Why Companies Need An Innovation Program2 March, 2017 / Articles
I spoke to Jeremiah Owyang, the Founder of Crowd Companies, about his latest report called “The Corporate Innovation Imperative: How Large Corporations Avoid Disruption By Strengthening Their Ecosystem.” Owyang talked about how large companies can make changes that allow them to remain competitive, examples of innovation programs, why it’s challenging for big companies to innovate, the most interesting findings from the report and how companies can build a innovative program.
Owyang focuses on how disruptive technologies—such as social media, mobile, and the internet of things powers the collaborative economy—and impacts the relevance of corporations to customers today and in the future. He is well recognized by both the tech industry and the media for his grounded approach to deriving astute insights through rigorous research. His site, Web Strategy is one of the premier blogs on how corporations connect with their customers using Web technologies. Jeremiah was an Industry Analyst at Forrester Research, a founding partner at Altimeter Group, and a web marketing leader at Hitachi.
Dan Schawbel: What is the innovation imperative and how can large companies make radical changes that allow them to better compete in the marketplace?
Jeremiah Owyang: Disruption is accelerating as new technologies are emerging at a faster pace. As a result, companies need to be ready, with a dedicated innovation program –not just knee-jerk reacting to each new set of technologies that emerges.
Corporate innovation is an imperative for any company seeking to proactively combat disruption to its business model, product lines, operations, and customer experiences. The “innovation imperative” is a mandate for large companies to launch the next innovation, all while maintaining connections to their customers (and maintaining existing revenue streams).
Corporations and their change agents are approaching innovation in 10 distinct ways (internal and external), from building talented teams to investing in the startup ecosystem. Though each program type carries its strengths and weaknesses, the most critical component of an initiative is its strong tie to both overarching business goals and innovation-centric metrics.
Without a clear charter for what the innovation program will achieve and why, success is futile.
Dan Schawbel: Can you give some examples of successful corporate innovation programs and what made them work?
Owyang: We were fortunate to speak to some of the real leaders at large corporations that are paving the way with their innovation programs.
Johnson & Johnson’s JLABS enable outside innovation inside the company. At its six sites within the United States, J&J gives startups the tools they need to level the playing field against large, corporate R&D teams. Half of each JLABS space is a common area with state-of-the-art equipment for use, while the other half is comprised of individual labs that help companies get started. J&J takes no equity from ideas and companies paying to use JLAB space, but rather builds relationships with the ultimate goal of ecosystem innovation that benefits all (even competitors).
If it sees an idea of interest, J&J often pursues deeper partnerships that allow it to shape the ultimate innovation or product at a later date. JLABS measures its success based on internal financial metrics, quality of innovators coming in, quality of science and technology being developed, development milestones reached, the number of people using its space, and education programs run.
J&J has one of the most advanced innovation programs, as they were willing to help the whole ecosystem innovate –even competitors –to allow all boats to rise with the tide.