In my capacity as Regional Digital Strategy Director, I’ve come across lots of corporates who are actively in the process of building an innovation capability as a response to industry disruption. The problem is that there is often not a conscious decision as to which approach is right given the organisation’s goals and aspirations. It’s not surprising then that these efforts often become innovation for the sake of it.
While there are many disparate flavours of innovation, they typically fall into one of five categories. By understanding the challenges of innovation, and which of the five approaches best align with goals and capabilities, any organisation can make a more informed choice on how to go about pursuing innovation.
So what are the most common approaches to innovation we see in the corporate space? Which ones work and when should each be used?
5 Ways to Innovate
COMMON APPROACHES TAKEN BY CORPORATES
Train staff and build capability from within the organisation
BENEFIT: Aims directly for the end goal of internal innovation
DRAWBACK: Limited by lowest common denominator; End up bringing up the rear rather than leading from the front
- INNOVATION HUB
A ”digital garage” style environment that creates products in isolation
BENEFIT: Able to attract suitable talent due to funky environment and team setup
DRAWBACK: Difficult to integrate products back into core business, and short term metrics are often introduced to justify ROI
- STARTUP STUDIO
Team of consultants build a startup environment and then handover to client to build capability over time
BENEFIT: Tap into an existing talent pool & buy only the capabilities needed at any given time
DRAWBACK: Value doesn’t fit typical head-hour model, so consultancies need to be remunerated in new ways
An external space that houses startups, with the option to invest in those that succeed
BENEFIT: Freedom for startups to operate freely, embracing and de-risking “failure” from corporate standpoint
DRAWBACK: Relevance of startups to parent is not guaranteed, making it a long-term investment decision
Scan broad startup ecosystem and build/ buy / borrow partnerships to fill capabilities as required
BENEFIT: Minimal investment in ongoing sensing, requiring major funding only when capability is needed
DRAWBACK: Very long-term view with low hit-rate
The variety of approaches observed across hundreds of corporates makes it clear there is no “one size fits all” solution. Innovation only succeeds when the approach is aligned to an overarching strategy, and when it is treated not as a project but instead as the new BAU.
The one thing we can all agree on:
“When Innovation is measured generationally, results shouldn’t be measured quarterly.”