Originally appeared on Forbes: http://www.forbes.com/sites/dorieclark/2012/12/09/how-to-make-innovation-less-risky/

Corporations are clamoring for breakthrough innovation – but in this economic climate, who can afford multimillion-dollar wagers that might not pan out? Enter Peter Sims, co-author of the bestseller True North: Discover Your Authentic Leadership, with Bill George. “Companies have the wrong mindset,” he says. “They don’t experiment well, they bet big, and that’s often a sign they’re going to fail. We’re living in an age where every person needs to be much more creative and entrepreneurial. You have to be able to really get out there and be scrappy, create value, and the way to do it is through entrepreneurship.”

Instead of launching expensive new initiatives, Sims says, companies (and individuals) should make “Little Bets,” the title of his newest book. The goal is to test demand – and then iterate, quickly and cheaply. Sims became a believer in the “little bets” approach during his previous career as a venture capitalist: “Whenever I talked or worked with entrepreneurs who had built billion dollar companies, I learned more from them than anybody I studied with in business school,” he says.

Upon connecting with Stanford’s renowned Institute of Design (also known as the d.school), where he ultimately became a lecturer, Sims discovered that “design was really the method of experimentation, iteration – acting like an anthropologist. It was similar to the way entrepreneurs I had worked with functioned. And I thought, why haven’t I learned to think this way all through my education? I wanted to empower other people to open up creatively the way I had. It was learning by doing, rather than trying to analyze and plan, and that’s a distinctly different mindset than anything else I’d been taught before.”

Corporations’ time in the sun has passed, says Sims – unless they evolve into a new form that embraces entrepreneurial tendencies (a view also shared by Nilofer Merchant in my recent interview with her). “The modern industrial corporation is really well suited to executing on known problems, but it’s poorly suited to executing on discovery, experimentation, and entrepreneurship,” he says.

“We’re going to see a huge devolution of the industrial power structures,” says Sims. “The industrial corporation is facing enormous pressure because it’s not creating nearly enough value. The alternatives are much more collaborative, network-based organizations, more partnerships, and a more entrepreneurial mindset.”

In addition to placing little bets, Sims believes another path forward is through a mashup of “entrepreneurship, social change, and art” (which he’s pursuing with two new projects, the social venture Fuse Corps and the for-profit B corporation the BLKSHP (think “black sheep”). The shift to a new way of doing business, says Sims, is a return to our entrepreneurial heritage: “It’s a healthy cleanse for capitalism.”

What little bets has your company made? And how are you tracking and learning from them?

Dorie Clark is CEO of Clark Strategic Communications and the author of the forthcoming Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press, 2013). She is a strategy consultant who has worked with clients including Google, Yale University, and the Ford Foundation. Listen to her podcasts or follow her on Twitter.