It is incredibly important for corporations to conduct regular innovation activities: develop new ideas and technologies, test and implement them within their business model, constantly optimize these activities and increase their efficiency. Without all this, the corporation runs the risk of losing its position in the market, losing even loyal customers and, as a result, being out of business.More
Scott notes that today in large companies, innovation laboratories, technology research centers and acceleration programs for investing in startups have become ubiquitous, as well as regular hackathons to which employees are invited to suggest and develop new ideas. In some cases, this leads to a stream of internal improvements, the emergence of new products and services, investments in young companies, and entry into new markets. However, in some companies, all this activity is reduced to nothing more than a “theater of innovations”, in simple terms – showing off.
What is the difference between these two groups? As a result of a study of 215 companies, about 10% of them were allocated to the benchmark group for the performance indicators of the innovation departments, and this is what they all have in common:
- These companies have the confidence in their innovation departments that their company has developed a viable innovation strategy and is committing sufficient resources to support it.
- The innovators in these companies know how to focus on what’s important. They spend their time researching and testing ideas that will only pay off in the medium to long term.
- In such companies, the innovation department collaborates with key internal partners, that is, they are embedded or integrated into one of the main internal teams. In this way, innovation is supported by long established, experienced teams.
- Among this group, approximately every fourth innovation team employs from 10 to 24 people, and every third of them employs more than 100 people. Fewer than 10 people are involved in innovations in companies not included in the benchmark sample. It’s simple: when innovation departments want to go beyond launching ideas and hackathons, they need more human resources.
- Such companies develop special incentive systems: recognition of ideas and awards, time allocated for further development of projects, employee bonuses, seed funding and even a financial share in new offerings they create.
- Tracking financial performance. Typically, these companies track things like revenue from their new offerings, efficiency, cost savings, or internal rate of return.
- They go beyond cultural clashes. All these companies noted a very low level of “cultural problems”, which suggests that the longer the innovation program exists and the more it demonstrates its benefits, the more loyal and wider its corporate culture.
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