We wanted to share these observations about how the winds are shifting in the corporate innovation world. They’re based on in-person conversations and lunches we’ve had over the course of the summer — as well as online meetings — with corporate innovators, academics, and consultants.
1. AI IS THE STAR — Leveraging AI (all flavors of it, not just generative AI) will be an important focus area for at least the next 3-5 years within most organizations. This is largely going to be about seeking efficiencies, automating processes, and yes, eliminating jobs. It will largely be driven by Chief Information Officers, and supported by CEOs and CFOs. As some early case studies of value creation emerge across industries, that will persuade more people that this is not “yet another fleeting technology trend” that you can wait out.
In some companies, AI will be the domain of the newly-named Chief AI Officer, but that is a transitory role. AI eventually becomes table stakes like “the Cloud” …. and we don’t have Chief Cloud Officers.
2. YOU NEED AN AI VISION — If the “horizon” for this phase of AI deployment is five years or so (perhaps 2030), very few companies have defined a vision of what they are trying to become over that stretch of time. The result? Lots of anxiety among humans who can slow roll AI projects. If you haven’t discussed the AI Vision Map in your company, now’s a great time.
If your leadership were to build the company from scratch today, what would it look like? Similarly, what would the greatest competitor to your company look like?
Some key questions: If your leadership were to build the company from scratch today, what would it look like? Similarly, what would the greatest competitor to your company look like? It’s likely that AI would be woven through in a lot of places. The leadership team needs to create a vision and set course to address the gaps that exist.
3. GROWTH SHOULD BE PART OF THE AI CONVERSATION — There is an opportunity for innovation leaders to bring growth into the AI conversation. How can AI help create, test, and deploy new offerings — not just help the organization become more automated and efficient? Delivering significant revenue needs to be the top priority, not just creating something that can be shown off at a trade show or in a press release.
4. DEATH OF THE INNOVATION LAB — The innovation lab at most companies is toast. Some exceptions include companies that really need and regularly use a prototyping space that is separate from production, or that truly invest in an ecosystem of customers and partners. One example of the former is Airbus’ Acubed lab in Silicon Valley; Visa and Verizon are examples of the latter.
Companies are exploring collaborations with venture studios as a way to incubate projects that may not fit in an existing business, or may target different customers. The results of these collaborations: largely TBD, and often hamstrung by corporates’ reluctance to truly let them behave, compensate employees, and fundraise like independent startups.
Culture change can work in small units or on project teams, but often we see innovation leaders trying to boil the ocean…
5. CULTURAL COMMANDOS DON’T LAST — Trying to “change the culture” is a tar pit. Don’t get stuck in it — unless you’re sure it can be a 10-year effort, you’ll have C-suite support and high-profile help over that span of time, there are clear metrics that would show what success looks like, and you have the people and resources to have regular touch points with everyone in the company. (In other words, don’t get near it.)
Culture change can work in small units or on project teams, but often we see innovation leaders trying to boil the ocean — rather than set up one nice-sized lobster pot and get that working well. (Yes, it’s summer-time here in New England.)
6. THE STARTUP ECOSYSTEM IS NOT A PLAYGROUND — Corporates may want to invest in startups, if they believe they can help spot (or help create) the winners in emerging sectors. They may want to partner with later-stage startups that have a product or service that is ready to go to market, and the corporate has an internal customer willing to deploy.
But the startup ecosystem is not a playground for corporates.
Most early-stage startup engagement, accelerator sponsorships, and rubbing shoulders with entrepreneurs has proven a waste of time because organizations have not had the plans, infrastructure, or funding in place to take collaborations to the next step. (Yes, the timing is ironic, as much of the AI innovation is coming from the startup world and can be quite eye-opening.)
7. GET SERIOUS ABOUT ORG STRUCTURE — Companies need a “quiver of arrows” when it comes to owning the future and finding new sources of growth. These arrows have often been situated in different pockets of the organization (corporate venture capital, strategy, innovation, R&D, and transformation or digital transformation initiatives.) They need to be unified under a leader who is in the C-suite for real — not a “temporary” CDO, Chief Transformation Officer, or Chief AI Officer. This individual needs to own a portfolio of activities — both internal development and external partnerships and investments — that can deliver tangible wins. They need to have a real budget, like marketing, HR, or customer support.
Better to call this something like Future Growth, New Ventures, Next Markets, or Growth Initiatives than “innovation” or “R&D,” both of which come with baggage.
Innovation leaders may think they are free spirits who can embrace new methodologies and tools, and evolve processes, as they feel inspired.
8. DON’T DISMISS THE NEW ISO INNOVATION STANDARDS — Innovation leaders may think they are free spirits who can embrace new methodologies and tools, and evolve processes, as they feel inspired. But many other people in the company have quality and reliability standards that they have to adhere to. Before you dismiss the new ISO 56000 family of standards as irrelevant, it’s worth doing a deep dive to understand what they are — and considering whether they could help you position your work as a solid “standards compliant” part of the organization.
CEOs and CFOs have limited patience to invest in “free spirits” who are doing things that don’t have a bright line to creating value. Do the research, and at a minimum consider what you could extract from the standards’ guidance. In some cases, particularly in ISO-centric orgs, consider implementing the standards — or pieces of them — because that will buy you time / patience / support at a minimum.
9. FIND A WAY TO BE AN MVP, NOT A CoE — More than ever, innovation leaders will need to justify their existence and redefine their role. (Yes, we’ve seen AI being added to peoples’ titles.) New AI tools will start to spread the work of innovation more broadly throughout the company — though central strategy, coordination, portfolio management, and capability-building will remain important.
It’s essential to keep your eye on the things that matter most to the C-suite and key business unit leaders — especially contributing to revenue growth, cost savings, and burnishing the brand. (Those are the three outcomes that senior leaders care about most, according to our research with KPMG.)
How can you and your team be seen as MVPs — scoring points that matter to the company — rather than a cost center or “center of excellence”? A scrappy approach that can deliver notable results with limited resources is a refrain that we hear from successful innovation leaders, so that senior leaders say, “Do more of that — and here are more resources.” Demonstrating thoughtful adoption of AI to amplify growth or efficiency efforts could be a great way to move forward.
As always, you’ll need allies up and down the org chart to help you make the case that being able to run experiments, map out possible futures, and drive growth are important “muscles” for your company to build over time, and need ongoing investment.
Featured image by Atte Grönlund on Unsplash.
