By: Joost Korver
The business environment is becoming increasingly complex. Organizations have lived in a stable environment for many decades. The competitive advantage resulted from executing better than competitors. This is no longer the case.
The environment is evolving fast with multiple technologies advancing rapidly and also startups in different regions constantly challenging the status quo. This new paradigm requires excellent execution capabilities as well as the ability to spot opportunities as they emerge. Companies are required to organize better to be able to innovate in order to disrupt and not to get disrupted. For many companies this is a challenging and even daunting task.
I am grateful that I had the opportunity to instigate and lead innovation in a large multinational company for two years. I was under the impression I was a real innovator, a real innovation expert when I was appointed as Global Innovation Director. How wrong was I, and how much did I learn since then. I definitely don’t consider myself the greatest innovation expert, but I do think I have a story to tell that can help others who are managing innovation in organizations.
From day one it was clear that this was going to be a long term journey. This was not going to be an easy quick win, but a complex journey with the aim to make a lasting impact. This is the reason I started keeping a personal diary as soon as I started the job. Somehow I knew this was going to be an exciting adventure, worth capturing on paper. I remember an early conversation with one of the executive board members, in which I wanted to impress him by sharing many ideas regarding projects and technologies. When I left the meeting I realized it was not about doing some nice innovation projects. This was about working towards a real culture change and going ‘wide’ and ‘deep’ in the organization. This eye-opener led to my methodology: the 8 P’s of Innovation.
This article describes my personal journey of trying to make a large corporation more innovative. It describes the highs and the lows during the two years of trying to transform a large multinational. I was based in Barcelona, with global responsibilities. The core Innovation team was based in the Netherlands, which meant lots of travelling. During my flights I had lots of time to reflect. It was definitely my greatest business challenge in my career so far. I used to be the Managing Director of a medium sized energy business in Spain, but that was peanuts compared to being the Global Innovation Director at the same multinational.
Why, you ask? It was so much more difficult to make real progress. It was also very difficult to gain overall support for the innovation agenda. People were so busy with their own jobs and the existing business model, that they didn’t spare time for Innovation. Surely many companies say they are innovative, or at least they say it is important, but how do you change those words into actions in the day to day business of all employees. How can you start a movement in a relatively traditional organization and change the culture of a company? During my first year I experienced it all; a CEO change, different expectations on innovation, heavy cost cutting, different priorities, etc. All in all a super exciting learning experience.
During the end of my tenure, I was asked by someone how it feels to be a corporate innovator. I responded that it feels like boxing a 12-round heavyweight boxing match. I love boxing and my Nike app with boxing exercises helped me to stay fit during my travels. On the other hand I was—metaphorically—punched in the face several times and even hit the ground a few times. As a corporate innovator you need to be strong, you need to train and learn hard, and you need to have great stamina and perseverance. I kept getting up and I learned a lot. Over time this led to a methodology that works for any company of any size in any industry.
When I started the job I read a lot about corporate innovation and I also met a lot of other corporate innovation directors. What I noted is that so many innovation programs fail and everyone is setting up innovation in a different way. Initially this came as a surprise to me, but later on I started to understand the reasons why.
The late Clayton Christensen wrote a famous book about this topic, The Innovator’s Dilemma, and I also remember a presentation from Tendayi Viki who talked about the concept of Innovation Theatre. Many companies who have the desire to innovate initiate some ad hoc innovation activities and are disappointed that they don’t experience a lasting change. The reason is that you need a structural approach.
Early on I understood that if we wanted to be successful with our innovation journey we needed to set up Innovation from a strategic perspective. It was not (just) about doing some cool projects and/or setting up a startup challenge or incubator. Based on my personal experiences and many engagements with other corporate innovators I developed a new methodology called the 8P’s of innovation. This methodology (or system) works well for any company that wants (or needs) to become more innovative.
The first step is to see Innovation as a journey (or a movement). As a company you will need to work on all different elements (P’s) to make the journey a success. Sooner or later you will need to develop all 8 P’s in order to make a sustainable change in your organization. It is essential to make a high level plan given the resources available, and then build the innovation movement step by step.
8Ps of Innovation:
- Processes (innovation strategy, governance, innovation methodology, team structure)
- People (finding the right people, training)
- Projects (methodology: lean start up, design sprints)
- Problems (start with real problems and not pet projects from a few)
- Priorities (Innovation thesis, aligned with strategy)
- Progress (Measure progress!)
- Partnerships (collaborations & external inspiration/trend watching etc)
- Places (create physical and mental space to be creative)
Processes & People
A solid basis when starting any innovation journey is the triangle of people, processes and projects. A good structure and processes are needed, as well as the right people with the right mindset and attitude. The people need to be trained and the best way to do that is to learn by doing. Innovation projects need to be started. A classical mistake is that higher management wants to get some ‘pet projects’ done. It is better to focus on actual customer problems.
When I started the job as corporate innovator, there was a real need for structure. The board thought it was important to become more innovative, but did not know what that meant, nor what was expected from them. Therefore the initial months it was a question of looking for structure. Structure of the team, structure of governance processes, what kind of innovation methodology was the best, and also developing an innovation strategy.
To be able to do all that I almost immediately started recruiting a global innovation team. We needed a diverse team with internal and external recruits, with different capabilities. For a large multinational that is starting an innovation journey it is critical to have some movers and shakers, 100% focused on changing things in the corporation. Equally it is important to find your (potential) innovators within the company. Who are the people who really want to understand customers, and with a desire to try things and improve things? You need to find and mobilize the right people in the organization at different levels and functions.
The best way to start learning about innovation is by actually doing it. Get started with some innovation projects and make sure you get the right support to be able to adopt the right principles and methodologies. Especially in larger organizations people are really good in talking about doing things. It is important to mobilize some small groups to start and try out some new innovation initiatives. Key is to give these teams time to learn and try out different things and activities.
We also realized that the way of running innovation projects is completely different than managing the existing business. We needed to learn about lean start up and design thinking principles. In the beginning we made the mistake of starting some projects because influential leaders asked for them. Later on these projects were ended or redirected, because we realized that we were not starting with problems. We were actually working on some interesting solutions, without understanding the problem we were solving.
An innovation journey usually starts when an organization is in a tight spot and under pressure. In other cases there is a manager who identifies the need for innovation when things are going well. In both scenarios it is usually not clear what is needed and what ‘success’ looks like.
For some months this was the main focus: processes, people, projects, and problems, but something was missing. To use the boxing metaphor, we were training (and learning) a lot, however there was no important match coming up. During this period it became clear to me that it is not sufficient to just do some innovation projects, it is also important to have the right focus and ensure your innovation activities are aligned with the overall company strategy. We had some projects that worked well, however no impact was made. These projects were not absorbed by the business units or it was just not clear what the use was.
Also one of the mistakes i made was not measuring clearly how we as an innovation movement were progressing. Over the two years, we started many activities in many countries, however we were not tracking what the impact was and whether we really were becoming a more innovative company. So how could we expect the organisation to understand what we were doing?
What progress is and how you measure it, remains a tough nut to crack. I had the pleasure to be on stage at the lean start up conference in Berlin to discuss how to measure corporate innovation. I also took part in a panel discussion about the same topic at 4 YFN at the Mobile World Congress in Barcelona. Every time I was amazed about how hard this topic is for many companies. I actually believe measuring progress is indeed one of the most important things to do for corporate innovators.
We finally turned these two topics around by (1) organizing innovation thesis workshops in the countries and for the management board. These sessions gave clear direction to the innovation agenda and it also aligned the corporate and the innovation strategy. (2) In year two we also defined several KPIs that we started tracking and sharing progress with the management board. I believe that having clear innovation priorities and clarity on what is progress, will give the biggest impact on the overall innovation movement.
The key is to make progress, because with progress you make an impact, and more impact leads to more credibility (from investors or senior leaders). More credibility leads to more support, like budget, resources, permission to do things, and this accelerates impact again, which leads to more progress. Obviously you need to determine what progress to make, but I bet it is related to better understanding and serving your customers.
I think Partnerships is one of the key elements of any innovation movement. You simply can’t do it alone. The sooner a company realizes that it needs to look outside and look for different types of partnerships, the sooner it can really start making progress.
I have always been passionate about establishing meaningful connections and partnerships. I learned the hard way that corporate / startup collaborations are not easy. It is actually quite astonishing that the company I worked for has a successful track record of acquiring firms all around the world, however agreeing to strategic collaborations with startups was a much more complicated process. It takes time to get comfortable and starting to learn from these types of collaborations. Other types of collaborations are also important, for instance with universities, research institutes, and other service companies that can accelerate a new way of working.
A key learning is that by finding the right partners, you can accelerate your learnings, and speed up the transformation process in becoming a more modern company.
I think Places is an underestimated topic as many people view this as a piece of innovation theatre. Set up a cool office with lots of light, great walls to write on, canvasses, and post its. I have seen examples where this worked really well. Creating spaces where creativity is facilitated is powerful and contagious.
Initially we went outside the company to find inspirational spaces, and we held meetings in co-working spaces and other creative spaces. Sometimes we held meetings in corporate innovation spaces at other companies. This worked really well because we always held sessions where we could learn from the other company.
When we finally set up an innovative room at headquarters, this was evaluated positively and other departments started using the room as well. When we talk about places we actually mean spaces. Physical spaces we mentioned above, but it also refers to mental spaces. People need to get the feeling that it is ok to experiment and fail.
Any organization that wants to transform to a more innovative culture need to make some critical and visible changes. Top managers that are explicit in challenging people to take time and experiment is helpful. It also helps to make visible changes to the office and creating more informal, high quality workspaces.
Recently I had the pleasure of advising several companies to kick start their innovation journey. I used the 8 P’s of innovation as underlying methodology and it worked in every case. In the end it is important to set the pillars and work on all elements sooner or later. You need to make a plan, depending on the (in)maturity of innovation, resources available, and ambition.
Start with a clear analysis of point 0 and agree on what will make the biggest impact in the beginning to get the innovation movement started. Over time all 8 elements will be filled in and progress will be made. If constant progress is achieved, you are on your way to change the culture of your company and becoming a sustainable company. A company that learns faster than others will be better positioned to disrupt and not to be disrupted.
About the Author
Joost Korver is a Chief Entrepreneur and is Head of Growth at Gasbot, an exciting Australian IoT startup. He has many years of experience in the energy sector in commercial and innovation positions, and is also a startup mentor and angel investor who advises some larger companies on developing their innovation movement.
Contact: Joo[email protected]