Building an innovation culture inside a medium to large, legacy business is hard work across multiple dimensions. Sometimes the challenge can actually be insurmountable with too many intractable forces working against change.

In some cases, it can be better to spin out a separate company with a new culture, mission and team composition. In these cases the legacy business provides the “seed” capital and takes a meaningful ownership stake.

The new company(s) should be free to aggressively pursue an innovation agenda - even if that means cannibalizing or even disrupting the legacy business.

This has many, many advantages (and, of course, some disadvantages). Amongst the advantages is that it allows outside investors to come in (reducing risk) and the development of an ESOP (employee share option pool). Both of these factors increase the chances of attracting top talent from Silicon Valley style companies who tend to be looking for high growth equity opportunities.

A related area to explore is setting up a strategic venture fund to invest in existing companies innovating in the areas you believe in. But that’s for another post.

So if you’re inside a large company fighting to drive disruption and new thinking, consider getting buy-in for a clean new entity with a different kind of structure, mission and people.