Competence Reframing (C-REF): Why Pitching To Your Boss Is Not Like Shark Tank

If you’ve ever watched an episode of Shark Tank, you might come away with the impression that decision-makers in the business world are eager to invest in innovative, marketable ideas. It is indeed possible for promising concepts to germinate into successful startups relatively quickly, especially in the current investment climate. But if you work for a big company, you may have a hard time getting an innovative idea past your boss, let alone Mark Cuban.

Inspired by the success of the lean startup model, corporate entrepreneurs who work for large organizations are becoming more focused on creating innovative new products and services. However, established companies are not always willing to take chances on new innovations, especially those that do not clearly fit into the organization’s core strategic priorities. This reluctance is often frustrating for the entrepreneurial types whose creations never see the light of day.

This doesn’t mean that corporate entrepreneurs shouldn’t try to innovate; they just need to innovate differently. By focusing solely on product-market fit, these creative thinkers often fail to account for important distinctions between startups and corporations that merit different approaches to pitching new ideas.

Successful startups make innovation a top priority. They use methods such as rapid prototyping and market validation to carve out new niches and disrupt existing ones, often in a very short amount of time. Larger corporations can (and should) embrace these same principles. However, to sell managers on the value of their ideas, corporate entrepreneurs must go further and pitch their innovations as the next logical step in their organization’s growth trajectory. Rather than trying to make the innovation fit neatly into the company’s current objectives, they should do the reverse and reframe the organization’s competences to fit the innovation.

For example, Ken, an innovator at Company A, proposed video conferencing innovation in an organization whose core competencies lay in making high-quality color printers. When he proposed the innovation, his managers were perplexed because video conferencing technology had nothing to do with printing technology. In fact, the companies best suited for in video conferencing were movie production houses that could create compelling virtual reality experiences to really take video conferencing to the next level. Ken, however, reframed his organization’s competencies. Ken asserted that video conferencing technology was just shifting his organization’s competences from color printing pixels on paper to printing pixels on the screen. Although Ken later acknowledged that printing on paper was very different from printing on screen, at that moment, the reframing helped decision makers understand the connection between Ken’s innovation and their organization’s competencies.

A key selling point in these discussions is to emphasize that launching the innovation will not require the organization to make significant investments in new resources or changes in strategy.

Furthermore, the corporate entrepreneur should demonstrate how innovation creates a unique competitive advantage by leveraging the organization’s existing strengths. So, how should they do this? I recently co-authored a study that set out to answer this very question.

Most research on entrepreneurship only addresses one side of the equation: product-market fit, or the degree to which a new product or service will gain traction among its intended customers. Our research highlights the importance of the other side of the equation, from the perspective of the employee who is striving to pitch an idea to internal decision makers.

Building on literature from the fields of strategy, organization theory, and corporate entrepreneurship, my co-authors and I conducted interviews and collected data at 14 large companies located primarily in Silicon Valley. Based on our findings, we outlined five key steps, Competence Reframing Practices (C-REF), that innovators can use to help their managers see the true value and potential of their ideas.

The five steps of C-REF are:
1) Assess innovation fit or misfit with the organization’s strategy
2) Assess innovation fit or misfit with the organization’s competences
3) Select commonly understood organizational competencies that are perceived as their organization’s strengths
4) Reframe the meaning of key competencies to show fit
5) Show that the innovation creates unique value for customers with minimum additional investments

In sum, the best way to persuade leaders to endorse an innovation is to creatively reframe the company’s competences to show how the idea creates a unique advantage with minimal additional investments.

In the example above, Ken not only reframed his organization’s competencies but also showed he had insightfully partnered with a movie production house. He thoughtfully emphasized that the movie production house had world-class capabilities to create a virtual reality experience for cutting edge video conferencing. Company A, as a leader in the printing technology space, already had the best technology. Thus the partnership between the two entities would create an unparalleled video conferencing experience for their customers. This would provide Company A with a unique advantage with minimal additional investments that other organizations cannot easily imitate.

Organizational leaders who spend millions of dollars on innovation are frustrated that although their employees may be generating a steady stream of quality ideas, few of them ever turn into viable innovations. This often occurs due to a perception -- correct or otherwise -- that the innovation does not fit the organization. Similarly, employees become frustrated when they succeed in demonstrating their innovations’ product-market fit but fail to convince decision-makers to implement their ideas.

While there are many resources available for entrepreneurs, very few are available for intrapreneurs beyond generic platitudes such as “take risks” or “ask for forgiveness, not permission.”

Rangapriya (Priya) Kannan-Narasimhan is an associate professor at the University of San Diego School of Business. She also holds a joint appointment as a professor of entrepreneurship at the University of Exeter Business School in the UK. At the USD School of Business, Priya leads a strategic initiative called Torero Ventures (TVX), which is a catalyzer focused on developing applied, interdisciplinary skills, among undergraduate and graduate student entrepreneurs as they create sustainable ventures. Priya teaches in the USD School of Business MBA program and she is also an affiliate faculty member at the USD Joan B. Kroc School of Peace Studies. She has also been affiliated with the Management Systems Consulting Corporation since 2004 and is currently a senior associate consultant at Management Systems. The above article was based on research Priya published in the Strategic Management Journal.