Guest Post: Want to move Corporate Innovation into Hyperdrive? Avoid These Three Pitfalls

(Valerie Vacante is the Founder of Collabsco, a strategy and innovation firm based in Austin, Texas. She leads cross-functional teams to create meaningful, consumer-centric experiences that connect brands, people and emerging technologies. You can likely find her at arcades, museums, tech incubators and almost anywhere creators are designing the future.)

Picture this. You just arrived in the office as emails are flying in and Slack is pinging by the second. Your competitor just gobbled up several startups and have moved their advantage into hyperdrive to advance their technology, improve their offering, and increase revenue.

Considering the successes of startup “unicorns” such as Amazon, Uber, Airbnb, SpaceX, Spotify, and more, it is no surprise that corporations need to invest in innovation and move faster. But how can large corporations compete against smaller, nimbler companies?

What is Innovation?

Innovation means so many things to corporate organizations. According to The Corporate Startup by Tendayi Viki, Dan Toma, and Esther Gons, the definition of innovation is: “The creation of new products and services that deliver value to customers in a manner that is supported by a sustainable and profitable business model.”

This definition also clearly articulates the role of the corporate innovator, which is “to help your company make money by making products people want.”

What does going into hyperdrive look like in a corporation?

Corporate leaders agree that they need to move faster and make a solid investment in innovation. But two big questions remain: where do we invest in innovation in the organization, and what’s the strategy behind it?
There are three common ways that corporate organizations approach innovation. All of them start with good intentions, but they almost always fail.

1. The “Dark Side” – The Innovation Stickler

  • What it is: Managers, usually Type As or perfectionists, working in a culture of fear tasked with “innovation” as part of their role. But before anyone can get started on anything, they need a traditional business plan outlining every scenario, every task, and every answer. Then the innovation initiative is sent up the chain for various rounds of review, before it is funded and moved forward.
  • Why it sounds good: Everything is figured out, and it is a sure bet. The group can claim they are pushing innovation forward.
  • Why it fails: Requires a significant amount of time and resources working on “what if” work rather than actually creating, testing, and learning. By the time all of the planning is completed a quick-moving competitor likely swooped in; or worse, the initiative is no longer a priority and gets killed.

“People cannot get any innovation done within a company that expects a thirty page business case before it funds any idea. Ultimately, such a company will always invest in sure bets; which means that the company will always work on the same types of products.” — The Corporate Startup

2. A Galaxy Far, Far Away – The Separate Lab

  • What it is: Separating the innovators from the rest of the organization. These teams are generally comprised of cross-functional teams working collaboratively to create the next “Uber, Tinder, Airbnb of X” or the “future of _____ ” for their company. These groups are intended to be startups within a large corporate organization and feature a fun culture with sticky notes, ping pong tables, and bright colored walls, as well as the latest technology, such as wearables and VR and AR equipment.
  • Why it sounds good: Enables dedicated teams to focus on improving or creating new products and services without being tied to the larger company bureaucracy. These teams are free to explore, experiment, think, and be creative. They have the freedom of a startup but the greater resources of a corporate company, with all of the benefits.
  • Why it fails: Lack of alignment with the larger organization’s goals, and a lack of communication and measurable success. Some teams are empowered to work on whatever they want, but efforts are not always purposeful or connected to larger organizational goals, resulting in a huge investment without a measurable return to the organization. People are excited about all of the experimentation and new products are created, but if they are not sustainable and profitable that’s where it gets sticky (the lab closes and a new strategy begins).

“Only a few products from corporate innovation labs will have validated business models, or any alignment with the company’s strategic vision. We have seen successful innovators with great products that whither on the vine because there are no managers in the company willing to pick up the products and take them to scale.” — The Corporate Startup

3. Going Rogue – Innovating Under the Radar

  • What it is: A corporate innovation insurgency, or a group of rebels who go rogue to develop a product or service as a passion project under the radar while working on their day-to-day work. Executives likely do not know or have not bought into the idea.
  • Why it sounds good: It sounds exciting for corporate culture; a group of misfits gathered around doing what they want, how they want to do it. It provides an outstanding learning opportunity for teams to experiment on something that is not their day-to-day work, whereby they can apply their learnings to other areas of the organization.
  • Why it fails: There will come a point when the product/service being created will need incremental investment (time, money, or people’s efforts) and that time will require conversations with other people in the company.
    • The project could be perceived as a waste of time/money as it is not aligned with larger company goals.
    • Teams are constantly walking on eggshells — they don’t want to get caught during work hours working on their passion project.

Navigating a Rogue Effort
Tristan Kromer recommends the following for teams going rogue in corporate innovation:

  • Lower the cost of innovation — explore applying design thinking or lean startup principles when developing a new product or service.
  • Find a diplomat — an individual in the organization who will do the hard work of corporate politics, begging or borrowing resources, and cutting red tape to keep a clear path for the team to continue working on their “guerilla innovation” effort.

“A diplomat is usually someone who is well-connected and respected in the business, who can work outside the bureaucratic channels to call in favors and get things done. Without a diplomat, most guerilla projects are dead on arrival.” — Tristan Kromer, The Corporate Startup

Using the Force: What Do Corporates Need to Win?

When it comes to corporate innovation, the company must be collaborative, open, flexible, communicative, and profitable. Successful innovation requires collaboration across the entire company — ensuring that all efforts align with the goals of the larger organization.

The Corporate Startup suggests that companies create an internal process that achieves the following:

  1. Facilitates the serendipity that creates sparks of creative ideation.
  2. Captures and tests the outputs of that creative ideation.
  3. Transforms ideas into successful products with profitable business models.

A corporate organization can achieve these goals by creating an innovation ecosystem. Co-author Tendayi Viki has created Five Principles for Building Corporate Innovation Ecosystems. These principles are comprised of the following: Innovation Thesis, Innovation Portfolio, Innovation Framework, Innovation Accounting, and Innovation Practice. The principles are a way to establish a holistic approach to drive innovation and move faster in corporations and the startup world.

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