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Things Successful Enterprise Innovation Teams Do

It’s no secret that meaningful innovation and monetizing value creation is tough. Even the “world’s most innovative” companies sometimes stumble. Just ask General Electric, Mattel, Occidental Petroleum, CenturyLink, Apache Corp., Mosaic Company, etc.  Further, Whirlpool’s tariff relief may give a temporary boost, but American consumers appear to favor Korean brands for value and European styling. And because of the changing nature of innovation, former innovation powerhouse Proctor & Gamble  (like many enterprises), despite great effort to invent new products, grow markets, transform, etc. – their innovation teams are struggling to meaningfully improve outcomes and effect change. Another example is IBM’s declining sales for many years is representative of the difficulties with business innovation to reinvent the organization and create new opportunities.  These examples as well as the turnover of companies in the Fortune 500 clearly indicate many enterprises are challenged by change and how to innovate for impact.

To meaningfully improve business outcomes from innovation, it’s important to –

1.  Spend more time on disruptive / transformational (H3) innovation, and less on incremental or      sustainable / adjacent innovation (H1, H2)

Winning enterprise innovation teams set their sights on moving the growth needle. They help their companies anticipate and navigate disruption in their industry. And they spend more time on “ transformational / disruptive “ innovation (entirely new offerings or business models). Many innovation groups within enterprises spend as much as 50 % of their time working on incremental improvements (H1) to today’s products and services; 30 % on adjacent innovation (H2) opportunities; and only 20 % on transformational / disruptive innovation (H3). But the more successful, growth-driving enterprises allocate even more time and energy to transformational activities. For them, the mix looks like 40 % incremental, 30 % adjacent, and 30 % transformational.

2.  Get the right people on the innovation team +  have an Incentive Program

Know who should be doing what, have them do what they do best, know who should be involved in the different “ horizons ” of innovation, get the business units to carry more of the load in everyday incremental innovation, enable the central innovation groups, R&D departments, and corporate VC teams spend more time exploring sustainable / adjacent and disruptive / transformational opportunities.

In conjunction with this, create effective incentives to reward innovation for successes and to recognize learnings from failures. A failing in enterprises who struggle with innovation is the lack of incentives geared at fostering innovative behaviors among their employees. Research shows 35% of many companies don’t have any kind of innovation-related incentives. However, in the more successful innovation enterprises, almost 80 % of them have an incentive program in place (that vary greatly and are always in flux). They can run the gamut from dedicated time or space for employees to work on their projects to spot awards for “ above and beyond ” dedication such as an all-expenses paid trip to a destination of choice, etc. to recognize commitment and achievement.

While good, the caveat with this is the rewards for success in an enterprise pale compared to what people can receive in a successful start up – from a financial perspective, industry recognition, opportunities, the ability to determine the agenda, control your destiny, etc. Because of this, for enterprises to attract and retain top innovation talent there is need to innovate on compensation!

3.  Allocate resources

Enterprises serious about success provide meaningful funding and resources to support their  innovation initiatives.  60 % of these companies invest at least $5 million annually in innovation, and almost 25 % have annual budgets north of $50 million. Those bigger budgets come from demonstrating traction, internal and external impact, and wins in the market.  With about 23 % of companies having a budget less than $1 million annually, unless you’re very ingenious and fortunate, it’s a major challenge to innovate for impact !

4.  Make innovation part of the organization DNA

In the more progressive companies, innovation is part of the DNA with many different individuals across the enterprise with various functions and numerous departments are involved with innovation initiatives — including people who don’t have “ innovation ” in their formal title. Still, there is often a good-sized central innovation team to coordinate the work or provide additional resources. Typically, there are 25 or more people in and enterprise central innovation team.

5.  Collaborate with external innovation practitioners and VCs

This is important to expand the thinking and options to innovate for impact to realize success. Rather than isolating themselves, the more sophisticated innovators in the enterprise collaborate with external Innovation Practitioner and those in the venture investing community to benefit from their knowledge and network. This often involves partnering for domain expertise or capabilities, business / innovation / technology strategic collaboration, M&A, validating opportunity, etc. – to facilitate progress as well reduce risk.

6.  Have funding flexibility

The better enterprise innovation teams are not married to the budget cycle because of the need for flexibility and agility with separately funded innovation investment processes. Having the means to get funding outside of the annual corporate process is a huge advantage to move on opportunities or an innovation initiative.

7.  Avoid politics and turf wars

The biggest obstacle to innovation in enterprises is politics and turf wars. To get past this ensure outcomes from innovation are aligned with corporate strategy. Further, put the right people on the right projects with the right incentives with clear responsibilities, tasks, expectations, timelines, etc. This is important to minimize conflicts that get in the way of launching or experimenting with a new product, service, line of business, etc.

8.  Align with organization overall strategy

Another important indicator to innovate for impact is to ensure people are on the same page. To make innovation more rewarding, it’s important to have a unified strategy and vision of where the organization is going.  That means employees can spend less time fighting for support or budget, and more time delivering real results.


Dec 10, 2019       Robert B. Tucker / CAIL Innovation commentary