Corporate Innovation in the Era of Startups

“Innovation is the implementation of an idea that leads to a business or social impact”

I spoke recently at Total’s Innovation Conclave — Innodays in Mumbai. Through this article, I wish to highlight some of the challenges and opportunities in Corporate Innovation, Design Thinking and Open Innovation.

Innovate better together: Think Human, Think Open, Think Lean, Think Sustainable were the themes of Innodays 2019.

Corporate Innovation — The Current Scenario

Innovation broadly has three elements: idea, implementation and impact; in the corporate context, impact is measured either as a cost saving, process or business model improvement or even an enhanced customer experience resulting in higher revenues for the company through new products, services or offerings. It is not easy for a corporate with a large number of employees to constantly innovate and stay ahead of the curve; for startups have the inherent advantage of being lean and nimble on their feet. So how is it that a corporate can remain competitive by constantly innovating?

Here’s how:

While workshops and interventions are a good starting point, it often pays to have systems that can build and harness a culture of innovation. Sure, there are challenges in terms of the teams being large and distributed, employees taking time off from their existing work commitments to spend time on innovation related projects or even getting budget approvals from the top management to pursue innovative projects. However, large organisations have been successful in managing innovation at the workplace and in churning out innovations that are multi-billion dollar avenues for these enterprises. The solutions range from having a system for gathering ideas to creating a space where employees can brainstorm, however, the three models which were highlighted were:

Panel Discussion on Corporate and Open Innovation

1. Centralised Model: In this model, a specific department within the organisation champions the entire innovation agenda. It could specifically be a team which is working on innovation related activities; such as gathering ideas, connecting teams, securing budgets, implementing the projects and taking it to the market.
2. Decentralised Model: In this model, employees are expected to come up and share their innovative ideas and the grouping of teams can happen based on mutual interests to pursue it. This is unstructured and works best in organisations where there is already a culture of innovation.
3. Project Based Model: This is a model wherein, a problem statement or challenge is posed to the employees, who then group specifically for the purpose of solving that problem and retract back to their specific functions after the completion of the project. I would call this more of a “Mission Mangal” Model, where members from different teams united with the purpose of sending Mangalyaan to Mars!

Design Thinking — The Foundation for Innovation

Design thinking is a human-centered approach to innovation that integrates the needs of people, the possibilities of technology, and the requirements for business success. It is a creative approach to problem solving that starts with the people you’re designing for and ends with new solutions that are tailor-made to suit their needs. Thinking like a designer can transform the way organizations develop products, services, processes, and strategy. Now the question arises, why Design Thinking?

For Survival and Competitive Advantage!

Participants experiencing the Design Thinking Process

There are many successful organisations and multinational corporations which had to shut down all of a sudden — the reason; inability to innovate and adapt to the market needs. With startups coming into the picture, this change in customer behavior has only accelerated. Many leading organisations such as GE, Apple, Airbnb, Uber, Google, and IBM have adopted Design Thinking to remain relevant and be ahead of their competition.

Open Innovation — The Way Forward

In closed innovation, companies innovate by using only internal resources, usually during the innovation process, ideas are evaluated and only the most promising ones are selected for development and commercialization. While employees are certainly at the core of innovation at companies, innovation does not always happen internally, it also occurs by opening doors to various stakeholders who co-create along with the company and that brings us to the concept of Open Innovation. In today’s context, open innovation is about collaboration between corporates, startups, universities, think tanks, research institutes and the role that each stakeholder plays while fused with the large businesses to create value.

Few models of open innovation include:

1. Hackathons and Innovation Challenges
2. Corporate Incubators and Accelerators
3. Developer/Tech Communities
4. Intrapreneurship
5. Acquisitions

While there are challenges in open innovation in terms of Intellectual Property (IP) and commercialisation; there are also a set of advantages in terms of opening the innovation process to the flow of ideas and knowledge in both directions. Some ideas reach the market exclusively by the use of internal resources while others are developed using external knowledge at different stages of the innovation process.

Needless to say, it was a great audience!