This is the seventh post in our series about the Corporate Innovation Problem™: Despite heavy investments into innovation, returns are not satisfying. (Note: For easier readability we will skip the ™-sign in the rest of the article). The series started HERE.
With this post, we show the ways companies can positively address a core root cause; what we call the ‘systems problem’.
A brief recap on our thinking process
We have shown that excellence in innovation requires excellence in the early phase, the so-called ‘Fuzzy Front-End’ (FFE) and in the execution phase, the so-called ‘Efficient Back-End’ (EBE).
In recent years, companies have invested heavily into the FFE (see HERE): They …
- embraced Open Innovation
- set up corporate innovation centers / accelerators
- set up innovation centers targeted at manufacturing technology (sometimes called ‘fab labs’)
- redirected Corporate Venture Capital to become an innovation vehicle
- invested into IT systems for managing ideas
Despite all of these investments, the Corporate Innovation Problem persists.
We have found from studies – see HERE – that (a) the Corporate Innovation Problem manifests in the FFE as well as in the EBE and that (b) the higher the innovation degree of an intended innovation (often called ‘adjacent’, ‘blue ocean” or ‘radical’, ‘breakthrough’, ‘disruptive’, … innovations) the harder it is to find an organizational home for it.
We found that there are three root causes why this is that case:
- The complexity problem – for innovation activities in globally dispersed organizations it is harder to keep track of who is doing what, where they are doing it, who with and even what the organization knows.
- The integration problem – All of the channels in the FFE (see above) need to be integrated at some point into one EBE. In many companies, this is not done properly and this interface is critical.
- The system problem – The complex fabric of innovation (including e.g. strategy, leadership style, governance, KPIs, resources, culture, budgets and resources) are not organized to stimulate the innovation energy and let it flow.
Assuming your innovation strategy is right …
We all know there is a big difference between ‘doing the right things’ (effectiveness) and ‘doing things right’ (efficiency). Translated into the world of innovation management this means that the innovation strategy first needs to be set up right. If not, solving the ‘system problem’ you simply install a well-oiled innovation engine within your corporate ship – but without setting the correct course, this engine will not take you to where the value is.
Now, getting the innovation strategy right is an art and science in itself. It needs to address,
- where to innovate (existing/new markets, relevant trends in markets, technology and Intellectual Property, etc.)
- what to innovate (products, products + X, processes, services, business models, etc.)
- how to innovate (incremental…radical, platform strategies, Digital tools such as Big Data, Cloud, Internet Of Things to open up new growth frontiers, etc.)
- when to innovate (timing strategies, etc.)
- who to partner with (open versus closed innovation, academia/SME/LargeCo partners, legal frameworks, business models, etc.)
So in order to keep our model about how to solve the Corporate Innovation Problem handy, we have decided to keep the strategy part out.
… you need to ENGAGE the organization to solve the Corporate Innovation Problem
Looking at the ‘system problem’ of corporate innovation, we think that there are six levers an organization can positively act upon to generate improvement.
And all of these levers need to be activated since there are inter-dependencies between them. So, for instance, just aligning the management system – in particular KPIs – without empowering the culture and strengthening the innovation skill set will only have limited impact. The reverse is also true.
By their initial letters, these six levers may be shortened to the acronym ENGAGE. In other words, we state: Solve the Corporate Innovation Problem – ENGAGE the organization™:
These six levers are:
- Ensure sustained Top Management support
- Network of innovation catalysts / coaches
- Get people into the field
- Allocate resources / manage the portfolio, advance the culture
- Grow the innovation skills base
- Enterprise-grade, modern platforms connecting ideas and experts
In the next blog posts of this series we will show the academic and practitioner’s foundation of the ENGAGE model and then dive deeper into the six building blocks. We will also show how ENGAGE’ing the organization contributes to solving the other two root causes of the Corporate Innovation Problem, the complexity problem and the integration problem.
innovation.support is an international agency focused on solving the corporate innovation problem. To achieve this, we provide consulting services based on proven, best-in-class methodology which in many cases is proprietary. The services are delivered by experienced innovation management specialists and by subject-matter experts.
Please get in touch with us if you want to improve the outcomes of innovation investments.