As Corporate Innovation Evolves, Past Lessons Are Being Ignored

This article provides a personal perspective to the ongoing evolution of corporate innovation efforts, along with an overview of how some past mistakes are being repeated.

“Innovation” as a corporate practice first gained traction around 10-years ago, primarily in US-based multinationals. Programs were often started as C-suite pet projects, to quickly create the transformation narratives demanded by external and internal stakeholders. This was often in response to a rising tide of disruptive (technology driven) competitors that began to appear in almost every industry sector.

While these programs started with grand goals of introducing disruptive change, they quickly hit resistance by the core organization and ideas were scaled back to focus on incremental product / process improvements. Taken further, objectives around tackling disruptive competitors were replaced by softer objectives (such as employee engagement, site hits, etc.). These programs kept everyone happy for a while, but as the range of activities expanded and sunken investments piled up there was increased scrutiny from stakeholders who questioned the lack of hard business results.

The resulting tension often led to changes in innovation program actions, focus and leadership. These were often knee jerk reactions, with little strategic foresight or building of connections to Business Units and their goals.

About 5-years ago the luster of corporate innovation programs began to fade as leadership’s attention shifted towards capturing value from digital channels. At this point the earlier emerging startups were growing and maturing, underpinned with slick digital platforms and effective marketing messages. Established companies were seeing direct impacts to market valuations, customer loyalty, new product development cycles, employee attraction / retention, etc. Note that profits from those startups are often scant, but given the new investor valuation approaches, that hardly mattered.

In response, established business leaders have invested heavily in digital transformation efforts, often at the expense of innovation programs. This has led to a change in innovation professional profiles, where an awareness of digital trends and ability to effectively create responses is now an essential requirement to personal career success.

As digital efforts mature and are viewed as standard distribution channels within corporates, there is an increased focus on profit generation and closer integration with business units. More importantly however, these efforts will need to take a more holistic approach to disrupting the organization if they are to successfully address the continued expansion of more nimble digital-native competitors.

So what’s next?

Disruption was previously something that happened to other industries, companies or leaders, but is now the norm across every industry sector. Further, the way businesses are valued has changed and business leaders are seeing that a true focus on radical disruption is now demanded by investors. Corporate leaders are looking at the new competitive landscape and realizing that they need more than a shiny digital channel to succeed.

In response, some progressive leaders are taking a thoughtful, strategically aligned approach to address disruptive forces. They are taking time to understand holistic approaches that address disruption, rather than piecemeal solutions. Books such as Exponential Organizations offer a more detailed, step-by-step analysis of the growth of digital disruptor businesses and a roadmap to address them for established corporate leaders. As full disclosure, my business partner is a co-author of the book. These leaders are looking to adjust their organizations to more effectively mirror those digital native competitors, by driving disruptive change both within their core organization, but also on the edge (avoiding immune system responses).

But this isn’t always the case. Many companies see their innovation programs and digital channels as effective ways to drive lasting disruptive change. And for some it may work, but generally I believe that thinking is long past. As more holistic approaches to developing disruptive, exponential innovation are implemented into mature corporates it will be interesting to see how they compete against companies that have been guided by these approaches from day one.

I am excited to see where this all goes!

Let me know in the comments section if you agree / disagree with any of the points that I have raised.

By Anthony Ferrier

About the Author

Anthony Ferrier is a well-regarded thought leader on corporate innovation, with a specific focus on employee engagement and training. He is the COO of ExOxo, working with Yuri van Geest and partners to help organizations thrive in an exponential world. Anthony is a widely-read author, speaker and advisor to organizations such as Bristol-Myers Squibb, Fidelity Investments, Pfizer, Johnson & Johnson, ADP and USAA. He previously led The BNY Mellon innovation program and has a Master of Commerce (University of Sydney) and Bachelor of Economics (University of Newcastle).

  • RAm

    Good read….Disruption is the most used word nowadays. ..How do you define disruption and what is disruption? ….

  • Chris Pehura

    Time begins and then time ends,
    and then time begins once again
    It is happening now, it has happened before,
    it will surely happen again.

    I think these repeats and do-overs are happening at a much faster rate.
    Before it was every 20 years. Then 10. Then 5. Now 2.

  • Anthony Ferrier

    Hi Chris, I agree that these programs cycle in and out of favor, and that the pace of competition is increasing, which drives the constant shift in leadership focus. What I do think is different now is that established companies are facing new competitors, that are set up very differently than incumbents. As a result, these new companies are able to respond much quicker and (often) more effectively. With this in mind, corporate programs shift from being window dressing, to being a more strategic driver of ongoing survival for incumbents, which is definitely a departure from the past.

  • Anthony Ferrier

    Hey RAm, thanks for the comments. In the past I have goen down the rabbit hole of discussing the definition of disruptive innovation. Though I believe it changes by company / industry sector, I typically go with the Clayton Christiansen definition: https://www.christenseninstitute.org/disruptive-innovations/?gclid=Cj0KCQjwgIPOBRDnARIsAHA1X3S6Sifi1_ZAXoZK6HbQXJfPxIQG8zEgyWsJtGKsf32Es_okzwT8olsaAkIFEALw_wcB

  • Chris Pehura

    Agreed. There is much less master plans and blueprints and more scorecards and management intervention when it involves massive change management and transformation. Still, the same kinds of changes are still there — alignment, centralization and decentralization of customer centric and organization centric business models. The only difference is more data, more change, and faster change.

  • Anthony Ferrier

    Hi RAm, thanks for your response. I typically use the Clayton Christiansen definition, which aligns well with the exponential approach that I work with these days. That definition has changed a little over time, but this is the latest description that I found: https://www.christenseninstitute.org/disruptive-innovations/?gclid=CjwKCAjw6ZLOBRALEiwAxzyCW1IsPM5fxqFGBw5eECgkCuXVm2zM1y1wdj5g0xGk-FsOIw3Y8Zx9oBoCKS0QAvD_BwE

  • Anthony Ferrier

    Hopefully, yes!

  • Chris Pehura

    I’d define disruption as some event has occurred in a point of time that significantly changes the mindset, culture, or systems of a company, market, or culture. That event has a domino effect that builds momentum across several different schools of knowledge, fields, and disciplines. It’s “letting the genie out of the bottle.”

    Examples of disruption
    1) iPhone
    2) Word Processor programs
    3) Cell phones
    4) World Wide Web

  • Anthony Ferrier

    Chris, you are going with the classic Clay Christensen definition, which makes perfect sense. I like this perspective, in that the focus is on the impact beyond the idea itself. It’s happening more and more, so get ready!
    BTW, sorry for the delayed response, I thought I had already responded, but apparently not.

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