Corporate Innovation Defined
Corporate innovation can be the catalyst in adapting to the ever-changing marketplace and leading your business into a success. It is the process of enterprises implementing innovation opportunities into existing business models, such as new ideas, improving services or products, or creating unique commodities. Studies have shown that established companies that engage in corporate innovation have a dedicated team towards innovation efforts.
One of the main objectives of corporate innovation is to implement new technology, such as the process of sourcing startups. External accelerators, internal corporate innovation programs, and corporate venture arms (CVCs) are examples of sourcing startups for businesses to start innovating. Embiggen Consulting recommends five levels of corporate innovation, which is outlined below:
Dedicated Innovation Team
Build an innovation team within the company composed of full-time members dedicated to developing the strategy, managing, and activating innovation programs. Innovation team members should have expertise in internal communications and are change agents of the corporation. Major corporations like Mastercard, Hallmark, and BMW excel in innovation by having teams dedicated to new business innovations.
Innovation Center of Excellence
Expand teams within corporations by setting up cross-functional, multi-disciplinary groups to share information throughout the company. By allowing ideas to flow throughout the company, innovation can prosper and grow across all teams in a corporation.
Develop intrapreneur programs to give internal employees a platform and resources to innovate on ideas and products. These programs allow the unlocking of potential found within current employees to bring forth product enhancements, customer service improvements, and internal startups. Adobe, for example, created its Kickbox program which focuses on intrapreneurship and streamlining innovation.
Immerse corporation leaders through innovation tours across organizations, companies, and regions to discover trends in various industries. Innovation tours allow corporation leaders to have exposure to different industries that can offer insight into the market that is essential to innovation. European-based WDHB and Nexxworks tour executives in Silicon Valley and other areas to keep up to date on market trends and innovation practices.
Sustain corporations by establishing innovation posts in influential locations where innovation occurs. Innovation posts have the duty of monitoring the market for changes, connecting with local startups, and reporting and integrating programs back into the corporate headquarters. The work of innovation posts keep corporations up to date about the latest market trends and give businesses a headstart in innovating their business models.
However, some corporate innovation levels contain risk, meaning the outcome of implementing these levels have the possibility of negatively affecting the corporation. These innovation levels have advantages that may benefit the company, but these levels place a high wager on the corporation’s capital with no certainty on the outcome. Embiggen Consulting acknowledges that these corporate innovation levels that contain risk outlined below:
Corporate Venture Capital Investment
Corporate venture capital investment is the process in which many corporations place bets among the startup ecosystem. The investment made depends on the nature of the startup and creates possible opportunities for follow-on investments, and blocks competitors. However, these investments may yield negative results if the startup invested in performs poorly in the market or does not deliver the performance expected.
Acquisition is the process in which corporations purchase successful startups and then integrate them into the corporation. While often expensive, the purchase may help the startup scale further. However, this may strategy comes with a heavy financial burden and does not guarantee success for the corporation that initiated the acquisition.
Several corporate innovation techniques add value to the company and are worth considering when planning innovation strategies for an organization. Embiggen Consulting suggests these corporate innovation levels that add value to the corporation outlined below:
Large corporations invite startups to embed at their physical locations and provide funding and corporate support. In exchange, innovative startups can occur from within the corporation. Other variations include online open-innovation programs that request ideas from the crowd. Allianz Digital Labs in Munich hosts startups, and GE Garages enables startups to partner.
Corporations partner with third-party accelerators to provide sponsorship in exchange for relationships with startups and integration opportunities. This technique can help foster better relations with local startups. External accelerators are run by third parties, unlike innovation outposts, which are managed by employees. Plug and Play, Singularity University, and 500 Startups are examples of external accelerators.
Corporations can tap into new graduates, early-stage projects and companies, and the network of an established educational institution allowing access to new, fresh ideas. This technique gives corporations direct access to innovative thinkers and projects within a university.