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If you ask Steve Faktor, founder of the New York City based incubator, The IdeaFaktory, and regular contributor to Forbes, Harvard Business Review, The Wall Street Journal and others, if corporate innovation is even possible, you might not get the response you were expecting.
We were fortunate enough to host Steve at our first ever meetup, “Corporate Innovation – Past, Present, Future,” which took place in NYC, February 27th, 2017. The meetup, moderated by TV personality, Ari Zoldan, brought a crowd of corporate innovation managers, CIOs (chief innovation officers), and industry leaders.
To catch you up on the latest from the corporate innovation world:
Today, more than ever, enterprises are looking to transform their companies by innovating. There are many ways of going about this – one common practice is for enterprises to hire innovation leaders and managers to reignite the innovation flame within their organization. But, as much as an innovation rush is wanted, the wished-for revolution is not happening as fast as enterprises would like it to.
Today, more than ever, enterprises are looking to transform their companies by innovating Click To TweetAccording to Steve, the problem lies in the fact that there is a discrepancy between the time it takes to instill an innovation, and the life expectancy of the people responsible for instilling it. When the life expectancy of an innovation group within a corporation is about two years and the expectancy of a corporate venture group is about one, a problem arises.
How can corporate innovation, which usually depends on long term plans contingent upon development, actually be followed through? Simply put, it can’t.
We’ll cover how one can and should go about instilling innovation.
Forward Thinking Innovation
One of the most important things corporations need to understand before embarking on an innovation journey, is that not all innovation is right for every company. Recognizing what type of innovation they need and want, and then focusing on achieving it, is key to actually bringing on an innovation boost within a corporation. 
Innovation is generally split into two categories – 1. conceptual innovation, which is mission and strategy based, and 2. capability innovation, which is product focused and technology powered.
Creating conceptual innovation is often claimed to be the goal of an enterprise’s innovation revolution, however it is generally harder to achieve for large corporations, since they have a complex internal infrastructure that is often built to resist radical changes. To achieve this type of innovation, companies often need to shake things up, which often leads to them hurting themselves in the process (but more on that soon).
So, instead of shaking the foundation of the company, many enterprises try to focus on tangible innovation of their product, such as their technology or their offering.
If this route is chosen, the key is to understand the most beneficial type of innovation and being clear about the path needed in order to achieve it. Knowing not only what you are trying to accomplish, but how these accomplishments will help you achieve the goals of the organization in the long run, is crucial. Simplify the process by breaking it into smaller, more manageable material problems that can be solved.
Challenges of Corporate Innovation
“To do real innovation, you have to be willing to hurt yourself. You have to take loss… Chances are the thing you really need to innovate is going to compromise or threaten your business” Steve Faktor at the February Meetup
Even after a company recognizes and understands the type of innovation needed, instilling it is still easier said than done. Corporations have powerful political forces that prevent radical change, not because they don’t want it, but because it will hurt their bottom line.
To do real innovation, you have to be willing to hurt yourself - Steve Faktor @ideafaktory Click To TweetCorporations have to answer to the public in the form of numbers, quarterly reports, increased profit margins and revenue streams. Once a company is committed to giving numbers and meeting them, creating any real innovation is nearly impossible – especially since creating real innovation often requires taking a hit financially or challenging a part of the corporation.
Companies often see the route they need to take in order to bring transformative innovation into their corporation, however it often comes at the cost of compromising or even sacrificing something existing within the company, and is rejected as a result. Apple for example, could have easily purchased Spotify in its early days and integrated the music streaming platform into their operating system, but instead of introducing true innovation, dealt with an Apple V.S Spotify feud.
Silver Lining of Innovation
The reality is that even without innovation programs, corporations do innovate. If 72% of the U.S. economy is driven by Fortune 500 companies, they have clearly done something right – they focused on the talent.
Steve Faktor’s conclusion, that “talent and culture are the only things left” is what will drive innovation forward in the future. A company’s ability to recognize talent and harness it, is what ultimately brings change. Much of the talent enterprises have today is actually due to their acquisitions of startups, so in essence, most startups end up working towards enterprise’s goals without even knowing it. Once an enterprise collaborates with a startup and brings its innovation in-house, they have already instilled something innovative. The real key to corporate innovation is knowing how to do exactly that – recognize the benefit in collaborating with startups and use their innovations as a competitive advantage.
And… if you happen to use the prooV platform to find these startups, run Proof-of-Concepts (PoC’s), and find the innovative solutions, well that’s the cherry on top!
* To watch the full recording of the meetup: https://www.youtube.com/watch?v=96KPJV8s1HY&t=555s
