It's cliché when people say, "Entrepreneurs are the risk-takers.” To the contrary, entrepreneurs actually seek to avoid risk. They mitigate risk.They seek to reduce the uncertainty in a new venture. Those who do not reduce uncertainty are the risk takers. This is what happens in many established companies.
When uncertainty creeps into the core business, the natural reaction is to stay away from it. But this is actually “risk-taking.” Continuing to execute the way “it’s always been done” in the face of uncertainty is a path to failure.
In order to reduce uncertainty, exploring in the core business is as important as ‘run the business’ activities. It improves operational efficiency, while also uncovering new opportunities.
In an uncertain business landscape, many companies fall short of their revenue targets, yet most still maintain aggressive revenue goals moving forward. However, we’ve observed that when this happens, these companies often cut budgets for exploration and opportunity discovery. Just this week, one of our clients shared that their CFO had put a hold on spending for opportunity discovery and customer insights because they had not met their revenue targets.
So how do you explore in the core with limited budget and resources. Here are the three essential strategies for applying an entrepreneurial approach that have proven effective in an enterprise.
1. Understanding Market Needs
In the startup world, exploration is the norm. It’s not necessarily because people think of it that way, but because the default nature of a new business is not knowing. There is no blueprint yet for building, marketing, selling and delivering new value for customers. The first step is (or ought to be) understanding the market needs. This requires interviewing or observing potential customers to understand their needs and running experiments to validate that your solution can address them—all before building any part of the product. And everyone is involved.
In established businesses, leaders and employees often assume that the blueprint they use to execute the business is fixed. This assumption is further reinforced in times of uncertainty, leading to a tendency to hunker down and focus on maintaining the status quo. However, as the past few years have shown, little is truly fixed. The pandemic, war, supply chain disruptions, inflation, and shifting government policies have all sent ripples through the business landscape, disrupting markets. To navigate this change, the blueprint must be continuously adapted to the evolving environment.
How do you fix that?
You have to adopt a startup mindset. You must go out into the world to discover what has changed and what additional changes are coming. You have to balance execution work with some exploration in order to have an operational plan that evolves with the environment.
On the ground, this could be as simple as having all team members—regardless of their expertise—interact with customers to gain empathy and understand their needs. This can be done by talking to customers or observing their behavior in the context of your products and services. Some organizations are hesitant to provide employees with direct access to customers. All I can say is: try it!Customers truly appreciate when you take the time to listen to them, and you never know what unmet need you might discover in the process. For example, by speaking with customers, a B2B company identified an opportunity for a new billing feature in their legal case management software, which ultimately led to increased revenue.
2. Confronting Risk
If you turn a blind eye to risk, you’re putting the business in jeopardy. Complexity and uncertainty for the core business is greater than ever, and is the new normal. The number of economic downturns that we've had in the first 24 years of the 21st century is extraordinary, and they are different from the crises of the 20th century. Digital connectedness and speed, systemic risk sources such as cyber threats, and new types of financial instruments are some of the characteristics that set them apart, with no precedent for how to address these issues.
As mentioned earlier, the core business needs to realize that when faced with rapid market changes, you can't merely do what you did yesterday. You have to adapt. And to adapt, you have to increase your awareness of what's going on around you, both inside and outside the walls of your organization. You must include into your normal work this idea: "We need to do some exploration."
So where do you start? Whether at the strategy, portfolio, product, or even feature level, it's essential to identify the market, technical, and regulatory assumptions, and prioritize them based on what is known and unknown and level of impact to the business. You also need to prioritize market risk over technical and regulatory. If there is no product for your market, why would you build it? We worked with a multinational that had previously prioritized technical risk in developing a mobile product, which resulted in only a handful of customers. Through exploration, we prioritized and mitigated market and customer risk enabling them to pivot to a product that met their revenue goals.
Exploration enables you to bust assumptions and cut through biases to gain new knowledge, mitigating risk and improving efficiency in delivering the desired outcome.
3. Adopting Agile
When it comes to “explore in the core,” the number one objection I hear from leaders is, "We don't have time, we need to focus on execution."What I say is, “if you put it on the calendar, you just made time.”
Remember, the goal is to overcome uncertainty, which requires the ability to adjust plans based on new information gathered during exploration. This is why adopting Agile practices is valuable—agility, as the name suggests, allows you to do just that. It enables you to move with both speed and precision while maintaining a level of specificity to stay focused. Sprints help structure work within a fixed time frame, allowing teams to pause, reflect, and define the next steps accordingly.
When you pause and reflect, you create the opportunity to balance execution with exploration, ensuring your operational plan evolves with the environment.
Exploration work might involve interviewing customers, running experiments, speaking with experts, gathering secondary market data, or collecting competitive intelligence —anything that reduces uncertainty. To reiterate, the goal is to minimize unknowns by acquiring knowledge, enabling the team to improve efficiency in delivering the desired outcome. Teams are also likely to uncover insights that reveal new growth opportunities."
Exploration is not always about discovering a revolutionary product. In fact, I would argue that most large enterprises do not need that. Identifying anew market for an existing product or exploring adjacencies can drive more business impact at speed.
Exploration improves execution efficiency, while laying the foundation for future growth. This is why we need to explore in uncertain times.