Corporate Innovation does not happen by chance ….
There is a big difference between corporate intrapreneurship and a real world entrepreneurship. Having seen the grass on both sides, here’s my view on how to create successful corporate innovation.
You know how inexpensive and agile it is to own and use a skateboard compared to a bike, and a car compared to a bus? Well, you get the drift — they are each meant for a purpose and is good at only doing what it really can. Bigger vehicles are efficient in taking many people from one place to another, while smaller ones are good to maneuver and run shorter loops effectively. Its more fun in small vehicles — depending on where you want to go.
So it’s not bad for corporate to think, behave and run very different than a startup. It’s slow, its big, its expensive; its too ‘Corporate’. Corporate is meant to be that way for a variety of reasons. Startups are agile, small and relatively inexpensive.
But large companies have to innovate and keep innovating to be relevant in the space. So how do you innovate and be agile like startups? How do you iterate and find opportunities that are not just drop-in-the-bucket but be a bucketful. The not-so easy way of doing it is investments and M&A; which I will not talk about in this article. Large companies spend millions & Billions to identify opportunities and much more to close the deal and integrate it into mainline business. Even with that, some either fail due to bad integration process or lacks of ownership post M&A or a failed cultural fit.
While growth by acquisition gives a much predictive growth path, one cannot ignore the growth created by cultivating innovation inside large corporations; it can be idea driven or market driven (demand led). If you rewind the clock on Google and go back to the year 2000; how would it sound if one said that Search engine company will provide Maps, email service, make phones, and self driving cars? — the point is, large business opportunities ‘CAN’ be build from scratch. Yes, its also true that you cannot innovate what you want, when you want or plan an innovation; you can only promote and cultivate for an outcome.
Employee-led corporate innovations have their own advantages and disadvantages. Statistics say that Internal employee-led Innovation not only buys the mind-share of employees and gets them to be more committed to the company, but it also breaks the monotony in their daily work, resulting in efficiency and ownership. It’s easy to launch Corporate Innovation programs, but its hard to get the systems to meaningfully innovate and create an impact.
There can be two ways to drive corporate innovation. A) Employee-led B) Dedicated incubator labs or maybe combine both.
Employee-Led: where employees volunteer and spend a part of their time towards working on something they are passionate about. Incubator Labs: where a system or structure is in place to identify market opportunities, creates strategies and business models solving real-world problems, aligns resources and budget needs together, plans go-to-market to take products/services to market in a startup-like environment.
In either case, I believe, the key to success lies in things that we do not pay importance to: I have done many projects and 3 were very successful. Few things that helped me:
- Setup a dedicated cost center that can identify and promote focus areas to cultivate innovation that’s aligned to Corporate Goals.
- Setting internal systems and processes to promote employees to spend time on it. Better yet, have dedicated hiring process to identify and run like an independent startup. Let the CEO of the project build a team
- Have a leader with a true entrepreneurs mindset to drive the projects and programs with an ownership and freedom to run it
- Motivate, recognize and reward employees of the potential outcome of Innovation
- Implement a collective, unbiased, evaluation methods to bubble up promising ideas that are not just innovative but also disruptive
- Setup cross functional Business Unit leaders to support the program and sponsor the projects
- Bring in or align Subject Matter Experts to support and provide mentoring
- Set up phase-gate process to make quick timely Go/No-Go decisions. Its easy to support a disruptive project but its extremely hard to kill one. Just like in poker; tournaments are won NOT from the bets you make but from the bleeding bets you stay away from.
- Setup systems and legal council to seamlessly manage the IP created in the process and further follow-on needs to spin-out, Spin-In or IP licensing.
- Establish industry relationship or use the existing partnerships to get traction and vetting from outside world instantly. There’s nothing like launching the product and getting real feedback.
- Corporate innovations are important but not always successful
- There is a need to cultivate innovation deep within the culture of the company
- Dedicated investments to drive strategic innovation and growth is important, don’t make it a one-off exercise but setup a structure and system to innovate
- Fail-fast and fail-quick may be a good mantra. But try this one — “iterate with an obsession and focus to win”. That’s what yields the best outcome.