Atlanta Spotlight | Brad Shepard

Innovation is such a hot topic among companies that it has taken over the cover of the Harvard Business Review and the agenda in the corporate boardroom. 

“It’s like a wildfire,” says Brad Shepard of Monumental Innovation. “The pace of change has just accelerated so much. I think a lot of people are concerned.”

That’s because they don’t want to get burned.

“Everybody’s trying to figure it out,” Shepard says. “Large companies are terrified of what’s happening. Can they keep up? Can they come up with new ideas? If they do, what do they do with them?”

Shepard believes large companies need to think like entrepreneurs -- or partner with entrepreneurs like his team to do the thinking for them and fast-track the process.

As co-founder of Monumental Innovation with Daniel Crowder, Shepard believes in “combining startup thinking with large company maturity and assets to form something new.”

They’ve coined a term for the concept: “Co-sourced innovation.”
Instead of innovating solely through acquisition, large companies partner with Shepard’s firm -- a startup itself -- to come up with new products or services.

Innovation can typically be categorized into three distinct buckets:  Sustaining, such as new product features; breakthrough, typically expands an existing product category; and disruptive, which are the game changers that can make existing products obsolete.  “Established companies typically are very good at sustaining innovation but struggle in breakthrough and especially disruptive innovation,” Shepard says.

“They use us to come up with uncommon ideas and business models and see if we can make them real,” he adds. “Right now we’re looking for large companies that are in a space that we find interesting or we think we can help them develop the next big thing.”

In existence only about 18 months, Monumental Innovation is working with three Fortune 500 clients and at least four are on the waiting list. Clients find Monumental Innovation through word of mouth. It doesn’t have a website and its name is not on the door of its office space on Peachtree Street.

“If we take on too many clients, we turn into a consulting firm and we’re not putting our love into it and our minds into it,” Shepard says of his 16-person staff. “Also, we won’t do it unless we think we have huge upside. And that’s the way it should be. Otherwise, I’m just taking fees and that’s not how our model works.”

Monumental’s business model is weighted on the back end, unlike a consultant who works for hourly fees.

If an idea reaches fruition, “We make more than we would if it was just by the hour, but if we don’t get there, we make a lot less,” Shepard says. “If at any point we don’t like where the product’s headed or we don’t believe there’s opportunity, we’re gone, because we’re wasting our time. The client will do the same thing.”

By aligning Monumental’s interests with the company’s, “That’s what gets people excited,” Shepard says. “If we take your project, we’re putting our time and our money on the line, too.”

But it’s not all about profit. “The interesting part is figuring out the angles that will end up being successful in the marketplace,” Shepard says
Entrepreneurial thinking can help a large company innovate faster, better and differently.

Large companies doing their own product development 100% in-house are often hampered by daily operational responsibilities and competing agendas, Shepard says. That can lead to complacency after making existing products a little bit better every year. Some companies simply believe they’ve already done everything possible.

“They’re not incented to go out and take a risk on something that nobody quite understands right now,” Shepard says. “There are a lot of good examples of companies that ignored these small little things, and all of a sudden that small little competitor now becomes the giant that’s going to eat you.”

Or the large company buys the smaller one for 10 times revenue, Shepard says, “when they probably could have come up with the same product themselves if they would have had a different thought process internally, a different incentive structure or if they had been partnered with the right people.”

Those people are entrepreneurs, for whom risk is in their DNA. “I’m incented to take risks for upside,” Shepard says, “And that alone, you can’t teach.”
Growing up in a tiny town in east Tennessee, “My only wish was to escape when I was 17,” Shepard says. He got a scholarship to Middle Tennessee State University and graduated with a degree in business, finance and economics.

Shepard moved to Boston and worked for a day-trading company, which went bankrupt within a year. Deciding he’d be better off back at school, Shepard got his MBA with an emphasis in information systems from Tennessee Technological University.

Offered a job by Arthur Andersen, he took it “because I thought I’d go to the safest possible company I could after going through a bankruptcy,” he says. “And then they had that meltdown within four years.”

He moved on to Ernst & Young in their business consulting practice, focusing on revenue management. Shepard left to launch his first startup, a real estate analytics company that could have been a competitor to Zillow, but had only a fraction of its backing.  The company ultimately failed, though Shepard “learned a lot of lessons about all the things I didn’t know anything about.”

In the midst of that startup, a former client at Ernst & Young recruited him to work as a consultant.

“Then one day he said, ‘Hey, do you have teams of people?’”

That was the catalyst for founding Innovar, of which he is still managing partner.

“If you have operational processes that need to get fixed, people talk to innovar,” Shepard says. “If you want to develop new products and innovation, talk to Monumental innovation.”

The entrepreneurial startup began quite by accident. Shepard says a couple of Innovar clients, with whom he did traditional consulting work, heard about his outside passion for startups and asked him to attend ideation sessions.

“I went from participating, coming up with interesting ideas and talking through them to, ‘Well, can you facilitate this session around this?’” Shepard says.
That’s when the lightbulbs started going off and a new model for entrepreneurship was born.

Shepard says that while a business case could take nine months to wind through the political bureaucracy of a large company, an entrepreneur can take an afternoon to decide if something economically and logically makes sense. Or the company may take two years and spend millions on market research, “when you probably could have taken one month, gotten the major insights and made a decision,” he says.

Large companies are also not set up to fail quickly, or even at all.

“We set up the right structure where we can fail, fail, fail, fail, fail, WIN,” Shepard says. “You have to go through iterations to find the right answer.”
A startup can get by with fewer resources because it uses partnerships and relationships differently than big companies do. Instead of building a manufacturing facility, a startup would strike a deal with an existing manufacturer.

“Even though I would make less margin, we have to see if it works, and if it works, then I go build a factory,” Shepard says.

He says his leadership philosophy is “very hands off when it comes to letting people be the expert in their domain.”

Meanwhile, Shepard stays focused on the overall vision and sales. “I think what a lot of small companies are really bad at is developing sales,” he says, “so I focus on the ideas and being able to sell those ideas to companies.”

Monumental also owns two startups. Kredible, a pioneer in professional reputation management, started in January and will go live around November. The other is a medical platform in the yield management space.

“People claim that they can help big companies innovate, but if they’re not doing it themselves, be leery,” Shepard says.
He is founder and CEO of Kredible, a tech company that uses an analytic platform to help people maximize their online credibility by optimizing their LinkedIn profile.
“I’d make the case the perception you send online is more important than your offline reality in some ways,” Shepard says, noting that people increasingly use the business social network to vet other professionals.

Again, he came up with the idea for the startup by accident. An Innovar client persuaded him – after much resistance -- to do a workshop on LinkedIn effectiveness.
“What jumped out at us was there was zero science behind what people were advising for a LinkedIn profile,” he says. What worked when shaking someone’s hand and looking them in the eye didn’t necessarily translate to an online profile.

Kredible provides advice specific to the industry as well as to the individual. “It tells you exactly field by field what you should say and how you should say it based on the audience that you’re trying to project credibility to,” Shepard says. “For a company, it makes all of your people look great, which makes your brand look great.”

Kredible has met with LinkedIn, and Shepard says his company “helps support our goals and their’s.”
Based on advanced research, including eye-tracking studies, Kredible became experts in several industries. The first to go live will be legal, followed by commercial insurance, accounting and financial services.

“We don’t just say, ‘Update your picture,’” Shepard says. “We say, ‘We know that a full-framed color picture of your face within the last year and a half will project a more positive sentiment than any other type.’ “

The ultimate goal would be to eventually sell Kredible. “Operating a management team takes manpower,” Shepard says, “and the part that all of us love is the ‘Wow, what about this?’ How do we make the ‘What about this?’ real, because most people are not very good at that.”

They just don’t have the right kind of entrepreneurial thinking.

 

Editor
ATLANTA TREND™

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