How to define your innovation search field
A few weeks ago, we had the pleasure to interview Pontus Siren, partner at InnoSight, about defining search fields for corporate innovation. InnoSight is a leading global strategy firm co-founded by Clay Christensen, who developed the theory of disruptive innovation. Here are the main take-aways from our interview.
Three golden rules for corporate innovation
- Define success
- Set boundaries of your strategy
- Reward entrepreneurial drive
What is success?
When you get started working on corporate innovation projects, you need to define what good looks like. What is a sufficient impact? Can it be just a change of perception? Does it have to have a financial component? How many people does it have to touch? How do you measure success? Some companies say that they are open to very different solutions, but in practice, they are not. You need to think about what is desirable, what is discussable, and what is off the table.
The most important question is “what is really off the table?”.
Business innovation is different from creativity. The role of business innovation is to drive business results and business impact. Ideas become sustainable if they are profitable. If you are not aiming to achieve financial profit, you need to think about the concrete value of the idea you plan to pursue. Companies working with external innovators, such as startups, can help them by clearly explaining what success looks like and what goals they have.
Where to innovate?
Based on the definition of success, you need to set the boundaries for your innovation efforts. The boundaries have to be commensurate with the goals. If you have very ambitious goals the boundaries have to be broad, if you have modest goals the boundaries can be tighter.
How big should this thing be, how much money are we willing to invest for the first two or three years?
Pontus' advice is to innovate as close to the core as possible. You should only push the boundaries of your innovation efforts if you can not achieve the goals close to your core. Companies don’t like to do new things and it is very difficult for them to do something big and new. They are reluctant to do things differently because they struggle to accept and adjust to new realities.
I’ve a very practical approach to innovation, ideally I would innovate as close to the core as possible to get the results.
One of the challenges for established corporations is that they are wired to execute a precise business model and they struggle to incorporate elements that do not fit their existing profitable business model. However, nowadays the changes are becoming bigger and faster and competition is increasing at a faster pace too. Just think about industries such as media and retail where incumbent companies were extremely slow to respond to technological progress and they ended up losing momentum.
Innovation is difficult, but it is not impossible. Finding focus is imperative. Sometimes companies try to do too many things at once and miss the point of what the innovation trajectory really is.
How to encourage innovation?
A final aspect to consider when enhancing the innovation capacity is your company’s culture. Contrary to what is commonly assumed, innovation is a deeply human affair. You can not solve innovation problems mechanically, just following good processes. There is a strong element of personal engagement and passion, which is seldom welcomed by established corporations, unlike in the startup world. Managers sometimes fear innovation. As a case in point, a store sales manager is unlikely to push for e-commerce, fearing his/her unit will be disrupted.
Companies do not fear cannibalization, business unit managers do.
Companies need to recognize that entrepreneurial drive is fundamental. Building a culture of innovation means harvesting passion and purpose, allowing for constructive disagreement, and embracing change. Only in this way, companies will set a pathway to innovate incrementally and substantially.
Thanks, Pontus for a great interview!
About the InnoDays
The InnoDays bring companies and talent together to prototype ideas with a positive impact in 48 hours. With our training program, we guide our participants’ innovation journey before and after the event with inspiring input and helpful methods. Find out more about InnoDays on our website.