Corporate Innovation – The Definitive Guide

I had the pleasure of interviewing Monika Rozalska, the Managing Director of CREATORS, a unique program for corporate innovation. Monika shared insights with me on CREATORS’ latest report, which examined various corporate innovation programs to identify the stages of innovation maturity within different corporates.

Among the topics we discussed were:

• How corporations implement innovation strategies
• What constitutes a holistic approach to innovation
• The innovation maturity scale, as presented in the report

Below is the full interview, and a link to the report.

You have worked with corporations for a long time to implement innovation strategies. What was your goal in creating this report?

When we first started working with the corporations, the first thing we discovered was that it was not clear to them that they could create a far better innovation strategy if they were aligned with their “innovation maturity” stage, rather than trying to copy the activities of other corporations, which might be less suited to their unique position.

Most corporates go through a similar process when they set out to implement an innovation strategy. They usually start with a rigid, internal process, when everything is still new and activities are more sporadic. During the next stage, they begin working with startups, which is where the transformation slowly begins, as the interaction with the startups opens their eyes to the benefits of the innovative co-creation. The final stage is a more holistic innovation strategy, when they have defined the goals and utilize both internal and external innovation to promote their organizational strategy.

For example, many of our clients come to us with a fixed vision for an innovation program, even though they do not have the internal capacity to implement or even test potential solutions. However, we also have clients wishing to expand their internal innovation programs, and to create new ones even after they have reached the internal maturity needed to start working with external innovation.

We wrote our report in order to share our knowledge about driving corporate innovation in a smarter, less wasteful way, with greater impact for both corporations and startups. We also wanted to dive deeper into the stages of maturity, to identify the most beneficial programs for each corporate and to effectively support companies in accelerating their transformation towards a mature, holistic innovation strategy.

What was the most surprising finding while working on this report?

Actually, it was something very simple. The majority of corporate innovation programs do not have clearly defined goals or suitable KPIs by which the programs can be measured. We tell our startups that they should always find a good problem to solve before they develop a suitable solution; surprisingly enough, we found that the same goes for corporates. Many companies feel pressured to “do innovation”, so they impulsively decide to start with “fashionable” innovation activities, such as an accelerator or a corporate VC (CVC), without taking the time to understand what exactly they are looking to gain from these engagements. They still struggle to understand what their needs are, and the value they are looking to create through innovation. This results in many resources being invested toward innovation without fully understanding how it can feed into their corporate long-term strategy and core business. They enjoy a small amount of success stories that are often random luck but they do not tackle innovation in a systematic way to achieve the true benefits innovation can offer.

What would a holistic strategy include? 

Innovation has many different goals, which we discuss quite extensively in the report, especially when observing the differences between internal and external innovation. Internal innovation programs are focused on employees, introducing various tools to their daily work (for example, design thinking), and promoting changes to the corporate culture around risk-taking and failure. External innovation is usually focused on finding solutions that are adjacent to the company’s core business. The ultimate goal of external innovation is to create a win-win situation for both sides, the startup and the corporate.

A holistic approach means that a corporation defines a set of goals and then builds a strategy toward achieving them that includes various activities that address them.

In most cases, internal and external innovation programs are complementary and will create a greater value for a corporate if implemented in parallel. This is extremely significant, as we have seen many cases where corporates run one program at a time and wait to see the ROI before implementing additional programs with completely different goals. However, the truth is that they will enjoy better short-term and long-term results if they work on both fronts.

What would be the most valuable takeaway for corporates embarking on a new innovation path? How would you suggest that they build their strategy?

With any strategy, it is important to first map the challenges: Why innovation? What challenges do we face? Innovation is a tool. To use it properly, you need to define what you are trying to achieve – and the answer should be as specific as possible.

The second step is to understand the corporate assets, which will be the basis for further strengthening the organization, and building upon its pre-existing competitive advantage.

Based on this analysis, we can develop a strong innovation strategy that addresses the specific challenges while building on the strengths. Deciding which program will best suit the strategy (for example: accelerator, CVC, customer-needs lab, internal innovation activity, and so on) is then better aligned with the unique situation of the company. There is no “One Size Fits All”, so innovation strategy must be tailored to the specific corporate.

Is there a way to leapfrog the process that you uncovered in the report, to create a full innovation strategy and not “waste time” discovering everything by yourself?

Our report presents the innovation maturity scale with a total of five stages. It is absolutely possible to implement some of the steps in parallel, depending on the interest, resources and commitment within the organization.

Some corporates get through these stages really quickly, while others take far more time. This is not necessarily due to their inherent inability to move faster, rather due to the structure of the innovation team. In many organizations, the burden of implementing innovation falls on a very limited number of individuals, who are expected to take personal risks to “win big or fail big” in order to implement bold innovation strategies. Many are unwilling to take excessive risks.

One of our suggested solutions within the report is to create multidisciplinary innovation committees spread throughout the organization, supported by executive levels that provide them with the resources and authority necessary to do bold things. This shifts the responsibility from a specific employee to a collective group distributed across the company, which allows much faster progress in implementing an innovation strategy.

From the 168 corporate innovation programs you covered in the report, which program did you find most interesting, and why?

I found the “mixed” programs to be the most interesting, such as Shell’s GameChanger or Cisco’s CHILL, which are both covered in our report. This is because mixed programs that include internal and external innovation activities are always customized to the specific needs of a corporate. It was quite impressive to see how creative and unique these activities can be, and how they add great value to these companies’ overall systematic innovation strategy.

CREATORS is an innovation lab based in Tel Aviv that supports organizations in developing and improving innovation practices. They bridge the gap between the corporate and startup worlds, doing so through a range of workshops and innovation programs formed and tailored to the corporate’s needs by experts in Israel’s Start-Up Nation. 

Their flagship program, CREATORS IDEAtion Lab, is the first ideation program in Israel and is trusted by Fortune 500 companies such as Bosch, Visa, and EDP. The IDEAtion Lab reverses the innovation model by partnering with experienced entrepreneurs before they create a startup (i.e., pre-idea and pre-team) and who want to build their next venture based on real market needs as identified by strategic partners. Each program concentrates on a specific vertical and is led by a specially selected industry leader. The overarching goal of the lab is to solve problems for strategic partners by creating new solutions, while also helping the entrepreneurs to create a high-growth company. In other words, a win-win situation for everyone. 

Click here to get a free copy of the CREATORS Corporate Innovation Report.