Giant Innovation: A New Way for Large Corporations to Build Innovation Capability and Do Real Innovation

By Bill O’Connor

Dean of the Vault Innovation Academy (VIA), San Francisco/Silicon Valley

Real innovation...

Where does it happen? Who’s good at it? And why?...

Not innovation poetry. Not innovation theater. Not innovation theory.

But real innovation, which means establishing things that are new or different out in the real world that have a significant impact.

Who’s really good at it?

Let’s say you were to pose this question to a specific set of people, for example:

• A venture capitalist
• A corporate executive
• A Silicon Valley startup founder
• A business analyst/author
• An MBA student
• A government leader
• Or an innovation consultant…

Ask this crowd “Who’s good at innovation?”, and they’ll all likely give you the same answer (say it with me)...

Startups...

Startups are good at innovation.

Startups: Jedi Masters Using the Force of Innovation

So many of the most famous companies in the business and technology firmament have started out as startups that this is the natural -- and understandable -- answer people usually give when talking about innovation.

Personally, I happen to agree with this assessment. I’ve been in Silicon Valley for 20 years now, and I have worked for or founded 7 start ups (and counting), of widely variable success. So I have experienced firsthand the goodness, and sometimes greatness, of startups.

And right now, because I’m working at the SF Vault -- a startup accelerator/innovation ecosystem in San Francisco/Silicon Valley -- I’ve got a front-row seat for watching 54 startups each working away on their own innovations.

It’s true: startups have vision; they have courage; they have flexibility and adaptability. Startups are focused; they have energy and chaos and power and craziness and excitement. Start ups are innovation.

In fact, I think it’s pretty clear that startups are the current heroes of the global innovation story; and by and large, I think they deserve this exalted reputation.

Welcome to the Dark Side of Innovation (But Not for Long...)

But of course, there’s another side to this story; a darker side, some might say (Not me, you know...but some...).

Every story needs not only a hero, but also a nemesis, an adversary, or a villain, if you will...

The dark(er) side of the global innovation story -- kind of the Darth Vader vibe to the Luke Skywalker vibe of startups -- is the corporation...

Ask that same list of luminaries from above what they think about “corporate innovation,” and most of them will say it’s an oxymoron, just as “startup innovation” is a tautology.

They’ll say that corporations aren’t set up to innovate; they’re too invested in the past and the present; they move too slowly; they’re too conservative; they can’t attract, retain, and empower the kind of people who can do real innovation.

This view, like the “startups are great at innovation” view, is well-founded, and it’s not hard to argue that, yes, most corporations do very little real innovation.

But here’s the thing: I think that’s about to change...

Right now I think we are on the cusp of an inflection point for corporate innovation.

Powerful forces at work are creating what I believe will be an explosion of corporate innovation, as these large companies create their own brand of innovation -- which I think of as giant innovation -- and challenge the world’s startups for supremacy in the realm of innovation.

In other words, Darth Vader just became a good guy -- and now he’s bringing his Death Star (which will, of course, have to be renamed) out to play...

Corporate Innovation: The Argument for an Inflection Point

Why do I believe that we’re at an inflection point for corporate innovation?

Over the past seven years, as Innovation Strategist for Autodesk in San Francisco, as as the Founder of the Autodesk Innovation Genome Project, I’ve worked directly with 200 corporations from 40 countries, conducting 500 innovation engagements with them.

In the course of that work, I’ve noticed two things that I think are the catalysts for an increase in corporate innovation:

First, I think many corporate executives who care about innovation have realized that, in some ways, the only thing holding them back from doing real innovation is the lack of an innovation mindset.

After all, think about the many natural advantages corporations usually enjoy -- especially in comparison to startups:

• Tremendous size and scope
• Efficient systems and processes
• Smart, experienced professionals
• Massive resources, such as money, facilities, and bandwidth
• Well-known and trusted brands and huge marketing power
• Sophisticated, battle-tested senior leadership

The modern corporation today is like the elephant in that wonderful parable about self-awareness and infinite potential: the elephant grows up consistently tied by a light rope to a stake; when it’s young, it can’t break the rope, and even as it grows up and becomes tremendously large and strong, it continues to believe that it can’t break the rope, even though it easily could. Today, like that hypothetical pachyderm, I think many corporate executives -- including many CEOs -- are realizing their own “strength,” and coming to the conclusion that all of those natural advantages could be extremely powerful in terms of doing real innovation -- if only an innovation mindset was added to the mix.

The second reason I think we’re at a corporate innovation inflection point is the sheer number, variety, and profundity of the disruptive emerging technologies we see all around us -- everything from robotics and automation to AI, VR/AR, and blockchain. This toolset for innovation is giving would-be corporate innovators a much richer palette with which to attempt to innovate -- and the fact that it is doing exactly the same thing for all of their competitors is making it much more imperative that companies innovation, as opposed to optional.

The Seven Essential Capabilities of Innovation: A Prescription for Corporate Innovation

So if there is, in fact, going to be an explosion of corporate innovation, what do big companies need to actually do to make sure that happens for them?

Over the past few years, I’ve identified seven essential innovation capabilities that I think all corporations need to develop and maintain in order to do real innovation. They are presented here not only as a list of capabilities, but also as a series of sequential phases, because each phase/capability builds upon the next.

So, in a nutshell, here are the seven capabilities I needed for giant innovation to happen...

Capability #1: Innovation Metrics (Diagnostic)

Peter Drucker’s famous maxim, “What gets measured gets managed” is very relevant to that seemingly nebulous concept of innovation. The first step along this path is to get a sense of the company’s innovation strengths and weaknesses, using innovation metrics that actually matter, and work, rather than the “vanity innovation metrics” we usually see in big companies.

For this challenge of innovation measurement we recommend using a simple 10-metric measurement that we have developed, which includes only the things that must be done/measured in order to do real innovation. And we add a collective intelligence element to these metrics by putting them out there in the form of a survey, where each person at the company (or at least some relevant subset of that) gives the company a “1-10” rating for each of the 10 metrics; this gives us a current, large, and flexible innovation dataset to start with when building innovation capability at the company. And we do this snapshot quarterly from this point on, for continuous improvement.

Capability #2: Innovation Culture (Mindset)

Once innovation metrics have been established, the next step is to work on enhancing innovation culture/mindset at the company. It’s essential to have a robust dialogue with all your people about what innovation actually is; why it’s important, and what kinds of cultural factors in an organization either impede of encourage innovation. Over the years I’ve created a wide range of material on innovation culture drawing upon Silicon Valley innovation and the mindsets of great innovators throughout history (going back 3.5 million years, all the way to the world’s first innovation, the stone hand axe).

Using material like this -- and of course customizing it for the specific company, you engage your people via presentations, discussions, events, videos, etc., to inspire the innovation mindset(s) essential for making the most of the techniques that follow. It’s important to make these engagements not only compelling and intellectually engaging, but also as fun and informal as possible, because one of the key ingredients in a real innovation culture is the sense that exploration is encouraged, and for that to take hold, you can’t hit people with a stuffy, rigid approach. Keeping it relaxed, loose, and “human” is the way to go in this second phase.

Capability #3: Innovation Process (Essentials)

The next phase is to teach, and get people to start using, a real set of techniques, or even a coherent methodology, for innovation. I use the Five Essential Innovation Techniques, which we have developed over the past seven years via the Autodesk Innovation Genome Project, which consists of creating the following: an Innovation Map, Innovation Targets, Innovation Ideas, Innovation Prioritization, and Innovation Projects. The goal here is to give people the practical tools to help them to actually start doing some real innovation. At the end of this phase, key groups in the company -- and maybe everyone, including C-Staff) will have new Innovation maps, targets, and projects to work on.

Capability #4: Innovation Strategy (Vision)

Next comes the step of creating an innovation strategy for the company. For this I recommend developing a radically simple strategy document -- a precisely thought-out, crisply written, and flexible set of related guidelines/principles about innovation designed to help the company make real decisions about innovation in dynamic situations, and in real time.

This is a document that is meant to be reviewed/revised as often as possible, taking into account how quickly things are changing in the world today. And as opposed to a “this is our strategy, and we’re not changing it” approach (which I see fairly often), for a good innovation strategy I’d recommend the classic “strong opinions/loosely held” approach.

Capability #5: Innovation Projects (Execution)

For this phase we start with the Innovation Projects developed in Phase 3 -- or by using whatever innovation projects the company is already working on -- and start working on bringing them to market as quickly as possible. With guidance from CEO/C-Staff, and the company’s innovation strategy, the individual teams work on their own projects, but also stay connected to what other groups are doing.

This is the actual work of innovation, where we finally get beyond the (necessary) preparatory work, and start trying to establish innovations out in the world/market. Innovation execution is, of course, essential to real innovation because without it, good/great ideas don’t reach the real world; for innovation to be real it has to have a real-world impact.

Capability #6: Innovation Performance (Managing)

This phase runs semi-contemporaneously with Phase 5; once the project work gets underway, we set up processes (dashboards, review meetings, performance teams, etc.) to track progress started in each of the previous phases, e.g., Metrics, Culture, Process, Strategy, and Projects.

This is how we establish/ maintain a holistic view of all things innovation at the company, and improve/evolve over time. This also creates a de facto (or de jure, if that’s the way you want to go) innovation team that people can join and leave as relevant, which is another good way to keep a strong innovation culture going.

Capability #7: Innovation Capability (Evolving)

Once we’ve set up the process outlined in Phases 1-6, we move into a the “teach a man to fish” phase, where we focus on ensuring that the company’s ongoing capability to innovate is strong/growing. We select qualified/interested people to take over key roles from previous phases, and we work with them to keep progress rolling in all of these areas.

This phase is critical for the ongoing success of the company’s innovation culture, because if that culture remains dependent on outside consultants -- as it often does -- it will always remain a kind of quasi-innovation culture, and it won’t ever really get into the DNA of the company. Building in a point in the future when the company will eventually take over all of these activities is essential if innovation is to keep happening beyond the duration of the work done with outside consultants.

Okay, Who’s First: The Race to the Realms of Real Innovation

The above is, to me, both a description of what I’m seeing in the big, bad world of corporate innovation, and a prescription for how corporations can make sure they make the most of this coming inflection point.

Who’s good at innovating?...

Today, sure, it’s all about the startups -- and I think that those brilliant little entities, with all of their vision, courage, creativity, and flexibility, will continue to do real innovation.

But...soon they won’t be alone, and they’ll have to adapt to a new breed of apex innovator out in there in the wilds of innovation, as large companies learn how to do some giant innovation.