Steve Blank The Three Pillars of World-class Corporate Innovation

My good friend Alexander Osterwalder, the inventor of the business model canvas (one of foundations of the Lean Methodology) has written a playbook (along with his associate partner Tendayi Viki,) From Innovation Theater to Growth Engine to explain how to build and implement repeatable innovation processes inside a company. 

Here’s their introduction to the key concepts inside the playbook.

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Over 75% of executives report that innovation is a top three priority at their companies. However, only 20% of executives indicate that their companies are ready to innovate at scale. This is the challenge for contemporary organizations: How to develop a world-class ecosystem that can drive repeatable innovation at scale.

The playbook describes the three pillars of corporate innovation: Innovation Portfolios, Innovation Programs and a Culture of Innovation. Under each pillar, the playbook describes three questions that leaders and teams can ask to evaluate whether their company has the right innovation ecosystem in place.

Innovation Portfolio: what are your company’s portfolio of innovation projects?

• Are your company’s innovation efforts exploring or exploiting business modes?
• Does your company have a balanced portfolio of projects that cover efficiency, sustaining and transformative innovation?
• What is the health of your innovation funnel or pipeline?

Explore: Search for new value propositions and business models by designing and testing new business ideas rather than execution. 

Exploit: Manage existing business models by scaling emerging businesses, renovating declining ones and protecting the successful ones.

Innovation Programs: how are your company’s innovation programs are structured and managed.

• Do your leaders get excited about the wrong innovation programs?
• What results are your innovation programs producing?
• Are your company’s innovation programs interconnected in a strategic way?

To close the innovation capability gap, companies can evaluate their innovation programs by asking whether they’reinnovation theater or producing tangible results for the company.

• Value Creation: Creating new products, services, value propositions and business models. These programs invest in and manage innovation projects that create value by producing new growth or cost savings.

• Culture Change: Transforming the company to establish an innovation culture. This may include new processes, metrics, incentive systems, or changing organizational structures. These transformations help the company innovate in a consistent and repeatable way.

Innovation Culture: What are the blockers and enablers of innovation in your company –

• How much time does your leadership spend on innovation?
• Where does innovation live in your organization and how much power does it have?
• What is your kill rate for innovation projects?

To overcome the innovation capability gap, companies need to create a culture that enables the right behaviors to produce world-class innovative outcomes. A reliable indicator of the quality of your innovation culture is how innovation teams would describe it. Is it a culture that is dominated by blockers of innovation or enablers of innovation?

• Leadership Support: How can corporate leaders have the biggest impact on innovation in terms of time spent, strategic guidance, and resource allocation.

• Organizational Design: How to give innovation legitimacy and power, the right incentives, and clear policies for collaboration with the core business.

• Innovation Practice: How to develop people’s innovation skills and experience and acquire the right innovation talent. How to ensure that we are using the right tools, processes, and metrics to test and adapt ideas in order to reduce risk.

 Lessons Learned

• The three pillars of an innovation ecosystem:
  • Innovation Portfolios
  • Innovation Programs
  • a Culture of Innovation
• Download the Osterwalder Playbook here

Filed under: Corporate/Gov’t Innovation |