1. Using the Same Definition of Success
Something I often see in corporations is that their innovation efforts still ladder up to the same core business goal. For example, if you are a bank, you know that a new checking account is the most important driver of customer lifetime value. So, naturally, banks will create innovative solutions that drive checking account sign ups. In turn, any activities that cannot be directly tied to a checking account sign up are systematically deprioritized (in terms of funding, people’s time investment, etc). When the company fails to see how value can be created outside their core business KPIs… well, that’s an innovation killer.
2. Prioritizing Assets Over Company Frictions
Another common misconception among corporate innovators is that if they have an asset, it must be valuable. Today, businesses hear that data is the new gold; they assume that if they are sitting on a pool of untapped data, it must be able to be monetized. For example, I once worked with a corporation that had access to 100k users’ behavioral data. They assumed that because they had this repository of data, it had to be valuable. But if you’re trying to find a use case for a dataset without first identifying a problem to solve, it’s like trying to fit a square peg in a round hole. The key to finding the right solution to solve with your data is to look outside the walls of the business. What friction points are your customers experiencing that you may be able to solve?
3. Fear of Leaving the Core
When corporations look at innovation, they naturally tend to come up with new concepts “close to the core.” For example, Amazon expanded from selling books online to selling other physical goods online in the earlier days of the business. This is “close to the core” because they already have capabilities in logistics, delivery, and online sales that could be repurposed for this new growth. Then, in 2017, Amazon acquired Whole Foods - quite a bit further away because Amazon had no expertise in physical stores, real estate, stocking shelves, physical point-of-sale, etc. Major moves like this are unusual because acquiring (or launching) something that appears on the surface to be unrelated to the core business can cause panic. Lack of familiarity with the industry, what’s involved in being successful, or even defining success - not knowing the unknown. Being afraid of what’s new and different definitely hasn’t done innovation any favors in the past.
As more and more corporate innovation vehicles come online and become successful, we have more data points to learn about what has truly made them work. Many corporations are missing the piece of the process where they identify a true need with their customers (think: a hammer looking for a nail). In this instance, successful corporate innovation leaders definitely need to take a page from startup founders’ books: the focus of your new venture needs to be focused on desirability–not availability– of an asset.
Lastly, and perhaps most obviously, the governance model cannot stifle the innovators. Don’t panic if your team is ideating away from the core, and get used to finding new ways of defining success and creating value. By defining and embracing this new way of thinking, you open up opportunities to unlock innovation in the unlikeliest of places.
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