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Common Themes in Stimulating Commercial Innovation

I had the pleasure to recently co-host an Innovation Roundtable on Managing Corporate Innovation Across Sites with Wellspring Worldwide. Attended by a diverse cross-section of innovation leaders from industries including finance, high tech, and manufacturing, this interactive forum provided a unique opportunity to exchange best practices, ideas, and challenges in driving innovation. Participants had varied mandates in their roles. Some were focused on finding new innovations to enhance their product pipelines. Others wanted to leverage innovation to excel in their operations. Still others played a dual role, scouting innovations to serve either or both purposes. Despite the diverse backgrounds, corporate cultures, industries, and innovation drivers, several common themes emerged during our engaging half-day collaboration.

Any Approach Can Work

These innovation leaders described assorted approaches to inspiring innovation. Successful options included innovation slush funds, Shark Tank-like competitions, part-time in-office sabbaticals to develop ideas, crowdsourcing, and gamification techniques. Some companies had centralized innovation teams, loosely connected to business lines, while others favored grassroots techniques. Multiple mechanisms were often used either in tandem or over time at the same company to serve different purposes and/or to stay fresh and current. Participants generally felt that any approach could work effectively, provided that it aligned with the corporate culture. Regardless of the approach used, participants cautioned that it is imperative to foster strong collaboration and relationships between innovators and business lines. Failure to do so often results in orphaned innovations that don’t support corporate goals and objectives, wasting precious innovation dollars and time.

Innovation Funding and Risk

Creating the Best Approach

1. Align innovation programs with corporate culture 2. Cultivate strong relationships between innovators and business lines 3. Design funding programs to foster risk taking

All of the companies employed dedicated innovation capital, funded by corporate and managed by the business lines. Participants described programs to award innovation funds with the expectation that the ideas are high risk. As a result, most required relatively flexible milestones demonstrating proof of concept and had little expectation that quantifiable return on investment (ROI) would be shown. One company described a program that awards in-house innovators dedicating time to pursue an idea, rather than providing funding. With a lower burden for corporate commitment, this program allows more participation from a broader group. For lower risk innovations, another participant had established a corporate loan program, which provided higher amounts of capital but with more rigorous milestones and increased expectations for demonstrable payback.

Challenges and Pitfalls

The challenges that our participants described were remarkably similar given the diverse set of companies represented.

Change Management

The cultural impact of today’s innovation environment frequently comes as a shock to corporate employees. As Chris Townsend, Chief Marketing Officer at Wellspring, shared, when the first commercially available telephones were made, there was only one party in the supply chain. In contrast, Apple has more than 200 suppliers and performed over 1,000 supplier assessments last year. Participants reported differing change management strategies. For example, one of the innovation leaders is also leading Enterprise Change Management. Another was previously aligned with the chief information officer (CIO) but has since moved into the business office to advocate, promote, and drive change at a faster pace. Both described significant changes in their work environment from closed offices to agile workspace with no walls as part of the new techniques for increasing innovation.

Centralization or Decentralization

The group had a spirited conversation about whether innovation resources should be centralized. Approaches used were mixed among the companies represented. The upside of centralization is that dedicated resources are not pulled into day-to-day operations. The downside is that connectivity with the business is more easily lost. Those favoring a centralized approach shared that they established deliberate mechanisms to maintain collaboration, such as seeding innovation groups with high performers from the business and/or use of rotational assignments. They all acknowledged that new ideas can come from any person in the business, regardless of their title or responsibilities; thus, empowering and encouraging participation was needed regardless of the structure chosen.

Transitioning to Scale

The most difficult challenge voiced by the group is effectively transitioning innovations from proof-of-concept stage to full scale. They noted that after meeting initial milestones such as a proof of concept, it is incumbent upon the innovator to take their idea forward and get funding from a business line. One imagines that some innovators are more skilled at this “selling” than others. Innovation leaders can act as mentors in this process, but ultimately have limited bandwidth. Increasing the velocity and number of successful crossings of this chasm is perhaps a topic for another roundtable. Let us know if you have an effective strategy to share. Based on their comments, each of our participants found the roundtable to be highly informative and useful. Conversations sparked many new ideas, and lasting relationships were formed, so much so that the group is now planning a “field trip” to visit the agile workspaces and continue the discussion. We look forward to seeing continued collaborations among the group and hope to see both them and you at an upcoming roundtable! Contact us to learn how Fuentek can help provide you with high-quality innovation management services.