Some startups seem capable of outcompeting in their markets by innovating at breakneck speed, always staying ahead of the curve and even charting the path for others to follow.
As the great Ice Hockey player Wayne Gretzky said, you need to “Skate where the puck is going, not where it’s been.”
However other startups get mired in competing strategies, priorities and initiatives that mean they end up going nowhere fast.
They work just as hard as the market leader, but instead of generating traction they spin their wheels.
From a certain distance, both types of organisation can look very similar.
In both organisations, the task of pushing boundaries and seeing what works (or doesn’t) will be decentralised, with multiple teams and individuals probing and learning in parallel.
A lot of time and energy will be spent on trying to figure out new ways of doing things, improving on what came before.
And individuals will join the organisation because they’re excited by the autonomy and potential to make an impact in their role.
The difference is manifested in the results, with the chaotic organisation being left with competing, incoherent or incomplete information for their efforts, a lot of rework happening, and individuals that quickly become dispirited because the impact they hoped to have doesn’t materialise.
Which begs the question, what causes the difference between chaos and rapid innovation?
It’s a thin line, but the differentiating factors are common goals, coordination, feedback and consistency.
Let’s dive into each.
Common goals
First up, it’s important to start your efforts to innovate from the same shared understanding and goals, otherwise your results will be like comparing apples to oranges.
For example, it would be very easy for the marketing team to start testing new messaging or campaigns targeting a persona they put together last quarter whilst sales are also testing a new approach to closing their core persona…only the personas are completely different, and they may not even realise it.
Which means they could very well come back having both proved their hypothesis that x messaging resonates with y persona, whilst the other team has also proved that some entirely different messages resonate with an unrelated persona.
They’re now going to double down on these results, which only serves to pull them even further apart and ultimately set themselves up for a showdown in future exec meetings as they both try to prove their case, which are both backed up by some level of empirical evidence.
That’s very different from the rapid innovation startup, where there is a shared starting point for any individual or team to agree they’ll test a particular hypothesis against a mutual understanding of their target market, and the goals or outcomes are clearly articulated too.
This makes it much easier to compare and then bring together results so the output is a coherent, aligned strategy that gets stronger with each iteration.
Of course in order to achieve this level of initial alignment, it’s vitally important that all teams work from the same common GTM playbook and build their experimentation from this source of truth.
Coordination
The next way that innovative companies work differently to chaotic ones is through disciplined coordination.
At startups where innovation is fast and effective, individuals and teams speak to each other consistently; they use a shared framework for how they tackle experimentation; and they agree up front where their focus is. Let’s unpack each of these a little more.
On communication, teams will use simple but effective approaches such as kick off meetings, daily standups and retros to ensure there’s a super clear flow of information around the experimentation taking place.
This will typically be in addition to asynchronous communication via slack, miro boards, looms, project management tools etc.
Chaotic organisations will instead rely on ad-hoc communications, with meetings called last-minute by exasperated leaders who are trying to catch-up on hearsay and gossip they hear from their direct reports and peers.
High performing teams will also agree on frameworks to help govern their approach to experimentation, for example using the RICE/ICE scoring methodology for prioritisation, or something like RACI to ensure stakeholders are clear on their roles.
In a chaotic company, these frameworks will be left ambiguous or different approaches will be used by different teams and individuals, making it impossible to deliver a standardised approach across the business.
And at successful innovators, there’s always clarity on what’s being worked on at any given time, so that the areas of focus are made explicit which saves people potentially doubling up on work, or working on areas that are not a priority for the business at that point in time.
To do this, it helps to have a really well documented and modularised GTM playbook, so the team can isolate different aspects of it to work on.
Trying to experiment across an entire playbook is biting off more than you can chew, so best to focus specifically on one aspect, such as whether you can reach a new persona via a new channel, or if a pain point is felt more strongly by one ICP over another.
In contrast the chaotic organisation will set out with vague priorities, double-up on the same areas of testing (without coordination) and try to work across multiple areas of their GTM at once, due to the lack of clarification that helps drive focus.
Feedback
Another key difference between innovative and chaotic scaleups is their approach to feedback.
As you might imagine, a chaotic environment will take an ad hoc approach to feedback, typically leaving it up to individuals how – and even if – they will document and disseminate feedback.
This will usually result in an absence of feedback (and therefore learnings) from experimentation; and even where it exists it’ll be hard to find, likely stored in various different formats and tools, with the quality of the feedback hugely varied.
In a well-organised, high functioning innovative company, feedback is a critical tool in their arsenal that is well understood and utilised consistently by all team members.
Before, during and after experiments there will be clearly formatted documentation to capture what they’re hoping to achieve, how things are going, and then what lessons have been learnt.
This helps keep everyone on the same page, avoids rework and means the company benefits even from experiments that didn’t ‘succeed’ based on their original hypothesis, because future teams can pick up those learnings and try something new without repeating the same approach.
It also helps ensure that when people move roles or leave the company, all their knowledge doesn’t go with them; and the feedback is a rich treasure trove for new joiners to help accelerate their onboarding.
Consistency
Last but not least, a consistent approach to innovation characterises the high performing scaleups versus the ones that never seems to get ahead.
Little and often is the preferred way of working for innovation machines, taking a marginal gains approach where many small improvements compound to make them unbeatable executors.
Meanwhile the more chaotic competitor will launch big, often expensive initiatives to try and find that next ‘silver bullet’ which will see them come out on top. However all too often this big push will be over-complicated and lose momentum because new priorities pop–up that seem like an easier win.
To be great at innovation, it pays off to bake it into your culture and ways of working so that everyone has the opportunity to contribute, and suggest areas of your GTM playbook that could be tested and optimised.
This way you enjoy the benefits of bottom-up innovation coming from all the great minds you’ve hired to work in your business, versus the more top-down approach where you’ll need to spend a lot of time ‘selling’ the experiments into the businesses and trying to win stakeholder buy-in.
When you engage your whole employee base in a collective approach to innovation they’ll feel more of a contributor to your strategy, which is a fantastic way to motivate the team and give them the sense of ownership and autonomy that also underpins scaleups with exceptional execution.
What next?
If you’ve read this and think you might need to shift your approach to be more in-line with the innovative scaleup approach than the chaotic one, then the next steps you’ll need to take are:
- Clearly documenting your GTM playbook in one place, broken out into distinct modules so its easy to navigate and digest
- Create a way for anyone in the team to suggest experiments, with a cohesive approach e.g. detailing what they’re trying to achieve, how they’ll measure success, who needs to be involved etc.
- Make it super transparent when someone or a team are testing a particular aspect of the playbook, so anyone in the company can see what it is they’re working on
- Ensure there’s a simple way to capture feedback after the experiment has been concluded, and a mechanism for then folding the key takeaways back into your playbook if the outcome was seen as successful
If you’d like a tool that can do this out of the box, then get in touch with GTM works here as we’re looking for some early-adopters to test an alpha-version of our product for free in exchange for your honest feedback!