Dual Innovation: Key Principles and Future-Proofing Corporate Innovation - Part 8

This is concluding part 8 of a multi-part white paper, co-authored by:

Dr. Ralph-Christian Ohr, Corporate Innovation Advisor on Dual Innovation and Scaling-Up

Dr. Eva Mitterreiter, Head of New Business Building & Innovation, Consulting at Bosch Engineering

Sebastian Budischin, VP and Head of Venture Building & Strategy at Bosch Stationary Solid Oxide Fuel Cells (SOFC)

Outline?of this white paper:

• Part 1 -?Cornerstones of Organizational Ambidexterity?
• Part 2 -?Dual Innovation: How to Set Up for Organizational Ambidexterity
• Part 3 - Scaling-Up: The Crux of Dual Innovation?
• Part 4 -?Dual Innovation Principles at Bosch
• Part 5 -?Establishing Dual Innovation at Bosch?
• Part 6 -?Dual Innovation in Practice at Bosch Engineering
• Part 7 -?Scaling up a Bosch Venture: Solid Oxide Fuel Cells (SOFC)
• Part 8 - Wrap-up and Recommendations

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Part 8 - Wrap-up and Recommendations

Future-proof companies need to become ambidextrous by nature. Evidence clearly indicates that Ambidextrous Organizations that manage to concurrently exploit and explore, i.e., sustain their existing core businesses and build new businesses outperform their peers and therefore increase competitiveness and longevity. However, most companies that aspire to become ambidextrous still struggle to make it work.

Based on our experience, we believe that organizations can be set up for Organizational Ambidexterity by pursuing a Dual Innovation approach. The previous seven parts were discussing Dual Innovation and its various aspects from a conceptual as well as practical angle. Here, we conclude this multi-part series by recapping key points and providing a couple of hands-on recommendations to help companies put Dual Innovation into practice.

From a conceptual perspective, the following cornerstones can be considered key for implementing Dual Innovation successfully (summarized in exhibit 1 below):

• Setting the stage for Dual Innovation to be pursued across the broader organization by creating awareness and legitimacy - particularly on the part of a company’s C-suite. Our experience shows that it’s extremely challenging, not to say close to impossible, to make Dual Innovation happen without consistent support from and alignment among top management.?
• Aligned delimitation of Exploit and Explore: Defining the strategic intent and scope of Explore, resulting in search fields, being complementary while linked to the core business.
• Setting up a dedicated, aligned space to explore (Exploration Unit) that is tailored to going about these search fields, where exploratory ventures can safely evolve without being strangled by the core business environment and receive the necessary resources and support.
• End-to-end Explore-capability: Following through exploratory ventures from problem/opportunity identification up to established business draws on the three distinct and sequential competences - Discovery, Validation and Scaling-Up. Unless?this end-to-end capability is in place, a company is going to struggle to explore beyond its core businesses in a systematic and repeatable way.??
• Learn ahead of investing instead of Invest ahead of learning: Establishing a changed logic of managing and investing in exploratory ventures, thereby accounting for their inherent uncertainty and demonstrating transparency and resource-efficiency towards share-and stakeholders.
• Innovation portfolio across three distinct Playing Fields, i.e., purpose-tailored corporate innovation arenas: Optimize the Core, Reshape the Core and Create the New. Organizing, leading and managing optimal interplay between Explore- and Exploit-activities by carefully balancing separation from and integration with core business over time. This is accomplished through assigning different Playing Fields to discovering/validating new ventures (focus: separation) on one side and scaling them up (focus: integration) on the other.

Exhibit 1: Dual Innovation cornerstones.

From a corporate practitioner perspective, the Dual Innovation measures at Bosch and Bosch Engineering that have been outlined from part 4 to 7 can be summarized in the Why-What-How circle introduced in part 1 (exhibit 2):

Exhibit 2: Why-What-How circle of making Ambidexterity work at Bosch by putting Dual Innovation measures into practice. Source: Ralph-Christian Ohr and Robert Bosch GmbH

Moreover, based on the collected experience and lessons learned in recent years at Bosch, several recommendations can be derived - from the implementation of dual structures in organizations to the specific validation and scaling of single ventures:

Dual Innovation in general

Look at Dual Innovation from multiple angles - but start small.

An integral look on

• motivation/awareness (Why),
• understanding/strategic context (What) and
• implementation (How)

of Dual Innovation is necessary to be successful in practice. Only if it has soaked through all layers of a company what Dual Innovation actually is and why it is needed, an execution can be fruitful.

This does not mean, however, that Dual Innovation is only possible when you have the full support of the whole company - this will probably very seldom be the case. Instead start small with first initiatives, willing/supportive stakeholders and have the big picture in mind to strive for.

Do not give up - it will be a long way to success.

No matter if implementing dual structures in your organization or specifically validating and scaling a new venture - it is a marathon, not a sprint. For most associates and key decision maker in your company this is new - it is a mindset, content, process, and approach that they have never been in touch with before - at least on in the depths necessary. On high level, they would probably all claim to know it already. Thus, from experience, Ambidexterity and Dual Innovation has to be explained more than once. Be patient and celebrate the small steps!

Validation & Scaling-Up

Do not follow the attitude "Know everything before you do something".

Quick decision making based on initial assumptions or first (qualitative) evidence is essential to move on. Rather than knowing all answers from analyses, have a clear set of hypotheses and measure your learnings against them through interaction and quick testing with real (relevant) people within the customer ecosystem. Make them act and get the right evidence rather then having them say how much they like your product.

Fight against the management claim "It’s ok to pivot, but you must deliver on the business case".

Adjusting your initial business case based on learnings and therefore mandatory pivots is still a challenge. ‘Promising’ based on assumptions without a proper validation is of high risk. Making this transparent to key stakeholders and showing a clear way forward must be ensured to build trust.

Implement learnings quicker into the organization and adjust your capabilities.

Testing and learning are worth nothing if your time plan, organization, and road to execute is fixed. You must ensure to integrate learnings into the organization. At the same time, balancing the needs to deliver first serial solutions into the market and sign contracts versus learning and pivoting is crucial. Look at your portfolio and differentiate by maturity level and thus by building a validation and scaling funnel. Business opportunities further in maturity are scaled with the respective organizational needs derived from the testing phase. Topics with a lower maturity are teamed and measured in a different way.

That’s it from our side! We hope we could provide some valuable insights and guiding ideas to help you and your organization tackle Dual Innovation to become truly ambidextrous. If you are interested in learning more, having an initial discussion around Dual Innovation in your company or even taking a Dual Innovation Maturity Check, please reach out to us.

We look forward to helping and getting in touch with you. All the best for your endeavors!??

[End of part 8 and the entire white paper]

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Do you want to?access the complete white paper?(after finished publishing here) or discuss Dual Innovation for your company??Please get in touch?with us by leaving a comment or dropping a direct message - we look forward to it!

Last but not least: We truly believe in?open and free sharing?of our ideas and experiences in order to move this crucial and forward-looking topic forward. In return, we kindly ask you to?credit?us in case you use the insights, made available in this white paper, for your purposes. Unfortunately, we have frequently found that this 'take and give' doesn't seem to be self-evident for all.?