To truly drive top and bottom-line results from innovation initiatives, it’s important for companies to quickly design, develop, and test if new products and solutions will be adopted by customers. Working with our clients, we’ve uncovered five key elements that help companies transform their way of working to successfully launch new propositions to market at pace.
1. Establish your innovation operating model up-front
There are several overarching building blocks companies must address if they want a productive environment where multi-disciplinary teams and technology partners come together to collaboratively create breakthrough customer propositions. These include Methods, Processes, Governance and Performance, Talent, Technology and Data Capabilities, Physical Space, Marketing and Communications. Together these form the innovation operating model.
These building blocks must be designed in a way that promotes customer-centricity and rapid development / testing cycles… similar to how startups function. The innovation operating model will typically be a significant cultural shift from how corporates are used to working today.
2. Revamp your approach to partner network sourcing
Companies cannot out-innovate the market. Truly innovative companies will take advantage of startup solutions and emerging technologies, building them into their own new propositions for customers. They must learn to source relevant technology and service providers from their network and beyond to identify suitable partners, conduct pre-screening evaluations, and validate capabilities very quickly.
This is not as easy as it may sound. A typical VC firm that searches for the “next big thing” every minute of every day will see over 10,000 startup ideas per year, performing due diligence on ~1,000 selected startups, and ultimately investing in around 10 ideas… 80% of their ROI usually comes from 2 to 3 investments.
The lesson here: don’t try to be overnight experts in the scouting field. Build relationships with VCs and consulting advisors who can help bring the right partners to the table for each specific innovation idea you’re working on. And this is only half the battle… engaging with nimble startups is not the same as engaging with traditional service providers. You will need a fundamentally different approach to sourcing and contracting with startups.
3. Use Collaborative Solutioning to finalize technology partners
Once a shortlist of relevant tech startups for the innovation initiative has been identified, there is a much more efficient and unique way of engaging with potential partners quickly – Collaborative Solutioning. In this process, the business challenge is shared with partners and solutions are developed collaboratively through joint workshops, rather than using traditional procurement processes (RFI, RFP). This leads to better solution outcomes, at a much faster pace, and strategic partnerships (as opposed to traditional client-vendor relationships).
4. Employ rapid prototyping sprints to develop MVPs
In this step, selected partners bring their ideas and working solutions onboard, collaborating directly with the business, digital, IT / architecture, and support functions (finance, marketing, legal, and compliance) to iteratively design, build, enable, and customer test a functioning prototype ready for MVP launch. The key here is to bring multi-disciplinary teams together to create differentiating customer experiences, products, services and solutions using integrated methods and tools. These teams are all working toward the same cause – to implement MVPs with the potential to drive business growth in a matter of weeks, not months.
5. Be prepared to make necessary deployment decisions
After a period of immersive live customer testing, companies must analyze the MVP performance using clearly defined metrics and analytics to determine if it should be productionized, discarded, or pivoted into a new prototyping cycle. It’s imperative for teams to be able to recognize when an idea or MVP is not delivering the expected results and to kill it sooner rather than later. Have adoption analytics dashboards prepared and ready to go. Then, you can continuously monitor and optimize new products and offerings for subsequent feature releases. It also means you can quickly identify which MVP’s are delivering real value to your business.
Corporate innovation is not easy. It’s not just about startup scouting, labs, and design thinking. It involves fundamentally changing your ways of working. The business needs to establish an innovation operating model that brings in the right partners, reshapes the way initiatives are delivered, ensures solutions are focused on the customer experience, and drives higher adoption. Importantly, this accelerates time to positive economic impact.
Those who get it right will be the game-changers. These are the businesses that will be the industry leaders of tomorrow.