Corporate Innovation Management Research
Throughout the early phases of our research we interviewed over 1,000 intrapreneurs. Insights from these interviews and research uncovered a set of common practices shared amongst the best of the best. To test and refine these practices we launched a private, by invitation only, no competitors allowed collaboration and working group. After more than a decade of working with the most recognized organizations in the world we’ve built a global collaboration for the senior innovation leader to gain access to everything they need to be successful, productive, and valuable serving their organizations.
Our collaboration gathers frequently and collaborates often to maintain the connectivity of the group, to share what’s working and what isn’t, and to help one another solve ambitious, complex innovation management and growth challenges. Since 2015, we’ve co-hosted working sessions at our members headquarters across the globe. Under Armour, Liberty Global, Clif Bar, the National Renewable Energy Lab, CableLabs, SendGrid and the National Center for Atmospheric Research have hosted our group at their offices.
Our working sessions are designed to be highly engaging, uniquely valuable, and supportive of each member’s innovation and growth challenges. We spend several hours each session helping a single member solve their innovation challenge. Each member will present an overview of their organization including markets, trends, and their product and service offerings. They then present their innovation challenge along with specific and targeted questions for members to provide feedback and solutions.
Throughout the working sessions, small groups of members will discuss, design, and ultimately present solutions and answers to the posed questions. Imagine receiving input from over 50 senior innovation leaders who have solved or are in the process of solving similar challenges to yours? The cost of three hours across 50+ senior leaders would cost hundreds of thousands of dollars. Our members not only receive unique solutions during our working sessions, but they also walk away with the commitment that those same innovation leaders will continue to refine their solutions and serve as advisor partners throughout the duration of their engagement with Innov8rs CoLab.
Serving as expert help answering critical questions as the innovation function matures, peers offer unique perspectives that’s highly relevant, timely, and empathetic to their situation. Innovation consultants typically provide specific deliverables for their clients within a relatively narrow scope. This can be helpful although the space to acquire new knowledge and skills is frequently limited and not included within the innovation consultant scope. Peers offer a unique perspective that can only be provided by those sitting in a similar position. We’ve seen peer-based support and advising as a highly effective approach for those innovation leaders who need targeted and timely perspectives as their corporate innovation function matures.
Case Study: Legal Innovation
Working with one of the largest regional law firms in the US, Innov8rs CoLab members helped the Chief Innovation Officer and the broader innovation team design a system that will continually manage and produce new growth opportunities. An important component of this challenge, and the new system, was to preserve the belief systems and processes that were already in place and working well while evolving the innovation function to meet new marketplace challenges.
Law firms and attorneys are generally risk averse therefore the belief systems and culture were a prerequisite and needed to be baked into any new system. According to i8CoLab research, high performing innovation teams position innovation functions as a risk reduction strategy that anticipates future needs, challenges, and objectives and plans accordingly. This ‘best practice’ fit well with the law firm therefore crafting a risk averse culture around innovation strategies was an easy win.
i8CoLab members join our collaboration in a wide range of situations, although the majority of new teams are less mature in their development. This data point also aligns with our research. Approximately 30% of the Fortune 500 has a dedicated innovation team with proper funding and a portfolio of projects. Of that 30% less than 20% are able to produce continual and dependable innovations year in and year out. Our mission as a collaboration and working group is to increase the number of organizations that have a dedicated innovation team or employ a corporate innovation methodology.
Working with members who are in the early stages of launching a new innovation function is a primary focus of i8CoLab. We start our members' journey establishing a foundation using core corporate innovation principles that are shared with the top innovation functions across the largest organizations in the world. Those principles, or shared practices, include defining innovation and socializing the description, creating and implementing metrics and performance standards, establishing protected funding mechanisms, and enabling an innovation leadership team.
Case Study: Technical Apparel Manufacturing
i8CoLab helped a large, multinational apparel manufacturer establish their innovation function. Working closely with the head of innovation in collaboration with the CEO and the head of product, innovation definitions were created and socialized across the organization. This exercise included defining innovation along a spectrum from (1) incremental innovation, through (2) minor and (3) major innovations, and bookmarked at the other end with (4) radical and breakthrough innovations.
Past examples of each innovation type, and what they were and weren’t, were codified in definitions and socialized through the innovation team, the CEO’s office, and the HR department so the organization has a reference to what innovation is and isn’t. When the innovation team engages various departments, everyone has a shared understanding, language, and framework for what innovation is and isn’t. This creates a more collaborative and transparent organization that goes well beyond the innovation function.
During the i8CoLab onboarding process, each member has an opportunity to define innovation using our tools and platforms. This spectrum of innovation from incremental to breakthrough forms a foundation for the innovation function. Building on the various innovation types, metrics, outputs, funding, and teams can then be developed. As the innovation function matures and acquires feedback in real world, marketplace situations, the innovation foundation can then be iterated. The innovation function is treated as a dynamic system that’s always evolving.
i8CoLab Working Sessions
During a recent working session, our members helped one of the largest, global manufacturers develop a system that identifies significant, long-term opportunities while simultaneously delivering near term results. This is a common challenge across the corporate landscape and aligns with i8CoLab member objectives.
The group explored and introduced new methods and techniques for ‘white space’ exploration. Of the fifteen small groups involved with this working session, several suggested collaborations and partnerships with the startup community which would provide a platform for new and innovative product, service, and business models. Working with our collaboration partners in the startup eco-system, we were able to translate those ideas and concepts into action and results.
A criteria was then conceived that would allow for the innovation team to gauge if they were uniquely qualified to exploit new opportunities. This criteria included unique distribution channels and customers, manufacturing expertise, and natural product line extensions. Using this criteria and others, the innovation team would have the insights to evaluate whether new opportunities fit within the corporate strategy and organizational capabilities. Collaborating with startups also allowed the manufacturer to test and pilot new concepts far away from the corporate entity therefore protecting their brand to the downside should pilots and experiments fail. This is yet another example of how innovation management can reduce risk.
Another group working in this session outlined metrics and performance expectations. Determining whether the experiments and tests were successful using objective and subjective metrics was critical for allowing initiatives to pass through various stages. The criteria used for experimentation purposes is different from those used for products already in-market. A criteria that was helpful for the manufacturer was how many early customers could be acquired across a certain time horizon. Sales volume was a less important indicator although the number of new customers indicated general interest in a new offering.
Innovation Management Best Practice: Metrics
Building on the innovation spectrum from incremental through breakthrough with specific metrics at each interval is a corporate innovation management best practice. Further developing this foundation includes securing funding and building teams. Establishing definitions, metrics, funding, and teams creates the cornerstone foundation required for successful innovation functions.
The third most important corporate innovation management best practice is the securing of resources and funding. Oftentimes, this is one of the most challenging and time consuming efforts new and early stage innovation teams face. Our guidance to members is to set up innovation funding off the balance sheet, or through an investment mechanism, rather than funding through the normal quarterly and annual budgeting. Securing innovation funding with an investment approach offers a longer time horizon mindset while protecting resources so the innovation team can produce.
A common approach to funding corporate innovation initiatives is through a Corporate Venture Capital (CVC) unit. A proper CVC unit has a mandate to drive top line growth, net income growth, and market expansions. One of the primary roles the CVC unit serves is providing a platform for external and internal collaboration that drives communication, partnership, expertise, and guidance to both internal business units and the startups and projects sitting outside the organization.
Innovation Management Best Practice: Building Teams
The final cornerstone of the foundation of any high performance innovation function is the team. The skillset, culture, and leadership of the innovation team are critical. These traits can change and evolve as the innovation function mantures. The capabilities of an early stage innovation function will look quite different from that of a more mature function.
Members of i8CoLab worked with a top 10 accounting firm in the US to support their efforts at establishing a first ever innovation team for their organization. In this particular situation, our members assisted the firm in the development of the right skill sets for their industry and unique culture. At the top of the requirements list was to reduce risk. Introducing innovation into a highly risk averse accounting culture was important therefore the senior innovation leaders needed to bring a broad range of technical accounting skills to the team while also offering innovation management expertise. This approach was intended to appease internal leadership and staff, as well as customers and collaborators.
Using that criteria as a foundation, a discussion was facilitated around digital transformation and adopting and adapting new technologies that clients, accountants, and firm leaders requested. We created a software application which utilized the previous three years world order and projects to output three proposed work plans for the year ahead. These proposals were then shared with the accounts and account executives managing specific clients for accuracy and improvement. This simple project saved thousands of accountant hours while enabling the firm to move quickly to address client needs. The system is still in place today.
Corporate innovation management skill sets such as this are quite rare. Any organization that takes on the task of building an innovation team would be wise to plan these efforts well in advance. Because innovation skill sets are so rare, training and education will be required to find the right fit. As corporate innovation matures as a function across the corporate landscape and approaches that of a profession, more education, networking, and mentoring opportunities to advance careers have become available.
Case Study: Top 10 Accounting Firm
A consortium of leading telecom providers was challenged with charting a path through an uncertain future as the rate and pace of innovation accelerated and quickly obsoleted many of their offerings. New content platforms, the advent of 5G (and beyond), and consumer habits formed a perfect storm that temporarily left these telecom providers scrambling. Senior innovation leaders recognized this trend early and we’re able to respond accordingly, refilling their innovation pipeline with new products, services, and business models.
Competent leadership and an understanding of the historical trends in telecom formed the basis of the innovation and growth philosophy. These trends could have easily created new threats but instead the innovation team turned them into opportunities. They sprung into action by filling the innovation pipeline with new opportunities that ultimately produced new value for the consortium. A new initiative to conceive of a 10G technology was formed and this single effort is now at the forefront of telecom innovation - industry wide.
Collaboration
Peer based collaboration that drives innovation and grows enterprise value is one of the most effective approaches for building a proper corporate innovation management system. Benchmarking with peers to better understand what’s working and not working now is a cost effective way to build an innovation function that reduces risk and enables new growth opportunities. For over 10 years, The Innov8rs CoLab has worked with many Fortune 500/Global 2000 organizations to unlock new growth opportunities while implementing a system that enables long-term innovation. As the marketplace moves at an increasingly intense velocity, large organizations are increasingly exposed to new threats and obligations. i8CoLab is here to support and guide senior innovation leaders along the journey to a more mature and consistently productive internal capability.
About Innov8rs CoLab
Innov8rs CoLab is a private, by invitation only, no competitors allowed peer group of Chief Innovation Officers and senior innovation, R&D, and venture leaders. Our members gather frequently and collaborate often to ensure they are advancing their individual and collective innovation growth agendas. Sharing and benchmarking corporate innovation management best practices, connecting to opportunities and resources, and building enterprise value is the primary agenda of our working group.
For more information regarding Innov8rs CoLab membership, please contact Thomas Knoll at thomas@innov8rs.co.