What is corporate innovation?
Corporate innovation is the development of new ideas to improve the existing business, modifications of existing products or services, or to create new businesses outside the traditional core.
How is corporate innovation different from start-ups?
Corporate innovation is different from start-ups in that corporate innovation teams have significantly more resources to test and learn the viability of many ideas while start-ups become narrowly focused much more quickly to one solution. Conversely, corporate innovation often lags the speed and agility of start-ups, due to the inertia and risk aversion of the existing business.
How is corporate innovation different from developing new products?
Corporate innovation can include developing new products, though it is usually more concerned with developing revenue streams and capabilities beyond the existing business. Corporate innovation and product development teams often operate on different time frames. Product teams focus on building products that will be accretive to revenue within 1 to 3 years, whereas corporate innovation focuses on a longer time horizon.
Why is corporate innovation essential today?
Corporate innovation is essential for companies to establish new sources of growth before their market share starts to decline. When a successful company’s business matures and reaches the top of its growth curve growth slows, making the search for new revenue an imperative. It is also essential for developing new capabilities that may be required for competing within existing markets, i.e., many firms find that software development is increasingly important to their digital transformation.
What is an example of a company that has had successful corporate innovation?
Two companies that have been successful in corporate innovation in different ways are Amazon and Proctor & Gamble. Amazon’s ability to focus on more disruptive innovation has given it the ability to be both the world’s largest book retailer and one of the most important information technology companies as Amazon Web Services. Proctor & Gamble pursues more traditional corporate innovation where their teams under each brand consistently deliver on adjacent innovation that creates new growth in existing (or new) markets every few years.