Corporate innovation can be tricky and hard to do successfully. You don’t want innovation theatre – you need actual results. Therefore, how does a company in a slow-moving industry get innovation right? As a consulting company, we have the unique opportunity to work with a lot of companies in a wide variety of industries. In fact, a lot of these discussions turn to how innovation happens at other organizations. This was a major reason we started Ask An Innovator.
As the need to understand corporate innovation and how to implement a program grows, developing a model for innovation is essential. The following are the Top 4 Models that we’re seeing companies adopt for 2020.
Corporate VC
What Is It?
A corporate venture capital team that looks for emerging technology startups in the same industry to invest in. This is the “if you can’t beat them join them” mentality. Startups the corporation might invest in are typically disruptive companies in the same industry. For example, Ford investing in new mobility companies such as Uber.
What’s Needed:
- Pipeline of Startups
- Investment fund (minimum $5 million, typically $15+ million).
- Corporate investment strategy
- Experienced VC team
- Advisory network and support for portfolio companies (e.g. why is it advantageous for startups to accept our investment?)
Level of Effort: Low
What Does It Look Like?
Corporate M&A
What Is It?
Similar to a VC team, a Corporate M&A team scouts the market for startups. M&A is different because the goal is to form strategic partnerships and investments to acquire and absorb startups into the corporation. Attractive startups will have the technology, people, processes or other forms of market disruption to allow the corporation to move faster and with more agility.
What’s Needed:
- Pipeline of Startups
- Startup engagement strategy and process to form partnerships, pilot projects and acquire desired startups.
- Capital for pilot projects and acquisitions.
Level of Effort: Low
What Does It Look Like?
Innovation Lab
What Is It?
Not only does the innovation team manage the movement of ideas through an innovation pipeline, but they also hand off successful ventures to applicable business units. Similarly, at City Innovation Labs, we position ourselves to help grow and validate your innovation pipeline.
What’s Needed:
- A robust innovation pipeline.
- A dedicated team with the autonomy to move as fast as possible and try an idea with a certain amount of separation from the corporation.
- Funding decoupled from traditional business budgets.
- Execution resources are available to not only conduct discovery work, but also prototype and pilot ideas.
Level of Effort: Medium
What Does It Look Like?
Innovation Accelerator
What Is It?
The corporate team that empowers entrepreneurial employees with tools to succeed to take an idea from conception to reality.
What’s Needed:
- Ideas
- A pipeline entrepreneurially-minded people within the organization.
- An employee is given 10% of the time to work on ideas.
- Incentive and structure to cultivate ventures (For example, transforming successful projects into “Innovation Colonies” and giving equity/ownership to the team.)
- Resources available for teams to utilize (e.g. Prototyper)
Level of Effort: High
What Does It Look Like?
Which Model is Right For My Organization?
There are many pros and cons to each of these models. The best fit for your company will largely depend upon your organization’s capabilities, industry, vision, and strategic plan. Additionally, there are opportunities to choose your own experience within these corporate innovation structures and create your own model. For instance, a corporation may see the value in creating their own innovation incubator while also seeking the help of an innovation lab to help guide and conceptualize ideas.
