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Too many organizations build innovation systems without first getting clear on why they’re innovating.
They start with structure: an accelerator, a funnel, a playbook.
But structure without purpose won’t get you outcomes that matter.
We believe form follows focus.
If you want your innovation system to deliver results on your organizational goals, start by defining what kind of value it’s meant to create.
We typically see three types of innovation system goals. Each requires its own architecture, metrics, and decision-making model. Below is a high-level overview of the common systems we see:
What: Internal innovation team that equips core business units with innovation training and uncovers practical innovation opportunities.
Goal aka the WHY: Build a culture of innovation, internal innovation capability, or sources ideas for incremental innovation.
Who: Teams of seasoned innovation professionals who have experience working in the core business and within the innovation function.
How: Educational programming, such as workshops, hackathons, or courses, that help staff learn about innovation principles, methodologies and frameworks and how to apply them to their role. Think sessions on lean startup and design thinking. Alternatively, these teams may facilitate short term secondements where staff from the core have the opportunity to temporarily be a part of innovation teams to gain practical innovation experience, think research or business analysts for a venture building sprint.
When: Leadership has made clear that innovation is an enterprise-wide priority with each business unit expected to contribute. There is a need for more ideas and capabilities to facilitate incremental innovation that will help improve internal processes, current offerings, or operations.
Where: May engage the entire enterprise or certain segments within it. For instance, only managers and above, certain business units, or up-and-coming top talent.
Good for near-term momentum, internal buy-in, and early wins.
Watch out for confusing activity with progress.
What: Internal innovation team that discovers, validates, and builds innovations to solve problems faced by business units.
Goal aka the WHY: Strengthen the core business through building incremental innovations while planting seeds for new growth.
Who: A team with research and development capabilities to create MVPs for internal innovations or ventures.
How: Internal innovation team sources ideas for new innovations from core business units or does sensing research. The team conducts primary and secondary research to validate the problem and opportunity followed by building and piloting an internal MVP of the solution. Alternatively, the team may engage with the external innovation ecosystem to identify startups or external partners who may already be solving internal challenges and look to them as inspiration or for potential partnership opportunities.
When: This is ideal when the core business units do not have resources, capacity or capabilities to innovate, or when there is a desire to build a portfolio of internal ventures that may spark growth from within the core business (e.g., new products, distribution channels, process or operations tools / optimizations, etc.).
Where: Unit sits within the core, has access to internal resources, data and capabilities, and has a close relationship with the BUs they are building internal innovations for.
Good for delivering both short-term wins and long-term strategy.
Watch out for spreading too thin or defaulting to incrementalism.
What: Building ventures outside of the core business.
Goal aka the WHY: Build long-term ventures with portfolio logic, gain strategic learnings for the core business from external experimentation, drive business back to the core, and/or establish net new revenue sources.
Who: Venture studios or corporate venture capital teams.
What: Team of researchers, strategists, designers, and developers who discover, validate, and build ventures outside of the core business. These ventures should leverage some sort of asset from the core business that may provide it a right to win in the market, such as data, customer access, or subject matter expertise. The venture studio should be capitalized to make investments into the ventures once they have been established. Additionally, the studio or a corporate venture capital entity, may make investments into external startups that provide strategic value back to the core (e.g., core business disruption mitigation, technology access, etc.).
When: There are new business models or technologies that the core business is interested in but are too disruptive, complex, or fast moving to be built within the core.
Where: Venture studio external to the core and is sustained by the core business (e.g., annual funding).
Good for transformative bets and future business lines.
Watch out for misalignment with the core business and unrealistic ROI expectations.
Once the goal is clear, so is the structure:
Before changing your org chart or launching a venture studio or a new innovation team, ask the one question that matters:
What type of value is your innovation system actually designed to create?
From there, work backwards to build the right:
Innovation isn’t just about generating ideas. It’s about designing systems with strategic intent and the discipline to say no to everything else.
