5 Key Ingredients for Corporate Innovation

By Avner Mor,Founder and CEO of Dyadic

Every enterprise needs to innovate in order to survive. But as they grow larger, new ideas and agile processes tend to find less expression. In order to capitalize on innovation opportunities, enterprises need to leverage their available assets quickly and effectively. Doing so calls for senior management to take responsibility for being

transformation-oriented and enabling the conditions that allow innovation leaders to thrive.

Here are five crucial ingredients that senior management should use to help their innovation projects succeed. When implemented together, these five ingredients can combine to promote valuable corporate innovation, in spite of the conditions that work against the success of innovation leaders within most large enterprises.

1. Frees innovation leaders from typical requirements.

While strategic planning meetings, comprehensive market research, detailed product roadmaps, quarterly forecasts and the infamous three-year business plan all have their place in the corporate world, these activities and the related key performance indicators (KPI), can severely limit innovation.

Senior management should free their innovation leaders from many business-as-usual requirements and allow them to form their own methodologies, better suited to rapid idea implementation and iteration. By definition, innovative ideas don’t yet know exactly what the product or market will look like half-a-year later, never mind three years down the road.

2. Reward risk and don’t punish mistakes.

Paving the way for internal innovation to generate successful commercial products and sustainable revenues is all about small steps, experimentation and iteration. Each experiment provides new insights on the most valuable product features or the right way to go to market. Each experiment faces uncertainty and embodies risk. The only people not making mistakes are the ones not taking any risks.

Large enterprises tend to be intolerant of mistakes. Promoting innovation means allowing innovation leaders to experiment, take chances and, yes, make mistakes. When innovating, mistakes are not failures -- they are important sources of information of how to improve. Corporate management must accommodate failure among innovators and perhaps even reward it. In the long run, this is really the only path to successfully building innovation programs into sustainable new lines of business.

3. Support and protect from the inside.

Make sure that innovation leaders are relatively fearless and resilient people who know how to get things done (even when there is no consensus and others may get upset), and match the innovation program leader with an executive-level sponsor who can run interference and smooth things over with others -- those making alliances, striving for consensus and trying hard to please their bosses and others in the organization.

This executive sponsor should have the power to protect the innovation leader by providing the innovation program with a seal of "corporate importance," establishing an "island of freedom"and attempting to mitigate conflicts before they arise.

4. Unlock access to enterprise assets.

Enterprises have assets that no startup can match, including extensive man-years of accumulated know-how, technologies, brands, relationships and routes-to-market. This intellectual property is a gold mine for corporate innovation programs.

Unfortunately, established enterprise assets tend to be compartmentalized, sometimes with competing owners looking out for their own turf and hesitant to freely share with other units in the organization. This can be a major obstacle to successful innovation programs.

Enterprises are not democracies; senior management must play an important role in balancing the legitimate needs of the asset owners and those of the innovation leaders. They must convey to all relevant managers the priority being given to innovation programs and even provide for loopholes that allow innovation leaders to circumvent certain bureaucracies that would otherwise hinder their access to key assets.

5. Quickly pave the way to customers.

Innovation leaders must strive to quickly get their first customers, who will provide unparalleled value -- product feedback, business model validation and initial revenue.

However, access to the enterprise’s existing customers is frequently blocked by the sales force. Sales teams are struggling to achieve their own quotas, with a focus on short-term results that may seem threatened by others trying to sell to their customers.

Again, senior management is the solution. Beyond stressing the importance of cooperation, management may even consider partially linking sales commissions to the innovation program’s revenue KPIs.