I’ll divide the answer to that to two parts: internal innovation and external innovation.
Hiring corporate entrepreneurs or establishing incubation groups has been an emerging trend.
A couple of elements will make those groups more successful:
- Start by understanding customers & markets, as well as the company’s core assets. Figure out the leverage. Don’t start with the technology.
- Hire the right people (skill-set and experience).
- Senior executive support is key. These groups should report to the CEO or someone on his behalf.
- Small group. Low overhead.
- Focus on quick and small wins.
- I find that being involved and supporting the company’s day-to-day business is very useful, especially in mid-sized businesses. The outcome tends to be more in line with the existing business and less detached.
As mentioned previously, I’m a great supporter of external innovation models. Historically, the majority of innovation comes from small businesses and startups. Think about recent disruptions: search, social networks, e-commerce etc. Facebook, Google, Twitter, Amazon and eBay all started as small companies.
Establishing standalone structures such as innovation centers has proven to have limited success. Tapping into existing structures, such as incubators and early stage venture funds, is likely to lead to better results. Incubators, for example, have already figured out the right formula for driving deal flow and screening entrepreneurs. Partnering with them would benefit both parties.