for the ideas to be truly disruptive, to let participants "fly" and support their projects beyond the exercise.

From this difficulty arises Disruptive Business Factory, the proposal from Ideas for Change and Paisanos to systematize the creation of new business models in existing companies. We propose to launch a permanent cycle of ideation, testing, definition, construction, and launch of new businesses. The generation and management of the matrix of business models to explore.

The step-by-step plan

Imagine that every three months, 20 selected people from the organization would start a cycle of ideation for disruptive business models using the Pentagrowth methodology. They produce four new business models that will be tested with the processes proven by Paisanos in the next quarter while 20 new participants begin to design new ideas. Those business model proposals that pass the testing will enter the product definition phase in the third quarter, and once validated, they will be launched in the market.

After a year, the organization will have generated 12 tested new models; prototyped and validated at least 4, and will have one or two candidates to launch. After three years, it will have generated and tested 36 ideas, progressively invested in those that show the most promise, and effectively launched three. Meanwhile, it will have developed an updated strategic learning, a permanent observatory for the future, a laboratory for new business models, and hundreds of people with a disruptive mindset.

The Pentagrowth methodology takes participants to design high-growth and potential return business models, the work systems and tools from Paisanos allow for rapid and progressive testing, systematically reducing risk.  This way we maximize potential in design and minimize risk in validation and development. 

Can you imagine having your own innovation lab within your organization?

Contact us and we'll tell you more ;)