Corporate Ecosystems and Innovation
Student Nina Körsgen reporting from the Digital Masterclass on the session Corporate Ecosystems and Innovation with Stefan Jeker.
How can we bring back the innovative spirit from Israel to our daily work? I for one am very curious to learn from Stefan about what they are doing with the RAI Lab in order to bring innovation to life in a corporate environment. We meet at Westhive, a coworking space in Zurich West where we will be sweating and working today.
What comes to our minds when we think of innovation? By now, we all have a lot to share: From green bananas to value creation, MVPs, progress and creating new things right up to the human element in it all. As manifold as our thoughts are also our expectations for Stefan’s session.
To think outside the famous box or even get rid of it is certainly not (always) easy. But it quickly brings us back to the human element: Humans innovate, robots don’t. So go, team human!
From innovation to corporate think tank
These days, the mandate at work is clear whether you work in a big corporation or in a small business: innovate, innovate, innovate – ideally for free and without having your daily job suffer of course.
Our starting point is not ideal though and can be summarized as follows:
- Organizational structures are often not the most innovation friendly places. Attempts to improve are being taken with providing time budgets for employees to work on innovative ideas and sometimes also financial support. However, these are still the exception.
- We are all born creative and innovative! But over time, we grow more and more into conformist thinking and lose our ability to be creative.
- The wheel of the technological (R)evolution turns faster and faster and whilst innovation still doesn’t come overnight, the development phases are becoming dramatically shorter (it took airlines 68 years to get to 50 million users, Pokémon Go only needed 19 days to reach the same number).
When we look for innovation, we can focus on three different horizons:
- Incremental which serves existing customers or markets (e.g. including new technology into existing products to improve these or Coca Cola extending its line by introducing new flavors such as Cherry Coke).
- Adjacent which leverages existing expertise in new markets (Amazon is surely a prominent example here: they started to leverage their digital storefront and logistics capability to make selling products online accessible to anyone and introduced third parties to use their platform)
- Transformational which means disruptive innovation targeting new customers and non existing markets (https://hbr.org/2012/05/a-simple-tool-you-need-to-mana)
We can further divide innovation into four types as shown on the chart below (adapted from Stefan Jeker‘s class):
So what do we need in order to succeed?
It requires hybrid thinking in development curves: Optimizing the core of the current business model while already working on the new core. During the dual core phase, new markets can be acquired until the new core becomes the current one. Almost all businesses are in transition today, because “if you only gradually improve your performance in exponential times, you fall back exponentially.” Curt Carlson, CEO, SRI International
Start ups, corporate think tanks and how they help to succeed
As business size often correlates with growing daily operations and increased complex bureaucracy, mainly young and largely free and flexible companies are capable of disruptive innovations (Poguntke, 2014). Within large corporations, think tanks provide the opportunity to innovate from inside. Think tanks and labs can have different shapes from temporary project teams to subsidiaries, to external laboratories or special departments within the organization. Crucial for their success is clarity in their vision and goal. If they start to work lacking these, the risk is high that outcome will be produced which at the end is unacceptable for the decision makers.
The path to the corporate lab or think tank
As the head of the RAI Lab, Stefan can share key insights to what’s needed when building a new corporate lab or think tank. The below overview was taken from his session and summarizes the needed steps:
A few points to be highlighted in order to be successful:
- separation from the daily corporate business is strictly kept in place and the lab remains an independent organizational unit,
- iteration is key: learning, building, measuring – learning, building, measuring etc.
- diverse teams innovate best as the team benefits from different perspectives
- support from top management for the lab needed as well as a quick decision making processes
- internal and external networks are key to foster exchange
- an innovation culture needs to be the basis for it all: In order to have a great idea for your company, you need to have lots of good ones
- innovation needs a high frustration tolerance: An innovative project is like riding a roller coaster – sometimes it goes up, sometimes down. Periods of confusion and chaos are part of it
and last but certainly not least:
- communicate, communicate, communicate! Stakeholders need to understand what you are doing, why you are doing it and how you are doing it. Choose your communication channels wisely.
We all learn this morning that implementing a corporate lab is certainly not for wimps but the potential outcome encourages to fight through the resistance. It’s good to be prepared for what’s to come:
- There is always a tension between creativity and efficiency (slide taken from Stefan’s deck):
- Companies have their own immune system which initially treats new ideas as threat or failure in order to ensure the daily business
- Slow decision making processes have the potential to kill any innovation and is among the biggest barriers. This stresses again the importance of keeping the processes as simple as possible and not overload it with corporate bureaucracy.
- Innovation needs a risk culture that encourages intelligent risk taking. Not exactly the decision-maker’s best friend. But companies need to recognize that without risks no real innovations are
possible and need to show courage to experiment.
Today’s morning session comes to an end with a short focus on success factors:
- It’s all about attitude and how we learn to thrive in times of uncertainty
- Respect the status quo: without the current successful business model there wouldn’t be any innovation or budget for new ideas
- Great visions and the ability to communicate these
- Remember that people generally don’t like change so be patient. It takes time.
Let’s start to ask ourselves more “why not?” rather than the usual “why?” and we will take the first step towards a more innovative culture.
Thank you Stefan for today’s session.