How to Close the Innovation Gap

By Coley Brown

Rare is the business leader who would question the importance of innovation, not only to promote growth within the organization, but also to ensure its very survival. Yet, although business leaders have invested significantly in innovation initiatives, a recent Accenture study found that more than half of corporate executives were disappointed with the returns on investment in innovation.

Why is there such a large gap between the need to innovate and the ability of organizations to actually innovate successfully? Executives tell us that the problem is not a lack of innovative ideas, but rather an inability to transform the best of these ideas into bottom-line results.

Many organizations have responded to this “innovation gap” by purchasing outside companies to acquire innovations and technologies with proven results. Acquisition has its merits, but often comes with its own set of costs and hurdles. In our experience, large organizations can successfully drive innovation internally, but it must be tied to finding and empowering their internal entrepreneurs. Leveraging these “intrapreneurs” is the key to generating bottom-line growth.

The process for transforming an enterprise’s maze of good ideas into bottom-line results can be achieved by following three steps:
1. Identifying the organization’s internal entrepreneurs.
2. Empowering them with a process and program to build their entrepreneurial expertise.
3. Leveraging these empowered intrapreneurs to encourage others inside the organization to innovate.

Identifying Intrapreneurs
A specialized “Open Innovation” program that engages external startups is an effective way to accomplish these three steps. In general, Open Innovation programs are used by large companies to solicit ideas and solutions to specific challenges from both inside and outside the organization. By leveraging startup founders’ entrepreneurial expertise to mentor and incubate intrapreneurs in a large organization, the organization can create an environment where intrapreneurs transform languishing ideas into results.

What qualities should an Open Innovation program look for when identifying an organization's intrapreneurs? A simple approach is to look at the skills found in successful entrepreneurs:

• Willingness to accept risk even if it means asking for forgiveness rather than permission
• Ability to accept failure and to pick up and move past failure
• A clear vision matched with a passion to overcome obstacles to achieve this vision
• Openness to new ideas and the flexibility to change course when initial approaches prove false
• Tenacious work ethic and willingness to do “whatever it takes to get the job done”
• Ability to work and communicate well with others

Creative methods for finding intrapreneurs with these skills include solution contests, internal hackathons, suggestion boxes, and collaborative discussion blogs.

The search for intrapreneurs should be public and open to all members of the organization. It’s important that an organization not be biased toward young employees or those who are new to the company. Often the best intrapreneurs are long-term employees with cross-functional experience and a high degree of peer respect. A strong leader with experience can be especially valuable. Programs like these will also naturally attract individuals who collaborate well across the organization. This can be valuable when they are canvassing for support of a new concept or innovation.

Once an organization’s intrapreneurs have been identified, the next step is to create an environment that allows them to collaborate, flourish, and add value. The following steps detail a method and include a specialized Open Innovation platform to achieve this.

Define Challenges
To maximize the entrepreneurial skills of the group, the supporting Open Innovation program should be focused on solving and implementing solutions to specific business challenges. To accomplish this, business owners and thought leaders in the organization must define and share their most important business challenges. This will allow the Open Innovation program to find funding when it matches challenges with potential solutions from both internal and external sources.

Create a Web Portal
A collaborative web portal allows intrapreneurs to easily identify, join, and communicate with other intrapreneurs and thought leaders. The portal provides a platform for them to work together, finding solutions to the organization’s business challenges. The portal provides a structured screening process where participants can publically rate and establish discussion forums on possible solutions. Discussions should be free form and should have the ability to easily branch out to subtopics. The portal also should facilitate the open exchange of ideas where consensus can be found for new solution approaches.

Assemble Teams
The collaborative, Open Innovation portal also allows intrapreneurs to organize into small, cohesive teams that include the necessary skill sets to evaluate and test identified solutions. In addition to the entrepreneurial skills previously identified, each team member should bring at least some of the following organizational experience to the group:

• Operations and testing
• Business expertise and a solid understanding of the challenge that needs to be solved
• Corporate communication
• Technical expertise in the area of interest

Attract Executive Support
Both the teams and the proposed solutions to business problems should have visible executive endorsement and support. This “executive air-cover” is essential for the teams to succeed and be recognized. It also paves the way to circumvent compliance barriers during the early stages of validation and can eventually facilitate funding.

Find and Qualify Startups
The collaborative Open Innovation portal should provide members with the ability to find, match, and qualify innovative solutions. These solutions should come from external startups, as well as internal sources.

Startup solutions can be found through either a proactive discovery process or through a link to a public part of the collaborative portal. This special public site allows external organizations to submit applications for their solutions to the challenges that have been approved for public posting.

When qualified solutions from either internal or external sources are found, they must be screened and evaluated by the team. In the case of an external startup solution, the opportunity must also go through an expert process that determines the company's viability, stability, and the experience of its entrepreneurs.

Test and Validate
The Open Innovation process must also include a planning and delivery methodology for rapid testing and validation of desired results.

When a combined team of skilled intrapreneurs and startup founders jointly believe an innovation opportunity is a viable solution to a business challenge, the team must establish and complete a Proof–of–Concept (POC) project. The parameters should be negotiated and agreed to by the internal team and any external startup founders. The goal of the POC project for both internal and external groups is the early validation of solution assumptions and proof of expected results and returns.

This sprint approach for the POC brings additional benefits to the organization when external startups are involved. Running a “just-in-time” boot camp forces internal and external team members to experiment, bond, and exchange skills. Including external entrepreneurs in the POC team naturally seeds the process with entrepreneurial skills and allows them to impart their experience operating in a lean and Darwinian startup process.

Seasoned entrepreneurs are able to mentor intrapreneur team members while reenforcing their innovation skills. The sprint format also reduces risk by setting hard constraints on time and budget for discovery and validation.

In addition to finding innovative solutions to business challenges and increasing bottom-line results, an Open Innovation program that focuses on external startups creates a culture of internal innovation throughout the organization.
To increase your own and your team’s creativity, consider these AMA seminars:
Design Thinking: A Customer-Centric Process for Rapid Innovation

Leadership Skills and Team Development for Technical Professionals 

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