Over the past decade, the corporate innovation industry has exponentially exploded beginning with Fortune 1000 corporations racing to Silicon Valley to build relationships with the latest tech unicorns and continuing with a new breed of technology innovation consulting agencies finding their sweet spot of connecting high-quality tech companies with those corporate behemoths. From these new relationships, several types of corporate innovation programs were born, as aptly summarized by The Huffington Post’s article The Ten Types of Corporate Innovation Programs.
With such a nascent yet already complex industry, where does a corporation even begin? Before corporate innovators determine what process, program, or tactic will work best, it is essential they first examine their belief systems that are impacting growth efforts.
Dated corporate innovation mindsets may impact whether businesses see any value in their own innovation, and as such, it’s important to identify whether or not these beliefs are still applicable within today’s innovation landscape.
Below are three common beliefs that hold back corporate innovators.
1. I’d rather just spend money on my organization’s own internal R&D initiatives.
“We control our own R&D process — in fact, we spend a lot of money to do so. Our ways of working have worked for us this long, and we have every resource you can imagine. What are the odds that an external perspective could bring something that we don’t already have? Additionally, our own internal business units are the ones that drive innovation. Realistically, in order to make change, we must have internal buy-in.”
2. There’s a reason we are industry leaders – we’ve been doing this for a long time, and no one knows our industry like we do.
“We’re the experts in what we do. We know everything about our industry, from our manufacturers to our suppliers to our customers. We will continue to thrive within our industry, and we don’t necessarily need the latest technology fad. Our brand name is strong and our consumer base is loyal.”
3. My inbox is overflowing with startups and emerging technology companies reaching out to me. I can engage with them on my own.
“I receive inbound requests from innovative startups regularly, and beyond that, I can easily meet any through conferences and industry events. I am confident in making the valuable introductions I need without any help because they all want to work with my company.”
Do any of these beliefs sound familiar to you? Has your organization — at one point or another — found itself sharing a similar mindset, which has prevented it from exploring the value of external innovation? Be careful of falling into this trap – many corporate leaders, including Blockbuster, Borders, Sears, and KMart did not innovate to stay ahead of new technology and consumer behaviors. As a result, they became industry laggards and ultimately were left behind as their industries’ core business models and products evolved drastically.
Now, let’s review some new beliefs shifting away from these outdated mindsets.
1. Yes, R&D is extremely expensive, but existing internal R&D is typically focused on individual product innovation within functional silos (think new beverage flavors or a new clothing brand) versus building technology expertise and application that can transform the entire company process or mindset through its foundational infrastructure.
According to R&D Magazine, global R&D spend has continued to grow, with more than $2 trillion invested in 2018 for the third consecutive year. Handling all innovation needs in-house is neither cheap nor easy. More than likely, internal R&D teams are product or subject matter experts focused on a specific area in the company (ie food scientists, biologists, chemists, engineers, etc). Where external corporate innovation experts can supplement and advance the innovation needs of a company is on broader technology expertise and application across multiple business units and infrastructure platforms. This brings the best of both worlds: internal R&D innovation teams focus within their defined scope and external innovation experts bring strategic and transformative thinking through the latest technology advancements on a broader scale.
The best external innovation leaders bring to the organization visionary thinking that leverages technology to sustain corporate leadership through changing industry environments. These innovation experts can bring about transformative change for a better return than internal R&D teams because they have deep innovation expertise, emerging technology access, and solutions-oriented strategy and plans that quickly deliver results that have been proven effective amongst corporate innovators.
Such is the case with the RocketSpace team — we steward our clients’ internal R&D and innovation teams to help them shape an intelligent innovation strategy and tactical plan based on their key objectives. Using a powerful combination of industry experts guided by innovation and technology experts delivers a stronger return than investing internal R&D funds alone.
2. The largest companies by market capitalization have a common denominator — they’ve leveraged cutting edge technology to transform their business and industry from the inside out. You must too.
“Innovate or die.” There have been fundamental technology shifts within even the oldest of industries — from supply chain and logistics to security and energy — no industry or organization is safe from the impact of emerging technologies. The belief that a certain industry or vertical won’t be rendered obsolete through technology advances must be squashed.
In 2000, Blockbuster was the leader in movie rentals across the United States, with very few competitors close to stealing their market ownership. Blockbuster had a successful brick and mortar retail business model.
According to a 2014 Forbes article, when Reed Hastings, the founder of an up-and-coming company called Netflix, flew out to Dallas to meet with Blockbuster CEO John Antioco to propose a partnership between the two companies, he was laughed out of the room. Most should know how this story ends — Blockbuster went bankrupt in 2010, and Netflix is now a global leader within the video entertainment, content production, and streaming industry.
An organization doesn’t necessarily need to completely change its existing business model like Blockbuster needed to, but companies must make intelligent hypothesis about how emerging technologies can or will change the way consumers demand goods and services and position themselves to meet those demands in a unique and competitive way.
3. The entire innovation and emerging technology ecosystem is far too large to master and navigate alone without external guidance.
High inbound rates of startups clamoring to connect with large organizations may mean lower quality or immature startups that a company must sort through. There is much to navigate when it comes to partnering with, piloting with, acquiring, or implementing emerging technology into your organization. From product-market fit to proof of concept ideation to quality of IP, and much more, an enormous amount of time, energy, and resources are spent simply researching and vetting new technologies and companies before even getting to the strategic thinking, planning, and testing. Beyond that, having a holistic view can be a challenge. Often, organizations have tunnel vision — a sole focus on their own industry, product, capabilities, and customer.
Bringing in external innovation experts can help your internal corporate innovation team quickly and efficiently vet the innovation ecosystem and identify the quality and appropriate players to partner with. Additionally, innovation experts can bring an external perspective that will stimulate out-of-the-box thinking and inspiration from cross-industry insights into the organization.
We now introduce the Ultimate Corporate Innovation Process!
According to CB Insights State of Innovation Report from 2018, 57% of survey respondents said their companies do not follow a formal innovation process, and most even do not have established processes for ideation and development. So where does a massive corporation begin?
We’ve identified and outlined below the most efficient and effective innovation methodology for bringing transformation to a large organization through emerging technology integration.
Step 1: Strategic Assessment and Alignment
First and foremost, have you defined a problem statement or a strategic opportunity area that you need to solve against? If not, do you need external support to identify these opportunity areas?
With so many areas of opportunity within your industry and with new technology crazes popping up each day, identifying where to begin can seem like a daunting task. However, it is the essential first step in an effective innovation process.
To begin, an organization must decide on two overarching areas: 1) the macro-level problem they want to solve (in this Playbook, we call them “opportunity areas”), and 2) how, organizationally speaking, will they support the initiative. There are several key questions that need to be answered and aligned upon in Step 1.
While these questions are simple, aligning an entire organization to a single answer is far from easy. Smart and effective organizations devote significant amounts of time to researching and discussing the best answers to these questions and ensure all key stakeholders are aligned before moving forward.
Step 2: Concept and Solution Design
From Step 1, you will have identified several key opportunity areas and selected one to focus on.
Within this opportunity area in mind, Step 2 is all about 1) designing a range of concepts and selecting one, and 2) designing a range of solutions from that concept and then selecting one. A concept is a high-level vision of a solution to the opportunity area that, if selected, can be further flushed out into a working, viable solution in-market.
Concepts can be ideated from a variety of different angles:
Once a concept is selected, then specific solutions can be designed based on that concept.
To design solutions, much more practical and tangible factors need to be considered, such as:
The above considerations should inspire a range of different concepts and then solutions that can ultimately solve your opportunity area. Once the ranges of ideas are identified, the goal of Step 2 is to select one single solution to move forward into testing.
Step 3: Product Test Design
Once you’ve successfully designed the solution, Step 3 is to design the proof of concept and/or pilot test.
The first component of test design is to select the technology startups that have the ability to build and implement the solution, either in its entirety or individual solution features. When selecting potential startup partners, ask:
The second component of test design is to ensure proper planning and preparation for the test. Forbes outlines how to successfully launch your first proof of concept, and includes the reason why most proof of concepts fail — a lack of planning.
In order to design the product test, you must align once more with all stakeholders, and this time, include your startup partner stakeholders.
Key test planning elements to align on:
Step 4: Product Test launch
To execute Step 4 successfully, you must be patient, disciplined, and agile. In this step, your innovation solution has been aligned upon, the product test has been designed, and now it’s time to launch.
There are two common types of product tests: a Proof-of-Concept (PoC) or a Pilot test. While sometimes these terms are used interchangeably, here at RocketSpace we recommend differentiating them as such:
After you select which type of test is right for your company, we recommend that you adhere to these types of key activities to ensure successful, informative, and conclusive results:
PoC and Pilot tests won’t produce results overnight – it’s important to give this portion of the process the time necessary to perform in a simulated market environment, collect the necessary data and insights, and make informed decisions on whether or not to move forward with the innovation solution.
Step 5: Scale-up
Once you’ve completed your Proof-of-Concept and/or Pilot test, you’ll know whether or not the solution is ready to be scaled broadly beyond the test environment. If so, then Step 5 of scaling across markets is the natural next step. You’ll want to ensure that there is clearly a product market fit, consumer demand, and sustainable business model for this emerging technology within your chosen business area in order to move forward.
In scaling a technology, there are two common paths to take within an organization: 1) scaling across geographical regions/markets, and 2) scaling across business functions. The best organizations ultimately achieve both, as you’ll remember in Step 1, great opportunity areas are holistic industry or company challenges.
To successfully determine where in the company to scale for best results, your organization should ask itself:
After determining where to scale, your company should execute the below to ensure successful scaling and results:
Scaling up a new technology across a large, global organization is no easy task! To support this effort, in the sixth and final step we outline absolutely critical necessities that any organization must adopt in order to make scaling a fruitful result with significant financial return, internal pride, and market leadership.
Step 6: Institutionalize Innovation
Step 1 got you the internal buy-in needed to begin this initiative. You’ve done a huge amount of research, exploration, preparation, designing, testing, and scaling. Now, how do you make sure the technology innovation sticks internally and that you have the support to sustain it so that it can truly produce the transformative results it is meant to?
According to CB Insights State of Innovation Report from 2018, high-performing companies build cultures of innovation across all functions – Sales, Marketing, Human Resources, Operations, and more. This culture of innovation must be felt throughout every function in order to succeed. What are the key ways to build a culture of innovation within a huge organization?
The best and most innovative companies have innovation in their DNA. Amazon, Google, Apple, Facebook, Uber – they practice the above (and more) in order to keep the culture of innovation alive and breathing every single day.
What will your company do?
Corporate innovation is an ever-evolving, iterative, expansive, and imperative process. No industry, sector, technology, or organization is safe from the “next big thing.” As such, corporations must always have a robust and future-forward innovation strategy.
The Corporate Innovation Playbook is a best-in-class framework and cultural mindset that has worked for our Fortune 1000 clients across a variety of different industries and challenges.