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In his talk, Auke discusses how corporates should organize and structure themselves in order to make innovation work. He and his team developed a model called the ‘The Corporate Innovation Model’, which consists of 7 habits of successful corporate innovation that they have identified. The model consists of two parts:

  1. The three elements derived from the Lean Startup methodology: possible (what is possible with technology), desirable (what users want) and viable (in the marketplace and in the business), while the sweet spot of innovation lies in the middle.
  2. Four elements that are crucial for an innovative corporate environment: skills, culture & behavior, governance, and a future proof vision. Auke links these four elements with a survey that he and his team carried out with various corporations in multiple industries, and he shares the learnings with us:

Skills

Everyone hears about agile and scrum, but there are many more skills relevant to be successful in a corporate. Think about the last ten hires that your organization has done – what type of people were hired?

Innovation requires people with a different set of skills than the traditional ones. Think about user experience design – you need people who know how to talk and listen to customers (this skill is totally different than doing a market research). Think of analytical people that can deal with large data, think of growth hackers, and people with the ability to do rapid prototyping.

Their survey shows:
•  In only 49 percent of innovative cases users were involved.
• 58 percent of companies do not have open IT.

Culture and behavior

Employees are often resistant to change; they believe that the world is not going the change much so why should they. The problem (and why might some think the world is not changing) is often with only looking internally and forgetting to look outside the window once in awhile. For instance, Auke worked with a bank and saw that less than 10 percent of the people in the risk management department were aware of the FinTech startups that were popping up around them.

From the many people that Auke worked with in the past few years, none of them ever said lack of innovation was a problem of ideas or money, but a problem of culture. Focusing on a culture that supports innovation means: daring to fail, having a non-hierarchal structure, being responsive to change, and being open & transparent.

Their survey shows:
• 44 percent of the companies have difficulties communicating failed projects.

Governance

A great way to get innovation started (and governance) is structuring seed projects in a sandbox with a lot of room for experimentation and testing. Beyond this phase, when you want to scale up (which is often a challenge for corporates), using scrum is a great methodology to get growth.

Another useful tool to use is innovation accounting. Most companies have great KPIs for financial accounting (e.g.: ROI) but not for innovation accounting (e.g.: client signups).

Finally, the ‘what’ that needs to be worked on should be confined to the management but the “how” should be left for the product team to decide.

Their survey shows:
• 48 percent of companies only use financial accounting.
• Only 7 percent apply ‘test and learn’ for innovation.

Future proof vision

Corporates that have a strong innovation culture and governance also have a clear vision statement. And that statement is actionable, accountable, and is external-facing.

Their survey shows:
• 23 percent of employees do not know their company’s vision.
• 75 percent of vision statements do not point towards the future.

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