Some might consider corporate innovation a “side activity” or even a rival or distraction to a company’s core business, but it is not. Corporate innovation can be a major driver for progress that will secure a company’s future competitive advantage.
To help you ensure corporation innovation is a success within your organization we’ve compiled this list of eight critical factors for successful corporate innovation.
1. Define clear innovation goals
It may seem obvious, but it is vital that you set clearly defined goals for but it is vital that you set clearly defined goals for your innovation initiatives. Without such goals, employees will have no idea how to make a relevant contribution – in the long run, these misguided innovation activities will leave you with nothing but a loss of resources.
This is why it is critical to clearly understand the company’s overall goals right at the beginning of any corporate innovation program or project. Only then can you define viable indicators for your innovation initiatives, such as growth targets and particular activities. This first step lays the groundwork for everything that’s to come.
2. Make innovation strategy one of the C-level priorities
The first steps of the innovation process, such as getting an overview of trends, generating ideas, and exploring the market, are usually the easiest. And more often than not, the difficulty and internal resistance increase drastically right after this initial phase. Why? Once you reach implementation the amount of needed financial, time, and human resources rises, and suddenly there’s an element of risk – and along with this risk often comes strong criticism of the ideas.
Hence, for your innovation activities to have a substantial and sustainable impact, giving an explicit and ongoing commitment by the top management and board is critical.
3. Develop an effective communication strategy to mobilize corporate innovation
Creating a culture of innovation is not a simple case of turning the innovation switch on. It is a process change that must be accompanied by communication. The innovative power of a company lives and falls with its employees. You must communicate effectively with employees about what is required from them but also show them that their contribution - in concrete terms, the gift of their ideas, their expertise and industry know-how - is needed and valued.
It’s also essential to understand internally how innovation initiatives differ from operational units – such as the lack of defined room for manoeuvre, roles, KPIs, and budgets and the higher risk of failure along with less predictability.
4. Put the customer first in all your validation activities
“Business plans rarely survive first contact with customers,” Steve Blank states in the Harvard Business Review. Putting too much focus on the idea without including the actual customer perspective is one of the main reasons why so many new business ideas fail. While this should go without saying, the truth is that most early innovation teams don’t adequately define their customer segments or do sufficient customer validation. In our experience, there can be great hesitation towards exploring your customers. Many employees shun talking to potential customers in an early phase because the access to them is or seems overly formalized. They often lack the resources, expertise and tools for customer exploration and to gain valid results.
Instead of being afraid of failure or getting “no” as an answer, embrace early customer feedback as the most valuable chance to validate and iterate your idea to create a solution that will ultimately benefit them.
5. Give the right level of resources at the right stage
The realization of ideas needs specific resources, such as money and time . Validating new business ideas is not only an intense process, but it’s essential to get quick results to improve further a vision based on real-market insights.
Access to necessary resources is often inconvenient or granted too late in the process. In other cases (yes, this also happens sometimes), corporates provide too many resources simultaneously, over-challenging and inhibiting employees not used to manage higher budgets. That’s why it’s so important to give the right level of resources at the right stage of the innovation process.
The same applies for time. Employees must be allowed to dedicate some of their time to work on these ideas. Starting with just one day per week may be the beginning, but anything less won't cut it for a project's ultimate triumph. As the idea grows, a full-time team might be the missing piece for unrivalled success.
6. Be agile and use lean principles in innovation
Internal processes are designed to make the daily business as efficient, safe, and coordinated as possible. But these same processes can also block the iterative and quick development of innovative business ideas.
Long coordination processes decrease the team’s motivation and consume the energy and focus needed for the project. Innovation projects might become so-called “submarines” – invisible for most and more or less uncared for. To keep the pace take an agile approach and use the five lean principles of management.
7. Offer attractive incentives from top to bottom
Making an innovation initiative a success requires the employees to go the extra mile: learning to fail, questioning the status quo, and sometimes burning the midnight oil. However, in many companies, going the extra mile goes unacknowledged, or even worse, it can have negative repercussions. Employees might even face negative consequences if they don’t get the support they need or if their initiative does not turn out to be the next big thing.
Ensure your employees are not only supported but also incentivized to embark on this transformative journey. Let attractive rewards, both financial and intrinsic, serve as catalysts for innovation at every level of your organization. Extend these incentives to your management too! By aligning their goals with innovation and acknowledging their vital contributions, you inspire a culture of innovation from the very top to bottom.
Remember, it's not just about the destination; it's about the experience and learning gained throughout the journey. Even if an initiative doesn't become the next big thing, ensure your teams walk away enriched and ever more motivated to pursue the next innovative idea.
8. Look beyond company borders for inspiration and support
If your company has strong reservations regarding solutions that were “not invented here,” you are not alone. The rejection of ideas, products, or knowledge from outside your company is so widespread that researchers have named this stance the “not-in¬vented-here syndrome.”
Established corporates have a long history of driving new products, services, and internal processes forward. But due to the increasing connectivity of the economy and the growing number of specialized, highly agile companies (such as start-ups), the pressure and requirements towards innovation are rising. Leading corporations increasingly rely on overcoming the “not-invented-here” syndrome and the fear of competitors.
Shortly, thinking outside the “corporate box” by networking within the ecosystem will not be a matter of choice but a necessity for corporations to stay ahead of the growing competition. When it comes to partnerships, the possibilities are nearly unlimited.
Conclusion: Cultivate a culture of innovation for lasting success
In conclusion, successful corporate innovation requires careful consideration of eight key principles. They are:
- defining clear innovation goals,
- making innovation a priority at the C-level,
- communicating effectively,
- putting the customer first,
- getting the right level of resources at the right time,
- being agile and lean,
- offering attractive incentives,
- embracing collaboration outside the corporate boundaries.
By addressing these factors, organizations can foster a culture of innovation and secure their competitive advantage and future growth.
Learn more about how to successfully set up and steer innovation projects within the corporate environment by reading our corporate ventures study. Includes insights and qualitative data derived from interviews with more than 40 senior innovation managers, and project leads from medium to large companies.