Over the last 100 years or so, we have become experts at wrangling efficiencies and optimizing processes for large enterprises. The enterprise resource planning (ERP) software that emerged in the 1980s and accelerated through the early 2000s created the digital architecture that has allowed large organizations to consistently scale, optimize and improve the way they manage their businesses, people and customers. It’s the vital backbone for national and global businesses – and when I worked with SAP, we would proudly explain that 74% of the world’s transaction revenue touches an SAP system.
But there are three things we can be certain of in life – death, taxes and change – and change has swept through the business world with an unrelenting fury. The sturdy, dependable, scalable systems that ERP implanted into our organizational DNA have given us a platform to connect – but rarely does that platform allow us to innovate. And with leaders facing an increasing need to innovate, we are finding that what worked in the 1990s and 2000s no longer works for the world we now find ourselves in.
In the recent Cap Gemini / Altimeter report on Innovation Centers, it was revealed that 90% of companies believe that they are too slow to market with new products and often over budget. The structures, silos, teams and even remuneration packages for most organizations are geared towards optimizing what is, not innovating around what will be. The result is that large enterprises struggle to respond to changes in the market and global conditions – allowing startups and smaller, more nimble businesses to out-compete at speed. In the report, this is summed up by an executive from a leading global bank:
When we look at the pace at which digital-native companies operate and launch new capabilities, that’s something that doesn’t really happen in large enterprises.
How then can enterprises accelerate the speed of innovation?
- The answer – span the organization rather than to straddle it
- The approach – learn to succeed first, and then to scale.
With these principles in mind, leaders can then turn their attention to the question of “where to innovate”. The report recommends the establishment of “innovation centers” – but the word “center” may, in some cases, be overkill. An innovation center can take various forms and address a range of functions – from small teams based in technology hubs through partnerships with universities to full-blown hosted in-house innovation labs.
Three bite sized innovations to tempt you
As the diagram shows, establishing any form of innovation center requires some form of investment. But before you follow this path, I’d recommend three simple actions:
- Host an innovation showcase – whether you know you’re paying for it or not, innovation is being funded within your organization. Hold a showcase event for internal teams to share their most innovative projects. Host it in each major office on the last Friday of the month and offer small prizes for the most popular presentation. You’ll be amazed at what you learn and what is already happening.
- Provide mentors for intrapreneurs – there are some people in your business who are great at “getting things done”. You know who these people are. Connect them with your innovators and arrange for mentoring. Good projects and good mentors will drive forward your grassroots innovation efforts.
- Feed innovation into your labs – for the best and brightest innovations, begin to transition them into your innovation labs. Connect them with your tech teams. Support them with your university research and partnerships.
For those with innovation labs already in place, this process will act as an innovation funnel. For those without an innovation lab, it will serve as the basis for a business case. The innovation clock is ticking. The time to start has already passed. Get going – and be sure to share your innovation story in the comments below.
Nina Nets It Out: Innovation is notoriously hard work – yet we cannot ignore the change that is taking place in and outside of our businesses. Leaders must face the challenge head on – but should also do so with a strategic eye on the future. Innovation labs are one of the best ways to accelerate your sped of innovation.