State of corporate innovation 2017 edition

Almost 2 years ago I wrote a popular medium-piece called ‘12 things we learned from setting up a corporate lab’ which still receives reads and ‘claps’.

This year I wanted to do something different, and that is to see where we are in corporate innovation land.

I didn’t do any quantitative research so don’t expect hard numbers or charts. I did coffee with friends, co-workers and people I worked with. Some of them work as innovation-managers, product managers or similar . I did informal coffee’s and some customer development to see what’s new, and what’s not. Furthermore I promised to not quote people by name to not compromise their work or their work-environment. I spoke with 7 people so far (you want t add on this story? Drink coffee with me). A fair warning: this is an observation.

Corporate labs are being dismantled

Clustering innovation-projects into one department has become less popular. You could argue that this is good news because less ‘innovation theater’ but the fact is that corporates now understand that domain specific knowledge is needed to power new products and services and to leverage potential unfair advantage the corporate does have in the market. So; standalone ‘labs’ are not that popular anymore, but could still be used as example within the organisation in a ‘lead by example’ role.

Downside of the dismantling of this is that innovation is now somewhat scattered within the organisation, thus creating new (governance-type-of) problems. Other downsides may be to recognise the true ‘intrapreneurs’, a term which by the way seems to be somewhat out of fashion in 2017: they are not facilitated anymore to join a ‘lab’ and to get building their venture.

IT
Big corporates still have these large vendors for IT services and despite them claiming to bring in ‘innovation’ or ‘innovative services’ these largely do not deliver on promise. They seem to do a solid job of ‘just keeping it running’ but not a essential part in building new products. However: some corporates now create microservice architecture or simple API’s of their services allowing teams to build upon these frameworks which I think is a way to move forward.

Agile, scrum, Kanban & devOps

Most employees are now trained to be full-action scrum-teams. This seems productive but sometimes heavily relies on coaches and freelancers to run keep the sprints in order. Also: length of the sprints may vary from a week to 3+ weeks. Other questions that arise in the workplace is what these sprints mean for long-term focus and strategy.

None of these tools however is capable of making a incompetent team work again, so with the existing failing workforce you’ll still have the same problems as before: only the format differs.

This brings us into a acient problem in corporate land: all chiefs, and no indians: some teams just lack resourcing to move big projects forward. Recruitment and HR need to innovate fast to deliver on a new workforce of people actually able to perform lots of new stuff: writing user stories, getting user-feedback, working with prioritisation of the backlog etc. and enable corporate-wide training for new roles. However: without actual makers you won’t move very fast. So: cultural change is very needed, and now broadly reconized by organisations.

Venturing

Lot’s of corporates are getting into venturing: investing in promising teams and startups that have a link to the corporate. The deal usually looks like this: the corporate does an investment and opens a network of clients to the fast-growing startup. Sometimes there are some additional perks such as high profile office space or first-customer deals. Venturing is a great way of building an innovation portfolio very quick. However: finding the right sized startup for the right amount of money is challenging: there’s a lot of (seed) money in startups these days as I found out on my way to Angel Island (awesome event btw!). Almost all universities have incubators and some of them even have seed-investment facilities to invest in external early staged startups. Combining this with the sheer volume of local investment opportunities for Dutch startups and you could argue that entrepreneurship is — to quote Dire Straits — money for nothing and chicks for free.

Also: companies that do not participate in venturing still have a hard time working with startups. You see a massive difference in culture, dynamics and time and money: startups want to move fast and break things, while corporates just need one solid product that just works.

Pipeline

A lot of people I spoken with are not convinced their efforts are a final solution for steady corporate innovation. This is not because their ideas are not bright enough but the mere fact tht the product-pipeline of new products is just too small. Working on 10+ promising new products is resource heavy, and not a lot of corporates can do even 5. Doing even less is dangerous to the business itself due to the high fallout risk of these products (of they are truely innovative and new).

Competition & new technology

Because ‘disruption is the new normal’ we see a lot of players enter new fields rather quickly. GAFA plays a key role here.When Facebook did a test by giving the Pages a new tab within the app, some media companies went bananas: 99% of their traffic comes from Facebook and associated social sources. Google silently shutting down the QPX Express API which did airfare search is gonna be a big problem for travel companies early next year, expanding the power of Google in the travel industry. Personally I think there are still many flavours next to the ‘fight or flight’ pattern I see arise within corporates, but that’s for another blogpost.

You cannot talk about new technology without mentioning Blockchain. Blockchain technology, and it’s associates like Bitcoins are not really worrying the finance sector. However: they feel that studying the properties of blockchain is a serious matter because in the long run it could be a major thread to their fundamental business models and their role in society as a ‘trusted third party’. Most people I’ve spoken are not really seeing this happening anytime soon as there are still not many blockchain-powered apps on the market which have significant traction, other than Bitcoin and Ethereum which more seem like casino’s, just as all the ICO launches we’ve seen this year.

New technology like Apple’s face-recognition software is coming to market faster, and allows fast teams of developers to integrate this in their security workflow within apps and other services.

For 2018 there’s a lot of new technology coming to market, of improved upon tech: AR, IOT, sensoring, drones, wearables and robotics, to name a few. It will become harder to catch up from an innovation perspective on where to be: and where to look. This makes 2018 an important year: can corporates catch the wave of innovation that the outside world seems to adopt more and more quickly to?