We are often asked by senior leaders and innovation managers “how do I know if the innovation programs we have are successful?”. In other words: how do we know if these programs will produce long-term growth for our company? While one might be tempted to answer such a question by simply looking at the number of new business ideas that their innovation programs generate, we believe that this question can only be answered by looking at the totality of a company’s innovation ecosystem.
Rather than looking at individual programs and their outcomes, it is important to see how these programs fit within the broader organization, and how their efforts culminate in building an innovation ecosystem that can repeatedly create new growth opportunities. While the goal for innovation programs might seem to be to create a few successful ideas, we believe that their goal ought to be to consistently and repeatedly create value for the organization, while improving company culture. Many companies often have a great deal of enthusiasm when it comes to generating new ideas - through sprints or hackathons - but those ideas later find themselves ‘homeless’ as they are then never turned into ready-to-scale business models, and never leveraged into anything that creates real value for the organization. This is what we refer to as innovation theatre—running innovation programs that look good on paper but do not create any real long term value for the company.
Most common innovation programs we see:
These programs drive innovation by investing in employee ideas in several ways. A popular example is Adobe’s Kickbox program which gave employees a red box with tools to work on their ideas and a $1000 prepaid debit card. Another example is the Bayer Catalyst Fund where employees build their own innovation teams and receive time and resources to test their business ideas.
While intrapreneurship programs can happen in a diffuse way within the company, some corporations create a physical space that houses innovation by providing funding, support and coaching for teams. An example is Kohl’s Innovation Center which is 369,000 square-foot space where teams work on inventing the future of retail.
This is a physical space like an Innovation Lab, except that the company invites external startups to come and work while physically located in their building. An example is Airbus Biz Labs which has accelerated over 90 startups in the aerospace industry since 2015.
These examples can be worthwhile innovation programs to incorporate in your organizations, but it is worthwhile to remember that these programs are tools, but not ‘ends’ in and of themselves. They should be a part of your ecosystem as you seek to build a repeatable and sustainable process to generate new growth again and again.
To make this concept explicit, we created The Ecosystem Map to help organizations assess existing innovation programs in a simple and visual way. In our experience, there are two main goals for innovation programs:
- Value Creation: those helping the organization create value by generating revenue/profit
- Culture Change: those changing the organization's culture to allow it to innovate
Think for instance about an intrapreneurship program that runs 200 teams through its program a year. By any standard, that would be considered a successful program. But the question remains, what happens after the accelerator? How would you know which ideas to fund or cut? Will the winning ideas get follow up funding, how will you help them to scale?
Now imagine that you also included a Leadership Innovation Bootcamp training program to help your leaders understand the fundamentals of innovation. They would learn how to reduce risk and uncertainty of new business ideas, as well as how the testing and iteration process works. They will emerge from the bootcamp understanding that as leaders, they can’t possibly pick the winning idea, but they can encourage a process and a system that enables the evidence to speak for itself.
A Leadership Innovation Bootcamp in itself creates no financial output for the organization, it can however have a huge cultural impact within the organization, which is why we put it in the bottom right corner. If Leaders have a better understanding of the innovation process, they can better empower the other programs by ensuring it has the right process in place and adequate resources. For example, when working with innovation teams one of the biggest challenges is that team members cannot dedicate enough time out of their busy work schedule to test and iterate their idea. If leadership understands how important this is, they can restructure the intrapreneurship program so that any team members working on their idea for a fixed period of time can fully dedicate themselves to testing their business idea.
Shift your thinking away from "what shiny new program should we implement?" towards an understanding of how these innovation programs culminate into building a sustained, repeatable process, integral to your organization. This understanding of innovation as an ecosystem will prepare your organization for sustained and predictable innovation outcomes.