Many large corporations tend to be conservative and mostly stuck in their ways. Ultimately, this is a risky scenario when considering the massive changes ushered in by recent technology innovations and the subsequent digital transformation. The financial industry provides a good example of how smaller nimble firms embracing FinTech quickly found success in this formerly staid business sector.
So how do large businesses and enterprises foster corporate innovation within their ivory towers? In many cases, they turn to venture studios, businesses that incubate startup organizations driven by a strong entrepreneurial spirit. This relatively new business concept provides the right environment for creative, out of the box thinking. They also increasingly play a key role keeping wise corporations ready to take advantage of fresh and innovative ideas.
What follows is a high-level overview of how venture studios – in addition to incubating startups – are also fostering corporate innovation. Some enterprises partner with established venture studios to generate compelling ideas, while others actually form an internal studio for the same purpose. Let’s look more closely at how working with a studio offers older corporations a real chance to thrive in a modern economy that’s consistently evolving.
Fostering Corporate Innovation at the Enterprise
Simply stated, corporate innovation relates to a large business devising new ideas for operational improvements, with an ultimate goal of competing more effectively in today’s economy. Some enterprises might form an internal team focused on innovations and process improvement. As highlighted above, others partner with a venture studio for a similar reason – fostering corporate innovation. In fact, some may even host this innovation team in a satellite office to work more closely with a venture studio.
It appears more corporations are beginning to see the myriad benefits derived from working with entrepreneurs and their venture studios. Notably, Harvard Business Research reported the amount invested by corporations in startups grew from $19 billion to $180 billion in the five years from 2013 to 2018. Now 75% of all Fortune 100 businesses boast a venture capital department operating like a startup accelerator. Obviously, somebody turned on the lightbulb in that proverbial ivory tower!
When partnering with a venture studio, innovation teams focus on the ideation process. After identifying a compelling idea worthy of further exploration, the team engages in a proof of concept project, typically using a modern methodology, like Lean Startup. A successful POC typically results in a larger pilot program within the corporation, with additional success leading to operational changes or even a new product offering.
The Importance of Innovation at Large Corporations
As noted earlier, the modern economy benefits businesses that combine innovative ideas with a nimble implementation approach. This combination led to many newer businesses completely disrupting the industries in which they operate. Airbnb, Netflix, and Uber only provide three examples of former startups transforming the 21st Century business world.
Large enterprises stuck in their ways with outdated processes might ultimately get left behind. As an example compare the overall success of Amazon to Sears over the last two decades. Any large corporation simply resting on its laurels eventually becomes ripe for disruption. Notably, over half of all Fortune 500 companies suffered bankruptcy, acquisition, or simply dissolved since 2000. In the end, staying nimble improves the chances of long-term, sustained success. Not surprisingly, these recently-formed Fortune 100 venture accelerators make sense!
Ideas For Adopting a Strategy Based on Corporate Innovation
Any large business needs to explore strategies aimed at fostering corporate innovation within their organization. Here are a few ideas to provide food for thought and hopefully, a measure of inspiration.
- Form an Internal Venture Accelerator: 75% of the Fortune 100 already adopted this approach, as noted earlier. The strategy makes it easier to partner with venture studios serving the same industry sector as your company. Those partnerships give your employees access to forward-thinking business and technology talent, helping to generate and develop new ideas.
- Create an Innovation Team: Again, we previously highlighted how many large enterprises form an internal innovation team with a goal of ideation and turning proofs of concept into business reality. It also helps your company attract and retain modern employees that want to work with businesses with innovative ideas.
- Champion “Intrapreneurs” Within Your Business: This approach serves to foster innovative ideas from within your company. This is another wise strategy to adopt when looking to build a corporate culture focused on innovation. Once again, it also plays a critical role in attracting and retaining talented workers you might find working at a venture studio.
- Partner with a Venture Studio: Gaining innovation from outside the organization helps bring new ideas and perspectives. Venture studios work with a variety of different industries and solve different problems, giving them extensive experience in finding innovative solutions and recognizing new market opportunities.
A corporation hoping to thrive in the modern economy needs to consider adopting one or all of these approaches. It’s the best way to forge partnerships with venture studios who focus on innovation on a daily basis.
If you want to learn more about corporate innovation, connect with the team at NineTwoThree. Our venture studio regularly works with startups and enterprises to develop innovative ideas and business models to solve pain points or launch new digital products. Contact us to discuss a potential partnership.