In today’s corporate environment, it is highly important to constantly inspire new ideas and ultimately be prepared for adaptation whenever necessary. Organisations that do not choose to maintain these practices can often fall quickly to the wayside, regardless of their success or brand recognition from previous years. This is why it is imperative to develop and implement an innovation ecosystem which will create the basis for maintaining the longevity of an organisation.
How to Create an Innovation Ecosystem
When you the foundation is laid for how to create an innovation ecosystem, there are a number of things to keep in mind to ensure a positive outcome. Many refer to the bestselling book “The Corporate Startup,” written by Dan Toma, Tandayi Viki and Esther Gons, for the five fundamental principles that are recommended to execute your innovative business models.
Beginning to implement innovation within your organisation should not be executed as a side note — something that is set apart from the rest of the normal day-to-day business practices. For innovation implementation to be successful, it must take root into every aspect of the company, and not be treated as a “hidden agenda.” This is why you will need to set forth a planned course of action, otherwise known as an innovation thesis.
This thesis will clearly set for the organisation’s future goals, as well as how introducing innovation will affect this path. Additionally, the objectives concerning innovation will need to be realized, and laid out in a step-by-step process.
An innovation thesis will also designate which innovation projects will receive regular investments, so there is never any guesswork when moving forward with funding. Moreover, the thesis will also change with the ebb and flow of the market, signifying just how important adaptation is to the innovation process.
To achieve the goals that are outlined in the thesis, the next thing on the innovation agenda will be to create a portfolio that will outline the company’s range of products and services, along with how they will fit into its implementation.
It is important to maintain a mix of the three major product and service types in the innovation portfolio. All that will be involved in each stage of the innovation process should be included, such as:
- Core – This will include the company’s existing products and services — what can be considered the base principles upon which the company has been built. They will also most generally include those products and services that have historically been responsible most of the company’s growth. These will be used as models, and further improved upon in ways to build upon their already successful nature.
- Adjacent Products – This category will be somewhere between core and transformational, creating a middle ground to introduce innovation. These products and services are typically already in existence and have been well-received, but are perhaps in need of an update — see this as a “2.0 style” transformation. This will require fresh insight that can be compared to the latest market demands for development.
- Transformational Products – These products and services are the exact opposite of those listed in the core category. This is where true, inhibited innovation can take hold and create something that could potentially be a real game-changer for the organisation. There will also be an element of disruption noted here, where unchartered territories are explored, and unfamiliar ideas are brought to the table to create new offerings for the organisation.
In order to introduce the ideas outlined in the thesis and to begin implementing the product and services changes laid out in the new portfolio, a proper framework must be set up to achieve these and other innovation fundamentals to create an innovation ecosystem.
This will include:
- Creating – Consider this a giant brainstorming session, where an organisation can begin to submit the ideas that could potentially lead to company growth. This is where identifying intrapreneurs (employees who work and innovate just as if they owned the company) can be key, inviting them to take part in the creation process.
- Testing – Every good idea must be tested to determine whether it will be successful in real-world scenarios. Therefore, it is important to determine the hypothesis and then set forth to ascertain whether the idea can be realistically transformed into an innovative product, service or procedure within the organisation.
- Scaling – Once the idea is properly and successfully vetted, it will then require scaling, which will determine the size and the funding that will be devoted to this project.
- Renewing – This is also an opportune time to look at already existing products and services to decide how they can be updated or improved upon for the future.
Once the framework is in place for innovation, organisations must then look at their accounting procedures in a different way, as that innovation can rarely be measured initially by typical monetary methods. Therefore, incremental investing is suggested, as well as three different KPIs.
- Reporting – Will track the process of a new idea as it moves through the framework.
- Governance – Will help illustrate the potential success of the idea and if an additional investment is warranted.
- Global – Will measure performance with the aspect of the entire organisation in mind, and how well this particular innovation will play a part.
The main goal within the innovation practice is to ensure that every idea has a business model in place before it reaches the scaling process. Ideas will work their way through:
- Creating – Formulating the basis for the product or service.
- Testing – Setting up a theory and testing it to the fullest.
- Learning – Examining the take-away from the testing process.
- Scaling – Determining the growth factor and proprietary positioning of the project.
Each step builds upon the next and will incorporate all aspects of lean methodology.
Implementing an Innovation Ecosystem
These five fundamental principles are like interconnected pieces of a constantly moving puzzle. They work together to create an innovation ecosystem, and will not function as successfully independently. However, the end goal is not for large corporations to begin to behave like startups, but merely to utilize some of the basic core values that typically make startups more adaptable, creative and not afraid to shake things up when the need arises. This is the definition of innovation.
The Academy for Corporate Entrepreneurship offers programs that can assist your organisation and its team members as you graduate through these fundamental steps. As intrapreneurship and continued innovation become even more relevant in today’s business world, you’ll find that ensuring your organisation is up-to-date is a clear-cut path to growth.