START FOR FREE
IDEATION INNOVATION PROGRAMS
INNOVATION QUESTIONS
How To Build a
Corporate Innovation
Program
Diana Porumboiu
Nov 16, 2021
In this day and age, when things move so
fast and uncertainty and changes are
inevitable, organizations of all sizes
acknowledge the need to increase their
investments in innovation. In fact, an
Accenture research reports that
investments in innovation are expected to
increase 1.8X in the next five years.
However, just increasing budgets for
innovation doesn’t necessarily lead to
better results. Even though the interest in
corporate innovation programs has
grown, the focus is too often on small
initiatives, and not on holistic
approaches.
As you may know, having one or two
good innovation initiatives is not enough
for a successful innovation program. So,
today we’ll go through some of the key
steps and requirements for successful
innovation programs. We’ll explain more
in detail what an innovation program
means, and how to go about it.
TABLE OF CONTENTS
What is an innovation program?
4 Steps towards an innovation program
A practical innovation strategy
Turn practical goals into an actionable
roadmap
Clear communication
Build capabilities
Common pitfalls and challenges
Unclear goals and misaligned strategy
Insufficient resources
Lack of ownership
Conclusions
What is an innovation
program?
Before going deeper into this topic, we
should clarify that successful corporate
innovation is not just about a well
implemented innovation program.
That’s why it’s also important to explain
what we mean by innovation program.
Usually, the discussion around innovation
programs is focused mostly on specific
innovation initiatives, such as
accelerators, incubators, innovation
hubs.
These initiatives can of course be part of
your portfolio of activities, but if you just
focus on them, you might miss the forest
for the trees.
An innovation program is a portfolio of
initiatives built around an innovation
strategy aligned with the organization’s
business goals. To pursue an innovation
program, the portfolio should adhere to a
set of policies and actions aimed at
achieving your goals.
In short, an innovation program is the
concrete manifestation of your innovation
strategy. Now, some might think, what is
an innovation strategy and how is it
different from a corporate strategy?
An innovation program is the
concrete manifestation of your
innovation strategy.
Well, the corporate strategy tells you
where you want to be in the future and
the innovation strategy simply outlines
the role innovation needs to play in
helping you get there.
Without an innovation strategy to guide
them, innovation programs can easily
turn out to be little more than a collection
of bets without a clear direction and are
likely to fall short of expectations.
The theory is simple but in practice,
things are more complex. Most failures of
innovation programs are attributed to a
combination of factors. This is something
we noticed after looking at a dozen of
studies on what impacts innovation in a
positive or negative way.
We identified as many as 13 different
elements spread across all areas of
innovation. The practical aspects such as
processes, decision-making and
organizational structures were the most
predominant factors.
Even though some aspects are more
common than others, there isn’t a single
factor to point at, but rather a
combination of several. In effect, you
need to balance structures, capabilities,
culture, and strategy to increase your
chances to succeed. And part of this
balance is the alignment of business
goals and your strategy.
Now the question that arises, is how to
build an innovation program and avoid
these common pitfalls, while finding the
right balance between all aspects
involved in innovation?
4 steps towards an innovation
program
As mentioned, for innovation programs to
succeed you want to integrate all four
aspects of innovation: capabilities,
structures, culture, and strategy. This
alignment will look different from case to
case.
For example, if you’re looking into
breakthrough innovations, your strategy,
structures, processes, and capabilities
will look different from those that would
work with incremental innovations.
We also briefly introduced the topic of
building an innovation program in our
Q&A series.
Innovation Q&A: What is an i…
But let’s take things one step at a time
and look into the practical steps of
creating an innovation program.
1. Have a practical innovation
strategy
A good innovation strategy is practical
and considers the organization’s
business objectives. Unless you make
these things a priority, you won’t see
things moving in the right direction.
If you don’t have these things in place or
the current strategy is too abstract, you
should work with top management to
clarify the goals before starting on the
program.
This will also give you a better
understanding of the current state of the
organization in terms of innovation.
Knowing your starting position will help
you determine how to get where you
want. In this case you can use a tool like
the innovation maturity matrix.
The innovation maturity matrix is a
framework that helps you illustrate where
you are by considering two important
variables: maturity and scale. With the
innovation maturity matrix, we can
classify innovators into beginners,
traditionalists, scalers, and advanced.
To understand how the matrix works, we
can simply look at the most successful
companies out there: Amazon, Google
and so on. While they innovate in
different ways, they all do it at a large
scale, across all parts and levels of the
organization.
To use this framework, you position your
organization on the scale so you can
assess your maturity level (all the
innovation processes, decision-making
and organizational structure, and the
skills and resources), and the scale at
which innovation is present within your
organization (how widespread and
embedded innovation is in the culture).
The innovation maturity matrix helps you
illustrate the big picture. You visualize
your current position, look at what is
missing to reach your goals, what
capabilities you need to build, then break
it all down into smaller, achievable
objectives.
Now you might ask yourself, how is this
linked to an innovation program and how
it helps in building one? It’s pretty
straightforward. An innovation program
can’t be built if you don’t have the
capabilities for it. At most, you get stuck
after every small initiative, and you don’t
get too far.
So, if you want a solid program
incorporated in your organization’s
strategy, you need to have a clear
understanding of the capabilities at hand
so you can start building the capacity
required for innovation.
And this takes us to the next step in the
innovation program.
2. Turn practical goals into an
actionable roadmap
We can’t stress enough how important it
is to have practical goals. Unfortunately,
many companies don’t articulate their
strategy well enough and, consequently,
their goals, or simply they don’t act on
them. To avoid falling in the same trap,
you can have a roadmap that tells you
what to do.
Successful innovation programs require a
systematic process to plan, prioritize, and
execute different initiatives. An
innovation program should consist of
different streams of activities that take
place simultaneously.
For example, at the same time you’d have
a team that works on a prototype while
another one is researching a new
technology to support the development
of your product. Then someone might be
running an idea challenge to find
solutions to specific problems. All these
can become messy, if they are not
followed up carefully with a step-by-step
roadmap.
An innovation program should
consist of different streams of
activities that take place
simultaneously.
For that, we can take the practical
approach of what Mark Johnson
describes as “leading from the future”.
What do you want to achieve in 5-10
years from now? You basically break the
future goal into smaller ones and take a
systematic and methodical approach to
do that.
Let’s say your big goal is to become the
industry leader in the next 5 years. That’s
a pretty big goal, and not a very specific
one. So, you start breaking it down.
To get there in 5 years, you need a
certain revenue in 4 years, which means
you need a bigger team and two product
lines. For that, in 3 years how many
customers would you need for those
products? You take it down to the
closest, most feasible deadline and
consider what is achievable in the short-
term, like investing in an area that will
make it possible to launch the new
products in one year.
You won’t have all the answers so far in
advance, and you don’t have to. But it’s
good to have a mix of long-term projects
and short-term ones, that bring quick
results.
This practice will help you see what
touch points are necessary and will give
you an overview of the resources you
need and the timeline to follow.
Without the necessary support, your
innovation program won’t get too far. So,
these small, reachable goals will win
people over, increase the trust in the
innovation initiatives, and help secure
more resources for the future.
Through these small goals you can start
building the capabilities required for the
future and you’ll be able to show
progress and tangible results.
3. Clear communication
When you communicate the program
clearly, as well as the goals and vision
you have in mind, you’re already one step
ahead. Unclear communication can lead
to misunderstanding and people could
see a high-level program for innovation
as a threat to their power within the
organization or to their personal
interests.
That’s why it’s good practice to
communicate the “why” of the innovation
program, what is at steak and what are
the future aspirations. Also, how this will
happen and bring benefits to the entire
organization.
For example, in the case of an idea
challenge or an idea management
process you want people to get involved
and participate. For that to happen, they
should first understand the role and value
of innovation and how that benefits them
directly.
So, remind them why it’s important for
them and for the organization to get
involved, how their participation can
bring value, what is expected from
everyone and how things are
progressing.
Usually, innovation is not part of
everyone’s job description, so it doesn’t
come naturally for everyone to change
mindsets as soon as they start working
on a new initiative. That’s why you should
also take the responsibility of becoming a
supporter, to teach and inspire them to
become innovators.
4. Build the capabilities of the
organization
When we speak about capabilities, we
usually refer to the resources, human and
financial as well as the processes and
structures that enable innovation. Even
though the term is mostly used as an
umbrella to cover different abilities and
resources, it revolves primarily around
people, because innovation relies on the
knowledge, abilities, and skills of those
who make things happen.
In the context of innovation programs, we
can think of two different capabilities you
would need to develop.
First, those required for the short-term,
immediate goals that can support
innovation initiatives. For example, if
you’re working on developing a new
product or service and you need to first
build a digital prototype, you’ll need the
people who know how to do that.
And second, the capabilities that support
innovation on the long-term and across
the organization. This is where the
innovation maturity matrix we mentioned
earlier comes in handy. It will help you
acknowledge gaps where new
capabilities need to be built.
In a recent HBR article, Rita McGrath
talks about 7 archetypes for locating
capabilities within the organization. So,
for example, if you have a business unit
prepared to focus on a specific venture,
you can create a dedicated division
within that unit.
This is a great way of building capabilities
and placing teams within an organization
according to goals and the current state.
On the other hand, if you’re after a
breakthrough innovation, or you are
trying something new that is different
from your core business, you can create
a new division that acts independently.
As you can see, building capabilities and
locating them on a timeline and in
specific areas of the organization is
closely linked to your goals and what you
want to achieve.
And last, also consider the resource
allocation. You don’t want to go halfway
your program and realize you don’t have
any budget left. There are various
methods that help you decide how to
allocate resources within your
organization.
: