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Innovation has long passed the hype phase of the 2010s. The honeymoon is over, and senior executives want to see the results of their investment- and they want to see it now.
But many corporates are not delivering the results expected, and there are many factors at play for that. The usual suspects are a bureaucratic culture, lack of funding, little senior management support, and an unclear strategy, among others.
We believe that in complex organizations what either causes those problems or could solve them is about how innovation is organizationally managed.
There seem to be an infinite number of tools and frameworks for executing innovation: business model canvas, agile and design thinking methodologies, scamper technique for ideation, innovation funnels, etc. But if a company is having hard time delivering their innovation goals, that is nearly never because of a lack of understanding those tools.
It is generally because innovation is not managed properly at a structural level- think innovation goals, purpose, roles and responsibilities, ways of working, skills required, relationship between “innovators” and business-as-usual etc. Unfortunately, however, senior management and innovation practitioners generally lack the basic concepts and vocabulary to have a meaningful conversation about this.
When it comes to talking about the current vocabulary and toolset, there is a bit of a mystery in the innovation world. It is not the only one, but perhaps one of the most surprising ones, and it is about language.
Most innovation practitioners and the wider business community are relatively familiar with concepts like innovation labs, accelerators, incubators, venture builders, corporate venture capital (CVC) funds, etc.
Of course, we might have different views on the validity of some of these, what they actually do, what their goals are, when they should best be utilized, etc. But when someone mentions one of these words, the core of their meaning is understood, which is particularly important, since they are also relatively complex concepts that are rich with meaning.
When that happens, some of the meaning might get lost in translation, but it is generally good enough. We roughly know what is being discussed, without the need of explaining it in detail, and we can move on with our discussion. That’s the power of words.
However, it seems odd that the innovation management vocabulary is still missing a word to bring all of these concepts together under a single label. It seems odd, because at the end of the day, they are all trying to achieve a similar goal (albeit in very different ways): generating business value by leveraging or creating something new (i.e. “innovation”): a new product, service, customer experience, venture, etc.
This missing piece is potentially both a symptom and a cause of one of the biggest issues facing the corporate innovation world. Something so profound that could potentially be one of the key drivers behind the failure rates of innovation labs and initiatives of the last decade. It is simple: the lack of importance that is generally given to how to manage and structure innovation, and the different options for how to do it.
This is where the concept of an innovation vehicle comes in.
“Vehicle,” because to drive (no pun intended) innovation, a dedicated and permanent structure (e.g. it cannot be managed as a project) needs to be put in place. And because “innovation” is such a broad north star, there are very different vehicles to get there- just like there are very different types of cars, although they all ultimately get from point A to point B.
Of course, selecting the right vehicle -whether it is a corporate accelerator, or a research and development center- is key, but not enough. Key decisions need to be made about the team that will be part of that vehicle, its strategy and goals, the resources it will require, and so on.
To draw another analogy with the automotive world, if we were designing our dream car, just knowing that we want a sports car (versus a sports utility vehicle, for example) is only the beginning- we need to also think about the right engine, brakes, suspensions, etc. We might also realize that a single vehicle is not enough, and it would be best to create a portfolio (a garage?) of vehicles that work together.
All of these choices should be driven by the organization’s innovation strategy, which, in turn should be driven or influenced by the overall corporate strategy: what are the innovation goals and ambition, what is the risk appetite, what are the resources available (financial and human capital), what is the time frame in which we need to deliver results to the top management and/or the market, what are the market opportunities, etc.
If your innovation efforts are not working, chances are you need to go back to the drawing board of how to structurally manage innovation as company.
Perhaps you already have an innovation vehicle, but some of its characteristics need to be recalibrated, or perhaps a new innovation vehicle needs to be created to purpose a dedicated objective. In some cases, you might even want to merge two innovation vehicles.
This, of course, depends on the specificities of the company and its “innovation maturity.” But one thing is certain: as long as innovation leaders will continue to underutilize the power of innovation vehicles, corporate innovation will continue to waste resources, and potentially build a negative reputation because of innovation theater.
It is up to all of us innovation practitioners to change gear.