In my experience, executives hesitate to invest in corporate innovation because of the inherent uncertainty. Given how many innovations result in waste, there is a fair chance the executive might lose resources, face, and position.
Why then, would they invest in innovation when they can pick a number of other, seemingly safer options? Well, for one simple reason—there is plenty of evidence indicating that innovative companies outperform their more risk-averse competitors.
Implementing following three counter-measures will significantly reduce risks associated with investing in corporate innovation, and consequently, improve its ROI:
- Focus investments on opportunities with sizeable upside. This isn't to say you should terminate your continuous improvement efforts! Think of it as a reminder that investing in innovation is about creating the future.
- Control investments through metered funding (i.e., release funding in tranches) and expenses through innovation budget. Both are important. Corporate venture boards are good bodies to oversee them.
- Measure performance of these investments on three levels: portfolio (strategic), funnel (tactical), and team-specific (operational). You might find how to measure innovation as well as 27 vetted innovation metrics articles useful.
A word of caution—above measures are most effective when implemented in unison. Success of your corporate innovation efforts depends on your whole organisation, not few scattered teams here and there.
Unsure where to begin? Reach out with your situation, and I'll point you in the right direction.
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