6 Foundational Success Factors to Establish Corporate Innovation Culture

3 Corporate Innovation Conundrums

1. "We've got to be more innovative."

The vast majority of clients I work with express the difficulties of establishing a strong innovation culture. They typically come at this challenge from the context of having industrial-era roots and from a reactive or defensive mindset ("If our company doesn't become more innovative, we won't be able to compete").  

This mindset often drives urgency and a tendency to mobilize a wide number of knee jerk initiatives: establishing innovation labs or "dojos," turning to open innovation with a leaning towards too-early stage startups, hiring design thinking masters, or creating employee ideation competitions and intrapreneurship programs. 

2. "None of our innovation culture efforts seem to stick."

I continually hear that these initiatives don't seem to affect real change. Each of these can have merits, deliver insights and learnings, but shifts in culture from these initiatives happen in isolated pockets, are skin-deep, and frequently short-lived. The phrase "corporate innovation theatre" rings painfully true for many corporates who started down this route with such gusto 3+ years ago.

3. "If startups can do it, why can't we?"

When tackling corporate innovation culture, it's imperative to start by holding up the mirror and recognizing who you are as a company and the corresponding common personality traits of your employees — they all came to you for a reason after all.  

Corporates must acknowledge that individuals who choose to develop their careers in large corporations do so for specific reasons:

• Career success, and therefore motivation, in a corporate, is measured by perk and rank.  
• Conversely, motivations for individuals to carve careers in startups is driven by a desire for stake and outcome.  

These fundamentally different motivations will always lead to radically different types of behaviors and mindsets. And, this is why corporates should not look to simply emulate "startup culture" to establish their corporate innovation culture.

The Reality Check

The bad news is that culture change is hard – really hard. It also takes time, trust, phenomenal leadership from the top and is never a once-and-done exercise. Think of your corporate culture and your innovation capabilities as muscles that require constant training and care. There is no one-size-fits-all silver bullet solution.  

However, corporates can develop their innovation DNA and achieve cultural changes. As a starting point, the corporate must be realistic about who they are, specifically what they want to change, and then identify initiatives that are authentic to your corporate personality and practical to implement.

Getting Started — Setting the Foundations

The good news is that some initial focus areas set corporates up with a strong foundation to build out innovation culture.  

Think of these as the foundational success factors:

1. Ensure you have a CEO who puts innovation front and center of the corporate strategy. The innovation agenda must be heavily and publicly championed from the CEO downwards. Get the executive board to celebrate failures by re-branding these as learning experiences to begin to establish a culture of permission.
2. Be authentic and purposeful in the culture you seek to create: provide clarity around objectives and focus areas. Innovation needs to live at the heart of your business, not in an isolated lab; therefore clearly mapping these objectives and target areas to your overall corporate strategy will help individuals to join-the-dots and recognize the ROI impact of establishing an innovation culture.
3. Decide where you will sit on the spectrum of closed vs. open innovation. Closed innovation represents internal R&D and intrapreneurship versus open innovation which serves as partnerships, M&A, and CVC. Once you have decided, allocate resources and funding accordingly. 
4. Establish innovation metrics: corporate employees are familiar and comfortable with metrics-based performance management and are conditioned to gear their performance in this way. But, caution! These innovation metrics must be context-specific. For example, rather than measuring the number of new products or services delivered to market, measure the revenue % increase of new products and services vs. existing.
5. Review the organizational structure of your existing transformation activities and shift transformation initiatives from being organized around projects to being organized around products and services. This shift typically surfaces non-value add efforts which can be culled.
6. Adopt a "crawl, walk, run" approach. Most corporates are not short of ideas, but they are short of resources. Resource shortage will always lead to dilution of focus at which point accountability and ownership fall away. Therefore it is critical to limit the number of initiatives you mobilize at any given time.

These foundational success factors represent visible, tangible, and practical actions which signal the tide of real cultural change to an organization. From here, corporates can move into their corporate-specific initiatives that continue to develop their own, authentic version of corporate innovation culture.

When it comes to cultural change, the mindset must be a marathon over race.

Don't Go It Alone

The journey to develop a corporate innovation culture will be tough. The smartest corporates help themselves by bringing in external perspectives. Although corporates often spend a significant amount of time on introspection, it is hard to identify what is going on when you are so close to what you seek to change.  

Invite external perspectives into your corporation to help you hold up the mirror – not only will this be an invaluable source of knowledge for your corporation, but collaboration is also a highly effective way of enhancing the implementation of innovative ideas.

At RocketSpace, we support corporates to change their culture and mindset through our corporate innovation programs. Our diverse curriculum allows you to tackle your specific innovation challenges and impact your culture in so-doing. Get started with our Ultimate Corporate Innovation Playbook.