Do corporate innovation programs work? | So Good News
There are very few companies without innovation programs. Innovation programs are often larger than innovation projects and include several innovation projects. There are many examples of corporate innovation programs, including idea competitions, corporate incubators, innovation councils, and corporate venture capital.
The main challenge of corporate innovation programs is to ensure that they do not end innovative theater; a set of actions that look like innovation but ultimately fail. So how do we know if our corporate innovation programs are working? What questions should you ask to find out?
A story about two theories
In their research on organizational change, Nitin Noria and Michael Beer identified two main archetypes of change. They called these two archetypes Theory E and Theory O. According to Noria and Beer:
- Theory E aimed at creating economic value for the company and its shareholders. This type of change is often driven by financial goals.
- Theory O focuses on organizational capabilities. The goal is to change corporate culture, employee behavior, learning and attitudes.
Both theories are valid approaches to organizational change. Each approach has advantages and disadvantages. Therefore, most of the organizations studied by Noria and Beer use some mixture of both.
A story about two programs
When evaluating the results produced by our corporate innovation programs, we can draw from Noria and Beer’s theory of change. We can use this framework to help our companies avoid the innovation theater trap. World-class innovation programs should focus on one or both of the following outcomes:
- Creating value: Creating new products, services, value propositions and business models. These programs invest in and manage innovative projects that create value through new growth or cost savings (ie Theory E).
- Culture change: Transforming the company to create an innovative culture. This may include new processes, metrics, incentive systems, or changing organizational structures. These transformations help the company to innovate in a consistent and repeatable way (ie Theory O).
There are real-world examples of companies using innovative programs value creation. The Bosch Accelerator program has invested in 200 teams over three years. Each team received an initial investment of $120,000. This produced 15 successful teams with projects that were subsequently expanded through funding. The Sony Startup Accelerator Program (SSAP) has generated more than 750 business ideas, of which 34 have been incubated, of which 14 businesses have been successfully established. Laurastar steam iron innovators initially developed 14 ideas, including three teams participating in an innovation sprint, and one idea was successfully implemented.
A great example of a company using innovative software for driving culture change Intuit, a major financial software company. Since 2007, Intuit has been able to transform its culture to drive innovation as an iterative process. They created a framework of tools and techniques called Design for Delight (D4D). To expand the impact of the D4D toolkit, Intuit subsequently hired and trained a team of trainers embedded across the company. The cultural role of these innovation catalysts was to support internal innovation teams in doing their work.
While the above examples show how innovation programs can be used to create value versus cultural change, none of these types of programs can succeed on their own. Therefore, it is important that our innovation programs are strategically linked. Most innovation programs require other programs within the company to support them.
One debated question among innovators is whether hackathons or ideation competitions are a form of innovation theater. To answer this question, we need to know what happens to the ideas after the winners are selected from hackathons and idea contests. Then, if there was nothing official with the winners, then the hackathons or competitions became the theater of innovation. Other programs are needed to help lead winning ideas to success.
Many research and development programs (ie, R&D) can be considered Theory E. They are focused on creating technologies that ultimately provide some value for the company. But R&D programs are less likely to succeed if they focus only on developing cool new technologies. The best way to generate economic value is for these technologies to become value propositions that resonate with customers and efficient and scalable business models.
This is where support from other parts of the organization becomes important. No single department in a company can successfully innovate on its own. For example, technologies from R&D teams can be acquired through a corporate incubator program that supports the development of the right business models for successful commercialization.
Most innovative learning programs can be considered Theory O. These programs are usually run by the HR department to help develop innovative skills and capabilities within the company. However, without innovative projects for people to work on, this training is meaningless. In fact, the best way to develop world-class innovation skills is through experience and practice. Thus, training programs are only effective if they are supported by other company programs (such as an accelerator program) that allow people to put what they have learned into practice.
Release the results
Can corporate innovation programs pay off? Yes, they can! Leaders must be clear about what they are trying to accomplish with the programs. Are they focused on creating new products, services, value propositions and business models, or are they focused on transforming the company to establish the right innovation culture? In addition, our innovation programs must be strategically linked with other programs. If leaders can do these things, then they can see the results of their innovation programs.