Sep 14

The Ultimate Guide

to Company
Innovation:
Programs, Models,
and Examples
In today's rapidly changing business environment,
innovation has become crucial for organizations to
stay competitive and relevant. The pace of
technological advancements, evolving consumer
preferences, and the unpredictability of global
markets have made innovation not just a luxury
but a necessity for survival. With 2023 ending,
business leaders are reevaluating the critical
priorities and strategies to drive success in the
next twelve months and beyond. Faced with
several looming factors that threaten to derail
operations—including labor shortages, inflation,
and economic uncertainty—business innovation
leaders must focus on their organizations'
missions, refining current strengths and identifying
ways to fortify weak points.

What is the importance of

innovation in business?

Company innovation goes beyond using new

devices or ideas and extends to finding new ways
to do something. Management teams must shift
focus to developing new business models or
creating environments that foster novel ways of
thinking.

Innovation helps build an adaptable organization

well-positioned to grow and di"erentiate itself
from competitors. Companies that master
innovation can garner better performance with the
potential to generate income 2.4 times higher than
their peers, as reported by McKinsey. In 2023, the
emphasis on innovation has become paramount
for businesses navigating challenges such as
labor shortages, economic uncertainties, and
rapid technological shifts.

While many believe increasing budgets for

innovation can lead to success, the reality starkly
contrasts. Forbes estimates that over 90% of
innovation projects fail. This failure can be
attributed to underestimating the e"ort required
and a lack of alignment between a company
innovation strategy and on-the-ground activities
to innovate. Dreaming up new ideas is as crucial
as developing a solid action plan to embed those
ideas into a company’s DNA.

Corporate innovation
models and innovation
examples

• Open Innovation: This type of innovation

emphasizes external collaborations with
startups, researchers, or other entities to co-
create solutions, bringing fresh perspectives
and ideas from outside the organization.
Procter & Gamble's (P&G) ‘Connect +
Develop’ program is a prime example of
open innovation. Through this program, P&G
actively sought partnerships with external
innovators to co-create products as they
realized not all good ideas come from
within. This approach successfully launched
several products, including the Swi"er
duster and Mr. Clean Magic Eraser.

• Disruptive Innovation: Focusing on creating

new markets or disrupting existing ones with
radically di"erent, often more a"ordable
solutions is the central idea of this
innovation model. Disruptive innovation can
redefine industries and consumer
expectations. For instance, the internet was
not an evolution of previous technology but
one that disrupted existing models and
created new ways of making money.

• Business Model Innovation: Instead of

product or service changes, this model
rethinks how a company creates, delivers,
and captures value. Organizations
embracing this concept find new revenue
streams while maintaining a competitive
advantage. A great example is when Netflix
rethought its value proposition and delivery
model of renting physical DVDs, leading to
the rise of online streaming and the decline
of traditional video rental stores.

• Intrapreneurship: This model encourages

employees to act as entrepreneurs within
the company, giving them the autonomy
and resources to develop and test new
ideas, fostering a culture of internal
innovation. Google's ‘20% time’ policy is a
strategy to encourage intrapreneurship
wherein employees were encouraged to
spend a portion of their working hours on
projects they were passionate about, even if
it wasn't directly related to their jobs. This
policy led to the creation of revolutionary
products like Gmail and AdSense.

• Corporate Accelerators and Incubators:

Corporate accelerators and incubators
provide teams with essential resources such
as mentorship, training, funding, and access
to the corporation's vast network to grow a
potential venture or incubate disruptive
ideas. Barclays Accelerator, powered by
Techstars, is a startup accelerator program
designed to nurture fintech startups by
providing mentorship, o#ce space, and
funding in exchange for startup equity.

• Innovation Labs: Corporate innovation labs

are dedicated units within organizations,
emphasizing creativity, experimentation, and
the development of groundbreaking
technologies and solutions. These labs
serve as the epicenter for research and
development, where novel ideas undergo
rapid testing and transformation into viable
prototypes, which are then integrated into
the broader business framework. Google X,
now known as X, is a research and
development facility founded by Google. It
aims to work on futuristic projects, often
called ‘moonshots.’ Some of its notable
projects include the self-driving car and
Google Glass.

What is a corporate
innovation program?

An innovation program is a holistic approach

encompassing initiatives like innovation labs,
accelerators, and incubators, along with the
culture, processes, and structures enabling and
fostering innovation within an organization. It's
about creating an ecosystem where innovation is
not an occasional event but an ingrained habit.

How do you create a

corporate innovation
program?

1. Ensure strategic alignment

and stakeholder buy-in
Corporate innovation programs engage critical
stakeholders, from top leadership to middle
management, early in the process to guarantee
support, resource allocation, and championing of
the initiative throughout the organization. Ensuring
that the innovation program aligns with
stakeholder and company objectives is critical to
setting the program's direction and garnering
support.

The Balanced Scorecard is a strategic

management tool ensuring innovation aligns with
overarching goals. It translates the company's
vision and strategy into a coherent set of
performance measures, balancing financial
measures with operational, customer, innovation,
and growth perspectives. Business leaders can
also use the Innovation Maturity Matrix alongside
the Balanced Scorecard to evaluate the scale and
maturity of current corporate innovation strategies
and identify persisting gaps.

2. Set up the infrastructure and key

performance indicators

Organizations must consider establishing a robust

innovation infrastructure, resources, and key
performance indicators to sustain and grow an
innovation program. One crucial element is
defining clear, quantifiable metrics to measure the
program's success and the innovation’s
improvement over existing or traditional methods,
ensuring accountability and continuous iteration.
Measuring a program’s financial performance too
early can often disrupt the program itself, so
strategically setting metrics to evaluate a program
is essential to success, and choosing key
performance indicators that correlate to activities
that will eventually help the program turn financial
gains is a good strategy. Organizations must also
be equipped with tools and knowledge hubs to
impart skills to employees on design thinking,
agile methodologies, and lean startup principles
to drive innovation.

3. Encourage diverse ideation &

iterative prototyping

Encouraging idea generation from various

sources, including cross-functional teams,
external partners, and customers, is vital. Tools
like Brightidea or IdeaPlace (formerly Spigit) can
help crowdsource ideas from various
stakeholders. Rapid prototyping can be achieved
using tools like InVision or Figma for digital
products and 3D printing for physical products.
The Build-Measure-Learn feedback loop from the
Lean Startup methodology can also help ensure
the iterative development of innovations based on
real-world feedback.

4. Build a culture of innovation and

feedback loops

Cultivating an organizational culture that

champions unconventional thinking, curiosity, risk-
taking, and learning from failures is essential.
Companies can do this by giving people
accountability for the company’s goals, focus
areas, capabilities, and commitments to
stakeholders while giving them the discretion to
conduct their work to the best of their ability. They
must simultaneously establish robust feedback
loops from end-users and internal cross-
functional teams to continually refine and adapt
the innovation process.

Conclusion
Innovation is the linchpin for organizational
success and sustainability in an ever-evolving
business landscape of technological
advancements, shifting consumer preferences,
and global market unpredictability. As we
transition into 2024, businesses face multifaceted
challenges, from labor shortages and economic
volatility to the pressing need for digital
transformation. Companies need a strategic, well-
thought-out plan for innovation programs and
projects to ensure impact.

Are you a corporate looking to drive innovation?

Futurize can foster collaborations between

academic institutions, governments, corporations,
and startups to help you build innovation
programs to develop new ideas that create an
impact. Get in touch with us at
hello@futurize.studio!

Moritz Gripp

How a Futurize and

University AstraZeneca
Student is unveil
Building an FuturizeU:
App to the first-of-
Empower its-kind
Millions of healthcare
Farmers in incubator
India across
Africa

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