With a new U.S. administration now in office and trade negotiations beginning for Brexit, 2017 is poised to be a year of extreme uncertainty. But despite the risks, corporate innovators are bound to forge on and discover new opportunities for R&D and expansion.
In 2017, intrapreneurs will need to navigate a world of extreme geopolitical shifts and economic transitions, such as the transition of China's economy from manufacturing to intellectual property and services.
Here are three approaches corporate innovators can take to minimize risk and uncertainty in 2017:
1. Encourage Openness About Errors
Fear of failure is a natural human instinct. But it's a point of friction that can force the momentum of innovation to reach a screeching halt. Not that any organization truly loves risk. According to research from Accenture, "highly innovative companies are essentially no more likely to embrace risk than their less innovative peers." Rather, Accenture's report found, "they approach the management of innovation risk differently—and ... their business models are critical factors in their success."
At the heart of the business models of innovative organizations is a willingness to be open about errors. Today's global markets are moving targets and steps forward can feel like throwing darts in the dark, so misses are not unexpected. What's important is that corporate innovation teams identify their failures quickly, share information, and learn from mistakes so that they can course correct as quickly as possible.
2. Adopt a Clear Innovation Model
Harvard Business Review (HBR) argues that in order to minimize risk, organizations need clear models. This process involves the development of several "if-then" forecasting scenarios.
"In the case of driving to New York in the snow, you might think, I can't control all the risks associated with making the trip, but I can choose the type of car I drive and the speed at which I drive it," says HBR. "A simple mental model for assessing trade-offs between risk and performance, therefore, might be represented by a graph that plots safety against type of car and speed."
To bring new products to market there are a few models that corporates can explore:
- Open innovation, in which multiple corporations combine efforts to co-run accelerators based on shared interests
- Partnerships with startups, in which corporations and startups can create well-defined projects to run as experiments
- Rapid experimentation, in which corporate innovation teams identify successes and failures on the path to a longer-term business objective
3. Get Big With Smaller Steps Forward
Why take the multi-million dollar risk of launching a corporate accelerator or investing in the wrong startup partner? That may be the wrong question, says Michele McConomy, SVP of Corporate Innovation Services.
"If your corporation's go-to-strategy involves $1B, you need to re-think it," says McConomy. "Not every company has $1 billion in cash sitting on their books to acquire any new player that poses a threat. And even the ones who do can't throw that kind of cash at every company with a good idea and a compelling customer strategy."
But here's the challenge:
The open marketplace will always innovate faster than any corporation. Entrepreneurs are individuals who tackle business challenges at the ground level. They tend to build strong relationships with early customers because they need to invest more in targeted acquisition.
Startup partnerships provide a low-risk way for large corporations to tap into that advantage, not just once or twice, but as an ongoing strategy, says McConomy:
"Facebook. Google. Netflix. They're some of the fastest-growing, most innovative companies in the world. ... Because they are quick, nimble, and relentlessly true to their entrepreneurial roots, these New Age Corporations stay ahead of the curve and continue to innovate by looking outside, instead of focusing internally."
Here are four rules of thumb to take small scale innovation into big results:
- Launch products with plans to iterate
- Be open minded about partnering with complementary corporations and startups
- Take small steps to introduce new business models to your organization.
- Explore opportunities, and scale the ones with strong product/marketing fit.