9.5 guidelines for successful corporate innovation

Are you investing substantial resources into your innovation efforts but are not satisfied with your organization’s innovation performance? Do you wonder why your innovation setup doesn’t yield the desired results? We thought about it at Pioneers.io and created our 9.5 guidelines for successful corporate innovation. A systematic, inclusive, and motivational approach to create sustainable value for your business.

The right strategic and organizational setup is key for successful corporate innovation. For innovation to be successful, a corporate environment is needed where innovation can prosper and is supported by the right resources, processes, structures, skills, culture, and methodologies that enable flexible and fast innovation development, testing, and scaling.

While improving one of these aspects, like introducing a new innovation methodology in all business areas, is a good start, it is unlikely to solely improve the overall innovation performance. Achieving corporate innovation success requires a holistic approach where the entire organizational setup is aligned with the long-term innovation objectives. In this article, we outline today’s traditional corporate setup and propose a new holistic approach based on 9.5 guidelines for successful corporate innovation.

Transcending from a traditional to a new approach

From the age of individual inventors through mass production and up until recent years, the prevailing tenor in the business world revolved around a product-centric approach. This resulted in innovation primarily emanating from R&D departments that ensured a competitive advantage mainly through intellectual property (IP) creation and protection. With the rise of new Tech giants such as Microsoft or Apple, it soon became evident that solely relying on established R&D structures would no longer be sufficient to ensure one’s competitive advantage in fast-changing market environments. Hence, a mindset shift towards a more customer-centric approach became imperative and top management became aware that innovation endeavors should not be seen as silo activities confined to one department; rather innovation needs to be deeply embedded within all organizational activities and the employee mindset across the entire organization. 

In the following sections, we delve into our 9.5 guidelines for corporate innovation examining what this new approach to innovation entails – from leadership’s role to cultivating an innovative mindset across all levels of the organization.

In order to ensure that innovation is deeply rooted within the entire organization, companies must anchor innovation and customer-centricity within their corporate strategy. A strategic legitimation for innovation is needed, which involves defining clear innovation areas and goals. Aligning these with the overarching business objectives is crucial to ensure that innovation efforts are integral components of the company’s long-term vision. It is all about the right anchor in the future that you are trying to reach, formulating clear hypotheses on future trends, and aligning strategy and innovation execution.

To achieve broad innovation success, however, the role of management needs to evolve from a mere “boss” into a proactive “agent of change”. This new role of top management not only involves setting clear innovation targets but also cultivating a culture of understanding, fostering focused innovation efforts, and actively being engaged in innovation initiatives throughout the entire organization.

The fast market developments require innovation in all areas of the company. Not every topic can be driven by the CEO. Thus, top management needs to act as empowering leaders, inspiring, motivating, and enabling all parts of the organization and providing incentives to innovate. Management commitment to innovation needs to be visible in every talk, employee interaction, and meeting to encourage the organization to think and act entrepreneurially and thereby become an innovation champion.

To ramp up innovation, over the last years, many corporates have established innovation departments. However, a common issue is the lack of interconnectedness with the core business. Without this linkage, innovation efforts often struggle to align with the company’s overall objectives and strategic direction. While some companies have incorporated initiatives like intrapreneurship programs or startup collaborations to foster innovation, these efforts often face challenges unless properly integrated into the core operations and strategies of the organization. Additionally, these are often characterized by “the same-old” long waterfall development cycles, rigid deadlines, and traditional financial KPIs. Overall, this approach has often led to incremental innovation and rising development costs for existing business models rather than the creation of highly innovative solutions and cost reductions. 

An effective innovation setup needs more than just “cool” innovation initiatives as they can soon become more of an ”appearance than substance” kind of thing. It requires a new, suitable organizational framework and smart management. At Pioneers, we see the need to create a coordinated innovation community with clear roles and responsibilities within the organization. By defining who is accountable for innovation initiatives and ensuring that everyone understands their role in the innovation process, companies can foster a sense of ownership and commitment to driving innovation forward. Central approaches (a central coordinating team) need to be combined with decentral innovation power (innovation enthusiasts and doers in all company areas) to achieve target results. Moreover, different setups may be necessary for exploration and exploitation activities.

While the approach of using more customer-centric methodologies and tools in existing structures seemed exciting in the beginning, many companies did not reach the expected results. While thousands of new ideas are created using new methodologies, many do not even make it past an early validation or become zombie projects. 

This is often due to the inexistence of clear processes, decision gates, and criteria that kill bad and push great ideas inside a corporation. Organizations need a more systematic approach to take advantage of this new entrepreneurial way of doing things. By implementing clear processes that provide flexibility and transparency, companies can ensure that innovation project portfolios are efficiently managed and high-potential projects receive the necessary attention and resources. It is also essential to include fast-track options to ensure the necessary speed to outperform competitors when time-to-go-to-market is concerned. A structured approach furthermore minimizes the risk of ideas getting lost in the bureaucratic jungle and facilitates the rapid development and deployment of innovative solutions.

The right tools and processes are, however, not enough. Innovation also needs resources. While startups on the open market have scarce resources and thus have to speed to market, in many corporates we see even fewer resources being dedicated to innovation development. The backbone of corporate innovation is to secure long-term budgets, employee resources, and entrepreneurial talent. Resource competition with the core needs has to be managed carefully by protecting innovation budgets actively and by creating enough flexibility. Furthermore, access to necessary technologies and partner structures can speed up the go-to-market time.

To ensure the long-term success of corporate innovation efforts and maintain management commitment, it is crucial to track innovation activities in a transparent manner and measure their success. As Peter Drucker famously said, “What you can’t measure, you can’t manage.” This requires tracking input, throughput, and output metrics across various dimensions. A data-driven approach enables informed decision-making and continuous improvement of the entire innovation setup, ensuring that innovation efforts remain closely aligned with strategic objectives and yield the desired outcome: Create sustainable value for people, planet, and profit.

The key to successfully mastering the game of corporate innovation is to leverage one’s internal know-how and entrepreneurial talent across the entire organization. Hence, the innovation mindset must be deeply embedded into the corporate DNA, and employee mobilization for innovation activities is indispensable.

Similar to a strong purpose that drives the motivation of startup employees, cultivating an entrepreneurial spirit within the organization fosters intrinsic motivation among employees. This empowers them to think outside the box, take ownership, and drive meaningful innovation. To truly unleash the innovation potential of employees, organizations must democratize innovation and empower employees to contribute their ideas and insights. 

By top leadership providing strategic guidance, inspiration, and active involvement, companies can create a culture where experimentation, collaboration, and learning are encouraged and rewarded. Through open communication and by providing creative and safe spaces for employees to think outside the box, employees will be inspired and empowered to create innovative ventures.

Innovation thrives in environments where both exploration and experimentation are encouraged and failure is embraced as a learning opportunity. Innovation sandboxes provide a safe space for teams to explore new ideas, test hypotheses, and iterate rapidly without fear of repercussions. Combining these experimental spaces with state-of-the-art methods and tools fosters creativity and risk-taking, ultimately leading to breakthrough innovations. 

Such an environment can take many forms and might look completely different across organizations. While for one corporate the right way to go might be to have formalized incubators, accelerators, or startup collaboration programs, others might opt for dedicated innovation formats like innovation challenges. Some organizations might even want to go as far as to establish entire units dedicated to venture building. There is no one-size-fits-all approach; rather, the key lies in identifying the most suitable innovation sandbox tailored to the unique needs and innovation goals of each organization.

In ever-evolving and rapidly changing markets where established industry players are constantly being challenged by innovative players that are fast, agile, and built customer-centric from the ground up, the ability to introduce innovative solutions to the market at a high speed is paramount. However, companies don’t always have to tackle this alone. There’s a huge potential for speeding up innovation by reaching beyond the organization’s borders and expertise and forging strong connections with the startup and entrepreneurial community. 

By tapping into external technologies, and talent pools, corporations can seize opportunities for collaboration and growth. Opening up to the world means building ecosystems where corporates co-create with others – customers, suppliers, start-ups/scale-ups, and research entities – to foster innovation and drive collective progress.

Last but not least, innovation demands courage! The courage to take risks, to challenge the status quo, and to embrace failure as a natural part of the process. To truly excel in corporate innovation, companies must adopt a bold mindset, where exploration and experimentation is encouraged, failures are accepted as learning opportunities, and the agility to adapt quickly is highly valued. 

This means being willing to “just do and try,” to move fast, and to have the humility to recognize and eliminate projects that are not yielding results – a process often referred to as “spotting and killing zombie projects.” By embracing boldness in innovation, companies can unlock their full potential and thrive in today’s rapidly changing business landscape.

Successful corporate innovation requires a holistic approach 

To put it in a nutshell, corporate innovation success is not only a matter of selectively applying new methodologies but it requires a holistic approach. It requires bridging the gap between the corporate and startup world and finding the right balance between a ”customer-centric, startup-like” approach and effectively running the organization’s core business. Hence, combining a startup-like, “customer-centric approach” with the corporate’s core strengths and assets. In other words, managing exploration and exploitation (also called ambidexterity) at the same time. It’s not easy, but also not impossible. It requires communication, collaboration, and openness to build the bridge from the traditional to the new approach. And in many cases, it requires to pioneer.