This is the third in a series of six articles that will be published over the coming weeks discussing the Innoleaps six pillar strategic methodology. In this third article, we focus on innovation governance. For an overview of all six pillars, click here.
Currently, only 7 percent of companies are able to capture the benefits of speed and scale. These include some of the world’s best-known digitally native businesses – the likes of Apple and Amazon – but generally, businesses are faced with a challenge that they are finding difficult to overcome. They are crippled by the growth dilemma.
The growth dilemma sees most organizations struggle to continue scaling their core business whilst also heavily investing resources in disruptive, new opportunities – the kind of innovations that will open up new markets and even create entire industries. Larger companies do not have the financial governance to embrace and develop small opportunities into major ventures. They believe that if they finance small innovation activities, it takes away from their core business; that it has a dilutive effect. But while it’s true that innovation may not bring in money in its early stages, these small opportunities can become the big businesses of the future. At Innoleaps, we believe that there are six pillars that are essential to enabling businesses to break through this growth dilemma, and this one concerns innovation governance.
Steering two engines
In order to break through the inertia that hampers many organizations, businesses must adopt a dual-engine approach. While they cannot neglect their core business (delivering on legacy brands and product lines) the executive board must also steer the company’s Growth Machine (disruptive innovations that go from idea to scale).
In order for businesses to embrace disruption, there must be buy-in from senior management teams. And for that to happen, the right innovation governance model must be created, one that gives employees the freedom with which to explore and launch new business models – in a structured way.
True innovation may be disruptive, but it should not be chaotic. The right growth governance directs businesses to take risks in the right areas, to think carefully about where they want to build new ventures. Crucially, it also provides accountability. What does it mean for a new venture to be successful? What are its growth ambitions and revenue targets?
Crucially, the right growth governance policy allows senior management to keep abreast of innovative new approaches while not neglecting their core business offerings. Where successful, the new initiatives that are developed as part of a company’s Growth Machine can inform and be incorporated within the core business. Far from being seen as a hindrance, governance can have a positive influence on corporate innovation. It can promote entrepreneurship and even speed up innovation.
Establishing the right growth governance begins with putting concrete, predictable timelines in place for new ideas. Businesses should examine when it is realistic to bring new ventures to market, putting milestones in place for each phase of the new product and highlighting what sort of investment will be required to achieve it. When you set up a new venture within the context of an established company, it is vital that it is predictable. Innovation is, most of the time, a black box – this needs to change
Corporations are accustomed to generating large amounts of revenue – but big opportunities don’t start out delivering these big sums. Hence, they often get ignored. Within an established company, a corporate venture team should be able to forecast the scalability potential of new ideas for the immediate and near future. This will deliver the big numbers that corporates need before they allocate resources for a project.
In order to truly express the scalability potential of a new venture, growth governance must incorporate forecasting that explores the possibility of using existing channels or brands to scale new ideas. This is why it is vital that new ideas are chosen wisely. If you start with an idea that is too disruptive or that involves a completely different business model, the likelihood that you can scale this within the setting of a corporate company is low. You will achieve alignment much faster and you'll be able to make more of an impact if you can scale your idea using existing channels.
How can we help?
At Innoleaps, we have helped numerous clients put new growth governance structures in place. We run full-day interactive workshops that help executive boards set up “dual-core governance,” the kind that embraces innovation while keeping core business processes on track.
We show our clients how to create a venture board – one that contains a diversity of viewpoints, from the c-suite, R&D departments, and relevant business verticals. We show businesses how this board can set goals and strategy, secure the necessary financial and talent resources, and manage its portfolio of new initiatives.
At Innoleaps, we aim to ideate, validate, test, and launch new businesses in the space of just months. Our timeline delivers clear accountability that takes new ventures from the problem-solving stage to product development, to launch and, finally, through to the scaling-up process.
Governance should be at the heart of your corporate growth machine. By taking an active role as external challengers on your company’s venture board, we can help you put the structure in place to build your internal innovation capabilities. One that ensures both your business engines are heading in the right direction.
The 10X Growth Machine Canvas + trigger questions
Like the Business Model Canvas, the 10X Growth Machine Canvas is a visual tool that executives can use to develop a roadmap for their own innovation engine that competes on both speed and scale. This canvas should be used to determine which building blocks need attention within your company. Use the trigger questions to help you get started and fill out the canvas, step by step.
Use the button below to get your free download of the 10X growth machine canvas + trigger questions.