I often consult for Fortune 500 companies who are looking for ways to innovate (quickly). Perhaps they’ve heard the stat that 40 percent of today’s Fortune 500 companies will no longer exist in 10 years.

Earlier this week I met with one such (large) company for a 90-minute consultation. In this post, I thought I’d share the top-line summary of the advice I gave them…

How can companies innovate?

In my mind, here are three counter-intuitive approaches that companies, small and large, need to take to disrupt themselves and surf above the tsunami of change, rather than get crushed by it.

Three strategies:

1. Your biggest problems are your biggest opportunities

I often teach entrepreneurs that the world’s biggest problems are also the world’s biggest business opportunities. This also holds true for your company.

Take stock of your challenges.

My advice: Hire a team of ’20-something year-old’ entrepreneurs and have them spend a week interviewing your customers, suppliers, employees, and managers.

Have them ask the questions: What are your biggest problems? What breakthrough would 10x our revenue? What problems, if solved, would completely revolutionize our business, product, organization, etc.?

Then, take a list of these problems and use them as targeting data for the creation of new business opportunities. Fund numerous teams of young entrepreneurs to take their shot at solving those problems.

Worst case you learn some valuable data. Best case you solve your problems, improve your business and create a whole set of new startups useful to everyone else in your industry (who likely have the same problems).

2. You need to be creating “unholy alliances”

Most companies feel most comfortable working with the traditional companies and suppliers in their industry.

Pharmaceutical companies work with other biomedical companies. Software companies partner with electronics companies. Aerospace companies work with aerospace companies. Etc.

My advice: Create “unholy alliances.” Find and partner with companies completely outside your field, non-traditional players who force you to think orthogonally to your existing strategy and value chain.

Here are a few of my favorite “unholy alliances”

  • Apple and Music – Today, this makes perfect sense, but when Steve Jobs took Apple into the music industry, people thought it was crazy.
  • Microsoft and Gaming – Xbox was a massive departure for Microsoft, now it’s a major profit center.
  • 3D Systems and Hershey’s – Partner to create a chocolate 3D-printer.
  • NASA and LEGO – Partner to explore using LEGO as a STEM education platform.
  • Facebook and Oculus / Google and Magic Leap – FB’s purchase of Oculus VR and Google investment into Magic Leap makes little sense (at first) but in a year or two, we’ll see this blossom.
  • Uber and Everybody! – Uber is capitalizing massively on unholy alliances, partnering with everyone from Capital One to provide subscription discounts to local restaurants with Uber Eats, to insurance companies, universities, and even animal shelters, offering promotional services like #UberKittens – on demand kitten visits.

For more examples, Co-society did a great report on unique business collaborations here.

3. 10x your thinking – you need to be taking moonshots

Most companies are really focused on how to create 10% improvements in their businesses. They ask: How do we reduce costs 10%? Increase profits 10%?

Astro Teller, Google’s “Captain of Moonshots,” often talks about how when you try to do 10% better, you are putting yourself in a smartness competition with everyone else in your industry (and everyone else in the world), and it’s a competition you’re unlikely to win.

Instead, Astro proposes what Google calls “Moonshot Thinking” where you try to go 10x bigger (10x cheaper, 10x faster, 10x cooler), etc.

Why try for 10x versus 10%?

  • When you shoot for 10x improvement you approach the problem in a radically different fashion.
  • When you attack a problem as though it were solvable, even if you don’t know how to solve it, you’ll be shocked with what you come up with.
  • 10x vs 10% improvement is 100 times more worth it…but, it’s never 100 times harder.
  • Finally, having a moonshot focuses and motivates your team, attracts the best talent in the world, and critically, allows you to solve interim problems and create interim products/services along the way.

Whatever the size of the company you run, I hope these three ideas will help you create a sense of urgency around innovation and add new capabilities to spur innovation.

In the world today, the only constant is change and the rate of change is increasing.

You either disrupt yourself, or someone else will.

Image Credit: Shutterstock.com

Dr. Peter Diamandis is the Chairman and CEO of the X PRIZE Foundation, which leads the world in designing and launching large incentive prizes to drive radical breakthroughs for the benefit of humanity. Best known for the $10 million Ansari X PRIZE for private spaceflight, the Foundation is now launching prizes in Exploration, Life Sciences, Energy, and Education. Diamandis is also the co-Fou...

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