The single biggest threat facing organizations today is their inability to innovate consistently and experiment cost effectively.
I cannot think of a more striking statistic than this one which is predicting the demise of 40% of the Fortune 500 in the next 10 years. A number that is heavily supported by what has been going on for the past 50 years and now accelerating at an exponential rate.
The major challenges affecting corporate innovation can be categorized into the following key areas:
1. Corporate data is spread across disparate systems
2. Diversity (of people, cultures, and thought) is not connected to innovation activity
3. Lack of standards for measuring innovation ROI
4. Innovation labs operate in their own silo
5. Chief Innovation Officer’s mission impossible
The future of corporate innovation depends on addressing the following challenges:
1. Develop and maintain a system of record for innovation management
2. Leverage AI to tap into diverse viewpoints and all data sources
3. New times call for new innovation measures
4. Innovation is an open cross functional collaborative effort
5. Establish innovation as a center of excellence
Let's have a look how we can move beyond today's challenges, and future-proof corporate innovation, and our organizations in general.
Present State # 1 - Corporate data is spread across disparate systems
Information, ideas, lessons learned, failures, insights and concepts are shuffled around and lost in the corporate bureaucracy. Employee turnover, shorter tenures and the increased use of consultants results in data leakage or loss. Innovation is required by everyone but there is no single system of accountability. Organizations instinctively know where to maintain financial data or customer information. But they have trouble knowing where they can quickly and easily locate the details on what drives the lifeblood of tomorrow. Innovation data is casually handled by a few and simply not managed nor accounted for in any centralized corporate system.
Future State # 1 - Develop and maintain a system of record for innovation
Much like ERP and CRM systems brought order to the chaos of supply chain, financial and customer data management in the last twenty years organizations must invest in a system of record for innovation. This system will manage any and all data and processes that help identify, define and develop the insight, ideas and innovations that the organization will invest in to build its future.
Present State # 2 - Diversity (of people, cultures, and thought) is not connected to innovation activity
There is no argument that diversity and inclusion (D&I) leads to better results. The combination of a smart D&I strategy not only leads to inclusive open thinking but it also helps build a more competitive team. Yet most companies still struggle to properly integrate and leverage their diverse teams beyond the initial recruitment objectives. D&I initiatives never quite translate into building a true competitive advantage.
Future State # 2 - Leverage AI to tap into diverse viewpoints and all data sources
AI will be the diversity equalizer and make actionable information more easily available and discoverable. Anyone in the organization will be able to leverage all accessible information from inside or outside the company and from all corners of the globe to tap into the organization’s full body of knowledge. The rapid and effortless nature of AI will help unlock the true potential of diversity by factoring in information from any and all data sources.
Present State # 3 - Lack of standards for measuring Innovation ROI
For most companies only desperate times call for desperate measures, maintaining the status quo and playing it safe is still the name of game. Trying new things, working in an agile fashion and making cost effective investments is settled science. Yet the focus on quarterly results and the inability to demonstrate financial value continues to shift investments from adjacent and disruptive innovation into predominantly finding incremental improvements and engaging in small innovation activities. Companies play it safe and go out of business at record rates doing so. Taking calculated risks while also being held accountable to show progress are viewed as diametrically opposed mutually exclusive objectives.
Future State # 3 - New times call for new innovation measures
Innovation and experimentation metrics such as number of ideas, collaboration activity, employee engagement rate, and value created will become as important as any other financial measure we are used to tracking. This mainstay adoption of innovation and experimentation metrics will turn the conversation to be based on clear data points that any organization must track and account for, in its innovation portfolio, no less important than profit, revenue and other key metrics as the best predictor of what can be reasonably forecasted based on the innovation funnel.
Present State # 4 - Innovation labs operate in their own silo
Innovation hubs and labs have been launched by a number of companies. These labs create value but they have also created a disconnect - a perception that innovation is somehow has been delegated and relegated to a specific team and occurring in a particular location. Some labs are launched with a lot of fanfare but with the exponential rate of technology, they quickly lose momentum due to their disconnected siloed nature.
Future State # 4 - Innovation is an open cross functional collaborative effort
Innovation is a cross functional collaborative effort by purpose-built teams of employees, customers, suppliers, partners and other stakeholders.
Innovation labs will evolve as they transform into cross functional collaborative virtual hubs that empower the organization to work with external sources such as partners, suppliers, customers and the startup community. Each person, team and group will work towards connecting the dots of how they can contribute to the company’s innovation efforts and help achieve the intended results.
Present State # 5 - Chief Innovation Officer’s mission impossible
Chief Innovation Officers are asked to build the plane while they're flying it. Some innovation teams now have a seat at the table but their role can quickly become embroiled in politics as companies struggle to define and refine another C level executive, with their own KPIs, who is highly reliant on everyone else across various divisions and business units to contribute and achieve their objectives. Their work is further exasperated by the volatile nature of the working conditions, operational challenges, funding, mandate and focus areas. New competitive realities in an ever changing landscape further hinder the Chief Innovation Officer’s ability to stay on a specific plan of action.
Future State # 5 - Innovation as a center of excellence
Much like the evolution the project management discipline went through in the 1990s, innovation management processes and best practices will also get more standardized. Organizations will look to centralize and invest in an Innovation Management Office to create a center or excellence. The preparatory work is already underway at ISO (see ISO 50501). These efforts will yield a standard for innovation management systems so that the Chief Innovation Officer and other innovation team members can focus on idea development, crowdsourcing, co-creation and open innovation as standard operating procedures.
In summary, the future of corporate innovation is bright. We may very well see some long overdue inventions as companies better organize and deploy their innovation efforts. Corporate Innovation management is how you can build an engine to continuously grow and transform your business, and to continuously solicit, identify and develop creative ideas and actionable solutions from your community of employees, customers, prospects and partners.
If you want to know how close you are to reaching this future then try this online Innovation Capability Assessment that helps you quickly establish a baseline and you will automatically receive recommendations on the areas to improve.
What do you think will shape the future of corporate innovation?
This is a guest post by Ludwig Melik. Ludwig is CEO of Planbox, a pioneering provider of AI-powered Agile Work Innovation software solutions – from creative ideas to winning projects. We help organizations thrive by transforming the culture of agile work, continuous innovation and creativity across the entire organization. Email Ludwig at: ludwig.melik@planbox.com