Innovation, like motherhood, is always a good thing. Deciding what the innovation strategy and the desired outcomes will be, however, is a more difficult issue. Good corporate innovation management starts with a focus on deciding what the company wants to achieve in the future. A directive from the CEO or board of directors helps to focus thinking provides cohesion when evaluating various techniques that will help the bottom line.
Organizations need to decide, first of all, whether they intend to use a closed or open innovation model. The best example of closed innovation were the research and development labs that large organizations set up to discover the next seismic shift in their business (think Apple iPhone). The open model, on the other hand, looks to buy an existing company to accelerate innovation through the acquisition of a nimble newcomer with a good idea.
An example of closed innovation is an ‘intrapreneur’ approach where employees of the organization are provided with the time and resources to improve existing products or even launch new ones. The disadvantage of this method is that it requires a great deal of capital to get started with no guarantee of a result at the end of the process. With this approach the thinking is that it’s possible an organization has the next Steve Jobs working for it but they just haven’t been given the opportunity to shine.
An example of an approach that uses the open model is to create an research and development outpost in a location where the current action is in innovation. Silicon Valley is perhaps the most obvious example but there are many others; for example London as a financial innovation center and Detroit as a manufacturing center for the automotive industry.
By situation employees at these sites and letting them immerse themselves in the culture, the thinking goes, will enable them to leverage networking opportunities at the cutting edge. The development of this idea might involve them creating a startup as a pilot program to see if their ideas are going to bear fruit.
Corporate innovation management does not have a one-size-fits all approach and the approach taken will depend on the overall goal set by the executive team. It will also depend on the industry, the organization and the types of employees that it has as well as the commitment of upper management to see the process through to the end.
