In my ongoing dealings with various organisations and innovation thought leaders, all too common mistakes have emerged when it comes to corporate innovation programs - especially when it comes to exploring what McKinsey calls Horizon 2 (adjacent innovation) and Horizon 3 (disruptive innovation).
These themes became so apparent in fact that I decided to capture these in a blog post for your reference.
Consider the following a checklist if you will - how many of these mistakes do you think your organisation or innovation program might currently be making?
When it comes to corporate innovation - each organisation is different and there is no silver bullet - but still, we can stand on the shoulders of giants and learn not to make these mistakes which can, with a little TLC, be easily avoided in order to not only cut the cost of making these mistakes, but increase our chances of success in delivering new commercially successful innovations to market.
Trying to tackle innovation through isolated initiatives instead holistically - Read More
Applying Horizon 1 policies, systems and values to Horizon 3 innovation
No funding is made available to pursue ideas post a hackathon or idea contest - Read More
People are not given time off to participate in hackathons and other innovation initiatives
Using traditional metrics based on dollars such as ROI, IRR and NPV are used to measure success, despite the fact that Horizon 3 and disruptive innovation requires innovation metrics based on learnings - Read More
Separating innovation initiatives from the mainstream - no integration with core business units - Read More
Selected ideas are not given time to incubate learnings and are withdrawn early based on ROI not being sufficient, instead of looking at innovation metrics such as learnings - Read More
Not determining a theme and criteria for idea contests, subsequently receiving hundreds of disjointed ideas of varying quality - the majority of which receive can not be evaluated effectively
Hackathons focus purely on building things, not on validating make or break assumptions underlying a business mode - Read More
Ideas for progression are selected by senior executives only and based on flawed criteria such as short term ROI potential - Read More
Beginning with a ‘what is’ constraint based mindset instead of ‘what if’ resulting in narrowly defined, unadventurous and easily replicated incremental improvements
Acquiring startups with and integrating them into the bureaucracy and systems of the mothership, ultimately killing them - Read More
Pulling human resources from projects when competing interests arise
Feedback is not given to people who submit ideas to an idea contest, subsequently resulting in disgruntled employees brandishing innovation initiatives nothing more than ‘theatre’
There is no mechanism in place to build upon ideas in an idea contest
Not effectively defining the objectives of an innovation program and the type of innovation that is sought (i.e. incremental, adjacent or disruptive - H1, H2 or H3)
Not effectively defining what the organisation’s definition of innovation is
Not updating performance reviews and KPIs to align with innovation objectives
Not tieing innovation strategy with corporate strategy
Selection criteria used to recruit people to innovation programs is often flawed and favours Horizon 1 ‘avoid failure at all cost’ personalities, but not Horizon 3 ‘embrace ambiguity and experiment rapidly’ personalities
Middle management are not trained in nor incentivised to take part in innovation programs
Engaging startups to speed up innovation but not aligning internal processes to support this speed (eg. long, drawn out procurement processes when engaging startups, steering committee meetings to communicate with startups, not making key people available to support startup testing and cadence)
Engaging only large incumbent consultants with a large, slow moving cost base to support innovation efforts inhibiting the ability to move quickly and take lots of small bets - critical to the exploration of Horizon 3 or disruptive innovation
Running hackathons without a strong mix of people with diverse skills and experiences - limiting breadth and depth of outcomes
Senior executives dictate what the answers are and what products need to be built - without input from employees, partners, customers or members of the general public
Confusing the adoption of technology with being innovative
Thinking that disruptive innovation is simply filling existing and visible customer needs
Not having a direct reporting line from innovation teams to the C-Suite or senior management
Having an innovation team which is not integrated with other business units and/or the wider organisation
Teaching people methodologies such as lean startup but not addressing the underlying culture, systems and processes that inhibit the application of lean startup principles - Read More
Running focus groups to support brainstorming and market research with people who are paid to participate
Asking focus group participants whether they would pay for something without actually having to demonstrate this behaviour
Asking focus group participants leading yes/no questions which results in false validation of hypotheses
People who vote on ideas as part of an idea contest do so without any knowledge of innovation theory - often resulting in contests amounting to popularity contests and one’s abilities to market the idea internally
Creating innovation roles that are purely ‘part time’, signaling that innovation is not a serious priority
Staff are not trained in innovation theory, design thinking or lean startup principles, yet are expected to act and move like startups
Hiring new employees based on traditional Horizon 1 competencies and skill-sets
Not investing in new technologies or innovations because initial revenue projections won’t support the achievement of short term growth metrics
Not having a process in place to capture knowledge from innovation programs centrally and leverage it effectively across the organisation
Insufficient guidance is provided to staff around ideation of initial ideas
Not getting out of the building - internal brainstorming and a lack of customer focus
Thinking that a startup is just a small version of a big company
Thinking that a large company is just a big version of a startup
Thinking that digitising broken offline processes is innovation
Investing in technology without addressing the underlying business model
Ignoring technologies that aren’t good enough for existing customers
Trying to sell and experiment with existing customers
Not investing because the market for a new innovation or technology isn’t large enough
Silos - business units not effectively sharing knowledge or talking to each for the purposes of innovation, especially marketing and different product divisions - competition across business units can also inhibit innovation
Misaligned communication and incentives across an organisation
If you're interested in finding out how to circumvent the significant time and cost involved in making and learning from these mistakes and navigating the corporate minefield, then reach out below.
The Innovation Manager's Handbook vol. 1
The Innovation Manager's Handbook is a comprehensive guide to innovating in the enterprise. Packed with over 110 pages of content, the book will go over everything from the why and the how, to changing company culture. There are also dozens of guides, case studies and instantly actionable tips backed up by in-depth research and the latest and greatest in innovation theory.
Steve Glaveski is the CEO and Co-Founder of Collective Campus which he established to help companies and their employees to create a more meaningful impact in the world in an age of rapid change and increasing uncertainty. Steve also founded Lemonade Stand - a children's entrepreneurship program, author of Wiley book, Employee to Entrepreneur: How to Earn Your Freedom and do Work That Matters, Harvard Business Review contributor, author of the Innovation Manager's Handbook vol 1 and 2, host of the Future Squared podcast, and keynote speaker. He previously founded HOTDESK, an office sharing platform and has worked for the likes of Westpac, Dun & Bradstreet, the Victorian Auditor General's Office, Ernst & Young, KPMG and Macquarie Bank. Follow him at @steveglaveski
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