Is your organization ready for the future?
It’s a straightforward question, but it can be extremely difficult to answer. Innovation has become a major buzzword. And it has very different meanings, depending on the person using the term. Is innovation a strategy, a culture, a process, or a specific leadership style? It’s appropriate that there is no single agreed-upon definition because leaders must decide what a successful innovation strategy looks like in the context of their own organization’s purpose, competitive landscape, and future goals.
Today, every organization is on a journey to the future and each trajectory is different. In larger organizations, measuring progress is challenging because innovation is more of a priority in some organizational divisions than others. We’ve found that one of the best ways to gauge overall progress is to check the connections between the organization’s innovation center and its extended ecosystem of partners and stakeholders.
Whether we call it an innovation center, corporate innovation lab, or something else, today’s premier enterprise organizations need these capabilities to stay relevant and build future value that can withstand the challenges of disruption from existing and emerging competitors.
Finding your center
Enterprise innovation centers that are actively sponsored by C-level executives and board members often indicate that an organization understands how exponential technologies are driving rapid and radical change.
In my experience, innovation centers in large organizations—including corporations, governments, academia, and nonprofits—tend to fall into three types, with different levels within each style. First, let’s take a look at the three types, and then how we can connect your innovation center to the entire enterprise and ecosystem for optimal outcomes and exponential growth.
Type 1: Innovation theater—just checking the box
Type 1 innovation centers tend to look backward, showcasing current and historical wins and commercial successes. This type of program represents what author and entrepreneur Steve Blank calls “Innovation Theater”—initiatives that are created mostly for show, with little measurable impact or economic value. These initiatives are frequently staffed by part-time innovators who are tasked with projects that are tacked on to their core responsibilities.
Surprisingly, even some of the largest global organizations still have Type 1 innovation centers. These enterprise companies typically have top executives under pressure to prepare their organizations for future success, but they often see innovation as only a cost center. Sometimes they pay lip service to innovation with one-off contests or hackathons. Often, the head of innovation has a title but limited authority or decision-making ability. There is no expected return on their investment in Type 1 centers.
The good news: It’s a start!
Type 2: Edge research and development labs—what we’re doing now, and what we’re doing next
Edge R&D labs feature permanent staff and working labs with committed resources and product showcases. They are housed in a physical space where innovators and collaborators can hold brainstorming sessions, innovation workshops, and demos. Moreover, in these centers, dedicated R&D teams (typically away from core R&D) are tasked with creating and developing competencies and solutions outside the organization’s core business—meaning they are creating new solutions, not just improving current core products.
Type 2 centers are staffed with full-time innovators and have sufficient access to the organization’s financial and human resources to be effective. The head of innovation typically has real authority to make decisions that drive the company’s future value. Further, the innovation group has adopted agile methodologies to enable collaboration and rapid solution development. Most of these edge centers will also have shared purposes, in that they’re working toward the unified vision of the company’s long-term targets, typically 5-10 years in the future.
More advanced edge R&D labs expand the ecosystem by collaborating with outside partners, their teams have a vision, and they are empowered to take ideas to the commercial stage through an established internal process. Typically, these centers dedicate a fixed percentage of time and resources to learning and building core competencies around emerging and exponential technologies, without being tied to short-term ROI targets.
Type 3: Experience centers—let’s build and showcase the future, together!
Finally, we have experience centers. You’ll find these innovation centers in organizations that are leading industry transformation, rather than facing disruption by competitors or their own inertia. The scope of activities at such centers is not tied to the company’s existing business but rather guided by the larger vision.
Innovation leaders at these organizations have a seat at the table among the organization’s top executives and decision-makers. Their staffs are empowered to work independently to create, develop, and build go-to-market plans for innovative products and solutions.
Type 3 innovation teams have defined systems and processes to project the profit potential of future solutions, and they utilize smart analytics tools and platforms to provide a mission control center that enables collaboration and provides a single source of truth for the entire organization. As such, they can monitor and assess competitive risks and opportunities from their own and adjacent industries, and they can track and monitor the progress of innovation projects from ideation to commercialization.
Experience centers host frequent internal events to help cultivate and sustain an innovative culture. In addition, they often serve as incubation hubs for new ideas that don’t fit the company’s current core business This approach allows dedicated teams to focus on building the future.
More advanced experience centers offer a truly immersive experience that excites the senses and gets visitors engaged with the company’s vision. While behind the scenes, changemakers, engineers, and creatives are empowered to build the next experience that likely will lead to the company’s next big breakthrough.
Connecting your communities
Now that you know which of these styles best describes your current approach, you can take action to level-up your innovation center, empower your teams with the human and capital resources and authority they need, and provide them with the tools to monitor and track their progress.
We have observed that when an organization stands up a Type 3 innovation center and brings that innovative culture and mindset to the rest of the organization, magic happens. This connection between your organization’s innovation community and extended ecosystem of partners can drive creative strategy development in a way you never thought possible. Advanced innovation centers often serve as talent magnets, attracting individuals from different disciplines who are inspired to create change within the enterprise.
Ideally, your innovation center will provide a model for your entire community—a safe space that enables people to share ideas and become energized and engaged by the massive potential of exponential technologies.
Whether you are beginning your journey, or you already have created an advanced experience center, achieving exponential growth demands that your leadership team works to connect your innovation team with the broader enterprise. It’s the surest way to empower your entire organization to thrive amid chaos and uncertainty.
To learn more, check out our latest publications, on-demand webinars, and other resources.