Modern businesses are competitive. In the past corporations only had to compete in the physical world. Now they have to up the ante, so to speak and embrace a multi-channel digital branding strategy.
On top of that, they have to constantly bring out new innovative ideas and stay innovative to be on par with the competition who are doing the same thing, or even more so, like entering into innovative business collaboration with other companies.
In such an environment, how can an established corporate business survive and corporate entrepreneurship thrive? The answer lies in a concept called Corporate Innovation.
Internal research and development teams help businesses get creative insights from all parts of the organization. Implementing innovative ideas is relatively simple when it comes to a corporation since they have the financial capital available to back up those ideas. Let’s perform a deep dive into the concept itself and see what we get?
Corporate innovation: a short history
Coca-Cola, for example, has a bunch of different non-alcoholic beverage brands under its belt. But they didn’t start out as such.
In the beginning, it was just the good old Coca-Cola that became the money-making machine that it’s known for today. But as with any natural progression, once they became established, they diversified into products that eventually became brands like Fanta, Sprite, and Diet Coke.
The key takeaways from this are that Coca-Cola diversified, improved their existing products, and created new innovative ideas from the parent brand. Think of it as producing the same music in the same genre. It’s successful, but it’s the same genre at the end of the day.
The previous decades are full of examples of corporate entrepreneurship but in the same product/service category.
But everything changed when the startup nation attacked
With the growth of startups, we’ve seen disruptions happening at a breakneck pace. Regardless of whether it was eCommerce entrepreneurs, tech startups, or healthcare professionals, startup companies took center stage and brought forth creative and innovative ideas. Ideas that threatened the market share of major corporations.
The latter hasn’t capitalized on the disruption as much as the former has. It is no fault of their own since the larger the enterprise, the less room you give for innovative ideas to grow.
However, that trend is slowly changing, and the concept of Corporate Innovation has now empowered established enterprises to think outside of the box and diversify amid modern disruptions. Amongst other things by entering into business collaboration with key companies - sometimes completely outside their industry.
With innovative ideas, businesses are enabled to rethink their business models in ways they could never do before. Take the case of Coca-Cola and how its business model has changed to handle disruption within the marketplace.
How corporate innovation works
Corporate Innovation is the process of implementing new and innovative ideas into a corporate enterprise. It adds value to the existing business models of a corporation by overhauling them with innovative concepts.
Now, these ideas don’t grow on trees. In an enterprise, you have a separate business unit accountable for collecting, processing, and implementing these concepts. These business units are responsible for one thing – to ensure that innovative ideas keep flowing.
Now processing them for viability is a different scenario, companies either employ an internal research and development process or create a business collaboration with other corporate innovation service companies.
Once the concepts are considered viable to carry forward, they are taken through a strategic implementation process. This is where the ideas are placed within a company incubator where they run independently of the main business operation as a corporate startup.
Only when these startups have proven effective in implementation does the company make room for its business model to be integrated with its own.
Six ways you can approach corporate innovation
As already discussed, corporations haven’t been very quick when it comes to capitalizing on disruptive business opportunities.
Startups are the exact opposite of that. They come up with creative solutions and innovative ideas to advance their interests and thus, are more successful in their market penetration.
With corporate innovation programs, companies can join hands with startups to build a beneficial business collaboration.
If your business is lacking in talent. You can always source that talent from entrepreneurs. These are called corporate incubators.
The idea lies with the entrepreneurs, but the funding, technology, and other resources are the corporations. Whether it’s product development expertise or service sector operations, the business that is investing takes care of it all.
This form of business collaboration is a win-win for both sides. For corporations, it’s the chance to learn new emerging technologies directly from the startup culture.
For the entrepreneurs, it means an opportunity to work on the project without worrying too much about the capital investment. The result of this is more efficient innovation cycles which lead to optimised performance and productivity.
For entrepreneurs, getting started is the biggest problem, even if the idea is revolutionary. Pro-innovation corporations are present to support innovative ideas. Their accelerator programs are there to foster growth by allowing people access to their resources and expertise to create a complete concept of their vision.
Now, accelerator programs are different from incubators since the corporations in this scenario are providing their services to get startups ready for venture capital investment. Compared to incubators, where all the activities are in-house, accelerators live up to their name by having a quicker process than the former.
We’ve already discussed how competitive the modern business landscape is. In such an environment it makes sense to leverage your existing employee base for coming up with creative and innovative ideas that they can channel into the company.
But how can a corporate enterprise capitalize on employee talent, create innovative products, and get them out to market? The answer lies in a robust intrapreneur program.
An ideal intrapreneurship program breaks away from the rigidity and red-tape of business operations. It gives employees the creative freedom to create concepts that benefit the business down the road.
Gallup reports that employees are happier when they’re engaged and feel as though they are a part of something. There are countless examples of organizations benefiting from such programs. 3m and its post-it notes. Google, with its Gmail, AdSense, and google news.
These are perhaps the best examples of intrapreneurship done right. These programs, combined with other similar ones, have benefited both the companies in terms of the bottom line and the employees in terms of building engagement.
Corporate innovation labs
Startups present an existential threat to corporate business models of established companies. Netflix, Amazon Prime, and others have taken over the entertainment industry’s major market share.
In the hospitality industry, Airbnb has changed the way people look at hotels and hospitality. There are countless other examples. Now, how does a corporation revive itself from such a crisis? Play the startup way.
Startups are quick and efficient businesses that can adapt to changes. While slow, corporations have learned that this is the road they should follow. Corporate Innovation Labs are how they’re making it happen.
Big businesses have now established their internal startups that work besides the business models of the parent company. The end goal? To make sure they don’t get left behind.
Verizon’s 5G labs are a prime example of this. They have partnered with academics and startups to come up with a new and innovative way to test the use-cases of their 5G technology.
The other two examples come from Amazon’s innovation lab, and Google’s X-Development, an innovative project that helps Google expand its business interests in other places.
Corporate venture capitalist units
A corporate venture capital (CVC) is the wing of an organization responsible for business collaboration with disruptive startups. They are also responsible for finding out new business opportunities and products.
In a multi-pronged role, this team is tasked with searching for markets that are either within the product/service category or completely new ones that have the potential to grow. CVC's help businesses keep with the times by providing insights on the major trends and data.
Of course, they’re not just present to identify the opportunities. The CVC arm is also responsible for capitalizing on the opportunities by providing investment opportunities for entrepreneurs and their innovative ideas.
Salesforce utilizes its CVC to perfection. With its CVC operations, it was able to increase its investments to more than $500m. For startups, CVCs are a godsend since they provide them with the opportunity to build business collaboration with corporations and develop products under their umbrella.
Networking matters a lot in the industry. Mastermind groups are the pinnacle of networking coming together to create something new.
It’s a corporate innovation model in which stakeholders and business owners form a business collaboration to create something entirely new. With this business collaboration in play, it becomes a lot easier to gather in and pool the resources for a new project.
[Related article - 20 of the Most Inspiring Corporate Innovation YouTube Channels]
For businesses looking to stay ahead of the game, Corporate Innovation provides the ideal opportunity to identify, nurture, and gain benefits from innovative ideas. This is integral in keeping corporate entrepreneurship flourishing.
But innovative ideas, as you can see, are not the easiest to come by. That’s why at Valuer, we want to provide a platform that can make your corporate innovation and business collaboration search a bit easier, and a lot more cost-effective.
We think that one crucial step in the corporate innovation journey is business collaboration. Our AI-driven platform provides deep insights into over 500,000 startups and companies to make your search for innovation just a couple of mouse clicks away. Top that with constantly updating innovation radars, you will always be one step ahead of new market opportunities.
Author Bio: A writer by profession, Ammar Naeem is an eCommerce and digital marketing enthusiast and is always digging into the latest marketing trends, best practices, and growth strategies.