The

Innovator’s
Handbook
The Best & Latest in Corporate Innovation
Innovation is
more important
than ever before
From implementing incremental Whatever you’re currently working on, and
improvements for existing products and regardless of industry and innovation maturity,
services, to launching new business this handbook offers you a comprehensive
models and building disruptive ventures, as overview of the best and latest in corporate
corporate innovators we are responsible for innovation, and practical tips for improving
creating new value, resulting in top and/or your innovation outcomes.
bottom line growth.
I do invite you to not just read the book, but
That’s of course easier said than done. to take action and implement your learnings.
As we’re entering post-Covid times, most
fundamental challenges for leading and doing On that journey, you don’t need to go alone.
innovation in large organizations from before- We offer you a community of peers to learn
Covid, still exist. from and collaborate with, as part of our
community membership and online events
In fact, new and even more complex Hope to “see you” there soon.
challenges are looming on the horizon – on
top of ongoing internal discussions about the For now, enjoy the read!
scope and structure of our function.

Over the last 12 months we’ve welcomed

5,500+ corporate innovators from around the
world and across industries, in roles ranging
from Junior Project Leads to Chief Innovation
Officers, to 500+ sessions, to address those
challenges, discuss possible solutions and
explore new approaches.

It’s impossible to capture all the insights we

gained in all those conversations, but still, we
wanted to share some of the key takeaways
with the wider innovation community through Hans Balmaekers
this handbook.
Innov8rs.co
[email protected]
 If you have innovation in your title,
this is your tribe

Leading and doing innovation in Our conferences have always been designed
large organizations can feel like for diversity, action and collaboration,
being on an island. welcoming typically 200+ participants to work
on actual challenges.
Innovation sounds sexy and glamorous, but
as we all know – in reality, it mostly isn’t. Since 2017, we’re hosting online sessions and
events because there was no other way to bring
On top of our actual innovation work, which is together our “glocal” tribe. For 2022 and beyond,
more than a full-time job already, we have to we’ll offer a blend of online and offline formats.
closely align with business stakeholders and
invest a lot of time in trying to change ‘how Our purpose is to advance the field of
things are done’. corporate innovation, to deliver upon the
promise of innovation for a better future, for
Innov8rs offers you a community of peers our organizations and the world at large.
to learn from and collaborate with. It’s a
space to safely discuss crucial moves and We are curators and conveners, creating an
critical decisions with others, facing similar environment for peer learning and collaboration,
challenges and chasing similar goals. always on the lookout for what’s working now.

You’ll learn new methods, frameworks One member recently summarized it nicely –
and tools. Innov8rs is “great people, great content”.

You’ll understand what other companies Let’s look at the different ways you can engage.
are doing.
Innov8rs CoLab
You’ll collaborate with others to solve the
many strategic and tactical challenges. The Innov8rs CoLab is an invite-only working
group of senior innovation leaders of non-
Innov8rs is where you keep up with what’s competing organizations.
working now and what’s coming next, in order
to make it happen in your organization. Every year, each member defines one key
challenge to focus on within the collaboration,
Bringing innovators together and then they get custom support to help
since 2011 solving that challenge. Depending on the nature
of the challenge, this support typically includes
Since 2011, we’ve hosted 25+ conferences in targeted working group sessions, selected peer
25+ cities around the world, from Singapore benchmarking conversations and as well as light
to San Francisco and Sydney to Stockholm. advising and coaching from expert members.

4 The Innovator’s Handbook 2022

Think of the Innov8rs CoLab as your personal It’s the mix of these different learning
advisory board, offering you the real, honest opportunities and modalities (live or on-
and candid feedback you need to succeed. demand, with others or alone) that makes
You’ll leave every meeting with more clarity the membership such a valuable use of your
and confidence to lead innovation in precious time. Let’s explore these three items
your organization. in more detail.

Membership is by invite only. If you are 1. Always the “best and latest” at Innov8rs
interested in understanding more details Connect events
about the group and the application process, We run 8 online events each year, each
let’s schedule a call. covering one key pillar of corporate
innovation, and 1 Unconference program
Innov8rs Community where participants set the agenda.

The Innov8rs Community membership is Featuring the best and brightest experts as
the best learning resource for any current well as the most respected innovation leaders,
corporate innovation professional. our events always offer access to “the best
and latest” on each of these eight topics. Per
We support you to further improve your event, there’s a wide range of live sessions
innovation outcomes. Included in a to join, as well as content to consume and a
membership are: diverse group of peers to engage with.

1. Participation to all Innov8rs Connect Innov8rs Connect events are not your typical
online events, offering always “the best event: you’ll learn and do stuff. Whatever your
and latest” on 8 key topics, as well as our challenges are, and regardless of industry
Innov8rs Unconference. and innovation maturity, you’ll leave with new,
practical insights and an upgraded toolbox, to
2. Always and ongoing access to 800+ implement right away.
videos and other content items, covering
everything corporate innovation A–Z. Participation to Innov8rs Connect events
is included in an Innov8rs Community
3. Several peer support formats to tap membership. The events are open for non-
into the expertise and experiences of members after application, with passes
other members. for individuals and teams, for single and
multiple events.
As a member, you can engage how and as much
as you want, based on your goals and interests. Here’s the current schedule for 2022 – keep
We help you make the most out of your time an eye on our website for updates:
investment by suggesting what sessions to join,
content to checkout and people to connect with. • Strategy, Leadership & Organization |
20-22 September 2022
You can pick and choose from 400+ live • Governance, Portfolio & Program
sessions each year. The content library always Management | 27-29 September 2022
serves you everything you need to know • Foresight & Business Design |
in just a few clicks. And through the peer 25-27 October 2022
support formats, you can focus on whatever • Venture Building & Scaling |
tops your to-do list. 1-3 November 2022

The Innovator’s Handbook 2022 5

• Careers & Personal Development | There are two types of memberships for
11–13 January 2022 Innov8rs Community.
• Startup Collaboration & Ecosystem
Engagement | 15–17 February 2022 The Innov8rs Community Pass includes all
• Culture, Talent & Teams | of the items above: participation to all online
15–17 March 2022 events as they happen, access to our content
• Climate & SDGs | 12–14 April 2022 library plus several peer support formats.
• Unconference | 17 May – 1 July 2022
The Innov8rs Content Pass does include
2. Access to 800+ videos and other access to our content library only..
resources
Innov8rs Community members have Both passes are available for individuals and
always and ongoing access to 800+ teams. Membership is by application only.
videos and other (curated) content Schedule a call to discuss more details and
items, covering everything corporate how a membership supports you and your
innovation A-Z. Moreover, you can ask team.
questions, join discussions and share your
experiences with other members via our Let’s meet IRL again in 2022 :)
community platform.
Over the last two years, we’ve all missed
Whether you want to deep dive into a that feeling of meeting and talking with real
particular topic, or you just want to stay people in real life... But it looks like we can
current, this is the only content resource you’ll meet again in 2022 (yay!).
ever need.
We are tentatively planning for IRL
3. Peer support formats conferences in Europe (Zurich, Switzerland –
Innov8rs Community members can make use 1-2 June 2021) and North America (Austin,
of several formats to tap into the expertise Texas – fall).
and experiences of other members.
These are not your typical tech or startup
For example, a “Quarterly Quest”, leaves events with thousands of people chasing
members with relevant insights to address business cards. Our conferences are
one issue in just three months, through intimate learning experiences where you’ll
small-group sessions with selected guests, work on actual challenges, together with
as well as targeted introductions and 200+ other corporate innovators, from
content recommendations. To get feedback across industries, each bringing their own
on a question, members can host a unique perspectives and experiences.
“Challenge Call”. Beyond several working sessions and talks,
we’ll go out and explore the local innovation
Besides, members can join peer circles ecosystem as well.
for topics and/or industries, and join
monthly Community Club calls. Because If you can only join ONE conference next year,
one insight, one a-ha moment can make all make sure it’s Innov8rs. Stay tuned for more
the difference. info via our website soon.

Participation by application only, with

individual and team passes available.

6 The Innovator’s Handbook 2022

Trusted by brands. Loved by peers.

You’ll be in great company. Our 500+ members and 5,500+ event participants have roles like:

• Chief Innovation Officer, VP of Innovation “This is my tribe of lifelong learners

• Head of Innovation, Innovation Program and do-ers. Innov8rs is the only
Director, Innovation Lab/Centre Director place were corporate innovators and
• Venture Lead/Innovation Team Lead intrapreneurs get vulnerable and real
• Individual Intrapreneur, Innovation about the challenges facing disruptors
Team Member today and work together on creating
• Leader/professional in Strategy, IT/Digital, breakthrough opportunities.”
R&D/Product, Marketing, HR/Change/
Transformation “I am blown away with learnings,
reflections and new insights. Such an
Working for brands like amazing crowd with a true sharing
mentality. I have gathered so many
cases for best practice on how to run
innovation, how to measure it, etc.
Further, people are really down to earth,
pragmatic and no-bullshit kind of people
that are creating real impact in the
companies they work for.”

“This was a refreshing reminder that we’re

not alone. Sometimes working at the
front-end of innovation can be a lonely
place, especially in a large 100-year-
old company. Connecting with so many
other innovation professionals acted as a
shot of adrenaline reigniting my drive to
transform our organization.”

Join the tribe

Innov8rs is your best support resource to learn new approaches, solve challenges and
improve outcomes.

If you’d like to know more, let’s discuss how a combination of our online (live + on-
demand) and IRL offerings would support you and your team throughout 2022.

Talk soon!

Hans Balmaekers
Innov8rs.co
[email protected]

The Innovator’s Handbook 2022 7

Table of Contents

12 STRATEGY, LEADERSHIP & 38 5 Mistakes That Are Killing Your

ORGANIZATION Innovation Outcomes

13 Strategic Innovation as Management 40 Overcoming the Innovator’s Paradox:

System How to Win Resources and Support for
Innovative Ideas
16 How Invincible Is Your Company?
42 How To Overcome Resistance
18 Between the Devil and… Locating To Change
a Venture Within an Established
44 A Corporate Innovator’s Story: How I
Organization
Went to the Outer Rim and Back
20 Entrepreneurial Growth: How
46 Is All Innovation Leadership the Same?
Corporates Can Balance Vision &
Capability For a New Era of Growth 47 Developing Transformational
Leadership Currency
22 How To Build A Future-Ready
Organization? 49 Innovation Development Is Being
Disrupted, What Are You Doing
23 The Myths of Disruption: How About It?
Established Firms are Adapting to the
Digital Age
54 GOVERNANCE & PORTFOLIO
25 Lead From the Future – How to Turn MANAGEMENT
Visionary Thinking into Breakthrough
55 How Innovation Drives Shareholder
Growth
Value – The Power of Diversification
27 Actions and Learnings to Increase
56 How World Class Companies Manage
Innovation Impact and Speed to Market
Their Innovation Portfolio
29 Be(come)ing Ambidextrous: What Works
58 How a Growth Board Moves
and What Doesn’t Innovation Forward

31 ING Neo: How to Create an Innovation 60 Measuring Innovation Progress and

Enabled Organization Communicating Innovation Investment

34 5 Lessons From Building Scalable And 62 How to Design a Future-Proof

Sustainable Innovation Capabilities Innovation Portfolio in 6 Steps

37 The Eight Essentials of Innovation 65 Portfolio Predictability: Know What to

Revisited and Turned into Innovation Measure, Create Project Comparability,
Practices and Predict Expected Outcomes

8 The Innovator’s Handbook 2022

67 Why Business Cases Suck and How to 98 Fostering Innovation in
Fix Them a Large Enterprise: IBM’s
Incubator Success
68 Is Agile Killing Stage Gate?

71 Ready to Foster Intrapreneurship 107 BUSINESS DESIGN & VENTURE

With the New ISO 56000 Series on
BUILDING
Innovation Management?
108 The Offer You Can’t Refuse: The Future
72 Jumping Over the Compliance Barrier. of Customer Experience
Driving Innovation in High-Risk
Industries 109 How Business Model Innovation
Can Help Your Firm Embrace
New Opportunities
75 PROGRAM MANAGEMENT
111 How to Nurture the Innovator’s Gift
76 How to Plan and Run a Successful
114 Design Like You Are Right, Test Like You
Online Employee Ideation Challenge
Are Wrong: How to Lead Innovation
77 The 6 Secrets to Bringing Ideas to Life by Asking the Right Questions at the
Right Time
79 The Future of Intrapreneurship: Trends
& Best Practices 116 How To Test New Business Ideas

81 Area 120, Google’s In-House Incubator 118 The Serial Experimentation Approach to
Venture Evolutions
83 How to Help Brilliant Ideas
Move Forward 121 AI in Foresight and Innovation: 4 Steps
to Stress Test Your Innovation Pipeline
85 Innovation is Everyone’s Job
122 The Imperative for Inclusive Innovation
87 Intrapreneurship – Innovative and
Sustainable Business Ideas Invented by 124 Finally, A Framework For How To Build
Employees Businesses From Innovation

89 Stanley X: Getting Your Innovation 125 How to Design an Incubator for Growth

Program From Zero to One and Beyond
128 Scaling at Speed: A New Approach to
91 The Story of InGenius – Nestlé’s Business Building
Global Employee-driven Innovation
Accelerator 130 The Secrets of Taking Moonshots

93 To the Moon and Beyond: Cultivating

Innovation from Within
138 STARTUP COLLABORATION &
94 Top Ten Lessons Learned Standing Up ECOSYSTEM ENGAGEMENT
An Incubator Within a Corporation
139 The Corporate-Startup
96 What Makes Incubation Playbook: Innovate With Startups the
Efforts Successful Right Way

The Innovator’s Handbook 2022 9

140 Avoiding Pitfalls in Strategic Partnering 170 People Innovate, Not Companies
& Open Innovation
172 Innovation Talent Predicts Business
142 Collaborating With Startups – How We Results. Are You Using Yours?
Bridge The Scale Gap
173 The Science of Innovation
144 Creating a “Win-Win-Win” Situation
Through Open Innovation With Startups 175 Building the Teams for Solving
Hard Problems
145 How Corporates Benefit From Billions of
Dollars in Venture Capital 177 Swiss Post’s Innovation Culture –
Snapshot of a Journey
147 How P&G Ventures Collaborates
With Startups 178 Connecting The Dots – Creating an
Innovation Network at the Core of an
148 When to Partner and How to Make it Innovation Ecosystem Inside a Global
Successful? Life-Science Company

149 Why Do Most Business Ecosystems Fail? 180 What Co-Creation Means for IKEA and
How To Leverage its Value to Kickstart a
152 Axel Springer’s Ecosystem Strategy to Co-Create Movement
Become the Leading Digital Publisher
in Europe 182 What Got Us Here, Will Not Get Us There

153 Innovation Ecosystems Enable to Tackle

the Grand Challenges
188 CLIMATE & IMPACT

189 What are the Secrets of Sustainability

155 CULTURE, TALENT & TEAMS Front-Runners?
156 Is Your Company Culture
191 A Decade of Transformation: How the
Killing Innovation?
Climate Crisis Redefines Sustainability
158 The Imagination Machine: How to in Business
Compete on Creativity
193 Delivering True Sustainable Growth –
160 Psychological Safety for Why Eliminating Silos Across Strategy,
High Performance Sustainability & Innovation Functions
Is Key
162 Building Innovation Culture
with Tiny Habits 194 Business Models That Work in the
Circular Economy
164 How to Build an Innovative Culture
197 Impact-Driven Design: Expanding the
166 The Power and Pitfalls of Self- Design Toolbox to Address Tomorrow’s
Appointed Idea Teams Challenges

168 3 Strategies to Nurture Relentless 198 Making the Sustainability Shift at Sandvik:
Curiosity 100,000 Ideas or Innovations by 2030
200 Sustainovation – Insights from Sensing, 210 Permanent Reinvention Mindset
Seizing and Transforming Opportunities
212 Becoming a Rebel in Your Organization
202 The Business Case for Purpose
214 The Next Step: Lessons on Embracing
203 Using Social Innovation to Drive Change and Continuous Improvement
Diversity, Equity, and Inclusion
216 How to Be a More Effective Catalyst
205 Product Management for Social Impact
101 – Lessons from Disrupting Hunger 218 Slow Innovation: Decelerating in a High
Speed World

208 CAREERS & PERSONAL 220 The Dark Side of Corporate Venture
DEVELOPMENT Building

209 Overcoming Obstructionists: The 5 221 The Paradox of Innovation Leadership

Laws Of Intrapreneur Empowerment

Would you like a printed copy of the handbook?

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because you can focus better, or because
you want to add notes and scribbles on
the sides, or just because it just feels
good to not stare at your screen after a
full day of work? Purchase The Innovator’s
Handbook Printed Copy

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100+ sessions covered in the handbook
with The Innovator’s Handbook 2022
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Strategy,
Leadership &
Organization

12 The Innovator’s Handbook 2022

 Strategic Innovation as
Management System

Strategic innovation is an organizational

Gina O’Connor
capability that requires a management
Professor of Innovation
system designed to support the objective Management at
of new business creation, which includes Babson College
reallocation of resources and changing
business models suggests Gina O’Connor,
Professor of Innovation Management at 1. Discovery. A competency of
Babson College. conceptualization. The ability for creation,
recognition, elaboration, and articulation
The question is- how do you design such a of opportunities.
management system that works in parallel
with the core business while supporting the 2. Incubation. A competency of
“new stream”? experimentation. Evolving the opportunity
into a business proposition.
Such a management system is comprised of
eight important elements: 3. Acceleration. A competency of scaling.
Ramping up the business to stand on its
1. Clear mandate own, so it can successfully compete for
2. Culture resources within the core business.
3. Governance
4. Organizational structure Within each of these aspects, there need to
5. Processes be different people, processes, resourcing
6. Talent management strategies, and metrics What you need for
7. Resources discovery will be very different from what
8. Appropriate metrics you’ll need in acceleration. Elements of the
management system have to be designed
These elements need to be designed to within the strategic innovation function to
reinforce one another. Often, even if there accommodate each of those parts.
may be a mandate to create “newstreams”,
we use the same processes, skill sets, Four Dimensions of Uncertainty
resource allocation models, etc as we do for
“mainstream” activities, which undermines Strategic Innovation teams are going to
the objective. encounter uncertainty in four key areas:

Three Organizational • Technical

Competencies for • Market
Strategic Innovation • Resource
• Organizational
When organizations successfully manage
strategic innovation, they display these Of the four, organizational uncertainty is
three competencies: what kills off innovation projects most often.

The Innovator’s Handbook 2022 13

This is the politics of the organization and end up developing an emergent strategy
the confusion about where the “newstream” for what the business will look like in the
business fits in the organization’s current new area. All the learning gets wrapped into
divisional structure. New business models determining the first point of entry in the
are often force fitted into an existing market, with a plan for follow-on products and
organization, and people in the core can use cases.
end up attacking and incrementalizing
the new opportunities. Organizations will When there is traction, and you start getting
have to manage organizational uncertainty repeat business, it’s time to scale. That’s when
through governance models, such as an it’s time to invest the big money. Discovery
Innovation Council. and incubation are not that expensive, but
acceleration is. Commitment to the Domain
Avoiding the Problematic of Innovation intent at the most senior
Project Pipeline levels of the organization helps assure that
funding will be available when it’s time to scale
Large corporations have a tendency to the business.
believe that whatever goes into the project
pipeline has to come out, otherwise, it’s Creating Structural Ambidexterity
considered a failure. Instead, move away
from the pipeline idea to a portfolio of Don’t ask people to do breakthrough
opportunities that are incubated within a big innovation in the morning and incremental
problem/opportunity space, e.g. a “domain of innovation in the afternoon. Instead,
innovation intent.” organizations need structural ambidexterity,
which they achieve when the exploration and
In order to hedge their bets, company leaders exploitation activities are separate parts of
(members of the Innovation Council) should the organization.
identify and commit to several domains of
innovation intent that they firmly believe will Management will need to define the structure
become the “newstream” businesses that fuel and handle the integration of the two at
the company’s future. the level of the Innovation Council. But
it is important to clearly define roles and
You start by thinking about the problem/ responsibilities for the strategic innovation
opportunity areas that your organization function so that “newstream” creation is a
sees as future states to which it can persistent activity in the organization and so
contribute. It takes work to identify these the organization can consistently attend to
and articulate them in a compelling manner. improving their strategic innovation capability.
These become your domains of innovation Strategic innovation roles are defined for
intent. Then, investigate those areas with discovery, incubation and acceleration at the
many opportunities. The discovery work is project/opportunity level, the domain level
to populate the opportunity landscape of and the portfolio level.
that domain.
This allows the core to commit to operational
Then you can move on to incubation, where excellence, continuing with what it knows and
you can experiment with viable opportunities working on doing it better, faster, and cheaper.
to find an emerging business platform. The strategic innovation function can then
Probably 80% of those possibilities will fail exist with its own mandate and management
as you vet them through incubation, but you’ll system designed to support it.

14 The Innovator’s Handbook 2022

Innovation Role-Related The orchestrator can scan the organization as
Challenges & Roadblocks a whole and look for innovation islands acting
independently but doing many of the same
Strategic Innovation needs to be a discipline things. They can build a system to connect
and a profession in its own right, with roles islands of innovation and get people the right
legitimized and paths for advancement. training and tools. They can also work with
The people who volunteer for the task of the innovation council to review the portfolio
strategic innovation face a lot of challenges of emerging businesses. The orchestrator
and risk their careers. Retention matters, constantly audits the strategic innovation
too, because when innovators leave they function to find approaches to continuous
often join competitor organizations in new improvement in its outcomes. The Chief
innovation roles. Innovation Officer works with the Innovation
Council to develop the domains of innovation
Within a strategic innovation structure, you intent and align them with the company’s
need to have leadership and support people strategy for the future. S/he works with the
for the discovery, incubation, and acceleration council to review the portfolio of emerging
phases. Companies may resist this structure, businesses and help guide their direction as
claiming it adds too much overhead cost, decision points emerge.
but it’s necessary if strategic innovation
is to become a sustained capability in The biggest roadblock companies often
the organization. face is having the right composition and
understanding of the role of the innovation
There are ways to adopt the roles framework council. This group should be senior
for smaller organizations or organizations corporate leadership who are less concerned
that are just starting to build their strategic with the health of one business unit over
innovation capability. You can start small and another, and more concerned with the long
build from there with the discovery, incubation run health of the organization.
and acceleration roles.
Making this part of the process clear will
At the top of the innovation structure, help teams work on opportunities that are
you need a Chief Innovation Officer and/ strategically relevant. If the mandate isn’t clear,
or an orchestrator. Sometimes one person then they can end up having the rug pulled
plays both roles, but not once the strategic out from under them when it comes time to
innovation function matures. invest in scaling.

The Innovator’s Handbook 2022 15

 How Invincible Is
Your Company?

Leaders today are embracing that

Alexander Osterwalder
innovation is important, and something that
& Tendayi Viki
they can use to drive their growth. However, Associate Partner /
the fundamental question then becomes, Co-founder at Strategyzer
how is that done?

Instead of innovation being a one-run-off ideas need to be killed. If they are not, you will
project or merely innovation theater, what can condemn your teams to succeed. And when
companies do over and over again? So, what these teams are condemned to succeeding,
is it that makes a company invincible- being what ends up happening is they will hedge
able to reinvent themselves systematically? their bets because they will not want to
look bad.
Alex Osterwalder, Co-Founder at Strategyzer
and author of The Invincible Company, and This does not help the company’s innovation
Tendayi Viki, Associate Partner at Strategyzer performance. In truth, it stops the best ideas
and author of Pirates in the Navy, typically use from emerging. That is why if there’s a no-kill
three questions to determine and measure if rate, you will not have radical projects that
the innovation efforts are having an impact on spur reinvention over time.
the business or not.
The opposite of the kill rate is the number of
Question One: What is the zombie projects a company keeps running.
Kill Rate? These projects are not really providing any
value or evidence of progress; instead they
If companies don’t have a high kill rate of remain in the portfolio because they become
innovation projects, they are probably working someone’s pet project. These zombie projects
only on efficiency innovation, to improve what can actually continue to live forever and fund
they are already doing. themselves, taking away money from what
really matters.
Invincible companies kill a lot of their projects,
all the time. They even kill the good ones, Question Two: What Contributions
because they have so many that they only Are Your Innovation Projects
want to have the best ones survive. Making to Company Growth?

How does this work? You will start at a very The second question that companies need
risky beginning point since you have never to be asking if they are building a repeatable
tested your idea. By following the lean startup innovation ecosystem, is: what contributions
principles you will then de-risk your ideas. are your innovation projects making to
company growth? This is the ultimate metric
The thing is: you cannot pivot yourself to because it looks to what extent what you’re
success. In order to succeed, some of these working on creates value.

16 The Innovator’s Handbook 2022

We can genuinely create value for the Who Should Be Asking These
company, primarily in two ways — by hitting Three Questions?
the top or bottom line, and by creating a shift
in culture that supports innovation. Generally, the individuals that need to be
asking these three questions are the board
You can create a simple 2x2 impact map, of the organization. It’s not the innovation
plotting all the initiatives in your organization teams because the innovation teams do not
and how they score in value creation and influence these three questions. Rather, it’s
culture change. This exercise also helps to the board that hires and fires the CEO and
connect all those separate initiatives together, sets the strategic agenda. As a result, if these
and align them with your organization’s questions are not answered at that level,
strategy and innovation strategy. nothing can be done since the CEO is not
actually in charge of the organization.
In principle, every initiative could be valuable;
it’s not that for example hackathons by their Although the CEO would like to ask these
nature don’t deliver value. But if initiatives like three questions and get the answers they
hackathons are disconnected from the other need, it does not always work out in their
initiatives and there’s no clear link to value favor. Because if they start doing this with a
creation and culture change, that’s when it very conservative and uninformed board, that
becomes innovation theater. has no clue what innovation is it can become
career suicide for the CEO. As a result, these
Question Three: Where questions can only be answered at the board
Does Innovation Live in Your level and implemented by the CEO.
Organization Chart?
Are There Ways to Educate
Finally, the third question is where does the Board?
innovation live in their organization chart?
The best way the board can get educated
Another way to frame the question is: on innovation is to work with the innovation
how much time is their CEO spending on team. Most companies today already
innovation? If the answer is anything less than have innovation teams, where the heads
40%, it is likely the company is not going of the teams meet regularly and report
to truly get innovation. Alternatively, you their findings to someone responsible for
can also have a dual org chart, with a Chief innovation, whom in turn reports to a senior
Entrepreneur at the same level as the CEO. functional leader (could be marketing,
technology, IT and others) who then reports
This is not necessarily about money to the CEO.
but about power. In most organizations,
innovation doesn’t live at the very top of the However, most of these people responsible
management layer, and that’s felt throughout for innovation do not have the level of
the organization. influence that is needed to improve
innovation in the company. So as a result,
These three questions can help you discover these individuals need to start provoking
on which end of the spectrum you are, with conversations about this process internally
innovation theater on the one end, and that could rise up to the level where it
invincible company on the other. reaches the board members.

The Innovator’s Handbook 2022 17

One way that companies make this happen Fundamentally, these companies need to
is through the process of bringing in outside remember that whether they get on board or
thought leaders. However, even with these not, the industry is going to change, and if
fantastic resources and the best intentions, they do not make enough changes on time,
the board may still not be swayed. And they can be left behind. That is why people in
unfortunately, there may not be anything senior leadership roles and the board must
anyone can do about it. understand what innovation can mean for
them and what choices they need to start
making today.

Between the Devil and… Locating

a Venture Within an Established
Organization

When you go about launching new things,

the good news is that there are lots of Rita McGrath
choices of where to locate your efforts. The Professor at Columbia
bad news is that there’s no perfect choice. Business School
Rita McGrath, professor of management at
Columbia Business school and founder of
the innovation platform Valize, shares her
thoughts on the 7 archetypes of innovation
location in established businesses, and how Also, your ventures are likely to move
to ensure success. around in terms of where they belong in the
organisation as they mature, because different
Every venture goes through at least conditions are suitable for different kinds
three stages: ideation, incubation, and of businesses.
acceleration. While most might naturally
locate the major challenge in the The 7 Archetypes of Innovation
ideation phase, incubation and especially Location in an Established Business
acceleration are often more significant
obstacles when the core business threatens Give the Innovation Challenge to a
to dominate systems, processes, resource Line Manager
allocation, and rewards. The path of least resistance certainly creates
the least amount of chaos. But line managers
Seven innovation location archetypes exist tend to have other priorities, and in this
to overcome these obstacles. While none structure, innovation tends to get lost. It’s a
is perfect, each offers unique advantages good way to get started, but likely won’t lead
and disadvantages worthy of consideration. to business-changing innovation.

18 The Innovator’s Handbook 2022

Create an Innovation Structure Within a fall in love with their ventures enough to stop
Line Division reason and data from guiding the incubation
The new line division typically houses a few and acceleration stage.
full-time employees, giving innovation the
attention it demands. But this setup is still Create An Agile Innovation Structure
dependent on the core business; with a bad The most recent archetype takes its lessons
earnings quarter, attention and budget can from agile software development. It’s what
shift away from the innovation division to Michael Sikorsky calls the Permissionless
more short-term initiatives. Organization, embraced by companies like
Amazon and Netflix. Lots of small teams
Place the Venture Effort in R&D focus on specific elements of a challenge,
Within R&D, innovation has the time and swarming around to solve that element of a
space to get its natural attention. But in problem. That dedication and focus leads to a
many R&D divisions, incumbents focus on pinpointed solution that then gets integrated
technology over customer needs, and the back into the core business.
total separation from the core business
can mean that new ideas cannot easily get Done right, each of these archetypes don’t
integrated into the core. just drive innovation separate from the core
business. They help to innovate the core itself,
Provide a Mandate to a Senior Staff Leader looking to potentially transform it for new
That mandate, typically, focuses specifically business opportunities and audiences.
on emerging business opportunities.
Innovation projects and programs get folded Managing Venture Portfolios for
into emerging business opportunities, forcing Optimal Success
alignment between existing and new business.
Each opportunity gets its own leader, and its Regardless of archetype, understanding how
own mandate, which can be effective but also to manage portfolios is crucial to overarching
takes significant management time, attention, organizational success. Especially in
and resources. established organizations, it can be the key to
achieving comprehensive innovation.
Create a New Ventures Division
Take the individual venture mandate, and In that effort, the traditional method of
apply it to the entire business structure, and timestamped horizons is starting to become
you get a venture division. Here, innovation outdated. Even a horizon 3 venture can
takes its rightful place alongside other parts go into the core business in a matter
of the core business, with a time and space to of weeks. Instead, it pays to prioritize
experiment on new ideas and ventures. based on uncertainty. Managing ventures
through checkpoints can help to build a
Create A Direct Reporting Line to the CEO broad portfolio that allows for failure of
Skipping traditional hierarchies, this structure some innovations while others can make it
allows for fast decisions and cuts through through successfully.
much of the red tape potentially holding back
innovation. However, it also falls prey to the A good acronym to use at each checkpoint
CEO’s whims; the leader of the company may is “RACE”. Ask whether you should redirect,
either be too busy to prioritize innovation, or accelerate, continue, or exit.

The Innovator’s Handbook 2022 19

Leadership Structures to 2. Sherpas, who use their organizational and
Support Innovation social capital in the organization to guide
the project in the background.
The final innovation component in an
established organization has to be leadership. 3. Sherpas play a crucial but underrated
Here, three roles have to interplay, each role in the process. They’re pathfinders,
playing a role in creating the right conditions worried not about getting credit but
and environment for success: about the success of the venture on a
daily basis.
Executives, who provide guidance on
overarching direction, backing for a general It’s difficult to overestimate just how important
innovation priority, and funding. leadership is in this process. At their best,
each of the three roles don’t just focus on
1. Entrepreneurs, who take ownership of innovation, but bridge innovation efforts to
the ventures and lead them from ideation impact and match the core business. In the
to acceleration. process, they can remove natural antibodies
to innovation and optimize its chances
of adoption.

Entrepreneurial Growth: How

Corporates Can Balance Vision &
Capability For a New Era of
Growth

Corporations that add new revenue lines

outperform those that do not, yet many Rob Chapman
corporations are still struggling to add and CEO at Founders Intelligence
scale new revenue lines. Innovation as such
isn’t the problem, though. Corporations tend
to be good at identifying opportunities, says
Rob Chapman, CEO of Founders Intelligence.
The problem is that they’re usually bad at Vision
scaling those opportunities to create growth.
An organization’s vision should be a set of
How do organizations make sure they principles that they can use to rethink their
can both discover and scale new revenue approach to growth. The vision should include
opportunities in their market? They need to their beliefs about the future, ambitious
focus on creating entrepreneurial growth goals that require fundamental change, and
through a unified strategy that balances their an integrated process to adjust their vision
vision with their capabilities. based on learnings.

20 The Innovator’s Handbook 2022

Organizations need to start their Capability
entrepreneurial growth framework by
articulating their convictions about the To be capable, organizations need to
future of their industry. This isn’t just a find, nurture, and protect entrepreneurial
new corporate strategy. In fact, a typical talent. They need to create teams,
corporate strategy tends to be the enemy of processes, and governance that deliver
innovation because it’s backward thinking. growth. That should result in the creation
It’s written as a reaction to things that have of a balanced portfolio that responds to
happened in the past. Entrepreneurial growth opportunities.
growth requires the organization to be clear
about what they believe will happen in the Capability starts with people because
future. That point of view is fundamental investors back people more than they back
to innovation success because it focuses ideas. Of the people who left corporate
resources and helps the organization positions to launch a start-up, 93% of them
build innovation activity around meeting said they tried to bring their idea to their
future beliefs. It also allows an organization employer first. When talking to corporations,
to deprioritize things that aren’t moving though, they don’t believe they have the
it forward. entrepreneurial talent in-house. They want to
spend money on finding it elsewhere.
Once the beliefs are clear, organizations can
use them to foster ambition. Organizations The truth is, organizations need to do both.
need to set goals that can’t be achieved by They need to have a structure in place that
maintaining the status quo. Otherwise, there can support someone with a great idea,
is no incentive to change. People can hit whether they are internal or coming from an
their targets by doing what they did last year outside source. The organization needs to
as long as they have a little luck and some create a nurturing environment for those who
market growth. If an organization is serious want to build big new revenue lines.
about innovating, they need to set ambitious
goals that require fundamental change. Organizations need to create a structure
These goals center on those core beliefs in how they build teams and processes as
about the future and incentivize senior staff well as within their governance. This creates
to change. strong mechanisms to bring ideas to market.
The structure should start with a core belief
The final part of the vision requires an about what needs to be delivered, and then
organization to create a feedback loop to making sure there are internal mechanisms to
improve its vision. Rob worked with a beauty deliver it.
company on creating a system within their
corporate structure that mandated this The innovation portfolio is also a key part
feedback loop. The company had to update of an organization’s capability. The portfolio
its core beliefs on a quarterly basis, based needs to balance time-to-market, risk,
on new information from internal projects or and ambition. It needs to also reflect the
outside sources. This formalized the learning organization’s beliefs about future growth
process at a board level. It showed everyone opportunities in the market. The right set of
the value of innovation projects, even when projects should build on and align with core
they don’t work. Organizations need to have beliefs about the future. This can help the
a structure that records those learnings and organization identify key areas of growth it
gives them value within the company. may be missing out on, too.

The Innovator’s Handbook 2022 21

 How To Build A Future-Ready
Organization?

Howard Yu is a professor of innovation

Howard Yu
and management at IMD. He considers
LEGO Professor of
the pandemic a stress test to see whether Management and Innovation
companies were future-ready or not. at IMD Business School
Companies need to look out for the next
seismic event, prepare and be future-
ready when it comes. How do you make will succeed. However, companies need to
that happen? choose a future technology and exploit it
to get an advantage over competitors. For
Part of the answer is to look at the brands example, retail stores that stayed the course
that not only recovered quickly after the with mass marketing and standard products
pandemic hit, but are doing better than are failing, while those who took the leap and
before COVID-19. This is without taking into explored what would come next, personalized
consideration brands like Apple or Amazon, experiences and thrive.
which thrive online. The brands Howard looks
at are traditional retailers. What is it about What qualities allow companies to
those brands that enable them to thrive learn fast enough and experiment
while others fail? It has nothing to do with with enough ideas?
what they sell. Nike is doing very well, while
Under Armour is underperforming. Target They reduce complexity to go fast. Most
is exceeding expectations as Walmart is companies are organized like pyramids with a
leveling out. very rigid top-down structure. This structure,
however, doesn’t deal with change well. Even a
What do the companies that are tiny change can derail the system. So instead,
thriving post-pandemic have in organizations should be fluid like a flock of
common? birds. Each team has extreme autonomy, and
they can react to change quickly.
All the companies that are thriving post-
pandemic invested heavily in their digital With a reduction in complexity, you need
transformation before the pandemic extreme transparency. Document everything
started. The underperforming companies openly and allow everyone to search for
failed to scale when it came to their digital the data. There is no hidden information.
transformation and failed to collect data from Everyone has access to the data they need.
their customers in an organized way. Those Anyone can submit ideas on a company’s
who collected proper data were future- policy, and everyone can see those ideas and
ready and had data to correctly predict what choose to implement them for their teams.
consumers would want and need.
Finally, they collaborate with disruptors. If the
Companies that want to be future-ready company doesn’t have the future technology
also have to place small bets in many ready to go yet, they will partner with a
future technologies as it’s unclear which company that does.

22 The Innovator’s Handbook 2022

 The Myths of Disruption: How
Established Firms are Adapting
to the Digital Age

It is not difficult to persuade people that

Julian Birkinshaw
disruption is happening because there is
Professor of Strategy and
quite a bit of narrative out there on it. In
Entrepreneurship at London
fact, CEOs in every industry are worried Business School
about disruption. However, although most
people think disruption is a big deal, it may
not be as big of an issue as many tend to
believe it is.

We suffer from a sort of neophilia, where and that no industry is immune to it. However,
we like to believe that right now is the time some industries may actually be resistant
when everything is suddenly changing and to this disruption. In fact, full-on creative
that we are on the cusp of disruptive forces. destruction has only occurred in three
However, the trouble with this is that we have sectors. All the other sectors have remained
been saying that for the last 10, 20, 30 years. relatively stable.
And although there’s always some truth to it,
there’s also an awful lot of hyperbole, which Another myth is that disruption happens
is overstated. relatively quickly. However, many of these
disruptive trends take around 20 or 30 years
This is because the consequences of to play out. For instance, it took the media
disruption have varied dramatically from one industry about 20 to 30 years before it
sector to another up to now. For instance, if completely changed Blockbuster and Nokia,
you look at the established companies that and yet, while there are some exceptions to
have been wiped out versus continuing to this rule, such as Kodak, it still took almost
dominate, there is a considerable spectrum of 15 years before disruptions impacted that
them. For example, the photography sector, specific company.
with the likes of Polaroid and Kodak, has
completely disappeared, and we have seen Finally, the third myth surrounding these
full-on disruption there. However, on the other disruptions is that established firms are
hand, the retail banking industry is a much struggling to adapt. However, these types of
more nuanced story as today the industry stories are simply not true. The hard evidence
looks almost exactly as it was 30 years ago, is that established companies are showing
with some minor changes. themselves to be pretty good at reinventing
themselves from within and employing a wide
The Myths and Realities of range of strategies to help them fight back
Disruption and endure.

One disruption myth that keeps popping up is

that digital technology disrupts every industry

The Innovator’s Handbook 2022 23

How To Respond To Potentially These two specific strategies refer to the
Disruptive Technologies? offensive schemes that businesses use today
against disruptions, but defensive techniques
Today, established companies are not only can also be applied. For example, companies
reinventing themselves amongst all this can retrench or basically accept that this
developing disruption, but as it turns out, new technology is creating opportunities
there’s a whole bunch of strategies they that, frankly, they can’t compete directly
are using. against. Instead, they decide to defend
themselves against this technology by
For example, one method these companies are consolidating, merging with rivals, cutting
adopting is using a separate business unit and costs, or using lobbying and protectionism
putting a team of people in charge of fighting to keep those guys out. Or they try
back against the disruptive technologies on migrating away, which refers to the tactic
their own terms. However, this is not always of redeploying assets and money towards
the best way for companies to respond. This is other opportunities because the company
because not all new technologies behave the acknowledges they are not well-positioned
same way. There are many new technologies for the future.
that co-exist with established technologies and
are on a more gradual path of improvement. So although it may be tempting to always
As a result, rather than this new technology fight back against disruptions, there are
becoming potentially disruptive, it is becoming numerous strategies (fighting back, doubling
potentially complementary to what companies down, retrenching, and moving away) that
are already doing. companies can use to succeed in the
long run.
That is why to deal with these disruptions,
established companies have a whole portfolio It’s All About Timing
of responses, meaning that sometimes they
need to fight the disruptor, and sometimes When it comes to responding to disruptions
they need to pull back. Consequently, if and knowing what route you need to take,
a business sees a potentially disruptive whether offense or defensive, the answer
company, they can either fight back directly will often depend on the timing of these
with their own separate business units responses. In truth, many top executives
doing exactly what they have been doing, indicate they are doing all of these strategies
or they can remind themselves what their shown above, especially in the early stages
core competencies were in the first place of emerging technology, since early on,
and see if they can double down on those it is not apparent what the technology’s
existing strengths as a way of fighting back. In commercial potential will be. However, to
other words, the company will try to become succeed in the long run, these companies
even better at doing what they have been will have to eventually make a choice of what
doing and, as a result, squeeze the insurgent they need to do and follow through with
company out so that they do not take much it, and this decision will often come down
market share away from their business. to timing.

24 The Innovator’s Handbook 2022

 Lead From the Future – How
to Turn Visionary Thinking into
Breakthrough Growth

Is a pandemic the wrong time for long-

term thinking? Not for Mark W. Johnson, Mark W. Johnson
cofounder of Innosight. In fact, a long-term Co-Founder and Senior
vision for innovation and growth becomes Partner at Innosight
more important than ever.

The key to success: just overcoming basic That starts with looking beyond the typical
human nature. We’re wired for short-term strategic horizon. Going further out than the
thinking, and that wiring has long resulted traditional three or five years allows leadership
in a lack of prioritization for breakthrough, to see future threats and potential declines,
disruptive new growth efforts. Resources along with new opportunities that weren’t
are allocated to the main business, while apparent in a shorter-term vision. It helps to
leadership focuses on immediate results. avoid growth plateaus or even declines that
happen beyond the typical time frame, building
That’s a difficult process to overcome. But towards sustainable growth instead.
it’s far from impossible. To sustain growth,
long-term plans need to mesh with short-term Looking ten years out will not create a
plans, with a strong and actionable vision that perfect picture. It will, however, create a more
translates into a strategy. That, in turn, leads comprehensive point of view, with combined
to a process called “future back,” optimized to voices from leadership developing a type
turn vague but valuable visionary thinking into of impressionist painting that begins to see
active, real, long-term growth. future possibilities and potential scenarios.
It does, of course, require a more specific
How to Overcome the Natural definition of what we typically think of as
Biases of Short-Term Thinking terms like “vision” and “strategy.”

Too often, leadership focuses on short- Vision vs. Strategy: What Do They
term thinking. Overcoming that bias is vital Actually Mean?
to building a more innovative, growth-
oriented organization. What are the first things that come to mind
when thinking about the terms vision and
One way to overcome it: turning the vision strategy? For most organizations, the answers
statement into a story. Done correctly, this will probably revolve around something
story brings your vision statement to life, beyond daily operations for the latter and a
providing clarity to the future goals of the 1–2 sentence statement for the former. But
organization. The story talks about what could in reality, an effective vision is far more than
and should be, translating directly into a that. It’s distinct from strategy, with a few
strategy that helps you get there. vital characteristics:

The Innovator’s Handbook 2022 25

• A vision should impact choices made becomes a more prominent part of the
related to the long-term future, at least entire organization.
five years out or more.
• A vision defines a potential “new game Of course, that requires full leadership buy-in.
to play”, like a new business opportunity, From the COE as the agenda-setter to the
audience, or shift in organizational focus. rest of the organization’s leaders, everyone
• A vision defines the destination of the needs to carve out enough time to spend at
company, the ideal endpoint at which least a little bit on long-term thinking every
it could (and should) be considered month, quarter, and year. .
holistically successful.
• A vision inspires the entire organization to Future-back thinking, then, is iterative
work towards that final destination. learning. It’s the ability to explore, envision,
and discover as a continuum to identify
Compare that with a strategy, which is more new propellants and possibilities of where
short-term focused, outlining how to win in the organization can go, and what it can
the existing game or an already-defined new become. Continuing to review, ideate,
game. By defining the journey to the endpoint, address, and adjust the vision creates a
it operationalizes the vision and begins to put more agile, dynamic system that always
it into action. works to address the future, innovation,
and growth.
The Future-Back Approach to
Innovation Future-Back Thinking in Action:
The Apple Success Story
It’s easy to say that organizations should
be forward-thinking. It’s much more difficult Any story of innovation sooner or later
to take that approach in a way that actually mentions Apple. But there’s a good reason
encourages and drives innovation. for that. When the electronics giant faced
a company-threatening crisis during the
Most organizations think of the future as a Dotcom bubble in the late 1990s, Steve
continuation of the present. They predict Jobs gathered his top company leadership
future trends based on current data, facts, together and asked a simple question: what
and analytics, pointing towards clear solutions will our company, and our industry, look like in
that build from the current status quo and 10 years?
base level.
The result of this exercise was what we now
That’s an important approach, but it can’t know as Apple’s Digital Hub. It envisioned
stand alone. Future-back thinking imagines Apple’s computing technology company
not what is, but what could be. It’s more driving all types of new and emerging
imaginative and creative, and as a result more consumer electronics devices, turning
ambiguous and abstract, drawing a distinction existing core competency into a new type
from the present. Questions are kept open of business model, a new industry, and
deliberately, while a clean sheet leads to new audiences.
more systems-oriented and discovery-
based thinking. If leadership can spend even We all know the results. First came the iPod in
10% on this mode of thinking, innovation 2001. That was followed by the iTunes Store

26 The Innovator’s Handbook 2022

in 2003, which (especially once combined envision the future in 2000, they didn’t come
with the iPod) created a new business model up with these products. But they did create
entirely. Apple rounded out the decade with a real, actionable vision that every major
the iPhone in 2007 and the iPad in 2010, truly innovation in the years that followed could
making good on its “Digital Hub” promise from point back to. Keeping that vision in front of
ten years prior. them allowed every level of the company to
innovate, remain focused, and avoid getting
When Steve Jobs gathered his lieutenants to distracted by the short-term.

Actions and Learnings to

Increase Innovation Impact
and Speed to Market

Alexa Dembek is DuPont’s Chief Technology

and Sustainability Officer. DuPont is a Alexa Dembek
legacy company that’s been around for Chief Technology and
more than 200 years, and they’ve been Sustainability Officer at Dupont
around that long because they know how to
pivot and stay relevant for what’s needed in
the future. They have a constantly changing
portfolio and capabilities to innovate for
what’s coming next.

By thinking about innovation holistically, DuPont’s Transformation Journey

DuPont not only considers how to increase
the impact of their investments but also how DuPont went on a journey to create an
to do it quickly while staying aligned with their innovation portfolio that’s multi-industrial
mission. Innovation isn’t just about delivering and drives what they believe matters. The
new products, either. It’s about developing decision to start the innovation journey began
new applications, new business models, when it was clear that the pathway they
new processes, and incorporating digital were on wasn’t delivering enough top-line
solutions. Not only does this solve customer growth, bottom-line growth, or return on their
problems, but it helps DuPont tackle its own invested capital. Until they could get those
sustainability challenges. financial perspectives right, they needed
to keep making changes. Those changes
So how did they put innovation at the required innovation because innovation is the
forefront of their mission and start increasing driver for growth.
their impact?

The Innovator’s Handbook 2022 27

While the innovation journey started in 2016, current market growth. A sponsor team made
it still continues today. DuPont is perpetually up of members from each of the businesses
pursuing and improving innovation, taking guides the platform’s investments. They
on the innovator’s mindset that it’s never decide when to ramp up, double down, or
good enough and asking what more they can shut it down. It’s an organizational design
do. They ask themselves how they can get that’s fast and responsive and allows them to
faster, looking for areas of opportunity, and look at innovations holistically. It isn’t limited
challenge themselves to think about what’s by the current definition of the business.
holding them back.
The trick to a company as large as DuPont is
Of course, there are always detractors when knowing how to take advantage of its scale
it comes to innovation. One of the biggest and breadth while still being agile. These
detractors on DuPont’s innovation journey innovation platforms are part of that solution.
came in the form of nostalgia. Alexa says that
there are always going to be people who say, Portfolio Management
“This isn’t the way we do things around here.”
DuPont adopts a core-adjacent model when
Innovation requires a cultural change. There choosing where to invest. They protect
has to be a willingness to change the way the core of the business with sufficient
you work if you are going to deliver on investment. There is no need to invest in
the purpose of the company and make a innovation because these core areas aren’t
difference in people’s lives. Get people to going to grow. DuPont’s goal is to provide a
stop looking in the rear-view mirror and sufficient level of investment and then drive
thinking about the good old days. Those days productivity in the core business.
are over, and now it’s time to look forward.
Don’t let nostalgia be a reason not to change. Adjacent businesses, however, should be a
place of double-digit growth opportunities.
Platforms for Innovation This isn’t about productivity, but about having
a growth mindset. Adjacent businesses
DuPont has three businesses, each of them don’t need a five-year plan. They need to
making about $5 billion in revenue annually. look at what’s happening in the next three
They have a traditional structure, with a months. They need to be thinking about the
business president who owns the short-term next experiment and whether they have the
and long-term results. But Alexa says you can’t capability to bring innovation to the market.
believe the way you’ve structured a company
aligns well with the way the markets work. To DuPont is intentional about choosing where
align innovation more directly with the market, to extend their current business. They are
DuPont set up innovation platforms. mindful about where they elect to participate
and what problems they want to solve.
The innovation platforms target growth areas Businesses can keep it simple by asking
where DuPont needs to invest for the future. what problem they are solving, whether it’s
They start the platform by looking at an investable, and if they have what it takes to
important problem that needs solving which make it happen. If you do, go for it. If you
aligns with the enterprises’ capabilities and don’t, stop.

28 The Innovator’s Handbook 2022

Innovation has to extend from the core DuPont’s portfolio doesn’t look anything like
business into an area where DuPont can it did 20 years ago, let alone 200 years ago.
be relevant. This idea plays into portfolio Portfolios need to be constantly reinvested
management, too. Portfolios can’t be static. and changing to stay relevant.

Be(come)ing Ambidextrous:
What Works and What Doesn’t

Much has been written (and argued) about

“the Ambidextrous Organization” since the Tim Kidd, Line Lyst &
Bernd Zimmermann
early 2000’s when Charles O’Reilly and (formerly) DSM / GN Group /
Michael Tushman found that ambidextrous (formerly) Siemens Healthineers
organizations were significantly more
successful in launching breakthrough
products or services. What are some of the specific
challenges that made your companies
The idea makes perfect sense: ambidextrous pursue ambidexterity?
organizations separate their new, exploratory
units from their traditional, exploitative ones, Bernd: We got involved with ambidexterity
allowing for different processes, structures, and while learning how to cope with dualities. We
cultures; at the same time, they maintain tight don’t have a separate innovation lab, but we’re
links across units at the senior executive level. trying to manage the present and the future
within the same company.
Yet is reality keeping up with the original
idea? Are we indeed seeing better outcomes Line: We see seismic changes in the market
when innovation is structured with separate both in terms of new technologies like
“units” for exploration vs exploitation? Artificial Intelligence as well as new players
entering our domain. At the same time we
Here’s what Tim Kidd (then Innovation have an existing business that greatly benefits
Excellence Lead at DSM), Line Lyst from these new technologies.
(Chief Entrepreneur at GN Group) and
Bernd Zimmermann (then Global Head of Tim: We’re looking at transformative
Organization Development and Innovation at innovation and how to apply tools, practices,
Siemens Healthineers) discussed. and mindsets from being an ambidextrous
organization back to the business units. We
Ambidexterity is especially relevant to wanted to build an organizational structure
businesses that need to find a future that was able to think beyond the core. That
competitive advantage while optimizing was the transformational driver; to turn it into
their current business at the same time. a profession and not a single campaign.

The Innovator’s Handbook 2022 29

 Describe how you manage the balance of a unit to provide space for that. Equally, once
exploration and exploitation? innovations get back into the business, there
need to be structures in place to make sure
Tim: We have business groups with their own they aren’t squashed by the company.
innovation units. Those units look to exploit
and grow the core with incremental innovation Tim: It’s not us versus them. It’s about
while looking for adjacencies. Within the delivering value for the company.
innovation center, we set up an incubation
center and a venturing arm for investment in Is it becoming difficult to maintain that
outside innovations. separation as there is more pressure in
the core businesses to innovate?
Bernd: We don’t have structural ambidexterity,
but a conceptual one where all employees Tim: There is a lot more pressure. At DSM, we’re
are encouraged to innovate and optimize. looking at how to help the core businesses
If you divide innovation from the rest of the innovate their capabilities in adjacent markets.
organization, you create a two-class system. While every innovator understands the
We want to be a cohesive family. We foster challenge of uncertainty, we’re helping the
innovative actions through leadership. running businesses learn to embrace it.

Line: At GN, we aim to transform the existing Line: The biggest challenge comes from
business with the business. That is why getting enough resources. Not money, but
VentureWorks (our innovation unit) is located people. People already have a full calendar
inside the company and we work closely from working in the core business. So when
together with people across the company. you want to do new stuff on top of that,
That helps to ensure the innovations flow something either has to go or you need more
back into the mothership. people. There is a big machine in the core
business that needs to continue running at
How do you protect initiatives? the same time.

Bernd: We founded T Club, a transformation Is it challenging to find enough people

club, where in-company innovators can with an entrepreneurial mindset within a
protect and support each other on a corporate environment?
community level. There has to be a discussion
about who has value to the company, too. Bernd: Both intrapreneurs and entrepreneurs
Innovators are often treated as heroes, but have great qualities and skills that the other
the execution teams have important value doesn’t have. If people want to do something,
to the company, too. If a company can they’ll find a way to make it happen. If you
encourage valuing each other, then protection make the story interesting enough, people will
shouldn’t be an issue. support you. We offer innovation training that
focuses on design thinking, storytelling, and
Line: Innovation teams need protection, both in business model innovation. That way people
terms of funding, how they work, and how they can talk about the business side and not just
are organized. That is why we have established the invention.

30 The Innovator’s Handbook 2022

Line: Some people don’t have what it takes. saying they want disruption, but if you probe,
When you work with innovation, there are a you’ll find that they really want to stay close
lot of uncertainties and risks, and you need to the core business. Also, once you have the
to work in a different way than you are used resources in place, the most important part to
to. Some people simply don’t thrive in that become successful is speed to revenue. No
type of environment. In general though, I have matter how much support you have from the
always found there are more people with an c-suite – before a year has passed they’ll be
entrepreneurial mindset than there is room for. asking about results. The faster you can show
results, the better.
Tim: In an organization as large as DSM, you
are going to find entrepreneurs. The key is Tim: Have a strong purpose behind your
you need to support them. Encourage them innovation culture and mindset. Apply what
with the freedom to experiment and test. you preach and learn fast. It might feel like
You can try to hire entrepreneurs, but if they failing fast, but it’s only a failure if you don’t
aren’t used to corporate life it’s a good way learn from it. Having that mindset and culture
to kill them. That’s the benefit of having an is as important as having c-suite support.
intrapreneur; they understand the corporate
culture but have an entrepreneurial mindset. Bernd: You don’t need less leadership, you
need different leadership. Foster de-learning
What were your key learnings for making biases as a corporation and as an individual.
innovation successful? Be okay with having a fluid identity, because
you’ll change over time. Have a strong
Line: It’s fundamental to have the entire purpose and manage the tension that comes
c-suite onboard, and be aligned with their from duality. That duality can be joyful, not
strategic direction. You might have the c-suite necessarily stressful.

ING Neo: How to Create an

Innovation Enabled Organization

What does centralized innovation look like

at a major financial institution? According to Lieven Haesaert
Global Lead Innovation
Lieven Haesaert, Global Lead of Innovation
Transformation & Management
Transformation and Management at ING,
at ING
it looks a lot like the unit he belongs to:
ING Neo. He offers a relevant case study
for any business looking to centralize their
innovation efforts.

The Innovator’s Handbook 2022 31

Known globally as a pioneer in direct banking, 3 Reasons Behind ING’s Central
ING is no stranger to innovation in its industry. Innovation Model
And yet, in 2020, it realized the need to make
innovation a more central part of its business Before the creation of ING Neo, innovation
model. The result: ING Neo, a business unit was not a foreign concept to the business.
focused specifically on disruption and new And yet, leadership realized the need for an
business models independently of the core enhanced innovation model because of three
banking unit. key, common challenges it kept encountering:

ING Neo reports directly to the CEO. Separate 1. Short-term vs. long-term approaches
from the traditional org chart, it can influence Every company faces an inherent tension
innovation across the entire organization, between short-term horizons, between
including influencing the core bank to change one and three years into the future, and
over time. It’s the combination of all innovation horizons that lead beyond that. At ING, it
activities across ING into a single area was the three-to-ten year horizon that was
looking towards the long-term horizon. It’s in especially challenging.
service of the bank’s core goals, to provide
the business with the right tools, the right A Chief Innovation Office was already in place,
capabilities, and the right help in local unit but this was a staff department that needed
setups to allow for incremental improvements, to rely too much on the quarterly cycle of the
ongoing business transformation and core business to fund disruptive innovation. In
disruptive innovation. turn, initiatives were frequently cut mid-flight
in favor of short-term goals. This resulted
In service of that goal, ING Neo helps to in a stop-go effect that ultimately is harmful
manage 4 core innovation-related functions: for an impactful innovation effort. Splitting
innovation into a separate, autonomous unit is
1. Traditional innovation labs that find to allow for a stronger, more consistent focus
customer problems, and innovative on the long term
solutions to these problems.
2. Innovation efforts spread too thinly
2. A Ventures team that looks for across the organization
investments in innovative FinTech At ING, -the credo is that innovation is
companies as a minority stakeholder. everyone’s job - which mainly pertains to the
day-to-day incremental innovation. However
3. An active FinTech scouting team to bring when it is about disruptive innovation efforts,
innovative solutions to the core business. The standing business often lacks the
dedicated attention, resources, governance
4. Innovation culture within the core bank, and incentives to focus on the long-term
leveraging incremental innovation within or deal with the uncertainties inherent to
each department. disruptive innovation efforts.

In total, ING Neo is home to about 150–200 In addition, conducting innovation

employees within the 57,000-strong experiments was highly dependent on
larger organization. a myriad of other functions and policies

32 The Innovator’s Handbook 2022

throughout the bank, such as IT, Risk, HR, For ING Neo, that means leveraging people
Finance, Procurement.... In many instances, from the core bank in the process. They
supporting the innovation experiments was become experts or sponsors, continuously
e at its best an additional task in magic time challenging potential solutions to help build
and at its worst “noise” that one rather not propositions that will actually succeed.
deal with. ING Neo offers the opportunity for
a true, cross-departmental innovation focus, Measuring Innovation at ING Neo
pooling innovation resources and support
functions to create true oversight and an Barely a year into the new set-up, and given
overarching consistent framework for success. the time horizon in question, measuring
success at ING Neo is not yet an absolute.
3. Difficulties scaling innovation initiatives The team does, however, check itself against
Finally, innovation takes time. The pre-scale a few core variables to help it determine
phase alone can take two years or more, and the success of this endeavor and any
moving further presented an organizational individual innovations:
challenge. ING’s innovation governance
and organisational set-up prescribed that 1. What are the positive effects that
initiatives that graduated successfully from customers perceive in any innovations
ING’s Innovation Labs had to be handed over already put into market?
to the standing business organisation. Doing
this at such an early stage, these initiatives 2. How are we successful in driving
then faced the risk of early deprioritization - innovation across the business? This
as not yet mature enough to contribute to the includes asking pertinent questions to
bottom-line - or scaling it prematurely, leading employees about their perception of ING
to deceiving results. as an innovative company, etc.

The ING Neo set-up allows initiatives to 3. Have we made innovation a repeatable
mature within a ring-fenced environment capability, an engine that can deal with
until they deliver sustained impact and can new uncertainties in the future?
truly scale. ING Neo therefore covers for the
full innovation cycle - truly understanding Beyond these more general questions, Neo
customer problems, taking the time to validate teams also look at traditional effort vs. output
potential ideas, pilot and scale the solution. metrics, number of IDs in the funnel, and other
tactical numbers designed to focus on only
How ING Neo Influences the the most effective innovations with highest
Core Business ROI potential, and do so in an efficient way.

ING Neo might be decoupled from everyday Initial Indicators of Success

processes, but its interactions with the core
bank are still vital. Every effort ultimately While much is still to be learned from
needs to be connected to the core bank, ING’s business innovation model, early
designed to help customers improve their indications are positive. The unit has been
lives and experiences with new and improved able to let initiatives scale in a proper, ring
products and services. fenced environment, and working at the ING

The Innovator’s Handbook 2022 33

Neo shop has become a popular spot for increasingly relevant across industries and
employees across the larger business. organizations: separating innovation from
regular business processes to give it the
That all of this has been accomplished in the emphasis and priority it deserves to thrive
midst of the COVID-19 pandemic is not just a while safeguarding the connection and cross-
tribute to the team, but to a business model fertilisation with the core business.

5 Lessons From Building Scalable

And Sustainable Innovation
Capabilities

Even the best intentions don’t matter

much in the innovation process. Especially Jonathan Bertfield
at large and established organizations, Senior Faculty at
scalability and sustainability is key for Lean Startup Co
innovative ideas to make a tangible
business impact. Jonathan Bertfield, Senior
Faculty at Lean Startup Co., shares his
lessons from working with major players like
the National Security Agency, MasterCard,
and Cargill.

Lesson #1: How You Start Your better products. Similarly, the innovation
Journey Will Likely Not Be How journey can be improved and optimized
You End It based on learnings along the way,
optimizing or changing tracks continually
Organizations like MasterCard, Cargill, and as needed.
the NSA have very different organization
goals. But their journey, in many ways, is This lesson is evident at the NSA, a huge
actually surprisingly similar. For instance, organization looking to become more agile
they all share twists in the road, amending and responsive amidst the forces typically
the roadmap even as it’s being planned slowing down a bureaucratic organization
and executed. such as this. A first attempt at becoming
more agile through 3D printing prototypes
In that way, the innovation journey to to get around procurement led to random
scalability and sustainability is surprisingly innovations that didn’t actually match the
similar to the Lean Startup method of organization’s larger purpose and goals. So,
product development. The focus is not on a instead, the journey shifted to teaching an
method that’s set in stone, but on learnings innovation mindset, teaching managers and
that can lead to better prototypes, and employees “how to fish”.

34 The Innovator’s Handbook 2022

That process again fell short when managers measured the number of participants in
didn’t buy in within the legacy hierarchical its new growth accelerator.
structure, leading to another shift. Now, • When looking to scale its accelerator
department leaders were brought in as programs, it managed both its teams
partners to build buy-in, with an emphasis and its kill rate and time to rationalize
on solving organization-wide problems. investments and priorities.
Continuous shifts of the innovation process,
based on learnings of what didn’t work, Each KPI is in service of a larger goal. But each
eventually led to a process that has begun to also supports that specific step in the journey,
reach the NSA’s innovation goal of enterprise- resulting in vital buy-in from every stakeholder.
wide agility.
Lesson #3: Strategic Alignment Is
Lesson #2: At Each Stage Of The Non-Negotiable
Journey, You Should Be Looking
For Impact In other words, every innovation has to connect
to the broader business strategy. In a silo, even
Even though innovation is a long-term the best ideas run into trouble. If an opportunity
process, it isn’t enough to simply look for emerges through an innovation pipeline, but no
long-term, revenue-related lagging indicators one is interested in funding it as part of the core
of change. Short-term wins at every stage business, it likely still won’t succeed.
of the innovation journey can help even the
most hesitant managers and leaders buy into This became evident at Cargill, a global food
the benefits of a more innovative process. production and service company that with
its $114 billion annual revenue is the largest
This became especially relevant for Tektronix, privately held corporation in the U.S.
is a measurement insight company that
designs and manufactures hardware parts Cargill succeeded in an attempt to build
for routers and other computer and machine more digital capacity specifically because it
peripherals. Its products need to perform up embraced the concept of strategic alignment.
to and above high standards to avoid knock- Funding came from across the organization,
on effects on the supply chain. and the innovation focus was broad enough
to encompass all of these areas. A growth
To get there, Tektronix built specific KPIs board, consisting of leaders from the different
and impact metrics for every step of its businesses along with c-suite members, was
innovation journey: all put through a comprehensive training
program to get them up to speed.
• When optimizing its resources, it
measured the amount of engineers The result was a continuous pipeline of
shifted to more R&D programs. products emerging from initial problems
• When developing new ideas, it measured and ideas, but they still required significant
the number of ideas in its pipeline. funding. As a solution, Cargill began to
• When installing a growth board, it think of alignment at the earliest part of the
measured metered funding based on process, moving through only ideas that
evidence along with alignment to the truly aligned with business goals to avoid
business strategy. investments in promising but ultimately
• When building internal capabilities, it irrelevant innovations later on.

The Innovator’s Handbook 2022 35

Lesson #4: Break Silos And Push Lesson #5: Understand What
Decision-Making As Low As Success Looks Like For You
Possible
There is no single measure of innovation
Silos make it hard to make decisions. A success. Instead, it differs by culture, industry,
bottleneck of senior leadership has to and individual situation. Defining that success
break through, which reduces ownership. is a vital part of making the innovation journey
At MasterCard, innovation was governed scalable and repeatable.
by one large committee, only meeting
quarterly and leaving little time to decide For Tektronix, that meant understanding
whether an innovation opportunity was worth exactly how to reduce risk before a product
moving forward. could be manufactured. The company now
pushes new ideas through three different
The shift to growth boards here proved gates, allowing them to allocate funding based
especially fruitful because it avoided a on that evidence. Success depends on both
problem of perception, where presenting and quality validation and funnel velocity, using
getting rejected on unproven ideas could be KPIs to measure real opportunity and traction.
career enders for employees.
One benefit of those metrics is being
Thanks to growth boards and the opportunity able to say no. That allowed Tektronix the
to evaluate ideas and move them through ability to dedicate its human resources on
a series of stages, along with consistent fewer but more worthwhile projects that
coaching and customer evaluation, that are truly strategically aligned, allowing
mindset began to shift. It removed the risk, more time for training and true success.
leadership became accountable, and more Measuring what’s critical to them has allowed
sessions meant more room for potential new Tektronix to embrace the entire process
innovations to breathe. of innovation more fully across all levels of
the organization.

36 The Innovator’s Handbook 2022

 The Eight Essentials of Innovation
Revisited and Turned into
Innovation Practices

A lot of companies reacted to the COVID

pandemic by hitting pause on their Morten Benn
innovation efforts. That pause, though, could Partner at NOSCO
be a big mistake for them in the long run.

A study by McKinsey showed that businesses

with a high commitment to innovation 7. Extend: capitalizing on an external network
performed 2.4x better than their competitors. of partners to bring new ideas to market
There is evidence that more innovative
companies recover from times of financial 8. Mobilize: creating a culture of innovation
hardship faster, too. Organizations should internally that’s constantly generating
consider maintaining – or even increasing – new ideas
their commitment to innovation if they want to
build sustainable profitability. Companies that master at least five of
these practices tend to outperform their
During McKinsey’s landmark study on competition, according to McKinsey.
innovation, the research group identified And while all the practices are important,
eight essential practices that led to growth in says Morten Been, Partner at NOSCO,
organizations. These were: “Aspiration” is the best place to start. By
taking the practice of Aspiration seriously, an
1. Aspire: regarding innovation as critical organization can create a strong framework
and setting goals that drive the to guide the rest of the innovation process.
organization toward it When you know what the goal is, you can
identify clear action and create a commitment
2. Choose: building a time-risk balanced to meaningful funding.
portfolio of initiatives in line with aspirations
One of the primary issues in organizations
3. Discover: having actionable insights that today is that they view a lack of internal
can translate into new profit centers innovation as a lack of ideas. In reality, it’s a
resource allocation issue. Ideas are easier to
4. Evolve: turning those ideas into new come by when you have a clear direction, and
products or services that creates a focus for resource allocation
and management backing.
5. Accelerate: launching new ideas quickly
and effectively Once an organization identifies its aspirations,
it can turn them into quantifiable targets. This
6. Scale: building a business from a new ties innovation to the overall strategy within
product or service that is scalable the organization, and the targets can then be
and replicable used to create a strategic roadmap. Next, the

The Innovator’s Handbook 2022 37

executive team will want to use the targets to Choosing the right ideas is about much more
develop specific KPIs for the innovation team. than luck. Organizations need to set up a
Some of the KPIs they’ve seen yield strong process and internal culture that delivers
results for organizations include: new ideas to the portfolio that are in line with
aspirational goals. The practice of choosing is
• Establishing an incubation zone that’s about creating a time-risk balanced portfolio
continuously fed with new ideas to explore. that raises the probability of choosing the
• Establishing responsibility for a portfolio right ideas and providing sufficient funding to
of ideas. make them a success.
• Supporting innovation culture and
growing innovation capabilities across Creating a time-risk balanced portfolio gives
the organization. an organization an opportunity to succeed
in both the short and long term. They also
While the innovation team may bear the allow the company to focus on both core
responsibility of meeting the KPIs, business and disruptive innovation efforts, or “easy
unit leaders should share some of the wins” and “moonshots.” Morten recommends
responsibility. After all, they will be managing following the three horizon model and
the implementation and acceleration of ideas creating a strong foundation for the portfolio
coming from the team. through executive commitment.

Once goals and KPIs are in place, it’s a matter Morten also recommends using the eight
of ensuring the organization is choosing practices as a guideline for constantly
the right projects to execute. That means and consistently improving the innovation
after Aspire, Choose is the most important process within the company. It’s like
practice on McKinsey’s list. The two are also a muscle, he says. The more you use
very closely linked. Organizations need to the eight practices, the stronger your
select innovative opportunities with direct ties organization gets at innovation as a whole.
to their aspirations. If you don’t, it’s difficult That’s when you can start to see the
to get meaningful funding to move an idea payoff McKinsey found happening in other
through the innovation process. innovative organizations.

5 Mistakes That Are Killing Your

Innovation Outcomes

Opposite to the opening sentence in Leo

Tolstoy’s novel Anna Karenina -happy
Ahi Gvirtsman
families are all alike; every unhappy family is
Co-Founder at Spyre Group
unhappy in its own way- over the last years,
Ahi Gvirtsman, co-founder at Spyre Group
and former Vice President at HP, has seen
that organizations that are unhappy with
their innovation performance are very similar.

38 The Innovator’s Handbook 2022

Regardless of what industry you are in, what A reasonable amount of current projects in
your goals for innovation are, and how you are your portfolio at any given time is about three
going about achieving those goals, common to five. Limiting your portfolio size means
bottlenecks may be squeezing the life out of having a higher failure risk overall. If you
your innovation initiatives without you knowing it. don’t try enough projects, your chance of
success becomes less for the innovation you
Zooming in on what makes these companies want to achieve. The point is to experiment
unhappy with their performance, Ahi shares through projects to help increase your
five common mistakes that they often make portfolio success.
(and what to do to overcome them).
#3 “Being Right” Over “Doing
#1 Valuing Opinions Over Evidence Right Now”

When exploring a new opportunity (such Executives are typically the ones who
as an idea or product), many organizations make the final decisions about innovation
go directly to the proof of concept stage opportunities. They have to look at the
to check if they can build it, after making a data from your experiments and decide if
selection decision. However, this is costly, as it’s a good fit for the company. Even if you
it limits the number of opportunities they will think you’re right, it doesn’t really matter in
have. It also greatly limits the portfolio size. the end.

The alternative is to divide the proof of As innovators we need to work with executives
concept into two steps. The first step is to to make sure that they are on board from
run experiments to validate the hypothesis the start. As such, it’s best to find executives
for the opportunity. The next step is to ask that are committed to the process and the
the questions ”Should we build it?” and “Will outcome, and then to give them control.
anyone care?”
#4 Premature Executive Evaluation
By going through the proof of concept first,
we become prisoners of people’s opinions. There are two approaches to selection
But if we take the two-step process, then in the innovation process – and one is
we create evidence that proves the idea can definitively better for innovation teams
be successful. to adopt.

#2 Failing Scarcely vs. In the “Engineer Approach” there are

Daring Greatly four steps.

When a company begins the innovation 1. Submit an opportunity

process, it is natural to want to “test the 2. Select the most favorable one
waters” – to not risk a lot. However, this is 3. Test it
not the best solution. Taking on more risky 4. Build it
projects equals taking on less risk overall. The
more projects you have in your portfolio, the The problem with this approach is that this
fewer failures you will likely have. This doesn’t process creates a higher risk as well as a
mean that some projects won’t fail; however, higher cost of making a mistake. If you choose
it increases the likelihood of your projects the wrong selection, you have a higher cost
becoming successful. of failure overall. In order to lower the cost

The Innovator’s Handbook 2022 39

of failure in this process, you would need to #5 Not Measuring (The Right Things)
bring in more experts and to request more
detailed opportunity submissions before You need to measure the right things. Here
choosing a selection. are three key performance indicators that
should be measured:
In the “Entrepreneurial Approach”, there are
five key steps: 1. Action KPI’s: The things that you do.
For example the number of evaluated
1. Submit an opportunity startups. By themselves, these are
2. First selection – consider an experiment typically vanity metrics.
3. Risk Mitigation – a cycle of
experimenting, measuring, and learning 2. Progress KPI’s: Helping to understand if
of possible selections you are getting closer to your outcomes.
4. Second selection – make a decision For example, the number of executive
5. Build it sponsored experiments.

In this approach, the first part of selection 3. Outcome KPI: What your executive
creates a lower cost of error; and the second team expects you deliver. For example
part of selection then creates a higher cost of revenue generated.
error with a lower risk.
If you want your innovation programs to
The second approach helps you gain be sustainable, then you need to generate
evidence to show the chosen selection works, outcomes that are measurable and that affect
similar to what VC’s do. Think about selection KPIs which your executive team cares deeply
as a multi-stage process, not as something about. Only if you generate outcomes, innovation
that needs to be completed in a short will be regarded as a business process, just like
time span. every other process in the company.

Overcoming the Innovator’s

Paradox: How to Win Resources
and Support for Innovative Ideas

When we search for sponsors for our newest

project or venture, they will typically ask for Jeff Dyer
more tests and will want us to reduce the Author & Co-founder at
surrounding uncertainty before they decide Innovator’s DNA
to commit.

However, this creates a paradox because we validation these sponsors want in order for
need the resources to do the testing and them to sponsor us, but yet we can’t get

40 The Innovator’s Handbook 2022

the resources before doing the testing and That is why, even if you do not have a track
validation. Jeff Dyer, Professor of Strategy at record, but all you have are the ideas, there
BYU & Wharton and author of The Innovator’s are still strategies you can use to gain
DNA, suggests how to overcome this attention, visibility, and credibility. But, more
“innovator’s paradox”. importantly, they can also be used as ways to
better explain radically new concepts so that
Innovation Capital the value can be clearly seen by those who
can advance them.
The only way to escape this paradox is
through building “innovation capital.” Typically, Impression Amplifiers: Actions
there are three major reasons why a sponsor to Gain Credibility, Visibility, and
will want to support you: Attention

1. Human Capital: These sponsors know you Impression amplifiers are actions often used
as a forward thinker and believe in your by entrepreneurs and young innovators to
intrinsic abilities. persuade others to believe in them and their
idea, even when they do not have the capital.
2. Social Capital: These sponsors know These amplifiers include the following:
you, and you have existing relationships
with them. Comparing
The first amplifier is called comparing, which
3. Reputation Capital: These sponsors involves drawing a relevant analogy or
do not know you, but they know metaphor between your idea and a familiar
you already have a track record of and successful concept. This amplifier
successful innovation. works because it exploits our tendency to
use mental heuristics to shortcut complex
In terms of the human capital factor, it is thought processes.
crucial to be forward-thinking. People who
can look into the future and engage in “mental Storytelling
time travel” and see what problems need to The second amplifier is referred to as
be solved now in order to lead in the future storytelling which creates a compelling
can use this thinking to persuade others, narrative with characters, conflict, and a
which can become an important key to resolution. Basically, storytelling invites
influencing them. people to your cause by connecting them
with it emotionally, and since all people are
For instance, the current CEO of Microsoft, drawn to well-told stories, it allows them to
Satya Nadella, engaged in mental time engage their imagination and helps increase
travel and asked, “what will be important for their empathy for others. As a result, the
Microsoft’s future?” Back then, the company ability to tell a good story is one way to bring
made its living off consumer products such as sponsors to support your idea or venture.
Microsoft Office and Windows operating system.
Yet, he still decided to join an unpopular service Signaling
which we now called the Cloud, because he Signaling, or the third amplifier, aims to prove
thought it would one day be important. As a to its supporters that what you’re doing is
result of his forward thinking, he eventually legitimate and that others believe in you. This
became Microsoft’s CEO. amplifier works because of the “bandwagon

The Innovator’s Handbook 2022 41

effect,” which uses the idea that others affect everything on the line, you are showing to
our behavior, meaning that other people’s your sponsors how much you care, and by
decisions navigate our lives. extension, how much effort you will put into
achieving success.
Social Pressure
The fourth amplifier is called social pressure. Materializing
This strategy is known for creating a fear The sixth amplifier is materializing, which
of missing out or FOMO and helping spur involves making an abstract idea visible or
commitment from those who worry that tangible through videos, drawings, data, or
they may lose out on an opportunity if they graphic representation. It works because this
don’t act quickly. It works similarly to the technique involves the “seeing is believing”
psychological principles tied to scarcity. principle, which refers to how human brains
are systematically biased to believe in
Committing tangible, visible artifacts over abstract ideas.
The fifth amplifier is known as committing.
Committing involves making an irreversible Although using the above impression
commitment to an idea or a project that amplifiers for developing and selling an
signals to potential supporters that you innovative concept is hard work, they are still
believe in an idea or project so much that you a great way to convince sponsors to support
are willing to put your own skin in the game. your idea and help win support for ideas that
Committing often works because by putting are quite novel and perceived as risky.

How To Overcome Resistance

To Change

Greg Satell, author of Cascades: How to

Greg Satell
Create a Movement That Drives Transformative
International Keynote Speaker,
Change, says that we assume that if a change
Adviser & Bestselling Author
fails, it’s because people didn’t understand it. of Cascades

The truth is, all too often, when change fails

it’s been actively sabotaged. If a change is
important and has the potential to impact 1. Anatomy of a Cascade
people, there are always going to be some
people who work to undermine it. If we want Small groups that are loosely connected
transformational change, we need to learn to but united by a shared purpose are what
overcome that resistance. drive cascading transformations. It’s the
same whether it’s an internet meme or a
Radical transformational change is political revolution.
possible, but we have to know how to go
about it. Here are Greg’s four principles of But that’s very different from what change
transformational change. consultants say, who often claim that

42 The Innovator’s Handbook 2022

change needs to start with a big bang Spectrum of allies. Just like a general would
and a sense of urgency. While that can map out the terrain of a military battle,
rally people to your cause, it also works change-makers need to map out their allies.
to rally the opposition. You are better Identify who your most active allies are, along
off empowering smaller groups to be with your passive allies, neutral parties, and
successful and connecting them with like- the passively and actively opposed. Then
minded others, then united them with a identify what the shared values are that this
shared mission. spectrum of allies shares. Then stop engaging
with your active opposition. If you leave them
2. Identifying A Keystone Change alone while you are gaining traction, more
often than not they will lash out and end up
Every change starts with a grievance. This sending people your way by discrediting
was true in India, where Indians wanted full themselves. And while you shouldn’t engage
independence from Great Britain. Gandhi with them, you should listen to them. They can
understood that to achieve that, they point out flaws in your ideas that you can then
needed something that would bridge the gap fix. You can also start to adopt their verbiage
between the grievance and their ultimate into a shared value statement that helps bring
vision of independence. So when Gandhi first more people to your side.
announced he was going to march against
the salt laws, people ridiculed him. They Pillars of support. Imagine there is an all-
wanted independence, and he wanted to powerful dictator, but suddenly all the janitors
march against pesky salt laws. But those salt decide not to come into work anymore.
laws were a keystone change that would fuel Now that all-powerful dictator is powerless
the rest of the transformation that needed to get the trash picked up. Every regime
to happen. or status quo depends on institutions to
carry out its will. If you want real change,
A keystone change has three criteria: you have to identify those institutions that
offer pillars of support, then influence them
• Must have a clear and tangible goal over to your side. These institutions in a
• Involves multiple stakeholders corporate environment might be things like
• Paves the way for future change unions, media, suppliers, shareholders, or
professional groups.
Gandhi saw how the keystone change of
marching against the salt laws was a tangible When making plans and designing tactics for
goal that involved multiple stakeholders. change, you want to think about mobilizing
Abolishing these laws would pave the way for your spectrum of allies to influence
future change in the country. It would become institutions in the pillars of support. Ask
one of his greatest triumphs. yourself, “Who am I mobilizing to influence
what?” in every action you take.
3. Making a Plan
4. Surviving Victory
There are two tools used in making a plan
for change that have been battle-tested Start thinking about how you are going
for decades. Social and political activists to survive victory from the first day. That’s
use them, but they work just as well in an because the initial victory phase is the
organizational or corporate environment. most dangerous, and it’s where revolutions
They are: go to die. We think that once we get the

The Innovator’s Handbook 2022 43

initial victory, everything will become easier • How would an evil person undermine the
afterward. Often, though, once the initial change you seek?
victory happens, it becomes a lot harder • What are the vulnerabilities of your
to keep moving forward. That’s because change effort?
the people who hated the idea never went • How could you appeal to shared values to
away, and now the opposition is redoubling overcome the opposition?
their efforts because it looks like change is • Anticipate what they might do, where they
a possibility. might attack you, and then how you are
going to counter it. Because it will happen.
Ask yourself these three questions to develop
a plan to survive victory:

A Corporate Innovator’s Story:

How I Went to the Outer Rim and
Back

One of the key lessons for corporate

innovators is the ability to influence Florian Bankoley
decision-making by translating ideas from Executive Vice President –
imagination to reality. If you lose this, you Business Interface at Bosch
are basically telling the team that even
though you know how it may be done, and
that’s the future you are striving for, you will
never be able to make it work.

That is why for this type of innovation to work, corporate innovator to navigate the various
it has to be about translating this process gates. And as an innovator, you have to be
from start to finish. As a result, there are very aware of these cultural aspects and be
three things that can influence innovation, as able to move, sometimes outside of them
Florian Bankoley, Executive Vice President – and sometimes inside of them and make
Global Information Systems & Services at conscious decisions when to navigate where
Bosch, experienced and how.

1. The Importance of Culture and However, when you are able to get the
Processes needed decisions and implement your
innovation to the company, it can show
This first aspect refers to how strong a the organization its limits of what it can
company’s culture is and how strong this and cannot do. It can also demonstrate
culture is reflected in their decision-making. to the company what they are able to
This is because these decision habits can acquire, nurture, and how they can make the
significantly influence your ability as a necessary talent grow.

44 The Innovator’s Handbook 2022

2. The Individuals the subconscious, which revolves around gut
decisions and feelings. The problem with this
From senior management down to the is when your limbic system is not accustomed
collaborators and the contributors, every to the new technologies, such as in a new
individual is shaped by a certain thought business, you don’t know how to judge with your
system and certain expectations. And these gut. First, because you will only have a few data
expectations, especially when we talk about points to base this decision on. In comparison,
industrial companies, are mainly based on if you are in an established business, you can
the continuity of planning and avoiding make a decision right away because you have
uncertainty in manufacturing as well as safety. done it quite a few times before.
For instance, when you speak about ABS
or ESP systems, or safety systems in the That is why in a completely new business, if
automotive sector, you’re not experimenting you are a member of the board or a member
because you actually want to have very of a divisional board, you will often look at a
predictable results. As a result, you’re geared problem, and you actually will not know what
towards predictable results. to do because you won’t have a gut feeling
just yet, due to your lack of experience. As a
But if you are taking on a new and completely result, this will lead to analysis and paralysis
different space with new technology, you because you will constantly be sending ideas
have to act slightly differently. By honouring back to try again and get more data. This
this, you will manage these two modes will mean that as a business, you will not be
and work with them while addressing progressing. However, this is not because the
people’s insecurity. But it’s not only a data is not there. It’s because the gut feeling
rational problem, it’s also an emotional is not there.
problem because psychologically people
tend to avoid uncertainty. And they want to Consequently, these three points are really
have predictability. important if you’re trying to navigate the
jungle as a corporate innovator and want
3. The Way Senior Management to drive your approach ahead and deliver
Makes Decisions innovation. “I have learned these lessons
while shuttling back and forth from the
When we apply the iceberg metaphor to startup ecosystem in Berlin and the industrial
decision-making, we see that only 20% of powerhouse Stuttgart, nearly feeling
the information we need to make a decision like a space traveller every single time”,
is available to us. The other 80% is based on concludes Florian.

The Innovator’s Handbook 2022 45

 Is All Innovation Leadership
the Same?

What are the three most important

characteristics of any leader looking to Tom Waller
facilitate innovation? Tom Waller, incoming Head of Innovation at Adidas
Head of Innovation at Adidas, has learned
to rely on three characteristics: clarity
over security, you get what you pay for,
and language creates. Together, they True innovation leaders encourage the
form important lessons for any leaders opposite. They offer clarity on the future
looking to establish an innovation- vision, building a clear North Star to work
focused culture. towards. At the same time, they also enable
innovators and creative thinkers to simply
Everyone loves disruption, right until it comes start with a blank page, operating with minimal
to their doorstep. Loss aversion theory causes information and yet still being able to take
us to protect the status quo, even if future an idea, incubate it, and commercialize it
gains may rationally point us towards change. to market. Focus on where you are going,
That’s where leadership has to step in. assuming there’s a solid vision, and not
on how to get there will foster a healthy
Innovation leaders are responsible for the environment of inventiveness.
space in which teams feel empowered to take
action. Similar to the mantra that leadership That can be difficult to accomplish at fast-
happens when you’re not there, the space paced organizations , whose core business
that leaders create and where the mission does not necessarily have the patience
is well articulated ensures that what fills for ambiguity. Being able to step in, draw
that space on an everyday level is additive boundaries, and move within the pace of
towards steering an innovation forwards in the larger business while still offering clear
any organization. guardrails for innovation is paramount.
Challenge that the organization is able to
Tom’s three characteristics of innovation ‘walk and chew gum at the same time’. Being
leadership can help to ensure that the agile around short term opportunities and
space is filled productively, and with the investing in long term change is a normal
organization’s best interest in mind. human trait.

Lesson #1: Clarity Over Security Lesson #2: You Get What You
Pay For
The first lesson focuses, above all, on
ambiguity. Uncertainty drives innovation, and The next lesson revolves around
organizations tend to succeed or fail based incentivization. The structure that innovation
on how they approach this ambiguity. It’s leaders create, the training they provide,
tempting to value the security of the present and the rewards available for innovation, are
and to eliminate ambiguity too quickly with hardwired to the output of innovation that the
prior thinking that reinforces the past as ‘safe’. organization will see.

46 The Innovator’s Handbook 2022

That doesn’t mean tying innovation to a single with their own team, but with others across
or classical ROI that might only work for short the organization. In that scenario, they’re
term outcomes. Instead, it’s about searching for typically presented with three choices:
impact, and rewarding that impact. Rewarding
momentum , navigating the learning from failed 1. Teaching others to use startup, technical
experiments, even when that effort doesn’t and innovation-focused language in an
lead to commercialization, and supporting accessible way
the transition of ownership,can go a long way 2. Learning the commercially critical
towards building an innovation program designed language that drives total success for the
to encourage creative thought and a healthy whole organization and showing where
relationship with risk versus reward. innovation consistently creates value
3. Creating New, shared languages with
The standard rewards structure that occurs cross functional partners that everyone
through annual bonuses should be adequate can rally around and trade on in order
the innovations team where momentum can to eliminate any ‘them versus us’
be measured. But it doesn’t end there. An communication and culture behaviours
organization that ties rewards to project-
specific impacts, like margin improvements for In reality, true innovation leaders combine
a supply chain project or media impressions all three. New and shared languages bring
for a communications project can also be people together, and create a shared
valuable. A good balance between seeking vision, goal, and output that promotes
‘head lines’ and improving ‘bottom lines’ is a innovation projects instead of an out of
skill that all innovators must acquire. Take care date transaction between innovation teams
to celebrate wins as close to the actual work and commercial teams. It also creates a
as possible and encourage the teams who shared sense of empathy, allowing the
are working on innovation to celebrate each innovation leader to understand and serve
other. The numerous communication channels the entire organization.
such as MS Teams are excellent to keep
feedback contextual and between peers. Leadership styles are of course different, and
cultural nuances require different approaches
Lesson #3: Language Creates at every organization. These three lessons,
though, have remained true across cultures,
Finally, innovation leaders need to create the organizational structures, industries, and
language necessary to not just communicate the globe.

Developing Transformational
Leadership Currency

Abim Kolawole serves as the Vice President Abim Kolawole

of Integration at Northwestern Mutual and VP, CX Integration and
previously served as the head of innovation. Promoting Journey at
While many people think of process and Northwestern Mutual

The Innovator’s Handbook 2022 47

ideas as the starting point for innovation, Leaders as Barriers to Innovation
the true starting point is the mindset,
actions, and culture created by leaders. While most leaders will not realize they are
barriers, leaders are at risk of doing things,
Personal Mindset saying things, or modeling things to the
team and other people that are inadvertently
Leaders need to take a step back and think barriers to innovation. Beware of the
about their own personal mindset and how following actions that can become a barrier
this causes them to show-up. First, is the to innovation:
leader able to think disruptively? Leaders
who successfully lead teams focused on • If you are a leader who prefers to maintain
innovation and transformation tend to have the status quo, you might be shutting
their own personal history of disruption. If you down ideas before the team is given an
look at the career path or history of these opportunity to test, learn, or modify the idea.
leaders, you will find that they have taken • Some leaders play not to lose rather than
risks, challenged themselves, and stepped out focusing on innovation and disruption.
of their comfort zones. With this attitude, the leader is less likely
to consider an idea that isn’t a sure thing,
These experiences enable them to think creating a barrier to innovation. To be
innovatively and to come to the table with able to execute on innovation, it requires
a play to win attitude rather than playing creating a strategy and bringing people
not to lose. These leaders are better able along, which can be overwhelming.
to avoid the straight and narrow path and • Leaders need to be facilitators for
instead to walk a path that leads to innovation their teams. If you are a leader who is
and transformation. focused on your own ideas, you are
limiting your team’s ability to innovate.
Diverse Perspectives Mindset Analyze what you do as a leader to
give your teammates a voice when they
Leaders need to ensure they have diverse have an idea. Embrace a test, learn,
perspectives contributing to their projects. modify attitude.
Look at the room and challenge yourself and • Embrace risk taking. If your team senses
other leaders to critically review what voices that you are uncomfortable with risk,
are at the table. Innovation is about creating they will not bring innovative ideas to
something that has new value for clients your attention.
through a repeatable process. If you don’t
have people in the room who think differently Culture of Enablement
and look differently, the odds are high that
you will not end up with the best ideas or the You can have an amazing transformation and
ideas that best serve your customers. innovation strategy, but it won’t get off the
ground with the wrong culture. Companies
Make sure you have different mindsets, that innovate successfully and repeatedly
people who disagree with you, and people have a culture of risk taking, incentivizing
who have different experiences contributing people to be innovative, and providing
at each stage of the innovation process. constructive insights on failures.
This way when you are testing, piloting, and
engaging with clients, you are confident you These elements need to be infused
are bringing something of value. organically in the culture in order to be

48 The Innovator’s Handbook 2022

transformative and innovate. The culture on these values is made clear in the hiring
needs to become systemic. In order to create and review process, which requires partnering
a systemic culture, make sure that the focus with HR.

Innovation Development Is Being

Disrupted, What Are You Doing
About It?

In the past twelve months, Anthony Ferrier,

Anthony Ferrier
Head of Innovation and Commercialisation
Head of Innovation and
at Swinburne University of Technology, has Commercialisation at Swinburne
been having conversations with a range University of Technology
of leaders in the innovation, business and
digital space. Through these conversations,
he’s learned that innovation professionals
are, somewhat ironically, being disrupted. translating into a higher turnover rate of
innovation professionals, which is, in turn,
Innovation is becoming more decentralized making it more challenging to run successful
within organizations. Anthony compares it to innovation programs.
what happened in the marketing industry 15
or 20 years ago. Where organizations used to That’s led to a deprioritization of innovation
have one central marketing team that handled roles, especially within the upper levels of
everything, those jobs are now distributed innovation management.
throughout the organization within different
domains, but often with a central strategy It’s the functional groups within the
and coordination point. This is now starting organization that now seem to be delivering
to happen to innovation teams, with the those initiatives. They are working on projects
previously core activities taken over by other which are more in line with what business
functions in the organization. leaders are looking for from their innovative
agenda. For example, a digital group can
This is disrupting the innovation environment, come in and say they can digitize a process
and creating a disconnect between business within the organization within 12 months, with
leaders (sponsors) and innovation teams. limited risk, and tell the executive team exactly
Innovation teams feel like they are doing how much it’s going to cost and outline what
their job running incubators, accelerators, the ROI will be. That’s a big difference from
and crowdsourcing events. Leaders, however, an innovation professional who often has a
want to know what products and revenues longer timeframe, more risk of failure, different
are coming out of this activity. The activity alignment, and greater focus on activity.
was never supposed to be the goal, but
the means of delivering business impact. If these groups and functions within an
The tension caused by this disconnect is organization are taking on the innovation

The Innovator’s Handbook 2022 49

role, the question then becomes, is there still Cross-functional approaches get pushed to
value in having an innovation function within the side. Organizations lose the ability to drive
an organization? “Horizon Three” growth opportunities informed
by what’s happening outside of the organization.
The answer to that question is a resolute YES! When they become too operationally focused,
What these functional groups are doing is they miss out on new trends. Without an
repackaging their existing approaches into innovation program, attention is drawn away
an innovation framing. That’s great, but as from impact and execution. All the messaging
operational leaders they still need to produce becomes front-end focused.
whatever it is they are supposed to be doing.
Within this new innovation environment,
While their changes might be welcome and a innovators have to position themselves
long time coming, they can’t be innovating full as guides within the organization. It’s the
time, or consider products that may be more innovators who know the best practices
risky and take longer to execute effectively. for innovation. They can provide support
in a visible way to the teams now working
Without an innovation program, an on innovation initiatives across the
organization is going to lack an important set organization to create the greatest sustained
of capabilities. business impact.

50 The Innovator’s Handbook 2022

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54 The Innovator’s Handbook 2022

 How Innovation Drives
Shareholder Value – The Power
of Diversification

Every business model follows a basic life

Jan Sedlacek &
cycle that starts with an idea that’s then
Julian Ritter
launched, grown, and eventually reaches Co-founder and Partner /
maturity. After reaching its peak, the Associate Partner at Stryber
business model starts to go into decline.
Forty years ago, that wasn’t such a big deal.

That’s because the average lifespan of average annualized total shareholder return.
a company on the S&P 500 was about Of the companies that didn’t diversify,
40 years long. That means businesses had they showed an average of 7.3% in annual
time to adapt to changes happening in shareholder returns. Companies that
their industry. Today, though, the average diversified more showed stronger annual
lifespan of a company is 20 years, and it’s returns. Those getting more than 50% of
getting shorter. That means companies have their revenue from new segments showed an
to be faster at adapting. So the job of the average annual shareholder return of 11.2%.
innovator is to find new areas of growth to So companies that diversified outperformed
counteract the decline within the business those that didn’t, both in the short and
model lifecycle. long term.

Julian Ritter, Associate Partner at Corporate Achieving new growth through diversification
Venture Builder Stryber, says that they sounds easy, says Jan Sedlacek, co-founder
believed that diversification is the key driver at Stryber, but it isn’t. New growth happens
of new growth in business. To test this in four stages. First, you have an idea, then it
hypothesis, they looked at how innovative goes through launch, growth, and expansion.
companies performed on the stock markets But 89% of new ventures never make it out
between 2010 and 2019. What they found of the launch phase and die in the “Valley
was exciting. of Death” before the expansion phase. This
high rate of failure explains why so many
First, they found most companies don’t companies fail to diversify.
diversify. 68% of the companies that
they examined didn’t show any signs of To overcome this high rate of failure,
diversification, meaning they didn’t innovate companies have to increase the number of
or didn’t innovate successfully. Only 4% of bets they are placing in the ideas phase.
companies diversified strongly, with more Building a portfolio of ventures reduces risks
than 50% of their revenues coming from and drives impact. You’ll lose a lot of bets as
new segments. Next, they looked at how you move into the launch phase, but the idea
these companies performed in terms of is to lose them quickly.

The Innovator’s Handbook 2022 55

You can de-risk new ideas through methods a strategy that gets you through the Valley
like financing logic, team incentives, and of Death so you can become a part of the
portfolio management. By the time the idea 11% of companies that manage to diversify.
ends up in the growth phase, you’ll end up The key to this, says Jan, is setting up
with a small number of ideas geared towards the right governance. New businesses
ROI. Then you can start to harvest from those are fundamentally different from the core
seeds of the initial ideas, creating successful business, so they need their own governance
business units for your core organization. that will help them grow. However, they need
to maintain contact with the core business.
You need to create a portfolio that’s Most companies haven’t figured out how
substantial enough to keep the business to get this balance right, but it’s a problem
sustainable over time. You have to create worth solving.

How World Class Companies

Manage Their Innovation
Portfolio

Managers often make the mistake of

Alex Osterwalder &
believing they can choose a winning idea on Tendayi Viki
day one. That’s not how innovation works. Associate Partner /
Co-founder at Strategyzer
The best way to find a good idea is to invest
in loads of ideas, then see which ideas are
showing traction over time. The more ideas That’s less than a 10% success rate from the
you have, the better chance you have of initial 200 teams to the final stage. A lot of
finding something of value to create a new managers want to find the secret to skipping
multimillion-dollar business, argue Alex the first 200 teams and get right to the final 15
Osterwalder, Co-Founder at Strategyzer successful ideas, but that’s not how innovation
and author of The Invincible Company, and works. Innovation and failure are inseparable
Tendayi Viki, Associate Partner at Strategyzer twins. You can’t have one without the other.
and author of Pirates in the Navy.
But what tools do you need to decipher which
For example, Bosch’s innovation program of those ideas has potential? Good innovation
started with 200 teams. Each team got portfolio management comes down to the
£120,000 and three months to come up with ability to track the progress of ideas.
an idea. Only 30% of those teams had the
evidence they needed to move onto phase Measuring the Progress of Ideas in
two, where they received another £300,000 Your Portfolio
to start exploring and prototyping their ideas.
Of those, only 15 businesses made it through Your innovation portfolio is a collection of
the funnel to reach the final phase. ideas. Many portfolio managers can’t tell

56 The Innovator’s Handbook 2022

which of those ideas are the most viable How do you know they have the right
because they are waiting for the projects evidence, though? Both the teams and the
to start bringing in money. That’s a quick decision-makers should know what the
way to waste investments and miss out on required evidence is for an idea to move on
opportunities. You need to be able to quickly and receive more funding. By following this
evaluate which ideas are making progress strategy, you make small investments at the
before they start making money. beginning and large investments later on with
the ideas that show the most progress.
When it comes to determining which ideas
have legs, you need to measure their progress, A project scorecard should focus on four areas:
not their activity. Activity is a good way to
measure how hard the teams are working, but 1. Desirability. Do customers want it?
it won’t get you anywhere when it comes to 2. Feasibility. Can we actually build it?
measuring the value of the idea itself. Measure 3. Viability. Can we make more money than
the progress by the amount of risk a team can we spend?
reduce for an unproven business idea. 4. Adaptability. What’s the business
model environment?
One of the most straightforward ways
of doing this is through an innovation Teams should bring evidence to the table in
project scorecard. these four areas. They need to demonstrate
that they know customers want it, they can
How to Evaluate a Project Using a build it, they can make money off of it, and it’s
Scorecard the right time to bring it to market.

To get from an idea to a successful business, Scoring the Evidence

you have to reduce the risk that you are
producing something nobody wants. Teams A project scorecard allows a portfolio
can do that by continuously building evidence manager to objectively evaluate the progress
that is real and factual, and not based on of an idea and whether it’s ready to move
opinion or fantasy. onto the next phase. The scorecard should
break down areas of desirability, feasibility,
Portfolio managers should use the scorecard viability, and adaptability with questions that
in the three phases of innovation: evaluators will rank on a scale of zero to five,
with zero being there is no evidence at all.
1. Discovery (typically lasts around
3–4 months) 1. This is first light evidence, based on what
2. Validation (typically lasts around people say.
6–8 months)
3. Acceleration (typically lasts around 2. Light evidence with real artifacts. Maybe
8–10 months) not a working prototype, but feedback
based on initial designs.
Those timelines are guidelines; ideas might
stay stuck in a phase for a while. Portfolio 3. Light call-to-action evidence. For
managers should score the evidence after example, potential customers are visiting
each phase, and no project should move onto a landing page and supplying their email
the next phase until they can show they have addresses. They are taking action without
enough evidence to support the transition. a commitment.

The Innovator’s Handbook 2022 57

4. Strong call-to-action evidence. This might are getting from it. The only way you’ll get
come from customers making a deposit or value from an innovation portfolio is to make
a pre-purchase on a product. sure the returns are more than what is being
invested into the individual projects.
5. Irrefutable evidence. They are purchasing
a product from a pop-up store, for Adopt the Scorecard
example. The customer doesn’t know it’s an If you are trying to introduce the idea of using
experiment, they see a fully-fledged product. a scorecard to evaluate an innovation portfolio,
the last thing you want to do is announce you
Ideas won’t get all fives at the beginning have a newer, better system. You’ll just get met
stages, but as they move from the discovery with resistance. Instead, find ways to plug it into
phase to the acceleration phase, their scores the current system. When you filter it in, people
should move up. That’s how you know the will start using it more and more because
idea is making real, tangible progress. By the they’ll see that it works. Give them a feel for the
acceleration phase, they should demonstrate tool first, then let them adopt it naturally.
strong evidence in each building block.
They’ll see that when they use the scorecard,
3 More Tips for Managing An it makes it easier to determine where they
Innovation Portfolio should keep investing based on evidence
rather than a gut feeling.
Manage the Portfolio as a Whole
There should be a team working in the Reward Failure
background to manage the portfolio as Typically, it’s only the teams with the
a whole. This team can look for potential successful ideas that end up getting the
synergies between ideas, whether ideas are promotions and bonuses. It’s impossible for
cannibalizing each other, or identify which every team to win. But there may be ways that
projects have already started in another every team can benefit from the success of
market. There is no mathematical formula for the portfolio as a whole.
this kind of management, it’s just something
that needs to happen. By doing this, it encourages people to take risks
instead of acting like every idea is a success.
Evaluate the portfolio as a whole in terms of It teaches them that failure is okay and that all
financial success, too. Track the progress of teams will benefit because ultimately, they all
the overall portfolio to see what returns you contributed to the portfolio in some way.

How a Growth Board Moves

Innovation Forward

Innovation is always a risk, and risk is highest

at the beginning—when an innovation team Jonathan Bertfield
has an idea or starts developing a new Senior Faculty at
Lean Startup Co
product. There are a lot of unknowns at

58 The Innovator’s Handbook 2022

the earliest stages of development. More for a Q&A. During the final 15 minutes of the
needs to be learned about the idea, product, meeting, let the Growth Board deliberate.
customer, and the market’s response.
Different Questions at
Utilizing a growth board process is a smart Different Times
way to reduce that risk and prevent a
significant loss, as Jonathan Bertfield, Senior Editing down to a 15-minute presentation
Faculty at Lean Startup Co, suggests. means you’ll need to know what information
to leave in and what to cut. Understand that a
A growth board helps drive a company’s growth board requires the answers to different
strategy and fast-track the innovation process. questions at different times, not everything all
It typically consists of a group of top-level at once.
executives—the key decision-makers—enabling
a large company to innovate as quickly as a The growth board will ask very different
startup. Growth board members should be a questions when a product is in the idea stage,
cross-functional team with the ability, authority, for example, versus the business validation
and budget to make decisions. stage. Be prepared to communicate only
the information that is relevant at that time.
The growth board should approve only a small Remind growth board members that in the
amount of funds initially and increase funding early development stages, you will be dealing
in increments over time. Budgets should with low numbers. It might be a new market,
start low when the least is known about the which can be tough to evaluate. Still, it’s better
innovation and market because this is when to prepare with this in mind, than to come with
the risk is highest. made-up market research.

At every growth board meeting, the innovation Balancing the ‘Three-Ball-Juggle’

team should demonstrate that an idea or
the new product has traction. When the Plan for a productive meeting by knowing
team successfully demonstrates traction the growth board’s decision criteria and
by presenting evidence, funding should editing your research. Also, keep in mind that
increase—and the project moves forward. growth board members are ‘juggling’ a lot of
information when deciding to either fund an
Frequent, Short Meetings idea and advance it—or kill it.

Growth board meetings should happen Help the growth board balance all the
at least once a quarter, to keep everyone information they are taking in and not get
aligned. Ensure that every growth board overwhelmed by thinking about it as a
meeting is productive by advising your “three-ball-juggle.” The three balls in play
innovation team to stick to a disciplined are – Evidence, Market Knowledge, and
approach. By not providing any unnecessary Strategic Alignment:
information to a growth board, you will
eliminate confusion and communicate more 1. Evidence
clearly, which helps in decision making. Prove that an idea has traction by presenting
different types of fact-based evidence, not
For the actual meeting, consider following the forecasts, projections, or speculation. Only
15-15-15 outline. The innovation team should include information relevant to a specific
present for 15 minutes, followed by 15 minutes development stage.

The Innovator’s Handbook 2022 59

Talk about: If it’s in the idea stage—Have you from how the space looked 10 years ago.
spoken to any customers? How many people Balance their knowledge with what the team
did you speak to about the new idea? How understands.
many have used it, and did you get feedback?
Then, later on, have a good set of numbers Talk about: Who are the customers today, and
that support the idea of going to scale. Have what do they care about? What is relevant
you started to see revenue yet? now regarding competitors and regulations?

2. Market Knowledge 3. Strategic Alignment

Acknowledge what the growth board already Consider whether or not the innovation aligns
knows while communicating how a market with the company’s strategy.
has changed. The people in the room know
the space—but innovation means that what Talk about: Is this the right product idea for
the team is learning today is much different us at this time?

Measuring Innovation Progress

and Communicating Innovation
Investment

How can innovation processes be aligned

Dan Toma & Esther Gons
with key business metrics, and accounting
Co-Authors of The
principles? Esther Gons and Dan Toma Corporate Startup and
discuss key principles from their new book Innovation Accounting
on Innovation Accounting.

Innovation vs. Accounting

According to a 2019 Gartner survey, lack of It starts with a common language, which is
measurement is the biggest reason why top the design of innovation accounting. It’s a set
executives around the world fear investing in of principles that helps innovation leaders
innovation. Accounting for success is vital, but it measure their successes in a way that helps
also requires an understanding of the potential the organization see its values without
gulf, and necessary reconciliation, between hampering innovation.
innovation and accounting departments.
Crucially, innovation accounting adds to,
It’s a natural conflict. Long-term innovative but doesn’t replace traditional accounting
thinking clashes with accounting, which isn’t systems like GAAP. It seeks to show the value
able to show positive results on the balance in innovation, without devaluing the short-
sheet over the past fiscal year. Turning that term metrics that accounting departments
natural conflict into a conversation between use to measure the health of the organization.
peers is absolutely vital. To get there, it needs to follow a few key rules.

60 The Innovator’s Handbook 2022

Financial Leaders as That clear definition can then be followed by
Innovation Allies pragmatic processes designed to encourage
innovation. Putting processes in place before
For too many innovation leaders, CFOs metrics provides security, by ensuring that
and other financial stakeholders seem like any attention or investment in the innovation
adversaries. Fortunately, they don’t have to process has the support and clarity it needs
be. Managed well, and with an honest effort to to have a chance of success.
track success sustainably, they can become
the biggest innovation allies. The Fallacy of the Single Metric

Of course, that requires more than simply Innovation is not like Lord of the Rings. There
getting excited about new ideas or creative is no one metric to rule them all. In fact, trying
processes. A shared language, including to focus too hard on a single metric that
success metrics, is crucial. If you are can track all innovation success can lead to
honest, and truthful, about showing your dangerous pitfalls.
success, they can become the innovation
team’s biggest allies in developing the Using just one accounting metric to track
metrics necessary to develop an innovation innovation artificially narrows the focus, which
accounting system. can become actively harmful. It enables and
encourages individual teams to game the
Start With Defining Innovation system, changing definitions of new products
or moving dates to ensure their products
In most organizations, the core business track well according to this specific system.
structure is set up around accounting systems For example, if a New Product Reality Index
and principles. The key is to build a second shows what percentage of revenue was
system, with its own processes and its own generated from products in each of the
ways of working, building its own indicators of preceding three years, more departments
success that still align with the larger business will claim that even incremental innovations
vision and goals. That, in turn, is impossible should be new products that count for more
without defining innovation. recent years.

The same word can mean very different things The fallacy of the single metric holds true
depending on the industry and organizational especially when the same metric is designed
structure. Defining exactly what it means for to track both core business and innovation
your organization is crucial before setting any processes. Innovation accounting seeks
type of metrics or expectations. to amend that fallacy, focusing on metrics
specifically relevant to the innovation process.
In most cases, innovation means not just
R&D, but disruptive ideation and incubation Even within that separation, an array of
of ideas that are complex, and require complementary metrics can provide a fuller
comprehensive support systems. Naturally, picture, and avoid gaming the system. If, for
leadership needs to be unified behind that instance, the New Product Reality Index is
idea and structure, but the framework (and supplemented with a portfolio distribution
resulting buy-in) has to come first before report, a lack of alignment may show a lack
accounting metrics even become part of of innovation even though the core metric
the discussion. suggested otherwise.

The Innovator’s Handbook 2022 61

To Find the Right Metrics, Ask the building out the entire system on a set of
Right Questions pre-determined metrics, it’s about creating
the beginnings of a system that can show
If one metric isn’t enough, just what metrics the value of innovation, leading to better
should you track? investment, incubation, and commercialization
decisions in the long-term.
It’s an impossible question to answer, largely
because the answer depends too much People vs. Decisions: The
on organizational variables, history, and Rudder Fallacy
innovation team setup. But there is a process
to get to that point. Rather than starting with The final piece of the puzzle in innovation
some standard metrics, it begins with asking accounting is simple: do you have the support
the right questions to both your innovation of the organization and your own teams to
leaders and other organizational stakeholders: move towards a more accountable innovation
system that matches your organization’s needs?
• What does innovation mean in
this organization? It’s a question that evokes what Tristan Kromer
• At what layer do other stakeholders in the calls the rudder fallacy: at sea, turning the
organization need to understand innovation? rudder may appear to steer the boat. But the
• What do we need to know in order to boat doesn’t actually move in your desired
better understand and improve our direction unless you have rowers that can
innovation processes? create the momentum and move it forward.
• How can we best determine when additional
investment is needed, and when it is time to In this context, that means systems can only
call an experiment failed and stop? get you so far. The best tools, the best labs,
• How can we measure the number of and even the best metrics won’t matter much
current projects in our innovation funnel? to make innovation successful. You need the
• Are the projects in the innovation funnel right teams and people in place to feed that
moving fast enough to benefit the business? system with data, and even to help decide on
the right indicators. It’s the only way to ensure
Each of these questions can lead to related that innovation accounting will be successful,
metrics that track what your organization helping to drive your organizational boat
considers “innovation success.” Rather than towards the future.

How to Design a Future-Proof

Innovation Portfolio in 6 Steps

Misha de Sterke, Managing Partner at

Innoleaps, describes their six-step plan Misha de Sterke
to create a diverse innovation portfolio, Managing Partner at Innoleaps
increase growth and future-proof your
organization in a rapidly changing
business environment.

62 The Innovator’s Handbook 2022

It all starts with your company’s “growth gap”; • What important consumer wants are
the difference between the growth aspirations currently underserved?
and what can realistically be achieved, in the • Who is the target market for the
near future, with its current mix of core and opportunity?
adjacent business activities. • How can the opportunity be realized?

As corporate innovation teams, we operate Of course, you’re not starting from a blank
on three fronts, which are all “buckets” for page- you must take into account viable
possible investment. These are: technological solutions. The research to
determine strategic opportunities can be
• Core Optimization: innovation to conducted in a four-step process:
improve the current processes of the
core business 1. Use surveys and focus groups to obtain
feedback about consumer needs
• Core Renewal: innovation to expand into
adjacent areas of operation. 2. Apply trend analyses such as regulatory
changes and demographic shifts
• Future Growth: innovation to seek
areas for strategic innovation outside of 3. Set goals and boundaries (what will and
current domains won’t be considered)

The general advice here is to diversify 4. Narrow down which ideas are
innovation portfolios across all three viable opportunities
“buckets”, as the best way to future-proof
the company’s growth. So, how to get to this The ideas that make the cut should only
future-proof innovation portfolio? be ones that will close the aforementioned
growth gap.
Step One: Future Research
Step Three: Align and
The very first step is to map out as many Prioritize Direction
possible future scenarios and identify
obstacles that may arise on your way to This is the ideal time to bring senior
achieving the goals. This can be done by management and other decision-makers
graphing two possible variables that will either on board. You now have the metrics to
increase or decrease on the X and Y axes. demonstrate all possible outcomes and
Then you can plan for eventualities in all four risks. The innovation budget must now be
quadrants of possibility. This builds resilience distributed through the three “buckets.” Most
since multiple bases will be considered. commonly, the breakdown goes like this:
You should also identify what potentially
risky assumptions the company is currently • Optimizing core business – 85–90%
operating under. • Adjacent innovations – 5–10%
• Disruptive innovations – less than 5%
Step Two: Determine Strategic
Opportunity Areas However, depending on your company’s
needs and goals, the budget can be allocated
In the second step, it is time to answer “What”, differently. You may need to seek external
“Who”, and “How”. sources of funding for innovation as well.

The Innovator’s Handbook 2022 63

At this stage, you should be able to answer 2. Early growth – Once the opportunity has
these four questions: proved viable, growth funding is needed
as innovations begin to turn a profit.
1. What problem will the innovation address?
2. Which target audience struggles to 3. Market expansion – Ideas that have
overcome this problem? proven scalable will need to receive
3. How can the problem be solved? a series of cash injections to keep it
4. Why should this be done now? moving forward.

Step Four: Involve the Step Six: Managing the Portfolio

Whole Organization
The number of ideas an organization has
The more ideas for innovation that you can will differ. For instance, a larger organization
pull from employees, the better. Include your may have a portfolio of 50+ opportunities,
entire organization or at least broaden your while a smaller one may only have 10–15
reach beyond senior management so that opportunities. The success of a portfolio can
you can receive as many idea suggestions as be measured at three levels:
possible. Your innovation pipeline should start
with a wide funnel and then narrow at each 1. Strategic – Are the developed ideas
stage as you work through the development aligned with defined growth aspirations?
process. By the end of the process, you
should only have viable ideas in your 2. Process – How is the product
innovation funnel. development funnel functioning at scale?

Step Five: Start the Consumer 3. Value – Does each item in the portfolio
Development Phase deliver an acceptable ROI?

By the time you reach this stage, you have Finally, it is recommended that you assess the
only the best ideas remaining. Now it is viability of a portfolio by working backward
time to launch your first iterations into the from your growth gap goal. You estimate the
marketplace to gauge its potential. Feedback total investment funds required to commit to
will tell you if each idea is big enough to scale. that goal. That gives you the budget you need
You will need investment at three stages. The to achieve the goal. Following the steps as
funding can either come internally or from outlined then will help you design a future-
outside sources. proof portfolio.

1. Start-up – This is the research and

development phase, so pre-seed and
seed capital is required.

64 The Innovator’s Handbook 2022

 Portfolio Predictability: Know
What to Measure, Create Project
Comparability, and Predict
Expected Outcomes

Portfolio management is both science and

art. A portfolio manager is a professional Rafael Chaves Lopes
who selects and oversees a group of Managing Partner at Trimaran
investments. The goal is to meet long-term
financial goals while keeping in mind the
risk tolerance of the client and trying to
minimize those risks.

There is a lot of science behind portfolio

management and predictability. Of course,
you should never ignore your hunches in
order to anticipate the markets, but there’s • Price-earnings ratio
also a lot of skill that goes into it. Minimizing • Future cash flow costs
inherent risks while maximizing profitability • Earnings per share
effectively is the art of portfolio management.
Once you understand the value of the asset
Within the innovation funnel, you have many you have in hand (e.g. price per share),
assets in all different shapes and sizes. There’s you can create comparability between
always huge potential. However, each asset is at different assets, and understand your overall
a different stage. Some may be just an idea, while portfolio’s value.
others could soon scale into a core product.
How do you connect these together under one Creating a Compatible Portfolio
umbrella to effectively manage a portfolio?
Using the above metrics, you can create
Using Price to Bring a comparability between different assets since
Portfolio Together they all represent financial indicators. For
example, just by looking at the price-earnings
Price is one of the components that brings ratio, you can assume immediately which asset
portfolio assets together. For example, would could be more overpriced than the other. But
you want to invest a little bit of your savings there is no silver bullet. Other considerations
in Apple or Berkshire Hathaway stocks? Or include which market is growing faster than
do you want to go in a completely different the others, and where you see potential future
direction? It is the price per share, and the growth to happen. That is when your initial
indicators that derive it or are derived by hunch also comes to play. Just make sure you
it, that will help you make your investment can back it up with concrete facts.
decision. Some of these include:

The Innovator’s Handbook 2022 65

Unlike stocks, most early stage innovation Creating Portfolio Predictability
ventures don’t even have a validated business
model yet, let alone consistent revenue Once you have all these metrics in place as
streams that will allow you to have financial you grow your innovation ventures, you are
indicators for comparability. able to create financial models to predict your
innovation ROI. From measuring the earliest
When it’s time to start separating apples from assumptions being tested to financial results
oranges within an innovation portfolio, you from more mature ventures, along with your
need to understand which assets are de- funnel conversion rates (rate at which you kill
risking faster than the others. This also means ventures from one stage to the next), you can
understanding that, as ventures progress then predict the financial returns expected
through the funnel, the indicators that create from your total portfolio.
comparability between them also change. It
might seem like trying to hit a moving target If a new early-stage venture enters your
but, if you know your metrics you are able funnel today, it may only begin generating
to decide where to allocate your resources revenue in 12 months. This does not mean it is
efficiently and make the best investment. Here a bad investment. But if you have a portfolio
are some of the metrics you can use on to management view that allows you to see the
start comparing different assets: cost of opportunity for allocating resources
there, you will have far better data to make
• Market size; that judgement.y.
• Velocity metrics;
• Traction and growth metrics; Using the metrics discussed above will
• Gross margins; help you determine which assets are worth
• And more. pursuing and which ones need to be cut
out in pursuit of better opportunities. By
Once you have the answers to these measuring your innovation portfolio correctly
questions, you can start organizing, analyzing, and creating predictability, you are able to
and balancing your portfolio based on minimize its exposure to risk and increase
these predictions. profitability. And, at the end of the day, a
profitable portfolio is the best way to make
your stakeholders happy.

66 The Innovator’s Handbook 2022

 Why Business Cases Suck and
How to Fix Them

Business cases suck, says Tristan Kromer,

founder of Kromatic. The reason they suck is Tristan Kromer
that executive sponsors are asking us about Innovation Coach &
money, and usually asking about it too soon. Founder at Kromatic
So in a desperate attempt to satisfy the
desire to create a Profit/Loss statement,
we end up sticking a bunch of made-up
numbers into a spreadsheet. A business case for innovation needs to:

Yet by the time the project launches and • Predict the future while representing
we can be accountable for not hitting the uncertainty inside the model
numbers, we are gone. We’ve either left the • Be testable, so teams don’t have to wait
company or are working on another project years to see if predictions are correct
and no one will be able to track those results • Help prioritize by showing which variables
back to us. That’s why no one minds lying to focus on
about the numbers in a business case. • Help innovators and the financial team
communicate with each other
However, there are valid reasons for creating
a business case. The CFO needs a financial Creating a business case for innovation
model that tells them how much money a is possible, and it starts by taking a user
project is going to make and how much it’s journey map and creating a hypothesis-driven
going to cost. This information tells them if the financial model. By creating a spreadsheet
project is worth investing in. What innovators that breaks down the variables (such as
deliver is a business model canvas filled with acquisition, activation, revenue, retention,
qualitative assumptions and no numbers. That and referral), you can build a financial model
canvas doesn’t tell the CFO what they need to using a Monte Carlo simulation that delivers a
know, but it is useful for the innovation team. range of possibilities instead of depending on
It could help the innovation team understand exact numbers.
where they should be focusing their time and
verify the viability of their project. A Monte Carlo simulation is simply the
process of applying random numbers to each
A traditional business case represents variable to create a range of possibilities. This
certainty and predicts the future. A business range of possibilities will be narrower at first
model canvas represents uncertainty and because we can better predict outcomes in
prioritizes where to focus. These tools both the immediate future. But as the uncertainty
serve purposes, but aren’t talking to each compounds, this prediction of the future will
other. There needs to be a new approach to widen out into a cone of uncertainty as it
creating a business case for innovation that progresses.The most likely results will be in
can do what the financial model and business the middle of the cone, with the least likely
model canvas aren’t doing on their own. results being in the upper and lower ranges.

The Innovator’s Handbook 2022 67

With this type of financial modeling, you can By using the Monte Carlo simulation, you allow
tell whether a goal is highly likely, unlikely, the variables to push and pull against each
possible, or likely to happen. Then you can other and fluctuate. This is what builds the
reduce the uncertainty within the model by range of possibilities, giving you a much more
running experiments to test the variables and accurate understanding of what is likely and
narrow the ranges. what is uncommon. A standard business case
can overpredict the outcome of a project by
Unfortunately, with our current approach to anywhere from 30–70%. The Monte Carlo
business cases, teams will often take the best- simulation, done well, can remove that error.
case and worst-case scenarios and average The prediction of a Monte Carlo may be lower,
the two. This is the most common error in but it’s a much more accurate and makes for
business forecasting – but it just doesn’t work. better decisions.

Let’s roll two six sided dice and multiply the This approach takes a business model canvas
two numbers. What will the average result be? and translates it into a visual financial model
via a user journey map. By applying the Monte
Will it be the best case (6 * 6 = 36) added to Carlo simulation, you can predict the levels
the worst case (1 * 1 = 1) and divided by 2? of uncertainty. Innovators no longer have to
That would be 36 + 1 = 18.5. lie about the numbers, but can instead show
a more accurate “likely-case” scenario. By
Roll the dice and try. If you do this enough running experiments on the variables, you can
you’ll see the true answer is closer to 12. reduce those levels of uncertainty and more
That’s a monte carlo simulation. Roll the dice accurately predict the future.
to simulate the results and see what happens.

Is Agile Killing
Stage Gate?

Paul Heller, Chief Evangelist at Sopheon

believes that companies will benefit if they
Paul Heller
use the best of the two main methodologies Chief Evangelist at Sopheon
for managing product and software
launches: Stage-Gate and Agile.

What is Stage-Gate?

Stage-Gate is a methodology that was created The stages have specific actions and
in the 1980s by Dr. Bob Cooper. It was born out deliverables associated and require
of a study of companies that showed consistent involvement of cross-functional partners.
success with new product launches. Stage-Gate At the end of each stage, specified
establishes a framework from taking an idea “gatekeepers” decide whether the product
to launch by requiring the project go through should move to the next stage. Decision
several stages, with a gate after each stage. making is a critical aspect of reducing risk.

68 The Innovator’s Handbook 2022

The main stages in the classic Stage-Gate What is Agile?
process are:
Agile is a method that came out of the
• Ideation: Generate ideas software world’s desire to address a failure in
• Concept: Concept development product development – specifically, the lack
and scoping of input or decision points in the development
• Business Case: Building a business case process necessary to adjust to changing
based on intuitive decisions consumer needs. The model was created
• Development: Create the product in 2001. The three main steps of the most
• Testing: Field trails customer tests, trail common Agile process are:
operations
• Launch: Start production and selling • Product Backlog: Identify small pieces of
software capability that need to get done
The gatekeeper decision makers after • Sprint Tasks: Select a group of capabilities
each stage will change. The gatekeepers that are deemed important and go together
in the meeting need to be individuals that as a logical group and go into a cycle.
have the ability to fund the next stage of • Cycle: The cycle includes daily team
the project. meetings for a period of weeks until the
items are completed. Then you reevaluate
For the Stage-Gate process to be successful, where you are. Then pull more from the
there must be a large volume of up-front backlog. Throughout the cycles some
ideas that get winnowed down throughout things will disappear as no longer relevant
the process. If there aren’t sufficient ideas, and new items will come in, providing a
the gatekeepers will be too hesitant to kill a better selection to get to the optimal
project or to recycle a project back to the solution more quickly.
previous stage.
Stage-Gate versus Agile
The Stage-Gate process isn’t set in stone.
It can be tailored for different projects, and Stage-Gate and Agile were created for very
it is common to see companies leverage different use cases. While Stage-Gate is
a Full Stage-Gate Process, a Stage-Gate better suited to physical products, Agile was
Express process, and a “Just Do It” process. developed with software products in mind.
For example, if the product at-hand is a line Stage-Gate is being used in chemicals,
extension of an existing product line, it will food and beverage, consumer packaged
require less work and inherently present less goods, single products, simple products,
risk. This could be a good fit for the Just Do technology development.
It process.
Agile is being used for software, software as
The most important decision that is made part of a hybrid product, research and studies.
in the Stage-Gate process is often “are we
ready to launch?” Launch involves many Each presents advantages and disadvantages.
cross-functional stakeholders because
it will require marketing campaigns, sales Stage-Gate
training, delivery organization training, press Stage-Gate has the benefit of being cross-
releases, stores lined up to sell, and any functional, provides clear process and
other activities required to bring the product required deliverables with many readily
to market. available templates, and incorporates a

The Innovator’s Handbook 2022 69

governance model that defines the decision- • Alignment with other processes required
making framework. It provides for governance for hybrid products is difficult
beyond the product engineering activity and,
in fact, it does not really dictate how product In a world where products are increasingly
engineering is actually done at all. hybrid – consisting of both physical and
software components – companies must
While it has many advantages, Stage-Gate understand both models and adopt a
presents the following problems: hybrid approach.

• Does not work for product What Does a Hybrid Approach

engineering (development) Look Like?
• Effectiveness of gates – organizations
need to have the right people involved Rather than solely adopting one method,
and to stick to the discipline companies need to be strategic when
• Hybrid products are not killed but are selecting the product development model
refactored with changed features for a particular feature or product. This is
• Business case can be too rigid too early particularly true for hybrid products. Agile
• Viewed as “old” is also a good iterative fit for the earlier
• Value not often understood stages in Stage-Gate, particularly voice of
or appreciated, especially by the customer needs, concept tests, and
software engineering prototype tests.
• Linear stages can be problematic
• Lacks systems thinking because products A company will need to assess individual
are actually portfolios of capabilities projects to determine whether to:

Agile 1. Use Stage-Gate

Agile was developed to enable developers 2. Use Agile
to fail fast, create a minimum viable software 3. Pull relevant elements from Stage-Gate
product that provides value, reduce the risk of and Agile to accommodate the needs of
bringing the wrong product to market, and to the project
allow for a changing target.
Product developers need to understand the
It is not, however, a perfect solution for all language used for Stage-Gate and Agile
use cases: to avoid friction and to understand the
differences in timing and cadences. There
• Lacks business case which, in some also need to be natural points in the process
organizations, can be a problem to bring these different teams together.
• Lacks financials which creates similar
problems to lack of business case So is Agile killing Stage-Gate? Not
• Not all teams can be dedicated which is a necessarily. While Stage-Gate is sometimes
challenge especially for physical products considered too rigid, the real issue is applying
• Alignment with corporate strategy is not the wrong methodology to a project. Failure
always clear in a Stage-Gate process leads companies
• Begins with “what” not “why” to seek alternatives, but Agile may not be
• Sprint demos can be hard to follow for the best alternative. Each model offers
key stakeholders – viewing only a small good options and should be used in the
portion of work doesn’t provide context right context.

70 The Innovator’s Handbook 2022

 Ready to Foster Intrapreneurship
With the New ISO 56000 Series
on Innovation Management?

Companies are eager to make innovation a

Ludwig Melik &
part of their culture. They want to promote
Alice de Casanove
intrapreneurship within the organization CEO at Planbox / Innovation
but aren’t sure how to make it a part of the Director, Culture Evolution at Airbus
company culture. In an effort to do this,
they’ll often try to kick-start it by organizing
big events that celebrate innovative in 2013 at the initiative of France, this
thinking. Airbus tried this same strategy, committee on international standards for
shares Alice de Casanove, responsible for innovation management has members from
innovation competencies and learning in more than 66 countries working in liaison
Airbus Defence and Space, in conversation with OECD, WIPO, the World Bank, and the
with Planbox’s Ludwig Melik. World Trade Organization among others. The
Innovation Management System Standard is
They created the Dream Big event, where a guiding framework for top management to
employees could send pitch videos to top lead and organize for innovation. It’s also a
management. They were then celebrated for checklist for the innovation team to enable
their ideas during the big event. The goal was systematic innovation.
to create a unique bond between top leaders
and the people willing to challenge them. With this collection of standards, companies
have best practices to make innovation visible
Ultimately, this did nothing to change and recognized within the organization.
company culture. It gave people an It’s reusing the language of the business
opportunity to speak up and share ideas, but management system (from ISO 9001) and
when the event was over, everything went integrating the innovation process into the
back to normal. Intrapreneurs continued to system of the company. That way innovation
run up against obstacles with departments is understandable to every division in
like finance, HR, and IT. Those departments the organization.
continued to operate on the status
quo because nothing within the culture Through this standardized framework, Finance
really changed. understands how to fund innovative projects.
Production is free to find new ways of bringing
That’s where a new standard in the Innovation in materials for the intrapreneur. HR has a
Management System may help. framework to recognize the capabilities of the
intrapreneur, giving them an opportunity for
Why Standardize promotion and visibility within the company.
Innovation Management? Standards help intrapreneurs articulate a clear
vision and invite everyone into the process. It
Besides her role at Airbus, Alice is also the defines the organizational culture required for
ISO56000 series chairperson. Created innovation to flourish.

The Innovator’s Handbook 2022 71

At this monet, these standards have been management, tools and methods for
published already: innovation operation measurement and
illustrative examples of ISO 56000.
• ISO 56000:2020: Innovation
management fundamentals and In the ISO56000 document, innovation is
vocabulary. defined as “a new or changed entity creating
• ISO 56002:2019: Innovation management or redistributing value.” This definition isn’t
system and guidance. only talking about the financial value of
• ISO 56003:2019: Tools and methods for innovation. It’s also talking about the value for
innovation partnership and guidance. society. OECD, which measures innovation
• ISO/TR 56004:2019: Innovation potential in countries globally, is now using
management assessment and guidance. this definition. They’ll be measuring innovation
• ISO 56005:2020: Tools and methods in terms of both the financial and societal
for intellectual property management impact it makes. That’s a game-changer.
and guidance. Countries want to be in OECD’s top ranking
for innovation, so a change in criteria can get
There are additional documents under them thinking about societal value. Eventually,
development. These include requirements that could lead to changes in public policy
for innovation management systems, tools and encourage innovation that brings more
and methods for strategic intelligence value to society.

Jumping Over the Compliance

Barrier. Driving Innovation in
High-Risk Industries

Working with a friction department Erwin De Beuckelaer &

can be quite beneficial to innovation. Claire Kingston
Erwin De Beuckelaer and Claire Kingston, Director Innovative Capabilities
who work in the Quality department within / Director, Platform Innovation &
Design Head at Johnson & Johnson
Johnson & Johnson, share their suggestions
about the process.
rationale is not always accurate because this
Friction or Enabler? department can be an enabler, especially
since they are there to protect the company
When you are in a quality or compliance from any unacceptable risks and make sure
function, you are considered an inhibitor, innovations can actually make it to market.
almost like a hurdle for innovation. And it’s
that friction you may encounter when you are Another way to think of a quality control
trying to propel an amazing idea forward. This department is as a partner. Someone that
is why a quality department is often referred is behind you, encouraging you and telling
to as a friction department. However, this you which way to go and what to avoid.

72 The Innovator’s Handbook 2022

Although many people may assume that trust. This means if you have a disruptive idea,
this department just sits back and creates you will want to:
programs and tells others to innovate, it does
not work that way. Instead, this department is • Look for allies that truly understand
there to make sure that everyone innovates your business
in a way that helps the company align with its • Involve the friction department as early as
objectives and business goals. possible, not wait till the last moment
• Use the external environment as a tool
When you think of quality and compliance and also use crises as catalysts. Some
and innovation at large, the balance between of the most wonderful ideas come out of
being customer-centric and compliance high-pressure situations.
is often a tricky balance. In fact, this is one
of the main challenges that the quality and One other way to work with the friction
compliance teams often experience when department revolves around reframing
working with business partners. and experimenting:

Resolving a Dilemma • Focus on desired outcomes

• What are the “jobs to be done?”
A very famous study around business culture • Test assumptions to reduce uncertainty
developed a technique called dilemma
reconciliation, which is a way to deal with Do not be afraid to experiment with your
dilemmas but not end up with any weak ideas. If you believe something is not
compromises. This means that if you are resonating with your friction departments
trying to bring a customer-centric idea, you at first, consider reframing the idea in a
could create unacceptable risks that never different way. That is why trial and error
hit the market. However, on the other hand, if are so valuable to this process, as long as
your compliance and quality control are too you do not waste too much of resources
strict around an idea, you’ll be too slow, and and time.
you may leave user needs unmet.
Furthermore, it’s your responsibility as an
As a result, you are left trying to sort out this innovation team to engage your friction
dilemma and make sure you find a happy department in future scenarios. For example,
medium, which is nearly impossible. regulations in pharmaceuticals are real- they
keep patients safe and make sure products
The only way out of this is by embedding are safe. But sometimes, the interpretation of
quality, not just as a separate function into these regulations evolve over time, or change
all of your business operations. The same drastically, because of digitization and other
goes for all of the friction departments. fundamental shifts.
You want to start blending and combining
these different aspects and forming a Moreover, regulations that may apply at
true partnership. some point in the near future can help
shape an industry. That means friction
How Can You Work with a Friction departments need to include these options
Department? in their thinking, and that’s where you
can help them.
If you genuinely want to work with others, you
need to look for a connection and develop

The Innovator’s Handbook 2022 73

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The Innovator’s Handbook 2022 75

 How to Plan and Run a
Successful Online Employee
Ideation Challenge

An employee ideation challenge leverages

the power of your workforce to create Coby Skonord
business solutions. The vast majority of Co-Founder & CEO at
employees have a clear understanding of Ideawake
where the company is at and they have
ideas to improve the challenges your
company faces. In fact, 90% of employees process improvement and innovative change
would engage more if they felt listened to. within your organization.

Some of the best products currently on Choose between 3–10 evaluation criteria and
the market have been brought forward by focus on ideas that are easy to implement
entrepreneurial employees. In a market where and have a high potential to impact
industry leadership lasts significantly less time customer experience.
than ever before, you need to harness the power
of your employees to ensure creative solutions, Promotion, Promotion, Promotion
argues Coby Skonord (CEO at Idewake).
Any effective challenge requires employee
Define and Create an participation which in turn requires promoting
Effective Challenge the challenge to your participants. A well
planned and promoted challenge should
To start an ideation challenge, first define the reach a 60–80% engagement rate.
goal to ideate around. Target the challenge to
a specific topic related to your business goals Your communication plan builds promotion.
and follow a defined process to evaluate the A unique branding and name for the program
ideas in the challenge. Then set a timeline for with uniform messaging, pre-launch and post-
the challenge. launch communications are all part of your
communication plan to ensure employees
Keep in mind that challenge statements know what is happening with the challenge.
should follow the SMART principle (Specific,
Measureable, Achievable, Realistic, and • Company E-Newsletters
Time Bound. • Feature on the Internet
• Dedicated Pre-Launch Emails
Your workflow and evaluation criteria are • TV Slideshows
key parts of running an idea challenge. This
is where you tie information back to the Any promotion should contain specific items
organizational goals you set for the challenge. to ensure it communicates effectively with your
The right criteria engages stakeholders in employees. The email communication should
the evaluation processes that will make the reference the internal innovation brand, focus on
challenge an ultimate success: leading to employee empowerment, show how employees

76 The Innovator’s Handbook 2022

can participate, provide an incentive for successes. The incremental ideas like simple
participation, and show management support. process improvement can sell the entire
program to leadership. Early successes
You can use cards to promote the challenge can also keep the idea challenge on the
including postcards and “save-the-date” budget even in economic downturns or
cards. Also, talking about the challenge at leadership changes.
weekly or monthly department meetings
helps convince people to attend. Finally, use Incremental changes need to be the primary
company gatherings to help people take part goals of the first few idea challenges as
in the challenge even if they might not have you don’t require a dedicated budget
remembered at first. For recurring ideation to implement these changes. This is the
challenges, regular events are key times to get crawl stage.
people engaged and find new criteria for the
next recurrence. Disruptive – Horizon 2
The second stage is to implement more
A champion network within your organization disruptive ideas. These disruptive ideas may
can help you achieve a high engagement rate. include changing processes or product
They can promote ideas, comment on ideas, lines and need to have early success of
and vote on ideas. A network of champions, Horizon 1 in order to sell it to decision makers
your frontline managers who are behind the and gatekeepers. When you have had 2-3
changes, can really help to separate the wheat successful ideation challenges, you can start
from the chaff in creating innovative ideas. implementing the more difficult ideas. This is
the walk stage.
Making Ideas Happen
Transformational – Horizon 3
In order to make the ideas work the best for The final stage will require dedicated budgets,
your organization, you need to start with the complete leadership buy in, and significant
incremental ideas. employee engagement. This is where the
“innovative company” ideas can be thought
Incremental Ideas – Horizon 1 through, tested, and put into place. Ideas
To sell the ideas that are created by employee that transform an entire company are the
engagement, you need to have some early run stage.

The 6 Secrets to Bringing

Ideas to Life

It’s one thing to have an idea. It is another

animal to bring it to life, says Will Read, CEO Will Read
and Founder at Sideways6. It starts with Founder & CEO at
structured methods to listen to the insights, Sideways 6
suggestions, and ideas from everyday
employees. You can then build processes

The Innovator’s Handbook 2022 77

and support so that those ideas can come the business could grow during a 5 year
to fruition and actually make a difference in period. They received more than 30,000
the organization and the world. ideas from employees. Decision-makers
learned from those ideas and then
To make it clear, we are not talking about implemented a number of strategic points
the age-old method of the suggestion box to use going forward, thereby creating
where employees can write suggestions on engaged programs.
a piece of paper, slide it in the box, and likely
never hear about it again. Instead, we are The Flywheel
focusing on modern, structured and digital
ideation programs where employees have The flywheel as a management concept was
an opportunity to see and understand a introduced by Jim Collins in his book, “Good
company’s challenges and respond to these to Great.” Think of the flywheel as a hamster
unique challenges with their insights. wheel. The hamster takes his first steps on his
wheel to get it moving. If you can find out what
There are three types of employee innovation those steps are to get your flywheel moving
programs you could be running at any time. to get your whole process working well, then
you’re likely to start seeing momentum. The
Broadly speaking, employee ideas programs secret to the flywheel is finding out what you
fall into one of three categories depending can do to achieve your desired result. In turn,
on the overall objective and the type of ideas this will lead to other things, and then we have
you are looking for: a virtuous circle of good results.

1. Innovation campaigns ask for ideas on Let’s take a look at Amazon. Amazon focused
fundamentally new products, systems, intently on lowering prices and providing more
or processes that are different from offerings. This led to an increase in customer
the company’s existing offering or visits, which then led to attracting third-party
product portfolio. sellers. This then led to extending store
distribution, leading to the ability to make
2. Improvement campaigns seek ideas with more money off of smaller costs. Finally, this
the potential to improve the business in the came full circle and led to lower prices and
short term and long term. These ideas could the ability to add more offerings, which was
range from incremental improvements to the original goal in the first place.
transformational changes and are typically
centered around optimizing existing The flywheel effect can be applied to great
products, systems, and processes. ideas and innovation programs too.

3. Engage campaigns strive to learn from You will start to leverage the flywheel effect
the community, usually through a burst and gain momentum when you focus on
of engagement, whilst at the same time achieving one key result first. Once your
exciting and uniting employees around stakeholders notice the impact you’re
core topics or themes. Successful ideas having, often through stories that spread by
submitted are used to inform, inspire or themselves, they will make more resources
alter company policy and strategy. available, so you can increase your capacity
to learn and improve- and bring more ideas to
An example is AstraZeneca. In 2018 they life. Your role in the early days of an employee
asked their employees for ideas on how ideas initiative is to bring as many good ideas

78 The Innovator’s Handbook 2022

to life as you can, and then to understand how looking to bring ideas to life. When you can
you’ve done it and repeat. And repeat. obtain data as proof points, there is a higher
chance of breaking down barriers and making
Bringing Ideas To Life a real difference.

Now, what can you do to bring ideas Give Ownership

to life successfully? Will shares six You will see better results if the problems
practical suggestions. you’re trying to solve are owned by the
people who can bring the solutions to
Visit the Graveyard life. Typically, the people experiencing the
The graveyard is where ideas go to die. This problems have unique insight into what the
collection of ideas and initiatives were never root cause of the problem is and how you
acted upon and got either forgotten or might solve it. They care about solving it.
shoved to the side. First, audit your company’s
graveyard and find the ideas that got buried. Educate
Then, find the people who were trying to bring You can’t be everywhere all the time. To make
them to life, to understand what got in the your program stick, educate your employees
way, so you can adjust your approach based on the core methodologies. Then, you can
on those learnings. Plus, you might discover give them accountability and help them
some hidden treasures too. through coaching, maybe only 10-15 minutes
every week.
Rally the Right Supporters
It’s essential to find a few first movers within Create a Space to Share
the organization to support your initiative. Instead of having people work in silos, build
There could be the well-known champions of a space where your innovators can come
change, or someone who’s new and wants to to learn and share their experience with
make their mark. If you help them solve their the program. It’s important for everyone
problems, they will not just provide you with involved to be able to understand what’s
the resources you need, but also become going on elsewhere. It’s your job to create full
advocates for you across the organization. transparency, also with regards to progress
and performance metrics for all of the
Show Data initiatives individually and collectively, as that
Data can be incredibly valuable when you’re will motivate your innovators to do better.

The Future of Intrapreneurship:

Trends & Best Practices

Céline Degreef, CEO of Yumana, launched

the first European Intrapreneurship Céline Degreef
barometer this year, with a central question: Co-founder and CEO at
what does the future of intrapreneurship Yumana
look like? Among the 65 barometer

The Innovator’s Handbook 2022 79

respondents, 60% reported having success, the barometer revealed that over
some form of program, with 60% of all two-thirds of them had no clear system for
programs being at least 3 years old. Does benchmarking results and achievements.
intrapreneurship have a bright future ahead Feedback is solely qualitative rather than
of it? Here are some of the findings. quantitative. This makes it harder to sell new
projects to upper-level management.
Executive Sponsorship… But Lack of
Support From Mid-Level Employees Success is itself a variable. You must define a
Over 80% of respondents reported that universal metric for success across the entire
their intrapreneurship programs have gained company before you can establish the rate
sponsorship from c-suite executives. This of success.
support makes it easy to promote the programs
internally and set up clear goals. Intrapreneurship: What’s Next

However, the barometer has shined a light on What can we learn from these findings, in order
the disparity between high-level management’s to improve our programs?
involvement with intrapreneurship initiatives and
the involvement of HR and mid-level employees. The core of intrapreneurship rests on the three
In fact, mid-level employee buy-in has historically goals: encouraging business development,
been a roadblock to the implementation of cultural transformation, and talent development.
successful intrapreneurship programs. But the big picture is far more nuanced
than that.
Multiple Benefits For The Company…
But Less for the Intrapreneur More and more high-level managers are
If done well, there are many and various supporting intrapreneurship. And while the
outcomes of intrapreneurship programs. same old “banana skins” such as autonomy
Turning ideas into new products or services and time still exist, HR departments mingle
(business), changing corporate culture, with the party to make their employer branding
mindsets, and ways of working (Transformation), shine. More than 50% of companies have
and bolstering HR efforts like talent attraction. implemented digital platforms to run their
Intrapreneurship programs are important tools programs, but the arena as a whole is hungry for
that transcend the organization. quantitative data to back up the effectiveness of
these programs.
While being supported during their journey
thanks to coaching sessions, training (…), You must set clear goals to ensure that all
corporate intrapreneurs reported a lack of stakeholders are aligned and should seek to
personal autonomy. 70% reported a lack of elicit buy-in from the entire company, from
dedicated time to work on their respective frontline workers to middle management, to your
projects. In fact, 55% or project participants c-suite. Each phase of an intrapreneur’s project
are not incubated nor excubated. Finally, 50% must come with clear budgetary requirements
of participants ultimately receive little in terms attached, and no project exists in a vacuum.
of reward when a project is successful. Great ideas must be incentivized, so make
sure to take care of your intrapreneurs during
Performance Management Still the project’s inception and after its success.
Mostly Lacking Finally, make sure to establish clear-cut KPIs
While 90% of respondents stated that they that measure success rather than relying on
have developed some way of measuring objective observation to gauge effectiveness.

80 The Innovator’s Handbook 2022

 Area 120, Google’s In-House
Incubator

Jackie Bernhelm from Google’s Area 120

explains that the innovation incubator’s
Jackie Bernhelm
name came from the company’s original Partner Area 120 at Google
20% policy.

“We encourage our employees to spend

20% of their time working on what they
think will most benefit Google. This
empowers them to be more creative and Today, Area 120 has funded 94 teams
innovative. Most risky projects fizzle, often with over $500 million in revenue
teaching us something. Others succeed bookings. They’ve trained over 500 full-
and become attractive businesses.” time employees and had 13 successful
graduations.
Area 120 is a place for people to work on
their 20% projects 100% of the time. It The Mission of Area 120 and How
makes space for innovation in a company that It Operates
now has over 100,000 employees who still
need to deliver on the expectations in their The mission of Area 120 is empowering
everyday jobs. diverse entrepreneurial Googlers to
unlock value for Google through zero-to-
While Area 120 is now experiencing success, one innovation.
it was an iterative journey to get to where they
are today. When it started, Area 120 was a Empowering Googlers means having
startup accelerator for large-scale projects that dedicated resources, shared services, and
had big teams and long timelines. Originally, experienced mentorship for them along the
they measured success by whether Area 120 way. Area 120 looks for people left out of the
created a billion-dollar business. This innovation traditional venture process, such as those
setup didn’t work, though, because it didn’t take who are innately entrepreneurial but who
advantage of the unique things about Google. can’t afford to take the risk themselves. They
It was looking externally for definitions of support these people, give them autonomy
innovation instead of looking internally. and resources to build their ideas as quickly
as possible.
The group pivoted and became an innovation
incubator. Today, it’s about identifying and However, resources within Area 120 are
fixing key issues that Area 120 is uniquely purposefully kept scarce. There is a limited
positioned to address inside of Google. headcount, budget, and time. That scarcity
The innovations are capital-light and have a drives ruthlessness in prioritization.
timeline of one to three years, after which the
programs graduate into an existing product The operating model of Area 120 differs
area. Success is now measured by how those from Google. Area 120 offers a huge amount
projects grow once they leave. of autonomy, paired with clear guidelines.

The Innovator’s Handbook 2022 81

Being independent allows people to How Area 120 Picks Its Projects
take risks, which might be harder to do in
existing product areas from within Google. Projects are initially assessed based on four
Streamlined processes and systems allow categories:
projects to get to market quickly, sometimes
in a matter of weeks. 1. Team and Talent: Teams need to
demonstrate entrepreneurship and
How the Incubation Process Works experience in the area of their project.
They should also demonstrate an ability to
Pipeline take feedback well.
There is an open call application process, but
Area 120 also offers guidance on the types of 2. Google Fit: Ideas need to either
pitches they’d like to see. Twice a year, they be adjacent to an existing product
provide templates for the pitches to shape area’s strategy or further out on its
the content that’s coming into the incubator. strategic roadmap.
The team listens to those pitches and
conducts product area diligence. Area 120 3. Area 120 Fit: The team has to run lean
fosters deep relationships with leaders within and learn quickly.
Google so they can approach them with pitch
areas for feedback or interest. 4. Value Creation: Projects need to show
that they are solving a problem which
Program could result in a significant number of new
Selected teams get an initial investment of six users or new revenue for Google.
months and $75,000. After six months, they
have their initial review. The review process What Makes an Internal
is strict, with 40% of projects discontinued Incubator Successful?
within the first six months. By the 18 to 24
month review, the project should be pivoting Reflecting back at their journey so far, Jackie
from proving zero to one to thinking about adds three success factors for internal
how they are going to integrate into a product incubators to succeed.
area. In the beginning, they’ll be building
fast, but by the end, they’ll need to hook into First, the incubator has to be good at
Google’s infrastructure. mentoring and coaching, as well as partnering
with existing product areas. It has to select
Graduation projects that can scale up quickly with
Projects are chosen based on their ability to limited resources while deciding the best
move Google’s business forward, and if they times to discontinue, pivot, or invest. Internal
are successful, they leave Area 120 to join incubators need to remove barriers for
other areas of Google to accelerate. Lean diverse entrepreneurial talent and retain those
teams need to have a win in one to three people within the company.
years. Successful teams integrate into product
areas with strong strategic alignment.

82 The Innovator’s Handbook 2022

 How to Help Brilliant Ideas
Move Forward

Microsoft is spoiled when it comes to ideas,

Ed Essey & Major Ryan Middleton
says Ed Essey, Director of Intrapreneurship Director of Intrapreneurship and
at the Microsoft Garage. Major Ryan Incubation at Microsoft Garage |
Sr Experimentation Lead at Air Force
Middleton, Team Lead in the United States Research Lab
Air Force, joined him for a year to see how
Microsoft Garage handles that influx of
ideas and helps to move high-value ones • Low touch: This is a self-serve style of
forward. He asks, if 5,000 incredible ideas support, so everyone in the company
showed up at your door, would you know can benefit from the discoveries made by
what to do with them? How would your other projects.
organization move those projects forward?
Types of Help Offered by
For many organizations, the goal is to Microsoft Garage
encourage innovation. Once you’ve
successfully done that, you have to know how For all levels of touch, Microsoft Garage
to move projects towards business value. It’s offers three types of help to innovators:
a process that Microsoft Garage has refined business viability, sponsorship, and the
over the years with a lot of success. experimental outlet.

How Microsoft Garage Moves Business Viability

Projects Forward This helps innovators assess their business
viability with the Validate stage of The Garage
No company has an infinite amount of time Growth Framework. This framework takes
and resources to move each project forward. ideas from lean startup and agile philosophy
To allocate their available resources, they use and translates them into the corporate
a touch system: environment of Microsoft. Enterprises can’t
and don’t operate the same way startups do,
• High touch: These are top projects, such so the process used to assess viability has to
as those that win prizes in a hack-a-thon. be a little different, too.
These projects get residency and work full
time on the project with support from the The Validate framework looks like this:
Microsoft Garage team.
• Understand: Innovators go through
• Medium touch: These are projects that a modeling exercise, such as using a
might be former winners of a hack-a- business model as a canvas, to build a view
thon. They aren’t the newest projects, but about how they believe the world works.
ones that have meetings with potential Within that model, they then identify any
sponsors. The Garage team helps prepare assumptions they made. Those assumptions
them to make the case about why that are converted into testable hypotheses and
project should move forward. prioritized based on importance.

The Innovator’s Handbook 2022 83

• Design: The team takes their testable to provide a letter of recommendation
hypotheses and designs experiments or making an introduction that can help
around them. move the project forward.

• Build: The innovators need to build the • Catcher: These are the people who will
leanest thing possible, then use it to test decide where a new idea should land
their hypotheses. within the organization. They know what
department, person, or team is ready to
• Test: Teams take their prototype and go catch the brilliant idea and land it.
test in the market.
• Funder: These are the people who can
This process should work as a loop. Teams provide resources like money, people, or
will take the information from the test and positions to move the project forward.
feed it back into their own understanding,
then start the process again. The idea is to Most teams think they need a funder right
increase understanding while continuing to away, but it’s often the least needed type of
build the project. Teams end up connecting sponsorship in the early stages. Initially, teams
with potential customers and finding the true should focus on building partnerships with
value of their idea. Feedback isn’t always influencers and creating allies in the desired
what you expect, and sometimes customers department. Once that’s done, they can focus
aren’t who you thought they were going to on finding a funder.
be. Getting ideas out into the real world can
help find value and demonstrate that value to Experimental Outlet
potential sponsors. The experimental outlet is an opportunity to
get ideas into the market where teams can
Sponsorship gather feedback from people buying them.
The Garage process can also help
intrapreneurs get the sponsorship they need Ed says that teams should spend their
to move forward. This is about finding the creativity on new ideas, not on how to do
right people, meeting with them, and nurturing them. For example, they don’t have to be
those relationships. creative about how to package their idea
for the market. The Microsoft Garage will
The Microsoft Garage team coaches take care of that part for them, using the
innovators on what to say to potential knowledge they’ve gained from helping
sponsors and how to prove the value of their hundreds of other teams. The teams get
idea. Innovation teams also learn about what the benefit of all that knowledge, and the
to do after a meeting and how to follow up. Microsoft Garage continues to learn new
things in the process, too.
Part of the coaching process is teaching
innovators how to tailor their pitch to different Once the teams run their experiments,
types of sponsors: Microsoft Garage has several checklists for
them to go through before launch:
• Influencer: This is someone in the
organization who can lend their status or • Compliance
authority to help the team. They provide • Naming
air cover or the protection and space • Go to market
in which to operate. They might be able • Market readiness

84 The Innovator’s Handbook 2022

These checklists might not be the fun part of process that provides immediate value to the
innovation, but they are an important part of team. When these checklists are complete,
it. They help ensure the project is ready for the Garage team then prepares the projects
market, and it’s not going to be a detriment to for their launch.
itself or to Microsoft when it launches. It’s a

Innovation is
Everyone’s Job

Innovation can only succeed when everyone,

at every level of the company, is involved in Stephanie Hammes-Betti
the process. That’s the major lesson shared SVP, Innovation Design at
by Stephanie Hammes-Betti, Senior Vice US Bank
President of Innovation Design at US Bank.

In the financial space, innovation is not innovation, gather as many ideas as possible,
optional. It’s at the heart of customer and then iterate to find the best solution
experience, both now and in the future. FinTech in the fastest way possible while building
continues to disrupt the space, causing large- core learnings.
scale banks to catch up or lose out.
The core innovation group itself consists
That’s why US Bank has built its entire of 30 employees and is organized into
innovation efforts around empathy, and seven areas:
understanding the stakeholder journey
through both employee and customer eyes. 1. Research and development, focusing on
Here, innovation is everyone’s job, with co- long-term horizons and far-out concepting.
creation happening at every stage of the
journey across the U.S. 2. Project management, including the
compliance piece that is so crucial in the
Within the larger corporate environment, banking industry.
innovation happens in three physical hubs
across different parts of the country. A hub in 3. Product development, which is where
San Francisco focuses on digital experiences, an idea that has been explored will be
connecting directly with the FinTech and piloted and commercialized.
startup culture of Silicon Valley. Atlanta
is home to two hubs around growth and 4. Innovation design, owning the early-stage
payment spaces, while Minneapolis is home to ideas phase to identify problems and
the core innovation group. ideate on solutions.

The core innovation group, in turn, has taken 5. FinTech acceleration for potential
an agile approach to the process. The goal is partnerships and relationships in the
to get everyone on board and excited about startup space.

The Innovator’s Handbook 2022 85

6. Artificial intelligence. Startup methodologies, it helps employees
see their ideas through to truly bring value
7. Industry and government partner to the company. A new rapid design studio is
relationships. specially designed and reserved for solving
big problems fast, with a more centralized and
The 4-Stage Innovators Journey agile approach.

But, of course, if innovation is to become Values-Driven, Value Delivered

a core component of the business, it
has to become everyone’s job. So, the In the years of developing and refining its
core innovation group has developed an internal innovation program, US Bank has
innovator’s journey available for everyone, at developed four core values that everyone
every level of the organization: in the organization, including the usually
resistant middle management, has begun
1. Stage 1: InQ, a simple opportunity for to embrace:
all 70,000 US Bank employees to learn
through speaker series and workshops. 1. Develop ideas, no matter where they sit;
2. Empower your people, including
2. Stage 2: Idea Place, where employees leadership, to spark those ideas;
can submit ideas at challenges 3. Build collaboration across business lines
or freeform, working together to and strategic partners;
develop them. 4. Make a real difference that drives
innovation into the core of the business
3. Stage 3: Innovator in Residence, where future and success.
an accelerator and incubator along
with a bootcamp allow employees to Within that framework, it’s okay to let things
learn how to grow their own idea, or fail. Failure is learning, and the more you’re
have the innovation group develop it on able to fail, the more you’re learning. A cultural
their behalf. mindset of innovation is best embraced
through an approach that keeps the entire
4. Stage 4: Commercialize, where company in mind, including incentives for
developed ideas get tested, refined, day-to-day operations to sometimes take a
piloted, and launched through coaching backseat to new ideas.
on design, funding, and more.
It’s this approach that has led to US Bank
Each of these stages has been developed being an early adopter of Mobile Deposit
over time, crafted to help anyone in the Capture, automation tools, and voice-
organization contribute to the best of their activated banking, with more innovations
ability. The Innovator in Residence program, in the cryptocurrency and AI space sure
though, is the crown program. Based on Lean to follow.

86 The Innovator’s Handbook 2022

 Intrapreneurship – Innovative
and Sustainable Business Ideas
Invented by Employees

With more than 19,000 employees in

Switzerland and Italy, Swisscom is a major
Ralph Hartmeier &
Marius Schlegel
force in central Europe. But it also happens Corporate Responsibility at
to be one of Switzerland’s most sustainable Swisscom / Co-founder at rready
and innovative companies, thanks in large
part to a commitment that reaches beyond
its bottom line.

Swisscom is 51% Confederation-owned, which • Business Impact, always focused on

means that its responsibilities extend beyond finding the next disruptive business case.
shareholder revenue. A commitment to Swiss
society, its people, and the environment along • Cultural Transformation, specifically
with a growing commitment for the same through educating employees in a
values across the globe has led to a strong ramified and applied way.
desire for internal, sustainable innovation. It’s
core mission: to make it easy for customers • Employer Branding, attract and retain
to take the opportunities of a networked talents due to the trust and support given
future through the best quality, pioneering in that bottom-up innovation program
innovations, and a commitment to Switzerland.
Neither of these goals, of course, is possible
To accomplish that goal, a corporate- to achieve without scalability. A simple
owned social responsibility team at the 10-person workshop to find that next
top of the hierarchy is not enough. Instead, business case is not enough to change a
Swisscom wanted to involve its employees culture of 19,000 employees. It also doesn’t
for innovation, feeling the pulse of both the leave enough room for constructive failure
current and future generations. Enter Kickbox. and iteration. That was the reason behind
creating the Kickbox Process.
Kickbox: A Community of
Internal Innovators The Tangible, Scalable, and
Gamified Kickbox Process
The name of the program has nothing to do
with the sport. Instead, it’s about innovation On the surface, the process employed by
in a way that’s as comprehensive as possible. Kickbox may not be revolutionary. But a closer
It’s a system designed to create new business look reveals just how Swisscom applied
for the company, while playfully educating generally known innovation concepts in a
employees at the same time. More specifically, unique and productive way:
Kickbox was founded with three goals in mind:

The Innovator’s Handbook 2022 87

• Everything starts with the idea toolbox filled with gadgets and the KICKBOOK
submission, done through an easy-to- help with pitches, while an entire innovation
use online platform. Every employee can ecosystem allows employees to collaborate
submit an idea, 24 hours a day. with other organizations, book service
providers, reach out to possible sponsors
• These raw ideas are not judged in and innovation teams to work towards the
the first place but are moved into same goal.
the validation phase. It’s where idea
owners prove the value and business Improving the Process Over Time
case of their idea. But the key here is
that, unlike most innovation programs, Of course, not everything has worked out over
most ideas actually get validated. The time. The innovation team tried GreenBox
validation process became automated, workshops that were ultimately shelved
with scalable resources to help every because employees were not receiving the
employee succeed. right information at the right time. Similarly, it
found that many of the ideas advanced were
• Validated ideas then get piloted. Teams solving personal employee problems, rather
find a sponsor, get a budget, and develop than broader business problems.
an MVP.
Still, the Kickbox project has been an
• Finally, the best ideas become GoldBoxes. immense success. Successful GoldBoxes
They get implemented, and become a include a mobile smartphone keyboard
part of Swisscom. for blind and visually impaired users, along
with a partnership with Swiss Post that
It might not be intuitive but for Swisscom, allowed customers to more easily return
the validation phase becomes the most faulty equipment.
important part of the process. The ability to
say yes, and reward even ideas that don’t Even projects that didn’t make it past an
become GoldBoxes, has played a major role earlier stage have led to success, like a
in shifting the culture towards embracing climate friendly roaming program that was
innovation, with every employee feeling they stopped initially but has re-surfaced as a
can contribute. The second goal of Kickbox, strategic corporate program. The innovation
business impact, only kicks in when projects team behind Kickbox lived what they
are piloted and implemented. preached: They themselves went through
a corporate spin-out process turning the
Before that, employees are giving every internal Swisscom program into a product
possible resource to succeed. A physical provided to companies around the globe.

88 The Innovator’s Handbook 2022

 Stanley X: Getting Your
Innovation Program From Zero
to One and Beyond

How does a traditional company that’s

Kevin Lemke
been in business for almost 200 years
Vice President, Innovation &
build its innovation system? Kevin Lemke, Head of Startups – Stanley X
VP of Strategy and Operations at Stanley at Stanley Black & Decker
Black&Decker, sees its success in an
autonomous, top-supported business unit
like Stanley X.

Founded in 1843, and the continued result of Today, Stanley X is an independent business
numerous mergers and acquisitions, Stanley unit focused on launching new ventures. Still
Black&Decker is not necessarily known for separate from both the core business units
its innovation. But in 2014, organizational and innovation pieces like Stanley Ventures,
leadership recognized the need to innovate the unit is able to build new and disruptive
around its three core businesses of global solutions to bring the company forward and
tools and storage, electronic security, and thrive for another 200 years.
industrial manufacturing.
The mission of Stanley X is threefold:
The initial result: a digital accelerator, launch new ventures, counter disruption by
launched in 2015 to find new and innovative competitors, and bring innovation into the
solutions around data, analytics, robotics, core of the business.
and other topics. That was followed in 2016
by innovation labs, designed to build on The Venture Studio Model: 12-week
the accelerator to free resources from the Incubation Process
constraint of short-term goals and operating
rhythms. One year later, the organization Stanley X follows a venture studio model. Team
added in Stanley Ventures, with the goal to fill members incubate new ideas, validate them,
gaps in the core portfolio and remain on the request funding from an independent funding
forefront of technology. committee, and launch them as either wholly
owned subsidiaries of Stanley Black&Decker
Each arm showed early successes and put or spin offs from the core business. In doing
core functions in place, but did not lead to so, it’s beginning to create a portfolio of
the desired commercialization or reliable businesses, even as innovation labs in each
processes for innovation. So, in 2018, the business unit continue to operate.
organization launched Stanley X, specifically
designed to both build on its core capabilities
and scale innovations to commercialization.

The Innovator’s Handbook 2022 89

To accomplish that goal, the venture studio • Surehand, a talent sourcing platform
goes into a six-week market opportunity for industrial work that was ultimately
assessment before launching into a twelve- co-founded with some of the product
week incubation process: specialists hired initially for the
incubation phase.
• 2 days to define a bold hypothesis that
estimates what true and acute pain points • Deephow, a partnership with an AI-
customers might be facing powered video learning platform to
• 4 weeks to validate the pain points bridge the skills gap in manufacturing,
through comprehensive research, turning construction, and maintenance.
assumptions into insights.
• 4 weeks to experiment with potential Together, the two ventures have become part
solutions, using customers to test the of a new north star in the talent solutions
value of solving specific pain points. space: to create a comprehensive ecosystem
• 4 weeks to design a prototype or MVP, of helping skilled professionals better engage
put a business case around it, and make a with employers and improve their skills.
go or no-go decision.
Lessons Learned
Through the entire process, Stanley X embraces
human-centered design thinking, coupled The story of Stanlex X comes with a few
with lean startup methodologies. Projects are important lessons that are relevant for
prioritized using an evolved NPS-like score to any organization looking to build its own
ensure only the most accepted and customer- independent innovation business unit.
embraced solutions move forward.
• A mandate from the top is absolutely vital.
4 Focus Areas of Stanley X Without it, the effort is sure to fail or fall
victim to short-term thinking and changes.
In many ways, Stanley X started as an open-
ended question, simply looking to find • The focus needs to be on problems that
the problems that mattered without many matter to customers, not the organization.
guardrails or constraints. Over the last couple Focusing on jobs to be done can
of years, though, that wide-open approach help organizations develop innovative
has narrowed itself into four core areas of solutions that customers will actually buy.
focus for innovation:
• Flexibility on what problems to solve
1. Construction Technology is vital. Rigid instructions can lead to
2. Digital Manufacturing constrained innovation that doesn’t
3. Talent Solutions actually solve real problems.
4. Sustainability
• Revenue expectations should be aligned
The talent solutions space is particularly to the strategy. The alternative risks
relevant to a company traditionally focused unrealistic leadership expectations that
on physical goods. After an initial attempt can cause the innovation unit to fail.
to create project guidance for DIY projects
failed because of the free tutorials available • There needs to be freedom to try, fail, and
in the space, Stanley X was able to find two reboot solutions. Nobody likes failure, but
opportunities for success in this focus area: failing fast is vital to successful innovation.

90 The Innovator’s Handbook 2022

 It’s about embracing uncertainty, and None of that means the innovation unit needs
learning from failure to make the next to have all answers and pieces in place before
success more likely. starting. In fact, that’s impossible to achieve.
Stanley X also found that a dedicated fund is
• Capital investments need to come with unnecessary, as is complete buy-in across the
patience. Innovation doesn’t happen entire organization. As long as the above points
overnight, and anyone working in the unit are met, the parameters are set for success.
should be able to pivot and try new things
without the need for immediate ROI. Three years into its founding, Stanley X is
beginning to celebrate its successes. The
• Look to get points on the board. You initial startups have been stood up, but
can define what those points are, from much is still to be done to scale and expand
transferring earnings to revenue goals on their success. The goal: real, meaningful
or number of projects in the pipeline. revenue for the company that brings them
But setting realistic goals helps from innovation into the new status quo,
continued buy-in and maximizes long- making room for new innovations that lead
term success. Stanley Black&Decker into the future.

The Story of InGenius – Nestlé’s

Global Employee-driven
Innovation Accelerator

How does a 150-year-old company that

also happens to be the largest food and Nick de Blasio
beverage corporation and overall 22nd- Product Group Manager
largest company in the world continue to Employee Innovation at Nestlé
innovate? By leveraging the collective power
of its more than 352,000 employees. The
program supporting that effort is Nestlé
InGenius, co-founded by product group
manager Nick De Blasio.

In total, Nestlé’s 2,000+ brands and more than In that same time, a chairman emphasizing
1 billion products require 500 factories, 127,000 innovation and significant advances in digital
stock keeping units, 2,000 warehouses, and technologies provided the ideal basis for
30,000 employees focused in supply chain innovation. So, two employees set out with
only. Just seven years ago, all of these areas an idea to prove: what if the employees
was still operated largely independently, and working within supply chain every day could
manually. In other words, it was a natural starting contribute to improvements within their
point for a platform designed to find new ideas own areas?
to make operations more efficient.

The Innovator’s Handbook 2022 91

The result was a one-page concept drawing ideas forward. The platform enabled Nestlé
that ultimately became the basis of InGenius. to design solutions around the ideas and
The process outlined a roadmap to success: insights coming directly from the people with
their ears on the ground, and working most
• Everyday supply chain employees were closely on the resulting solutions.
the imagineers on the way to success.
In the seven years since its initial concept,
• Helping the imagineers connect and InGenius has undoubtedly become more
ideate around common criteria and specific. Ideation happens around innovation
guidelines could lead to interesting proofs challenges, based on specific topics
of concept. presented by unit leaders. Ideation is defined
as a 4-week process, at which point the
• Each concept could be evaluated in people behind the ideas present them to
a type of dragon’s den of experts and a panel of experts. Concept development
key stakeholders. happens over the course of 8 weeks, before
an MVP is built within 12 weeks.
• Concepts surviving the dragon’s den
would get the resources to build It’s how 7,000+ ideas get narrowed down to
prototypes and MVPs. 180 prototypes, which have ended up in 84
MVP pilots to date. The projects coming out
• Through agile development, concepts of that process have ranged from an ocean
would turn into space ships flying all the container tracker to automatically anticipate
way to achieve their KPIs. supply chain delays, to customer speech
analytics designed to improve marketing and
Some of the terms have changed, but the customer support. In the COVID-19 pandemic,
same general concept roadmap still guides a Hack COVID19 challenge generated 96
InGenius today. And it all revolves around a ideas to improve virtual collaboration, improve
key component: crowdsourcing. exercise for sedentary work-from-home
employees, and more.
Leveraging the Power of
Crowdsourcing Lessons Learned From
a Comprehensive
The idea behind InGenius is that innovation Crowdsourcing Approach
can come from anywhere, and is in everyone’s
best interest. That idea became a platform Seven years into InGenius, a few important
around which the entire organization lessons can help other major organizations
could rally. The same key elements of leverage a similar approach for internal
crowdsourcing, conceiting, evaluation, innovation on an everyday basis:
exposures, and agile delivery still hold true in
the entire structure. • Diverse teams, not just in skills and
backgrounds but even across different
Today, InGenius is a digital platform on which types of brands and business units, can
every employee can not just submit ideas, improve idea generation.
but find similar ideas. Employees can also
vote and comment on the ideas of others, • Strict deadlines standardize the process
each playing a part in bringing the best and help to manage quantity.

92 The Innovator’s Handbook 2022

• Internal open crowdsourcing doesn’t just the glory of a selected idea is challenging, as
generate ideas, but also helps in filtering is recognition of long-term successes.
and validating these ideas.
And of course, the success of a
• Innovation SEED funding at the discretion crowdsourced innovation program still
of Senior Executives, through Shark Tank- depends on the ability of senior leaders to
style events, is especially successful when take risks to improve, rather than playing it
individual investments are relatively low. safe on the status quo.

At the same time, some challenges continue Nonetheless, InGenius has proven to be an
to require ongoing resolutions. Involving undoubted success in its first seven years. As
boots on the ground employees still requires the platform continues to iterate on itself to
convincing middle-tier managers to give empower its employees, monitoring its future
up their teams’ time on daily operations for success will undoubtedly uncover future
responsibilities not necessarily related to their lessons to be learned for other organizations
job description. Rewarding dedication beyond looking to take a similar approach.

To the Moon and Beyond:

Cultivating Innovation
from Within

Since NASA is filled with innovative people,

Carissa Callini
it only makes sense to tap into the creativity
Leader, NASA@WORK
and knowledge that already exists. Internal Crowdsourcing
Platform at NASA
Carissa Callini supports innovation efforts
at KBR and NASA Johnson Space Center.
As part of this work, she is a member of
NASA’s Center of Excellence for Collaborative
Innovation (CoECI). CoECI was asked geographic regions and specialties. This
to bring different innovation concepts program engages the workforce through
and methodologies to NASA and the challenges, discussion questions, and
federal government. innovation calls. Technical and non-technical
teams can turn their problems into mini-
NASA@WORK is NASA’s internal competitions with awards at the end.
crowdsourcing platform where anyone in
NASA can post a problem or question and What is a Challenge?
get ideas and feedback from across the The first step is to identify what qualifies
agency. This allows access and knowledge as a challenge. You can replace the word
sharing to NASA employees across challenge with problem to answer this

The Innovator’s Handbook 2022 93

question. Challenges can be big, small, An example of a recent, successful challenge
broad, or specific. Challenges are anything was a call to action for the COVID-19
that create an issue such as processes that response, including ideas relating to
take too much time or things that cost a lot personal protective equipment, ventilation
of money. Challenges should be limited in devices, and monitoring or forecasting the
scope, specific, and actionable. virus. Seven ideas have been implemented
including advanced research for treatments,
Developing the Challenge new virus tracking apps, and sensors for
NASA encourages challenge owners to start virus detection.
with the five whys to determine the root cause
of the problem, and simply requires repetition Key Takeaways
of the question “why?” Challenge creators As you look to implement internal challenges
should also ask: “What has been done in your company, consider these takeaways
before?” and “Why hasn’t this been solved?” from NASA@WORK:
All of this goes into the challenge for the
solvers to see. The typical NASA practice is • Take away as much friction as possible.
to keep challenges open for four to six weeks Guide challenge owners through
to keep things moving and fresh and to give every step
a sense of urgency to those that are thinking • Set expectations at the beginning
about submitting. • Encourage active participation by the
challenge ownersduring the challenge
Up to two winners are awarded at the end • Follow-up! How much of an impact does
of a challenge which includes recognition the idea make?
and awards that are unique to NASA and • Be flexible and willing to evolve
crowdsourced. NASA also identified that
managerial recognition was a key driver so You can use challenges at any point: at the
this has been integrated into the recognition beginning of a project, when you need surge
processes for challenge owners and capacity, when you are stuck, or when you
challenge winners. want to verify you are on the right path.

Top Ten Lessons Learned

Standing Up An Incubator
Within a Corporation

Nicole Walker, Senior. Director Innovation

Nicole Walker
Incubator at Blue Cross and Blue Sr. Director, Innovation Incubator
Shield of Illinois, Montana, New Mexico, at Blue Cross and Blue Shield
of Illinois, Montana, New Mexico,
Oklahoma & Texas summarizes her lessons Oklahoma & Texas
learned from leading employees facing a
corporate incubator.

94 The Innovator’s Handbook 2022

10: Develop a Foundational Process and As a result, teams must reference their
Always Iterate ambition metrics to ensure that they are really
When the incubator came online, it was moving beyond the core to innovate in that
essential to engage in a boutique design firm adjacent space, where they can identify new
to help us build the foundational process. This capabilities for existing customers.
process involved three phases — research
and concept development, prototyping, and 6: Identify Executive Producers
finally, piloting. The role of an executive producer is to
engage between each phase of the incubator
In addition, there were also checkpoints and decide whether an idea should graduate
between each stage to ensure strategic into the next phase. Consequently, these
alignment was in place and that the right individuals are often held accountable for
opportunities were being incubated. However, ensuring strategic alignment and ensuring
when taking on this step, it is also important that the company is incubating the right
to remember that you also need to iterate or opportunities throughout the process.
empower the team to identify opportunities
for innovation. 5: Ensure Strategic Line of Sight
Individuals need to make sure that they are
9: Hire the Right Team not innovating for innovation’s sake, but rather
When taking on the incubation project, it they are actually solving critical problems. And
was assumed that it needed strong project the way to accomplish this goal is through a
managers who were proficient at driving strategic line of sight, which is the ability to
ideas to different milestones. However, as the draw a clear line of sight to assure that a team
process evolved and ideas continued to be is incubating the right idea that is aligned with
pushed, it was discovered that the right team the corporate priorities.
is what matters since these individuals are
responsible for bringing the concept to life. 4: Bring Employees Along For the Ride
Employees cannot just drop off an idea
8: Establish a Funding Model and pick it up at the end of the pilot phase.
The eighth step involves establishing a Instead, these employees have to be along for
funding model that supports the exploration the whole ride. When employees are engaged
of innovation pursuits, which means that with each other and the process, they are
corporations need to create a fund that positioned successfully to create exceptional
enables teams to pursue, develop, and deliver capabilities that graduate out of the incubator
strategic priorities. and advance that strategy forward.

7: Innovate Beyond the Core 3: Create Capacity to Deliver Proof of

There are often more ideas at the company’s Concepts Quickly
start than the capacity available to pursue One of the main phases where concepts lose
these ideas as portfolio priorities and incubator steam is the pilot phase because this is where
pursuits. And although, it is a natural inclination we are taking a prototype of a concept and
for the enterprise to want to bring forward making it a working proof of a concept that
ideas that are on the continuous improvement can live beyond our walls.
side. It is also essential to educate the
enterprise on problems and ideas that will As a result, one solution to this issue was to
push the company beyond the core and help it create an innovation delivery team that was
develop game-changing capabilities. focused explicitly on this pilot base to deliver

The Innovator’s Handbook 2022 95

proof of concepts quickly, since the faster 1: Know When to Exit
you can get the proof concept to the market, When ideas lose strategic alignment, and the
the quicker you will know if you’ve incubated market moves faster than you can incubate a
something that could be positioned for success. concept, it is essential to know when to let go
of the idea and ensure that you and your team
2: Engage the End-User Throughout are not emotionally connected to these ideas.
the Process
The incubator process from beginning to This way, you can remain dedicated to that
end is anchored in the human-centered strategic line of sight. As a result, if the
design process, meaning that it is important enterprise is going in a different direction than
to engage users throughout the process what you’re incubating, it’s not necessarily a
to ensure that companies create robust good use of time or resources to continue to
solutions to solve their problems. explore that idea.

What Makes Incubation

Efforts Successful

Linda Elkins, Head of Gore Innovation Linda Elkins & Puja Samuel
Center, and Puja Samuel, lead at AreaX Chief Technical Officer at
at JPMorgan Chase & Co., discuss the W.L. Gore Innovation Center /
Digital Innovation, AreaX at
structure of their innovation centers and JPMorgan Chase & Co.
what makes them successful.

What is the structure of your organization to instead driving technology

innovation center? in a focused area. We want to understand a
white space, an area that Gore isn’t in, and
Linda: The idea behind the innovation center leverage partners and technology to see if
started in 2015, and it took about two years to there is a business opportunity there.
create the physical space and bring on a team.
We did a significant amount of research on what Puja: We started AreaX in 2018 with the
other innovation centers were doing as well as thought of how to accelerate product
understand what Gore leadership wanted the delivery. So it started by establishing the
impact of the innovation center to be. execution path first. Then we brought in the
talent who could focus on the incubation
What we learned over the first three years piece and follow through on the execution.
is that it’s challenging to be an outpost Now we have an end-to-end operation that
and maintain a close connection with our can do everything from idea sourcing to idea
innovation teams around the globe that execution and delivery.
represent such diverse industries. It was
much easier to innovate when we pivoted In your current model, where is room
from trying to be a resource to the entire for improvement?

96 The Innovator’s Handbook 2022

Puja: We’re very closely aligned to the through that process to determine if this is
business unit, but we’re not a part of it. That’s an opportunity that warrants further research
a positive for our specific targets because the and resources.
model is optimized to handle adjacent things.
We focus on something we can bring to How do you measure the impact of the
market today rather than a moonshot. To get innovation center?
traction beyond the initial stage of incubation,
it’s important that we drive things that are Linda: We’ve evolved our metrics over the
usable today or tomorrow. When innovations last three years. At one point we arrived at six.
are moonshot-focused, it’s harder for a Some of them were volume metrics, looking
business to wrap its hands around them. at things like how many events we had or how
many prototypes we made in the lab. Then
Linda: We started by looking to engage we had a series of metrics about how many
with each of the divisions which represent ideas we brought in, how many were assessed,
very different industries, but it proved to be and how many were adopted by a division.
a challenging model. That has to do with The adoption metric is the key metric. We
the structure of the organization, as Gore is could look at 5,000 startups but if they aren’t
known for its lattice organizational structure. generating output, there is no value-add for
That means there is no strong top-down push the business. So, the volume-based metrics
for the divisions to work with the innovation show how we spend our time, but we are really
center. What worked better for us was for our trying to get to those impact metrics.
team to look for potential new opportunities
instead of acting as a capability. Puja: We track engagement, depth of reach,
and how many ideas flow into the system.
How do you decide what to start We have those metrics for the overall
working on? ideation program. When we get down to the
product level, though, the KPIs become more
Puja: It’s both a proactive and reactive bespoke based on what we’re developing.
process. If people come in with ideas, we’ll go Those metrics might be user adoption,
through layers of vetting to decide if it has user engagement, how many people we
potential. If it does, we’ll shape it and pitch onboarded, or how much repeat client interest
it to the investors. That’s the stage-gate to there was. When we meet those stages
proceed to further incubation. Proactively, of success, we know we want to put more
we attack the white space to look for ideas funding into it. If we don’t meet those metrics,
and areas of opportunity. We might go to the then it’s time to either recalibrate or kill it.
business areas and have discovery sessions
with them where we proactively ideate for What’s the biggest lesson you’ve learned
areas to target. on this journey?

Linda: We use the lean cohort process, so Linda: Gore has about 11,000 associates
we do an eight-week sprint where we do a worldwide. One group of five can have a
significant amount of discovery work. For huge impact, but we need to set realistic
example, we might want to understand an expectations. If we have a clear focus, we’ll
opportunity in biosensing. We look at the be more effective and have better outcomes.
market, what the opportunity is, and what We have to adapt, know how to influence,
technology we have that we can leverage. and how to bring in the new technology and
We come up with an idea and then move it business models that will make a difference.

The Innovator’s Handbook 2022 97

Puja: There are so many models for have flexibility in the program, so you can
innovation, and what’s going to work for your change depending on what the business
organization is unique. There are parts and needs. If you want to survive, continue to
pieces of the innovation system that work reinvent the system and your structure as the
across the board, but there is a uniqueness organization evolves.
about how it works for you. You need to

Fostering Innovation in
a Large Enterprise: IBM’s
Incubator Success

Steven Astorino is the Vice President of

Steven Astorino
Development for IBM Data and AI and
Vice President of Development,
IBM Canada Lab Director which includes Data and AI & Canada Lab
leading research and development within Director at IBM
Canada. IBM recognizes that its people
are the biggest asset of the company and
has worked to empower them to innovate.
One mechanism to enable innovation by sponsors who provide insight and advice
employees is its Area 631 incubator. throughout the residency. The innovators
come from all different job roles in a lab with
Area 631: IBM’s Made-In- different experience levels and tenure.
Canada Incubator
To give you a sense of what they work on,
This incubator started in Canada but has here are two project examples:
since spread globally. It selects six innovators
to focus on a specific challenge for three Log Prophet: This was the first Area 631
months with the goal of one breakthrough project and is a tool infused with Machine
— hence the name 631. The goal is to Learning and Deep Learning models, able
create a small, focused team, operating as a to predict pending IT events and alert
start-up, who will grow an idea into an initial stakeholders of an impending failure. The
prototype, with the goal of kick-starting a new goal was to create a system that monitors
IBM offering. services based on metrics and log outputs,
detects patterns across historical and real-
In developing Area 631, the goal was to be time data, predicts system status anomalies
light on process and heavy on support. For and potential failures, notifies the correct
three months, the group should forget they contact to take action, provides Root Cause
are part of a large enterprise. There are no Analysis, and takes real-time user feedback.
rules or roadblocks to inhibit creativity. The The project was picked up by a business
teams have access to all the tools they need, unit and ultimately resulted in the product
as well as a team of executive mentors and WatsonAIOps.

98 The Innovator’s Handbook 2022

Sales Configurator: This project came out of • Improves employee engagement
the Silicon Valley Lab to help sales teams by and retention by providing a start-up
creating a visual tool that helps identify the experience within IBM with improved
necessary part numbers to be fed into the career trajectory, opportunity to boost
IBM Software Quote and Order system (SQO) patent portfolio, benefit from mentorship
to generate sales quotes. This replaced with senior executives and technical staff
a complicated spreadsheet used by IBM
sellers. This project was engaged in by team • Integrates speed and disruption into a
members remotely during the pandemic. large corporation allowing innovation
to happen more quickly, which provides
Benefits of Area 631 the opportunity to get to market faster
and disrupt
The incubator has been running for two
years with eight incubators worldwide. It has The recipe for Area 631’s success includes
proven that it provides several benefits to freedom for the teams involved, 100% focus
the company: by the employees, which requires manager
alignment, thinking big and starting small, and
• Achieving tangible business results is the providing constant support and feedback
driving force behind the projects selected throughout the process.
to participate
Area 631 has proven such a success that IBM
• Provides client and partner engagement recently introduced a new innovation engine
opportunities. Area 631 presents an called IBM Hyper Blue which is a start-up
opportunity to address client-specific incubator, designed to develop and fund
problems and engage with them the next wave of cloud-based AI companies
throughout the process. within IBM. IBM innovators get the time and
resources they need to build and run a multi-
million-dollar AI business.

The Innovator’s Handbook 2022 99

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The Innovator’s Handbook 2022 107

 The Offer You Can’t Refuse: The
Future of Customer Experience

How can you differentiate yourself in a world

Steven van Belleghem
of differentiation? The COVID-19 pandemic
International Keynote Speaker,
has accelerated processes that made former Author and Founder at
opportunities to stand apart to potential Nexxworks
customers the new norm.

Steven Van Belleghem, author and customer indication, voice assistance are destined to
experience expert, has built a model to help become true partners in people’s lives.
companies create an offer their customers
can’t refuse, helping them stand apart from Meanwhile, AI is beginning to change
their competition in this brave new world. customer experience behind the scenes.
At its best, it becomes IA – intelligence
Good Product and Service: augmented, where software and tools boost
The Minimum Baseline the productivity of human teams. Already,
a San Francisco-based company called
At the base of the model is the need for the Digital Genius can dive into customer service
right product, service, and price. The crucial data, translate into a mathematical model,
point: this is a minimum baseline, rather than formulates potential answers, and presents
an ultimate goal. Companies without a great them to human service agents. Agents can
product or service, or not offering that service use parts of it, personalize the message, and
at the right price, will not be able to compete. maximize their response time because the
But even those that have it need quite a most time-intensive pieces are taken away.
few other components to truly succeed in
building customer relationships. The front office has also seen major AI benefits.
Shein, for example, has propelled itself into the
Digital Convenience: A New biggest fashion retail website around the world
Minimum Demand thanks to using real-time software that can
rapidly identify markets, design fashion for these
As recently as 2019, digital experience was a markets, and adopt local audience behaviors.
differentiator. Thanks to the rapid acceleration
of digital necessities due to COVID-19, it has The interface of the future will share four
become a commodity. Customers now expect characteristics. It will be invisible, fully
every company they interact with to offer personalized, require zero customer effort, and
digital components, and that expectation will solve problems before they surface. That, in turn,
only accelerate in the near future. will raise customer expectations across industries
to turn digital convenience into an absolute must.
At the same time, we’re only at the beginning
of digital innovation, particularly in the realm Becoming a Partner in Your
of artificial intelligence. Voice assistants, Customers’ Lives
for instance, are best to simply tell jokes or
play music today. But, if the iPhone is any In today’s environment, we’re far beyond basic

108 The Innovator’s Handbook 2022

product benefits or sales goals. Companies Changing Your World By Adding
can only succeed when they’re always around, Value to Society
adding value at the exact right moment.
More and more, people are looking for
It’s not just about being present. It’s about brands and organizations to take a stand. In
bringing positive value, making a difference a world with challenges ranging from racism
even if that difference isn’t directly connected to climate change, the need for action is only
to customer goals. becoming more urgent. Business leaders who
can proactively participate in that action can
That’s how the Dutch insurance company make a major difference in building customer
Centraal Beheer has transformed itself into relationships.
a positive influence in their customers’ lives.
Rather than simply offering insurance, the Take IKEA as an example. Every year, during
company’s goal is to become a partner in Black Friday, IKEA hosts a Buy Back Friday
sustainable living. It helps with solar panel event in which customers can sell old and
planning and installation, and offers handyman gently-used furniture back to their stores. The
services in an Uber-type peer-to-peer format. company cleans it up, and gives it a second
Everyone in the Netherlands can participate, life. Through this circular economy, the
creating more insurance opportunities for the customers and company equally contribute to
future. But that’s not because the goal is to sell the journey.
insurance; it’s because the goal is to become a
true partner in their customers’ lives. In today’s world of heightened customer
expectations, that’s a major bonus. Combining
That, in turn, requires talking to customers. it with the basic needs to offer great products
Quantitative audience research is great, but it and digital convenience, along with the
cannot replace the conversations with customers ability to become a partner in people’s lives,
that helps companies understand feelings, can make it a powerful strategy that allows
emotions, and potential problems. Everyone in a any brand to make an offer that customers
decision-making capacity can benefit from these cannot refuse.
direct customer conversations.

How Business Model Innovation

Can Help Your Firm Embrace
New Opportunities

Pop quiz: Which of the following represents

business model innovation? Christoph Zott
Professor Of Entrepreneurship
A. Robot laborers at IESE Business School
B. Plant-based meat substitutes
C. An online platform like Apple’s

The Innovator’s Handbook 2022 109

Answer: C. While A may result in efficiency to what (activities), who (carries them out)
gains, and B may be a popular new product, and how (in what order they’re carried out),
only C represents a fundamental change in the remember to briefly explain why (the main
way business is being conducted, in this case logic of value creation). You may find it helpful
for a consumer electronics company like Apple. to draw it out, too. Armed with that, use these
tips to start designing a new model:
Business model innovation, or BMI, boils
down to four things: (1) what you do (i.e., new Write a problem statement. Thinking of
business activities); (2) how you do it (i.e., new prospective customers’ goals and needs, write
ways of linking the activities); (3) who does it out a problem they might have (from their
(i.e., new activity governance and partnerships); point of view, not your own).
and (4) why the interplay of these elements
allows for more value creation and capture Formulate a questionnaire. Don’t assume you
(e.g., through new revenue models). As I know how to address the problem yet. Ask
point out in my new book, Business Model prospective customers, as well as employees,
Innovation Strategy (Wiley, 2021), it’s only when suppliers and other stakeholders, to probe
you start reconfiguring these four and actually the nature of the problem.
change the activity system of your business
that you achieve BMI, rather than just tinkering Consider successful templates. Examine how
around with individual activities, without other business models out there address the
changing the system, the way A and B do. problem. Don’t restrict your search to your
own industry but look farther afield to learn
In his research, Christoph Zott, Professor and new (to you) templates. When benchmarking
Head of the Entrepreneurship Department at and copying elements from other business
IESE Business School, finds BMI offers four models, don’t forget that things can and often
main advantages: should be redesigned with novel features.

1. It complements product and process Scan the environment. Particularly in times of

innovations, creating positive change, like now, do a PEST (Political, Economic,
synergistic effects Social and Technological) analysis. Imagine
future scenarios, using strategic foresight tools
2. It can be cost effective, since it to help you think about future possibilities.
does not necessarily require a large
upfront investment Seek out valuable partnerships. The previous
steps may lead you to identify new partners
3. It can serve as an effective barrier whose capabilities can fill gaps in your own.
to imitation and therefore create a
competitive advantage Redeploy resources and capabilities.
Sometimes it may be necessary to pivot. Going
4. It can be a disruptive force in an industry, through this exercise of thinking about your
creating new markets and/or uncovering business model in abstract, conceptual terms
new opportunities in established ones. helps in identifying elements of your existing
model that could be applied to a new domain.
To engage in BMI, you first need to A strategy workshop, or leveraging the views of
understand your current business model. Try outsiders, can give you a healthy distance, so
this exercise: Write one paragraph about how you don’t get so mired in the day-to-day that
your firm’s business model works. In addition you no longer see the forest for the trees.

110 The Innovator’s Handbook 2022

Experiment. Once a new way of doing 3. How could the required activities be
business has been sketched out, it should linked to each other in novel ways?
be possible to engage in some low-cost
experimentation. Experiments not only serve 4. Who should perform each of the activities
to test your hypotheses, they also help that are part of the business model (e.g.,
overcome inertia in well-established firms. the focal firm or a partner) and what novel
governance arrangements could enable
Test assumptions. There are many questions to this structure?
ask: Is there demand? Will your suppliers find
value in working with you? Is the environment 5. How can value be created in novel ways
changing in a way that’s compatible with your through the business model for each of
medium-term plans? Here is where a Test the participants?
Assumption Matrix (TAM) can come in handy.
In a TAM table, each row highlights critical 6. What novel revenue model fits with the
assumptions of the business model, while each firm’s business model to appropriate part
column contains milestones, using low-cost of the total value it helps create?
experiments. Make it dynamic: Changing the
order of the rows can highlight your changing When presenting BMI in your organization,
priorities, based on the results recorded in be conscious of how you do it. When framed
your columns. Empirical evidence from your as a response to a competitive threat,
tests can validate your model and mitigate risk, people tend to get more rigid, which restricts
tackling the business model one piece at time. information, narrows attention and reduces
channels, resulting in inertia. When framed as
In this process, you can ask yourself these a response to a market opportunity, people
six questions: react more positively under the expectation
of gain, which motivates change and
1. What perceived customer needs can promotes innovation.
be satisfied through the new business
model design? Opportunity and threat perceptions act as
important cognitive antecedents to business
2. What novel activities are needed to satisfy model change and innovation.
these perceived needs?

How to Nurture the

Innovator’s Gift

Every day, Leanstack Founder and CEO

Ash Maurya runs into what he considers the
Ash Maurya
Innovator’s Bias: startups and established Founder & CEO at LEANSTACK
organizations try to apply their existing
or new solutions to see what customer
problems they can solve. But that introduces
a simple problem.If the solution is a hammer,
everything starts to look like a nail.

The Innovator’s Handbook 2022 111

It’s a way of thinking that permeates startup Paradoxically, for innovative solutions, the
culture, and innovation in general. Innovators problems need to be old and familiar, and
build an MVP, measure customer reactions, originate from current solutions the customers
incrementally improve their product to fit already use.
those reactions, and eventually put a better
product to market. But too often, that cycle Getting there is not simple. But it is, at its
doesn’t work. core, a relatively straightforward solution.
These 4 steps can help you get there.
Competition and simple customer fatigue
mean that the product feedback may never Step 1: Understand and Prioritize
come. Instead of reacting, and providing Customer Problems
feedback, the audience just leaves. Now what? Naturally, in this approach, you need to
understand where your customers’ problems
New experiments become guesswork. The come from. Unfortunately, though, they won’t
cycle is stuck in the build phase, without a always tell you. In fact, they might not always
product ever successfully making it to market. know what it is.
Fortunately, there’s a solution to this build
trap: the counterpoint to Innovator’s Bias, Talking to your customers is crucial. But, in the
which Ash calls the Innovator’s Gift. words of Steve Jobs, it’s not the customers’
job to know what they want. They might also
The Basics of the Innovator’s Gift not trust you enough to tell you yet. So,
instead of asking what their problem is, ask
At its core, the Innovator’s Gift is simple. them to describe their current behaviors.
It’s the ability to avoid any solutions-based Observe their struggles with current solutions.
biased, instead looking at customer problems
and finding new, irresistible ways to solve Consider the innovation of ride sharing as an
these problems. example. Uber never asked its audience what
was wrong with taxis. If it had, the answers
Underlying that gift is the basic truth that might have revolved around them being dirty,
fundamentally, customers don’t care about drivers being rude, and so on.
solutions. They care about achieving
outcomes that are beneficial to them. The Instead, Uber observed the audience. It
best product get a job done for a customer, found that especially for time-sensitive
and does so in a way that’s better than appointments like flights, drivers were simply
anything that has existed previously. not trusting taxi companies to be on time.
Even a two-minute delay would cause stress,
Customers don’t wake up asking themselves as was the lack of advance knowledge what
what solutions to buy. They wake up wanting kind of car they would get for their fare. So,
to improve their lives, removing obstacles or Uber built an app specifically designed to
achieving desired outcomes in the process. remove these nuisances, causing massive
switching in the process.
You might have the best solution in the world,
based on the best technology in the world or Before cars, customers would have just
even a patent that no one else recognizes. asked for faster horses. And yes, automobiles
But if that solution isn’t solving a problem presented a more innovative solution
that your customers recognize as a problem, that solved their problem in a specific,
nothing can make your product successful. considerable way.

112 The Innovator’s Handbook 2022

Step 2: Define Potential Solutions It’s about overcoming the natural inertia
Once you have a strong idea of your everyone faces. All things being equal, the
customers’ problem, it’s time to think about incumbent product always wins. Only a
the solution. Here, one thing is crucial to keep solution that’s much better than what was
in mind: your solution has to be good enough previously offered can cause the switch.
to actually cause a switch, and that switch is Think 3M, which offered a significantly better
typically not incremental. solution to hanging up artwork compared to
the traditional drill bit and nails.
That doesn’t necessarily mean functionally
better. In fact, physical features don’t tend to It’s the type of presentation that’s impossible
mean much, unless your customers are very to ignore; a mafia offer that the audience
sophisticated or specifically looking for a simply cannot refuse. They need to react
functional outcome. enthusiastically, with the problem laid bare
and current solution to that problem suddenly
Instead, it’s about the emotional needs, and no longer adequate.
the emotional jobs your solution can fulfill.
Achieving a desired outcome is always an In that scenario, it helps to bring in the
emotional process at heart. competition. Actively comparing your solution
to the existing one takes away your customers’
Think about a solution that helps businesses temptation to do the same, allowing you
build better reporting. The bigger question, to paint your solution in just the right light
then, has to be what users will actually be able compared to its current alternatives.
to do with the report. If you can sell them on
the fact that they will improve their meeting, Step 4: Build the MVP
raise more funding, or get the green light on At this point, we finally get to the step that
more projects, their chances of switching most startups and innovators try to start
increase dramatically. with. The MVP is still important, but placing
it last allows you to build only products your
It’s important to keep in mind, too, that audience has already actively endorsed. You
solutions can be improvements over your own have received a strong indication that the
existing products. No product is perfect, and MVP will get interest because it solves an
the ability to recognize when to improve on actual problem.
your own product has helped companies like
Apple and 3M stay at the top of their market. It doesn’t always have to be breakthrough
innovation. But it should solve a real problem,
Step 3: Craft an Offer and do so in a way that’s significantly (and
With a solution in place, it’s time to actually emotionally) better enough to cause a
craft the offer. This step is about finding the massive switch.
switching trigger that causes your audience
to believe in your potential solution so much,
they’ll be ready to move.

The Innovator’s Handbook 2022 113

 Design Like You Are Right, Test
Like You Are Wrong: How to Lead
Innovation by Asking the Right
Questions at the Right Time

When leading innovation, the first step

Tendayi Viki
is creating the context where winning
Associate Partner at
ideas emerge because, as a leader, you Strategyzer and author of
understand that you cannot pick the Pirates in the Navy
winning idea. Tendayi Viki, Associate
Partner at Strategyzer and author of
Pirates in the Navy, provides a new toolbox what is already known and push to come
for leaders to effectively coach teams for up with the craziest idea.
successful innovation.
2. Ensure progress towards value creation:
First, leadership must understand that Ask the team to identify what has to be
innovation is a “wicked problem” and that true within and outside the company for
linear questions are bad for successful the crazy idea to work. Then, the testing
innovation. Wicked problems are hard to and iterating process begins.
specify and describe, and complex to solve,
with no single best solution because the 3. Design like you are right, test like you
requirements are continuously changing. are wrong: Use David Bland’s illustration
of business design principles broken
Since “wicked problems” do not have a finite into two intersecting circles, Design and
set of potential solutions, there are no right Test phases. On the Design side, the
or wrong solutions but rather good or bad process is a continuum: Ideate > Business
ones. Therefore, leaders must stop looking Prototype > Assess. At the Assess point,
for a right or wrong way to address problems leaders need to curb their inclination
and push their team to identify better, to question how good the idea is—the
innovative solutions. focus should be on whether the idea is
breakthrough enough. If not, then the
Leading an Innovation Team design iteration needs to start over. Only
after you’ve arrived at an innovative idea
At the heart of leading innovation, it is about can you move to the Test phase.
asking the right questions at the right time.
The Test side is another continuum:
1. Inspire breakthrough business design: Hypothesize > Learn > Experiment. Here
You must push boundaries to allow your you question what it would take for the idea
team to arrive at breakthrough designs to work. And you give the team the time,
instead of keeping them within familiar resources and space to test their ideas. Over
grounds that you know already works. To time they can use the lessons they learn to
do this, avoid linear questions based on return to the Design phase.

114 The Innovator’s Handbook 2022

Thinking Beyond the Current • Cost Differentiators: Can we change
Business Model our cost structure significantly by
creating and driving value with
Here’s how innovation leaders can coach their different and differently configured
teams to think outside the box and iterate resources and activities?
through the Design and Test phases. • Margin Masters: How can we find ways
to eliminate the costliest aspects
• Remember: the mantra is to NOT fall of our business model and focus
in love with your first idea. You want to on value that matters to customers
trigger a thought process that will result in for which they are willing to pay a
multiple prototypes. higher price?
• Inspire Front Stage Innovation. Use trigger
questions to coach the teams along the Keep in mind that no one has the time or
business model canvas, focusing on: money to run experiments for the sake of
• Market Explorers: How can we tap into them. The point of all of this is to reduce risk,
new, untapped, underserved markets and the iterations of design and testing get
with large potential? us closer and closer to a business model that
• Channel Kings: How can we increase will work.
market access and build strong and
direct channels to our customers? The Business Model Canvas helps map
• Gravity Creators: How can we make hypotheses and prioritize them as important
it difficult for customers to leave vs. unimportant, evidence vs. no evidence,
by increasing switching costs in a always asking what needs to be true for the
positive way? idea to work. At this stage, you can begin
• Drive Backstage Innovation. This means to measure expected profitability against
focusing on your key resources, activities, innovation risk.
and partners.
• Resource Castles: How can we make Great intrapreneurs already have an innate
difficult-to-copy resources a key pillar sense for this balance, but leaders can model
of our business model? it using the Innovation Project Scorecard,
• Activity Differentiator: How can which measures:
we create significantly more value
for customers by performing new • Strategic fit within organization
activities or configuring activities in • Opportunity in the marketplace
innovative ways? • Risk reduction
• Scalers: What can we do differently • Is this feasible? Can it be done
to make our business model more with our key partners, activities,
scalable (e.g., eliminate resource and and resources?
activity bottlenecks)? • Is this desirable? Should it
• Stimulate Profit-Formula Innovation. be done, examining the value
Continue to push the design, this time proposition based on our customer
focusing on how it can be profitable. relationships segments?
• Revenue Differentiators: Which • Is this viable? Can it be done
new revenue streams or pricing profitability?
mechanisms can we introduce to
capture more value from our customers
or unlock profitable markets?

The Innovator’s Handbook 2022 115

Staying on Track 2. Is the business model described well, or
do you need more information?
It’s again crucial for the innovation leader
and their teams to accept that there are no 3. Is it clear how much progress the team
finite solutions or correct answers and that at has made so far in testing hypotheses?
any time in the process, any stage may alter
another channel or differentiator. 4. Has the team identified the right
hypotheses to test next, or is anything
Asking teams to go out and run experiments being missed?
to validate or invalidate opportunities is
the complete opposite of traditional work, 5. Will the experiments produce the kind
where you’re solving problems and fixing of evidence that will allow you to make
things. It’s no surprise that leaders feel lost informed decisions later?
when coaching teams during this period of
seemingly endless exploration. 6. Is there a project committed to driving the
idea forward?
As a leader, you can stay on track
by measuring progress with these 7. Has the team made reasonable requests
guiding questions: in terms of budget and resources given
the stage in the innovation journey?
1. Is the project idea aligned to
strategic goals? 8. Are you and the company committed to
supporting the team’s next steps?

How To Test New

Business Ideas

In the past five years, most of the corporate

innovation labs or programs have failed to Narjeet Soni
deliver any scalable business models. Product Strategist &
Co-Founder at Lean Apps
Due to these failures, corporate management
has begun to realize that corporations have
been reporting “vanity metrics” in what’s
known as “innovation theater.” The basic problem is that these innovation
programs didn’t have enough ideas to go
When engaging in “innovation theater,” through the funnel. Working with only five to
corporations show off numbers that don’t ten ideas a year, their possibilities for success
reflect their actual growth or innovation. They were very low. To make matters worse, they
may have been launching new products, but did not test their ideas.
there was no value delivered to the customer
at the end of the day. The results?

116 The Innovator’s Handbook 2022

The VC data shows these “innovation labs” Step 5: Scale Up
were actually making: Involve the core business to begin scaling.

• Products nobody wanted Of course, all of this depends on the ability to

• Valuable products that were not profitable test innovative ideas at speed.
• Profitable products that were not scalable
How to Discard Business Ideas by
At the end of the day, all their efforts were Rapid Testing and Experimentation
producing little to no ROI.
Opinions alone don’t help you validate your
But it doesn’t have to be this way. By making ideas. For that, you will need to pinpoint
small investments and testing hundreds of actual consumer behavior.
ideas a year at a very fast pace, you can
determine early on if any of them have a For example, while 57% of people say they
scalable business idea. would like to see healthier options on menus,
only 3% actually choose from among the
In order to succeed with this approach, healthier menu items when given the option.
Narjeet Soni, CEO and Innovation Strategist at
LeanApps, suggests you follow these steps. Describe the Idea
Define your idea in one sentence, beginning
Step 1: Collect and align ideas with a “we believe” statement: We believe “A”
Check in with different parts of the (the target market) has “B” (a problem) and
organization and gather data. Ensure will do “C” (an action).
all ideas are aligned with the overall
innovation strategy. From there, you create a hypothesis: “X%”
(% of group) of “Y” (target market) will do
Step 2: Test ideas “Z” (action).
Test ideas without writing a single line of
code. This prevents you from wasting time on In considering the problem, you can’t just
ideas that will not lead to ROI. consider that the problem exists, but you must
know why the problem exists.
Step 3: Define MVP
Create a design prototype and build • What are the causes leading to
the product. the problem?
• What are the consequences if it’s
Step 4: Develop a “Throwaway” MVP not solved?
This MVP is intended for you to use for • What will the future look like if the
learning, not to scale. problem is solved/not solved?

During this phase, the focus is on acquiring These questions will help you form your
users, making sure they’re active, and value proposition.
converting them to paying users. Learn what
channels are working for you and what the From there, you will
“ah-ha” moments are for your users.
• Define the customer segment
Only once you’ve done that are you ready • Complete assumption mapping (including
to scale. desirability, feasibility, etc.)

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None of this evidence is opinion-based. This forward and pivot till the idea has been
helps you make more rapid decisions. proven likely to profit.

Evidence helps a team decide quickly, Rely on Objective Decision-Making

especially after critical assumptions have
been filtered through concrete evidence. With clear evidence in hand, decision-
making on the management level becomes
Decide as a Team: Kill Idea, Invest, or increasingly objective. Formulas, calculations,
Experiment More? and experiments can offer a converged
Even with evidence, making decisions as a value of the probability for the success of
team can be challenging. That’s where an your idea.
evidence meter comes in handy.
And any false positive / false negatives are
An evidence meter is an experiment covered in this, because if you do enough
framework in which you can define the idea experimentation, you can observe a pattern.
based on how likely it is to succeed, from Though there is still a human element
“very unlikely” to “highly likely.” involved in decision-making, this process
can help you make more objective and
If you have eight experiments total, and effective decisions.
six experiments tell you your idea will not
succeed, you and your team can see that Eventually, this approach will make sure
the idea is “very unlikely” to succeed. Killing you make decisions based on data- not
the idea is barely a question. However, if opinions, vastly increasing your chances of
experiments say that your idea is “very likely” success (and delivering a decent ROI for your
to succeed, you and your team can move company’s investments).

The Serial Experimentation

Approach to Venture Evolutions

To arrive at investable businesses with

great products that can scale, MING Sebastian Müller
Labs have honed their approach to serial COO & Co-Founder at
experimentation in moving forward new MING Labs
ventures holistically. Their approach
includes using storytelling from the
start, having strong assumptions, and
experimenting and pivoting the whole to increase the success rate of building
venture concept, to recognizing that every a venture. MING’s COO and Co-Founder
corporation has a different risk tolerance. Sebastian Müller shares some of the tips and
tools that have helped them to build over 20
Taking these insights into account, they startups and over 25 corporate ventures in
created the serial experimentation approach the last decade.

118 The Innovator’s Handbook 2022

Opportunity Backlog & Unpacking rough, but all the information should already
be there. Then you can start evolving the idea,
Looking at the process from the beginning, looking at it as a whole business instead of an
the venture team starts by having a backlog isolated product or service.
of opportunities already in place that they
can start with. This could be through mapping To complete concepting the venture, the team
those opportunities, looking at mega trends, evaluates it by scrutinizing every iteration
at weak signals, and having done some against key strategic dimensions. What is the
research. After this ground work, the first thing concept’s strategic fit, its business impact,
they do is to unpack those opportunities to or its pioneering factor? Using a spider
understand if the existing research is detailed chart, you can compare different concepts
enough to move forward or if additional against each other on a level where ventures
discovery is needed. are inherently a bit difficult to compare.
Once that’s done, they look at the validation
Do we need to do more interviews? Do progress where they focus on desirability,
we need to run more surveys to collect feasibility, and viability to validate assumptions
data points? on a progressive scale of 0-100%.

Once enough information is available, then Once you’ve established your story, you
they brainstorm some “How Might We” can start probing the concept by inviting
statements. It’s important to provide enough other stakeholders into the process. These
space and time to look at the problem from stakeholders are there to challenge the team’s
different angles and try to come up with a assumptions and internal biases to determine
bunch of different statements. The idea is if the venture is a valid one. Challenging any
to have a few interesting problem framings assumptions they have about a concept
to really understand the problem statement is really important. Teams often take the
in detail. problem as a given and move too quickly
to the solution, so they need to get critique
Venture Concepting & Storytelling from outside stakeholders to challenge
those internal biases and get a holistic way
Moving on to the phase of venture of questioning.
concepting, it is all about brainstorming.
Doing ideation, market research, context Experimentation
switching and similar exercises, the team finds
potential solutions and builds a marketplace From there, we move to the key part of
of their top ideas. Each team member is the venturing process: the cycle of serial
then challenged to construct a concept experimentation. This is where the team
out of them, including a name, tagline, and designs critical experiments to test any
business model. assumptions they have identified about the
concept. What’s important here is to keep
Here is where storytelling comes in: the a validation score that helps to quantify to
whole concept, the target customer, the which degree the concept is validated.
value proposition, the technology. This allows
the team to more clearly communicate their Is the concept ready to go to the building
vision, which is key to getting buy-in from phase? Or do we still need to learn more
stakeholders. And don’t worry. As we’re still and iterate the concept? In this case, you
in the early stages, the idea can still be quite can continue with the experimentation to

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test additional hypotheses until the concept how far you’ve come towards validating the
is fully validated. Or is there no way to pivot concept. This allows stakeholders to see
and we need to find a whole new concept or how you’ve minimized risk. Innovation teams
opportunity? If the concept is not completely should create a standardized process for
on track, you can opt to pivot or return to the sharing validation progress across your entire
marketplace of ideas to find a new concept portfolio, so it’s easier for leadership to see
to test. your progress.

It’s essential to iterate the concept as a whole With enough validation and confidence, the
and design experiments that test multiple concept can now move to the consolidation
aspects of the idea. If you iterate just one and build phase. Here is where you review the
part of the concept until it’s right, such as its results from the experimentation cycles and
desirability, the rest of the concept might not use what you’ve learned to put together the
fit with this evolution. final business case and define the product.
With that, you can secure the appropriate
A tip: keep a knowledge database where build and operational budgets.
you have a backlog and give feedback into
the system so you understand the overall It’s not only about the budget for the build –
progress, the pipeline, and when and why but also for getting to product-market-fit to
experiments failed. This can be a helpful tool make sure you don’t run out of money during
for future venture builders which documents the first months of the venture journey. Parallel
all key learnings. to that, you start building the organization, start
sales and marketing, and build the product –
If a concept fails, recycling a competent team before moving on to launch.
is quite useful to successfully move towards a
portfolio-driven approach in venture building. And that is the whole approach in a nutshell:
The team can still build on its learnings and an evolution on top of the core process
go after a new opportunity. Don’t kill the team that most venture builders, innovators, or
just because they killed a venture. entrepreneurs from the startup space might
already be familiar with. It shows how these
Validation Threshold new tools and techniques help to increase the
potential success rate of a venture, especially
The experimentation phase doesn’t end until in the context of corporate venture building.
the concept reaches the minimum acceptable Specifically for first-time venture builders,
validation threshold, and every corporation some of these insights might be helpful to
has a different risk tolerance. You’ll want to keep in mind to avoid some of the mistakes
establish that risk tolerance at the beginning we made in the past along our venture
of the experimentation phase and track building journey.

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 AI in Foresight and Innovation:
4 Steps to Stress Test Your
Innovation Pipeline

A crucial part of driving innovation within

your organization is looking at the future by
Christian Mühlroth
conducting scenario planning. Dr. Christian CEO at ITONICS
Mühlroth, Chief Executive Officer with
ITONICS, offers four steps to do just that by
stress testing your innovation pipeline with
the help of Artificial Intelligence (AI).
a daily or weekly basis to identify signals
Step 1: Understanding Change by Collecting and hints about what is to come based on
Company-External Data the financial investment made by other
During this step, you want to understand companies and organizations.
external change by integrating public and
non-public external sources into your Step 2: Capturing Your Innovation Pipeline
innovation platform. Implementing AI to by Connecting Company-Internal Data
collect and standardize this data will save you In this step, you can use AI to capture the
time and help organize the information in a innovation pipeline to develop an effective
structured format. future course of action by connecting your
company’s internal data to the external data
You can organize all future-oriented gathered in the previous step. The process
knowledge and assumptions related to begins by collecting all innovation efforts
external change to form a central research your company is working on and combining
database. This allows you to discuss how them into a clear roadmap in your innovation
these changes can affect your company in the platform. To structure the data, you should
future and the actions and innovation needed apply best practices to categorize each
to address it with both internal and external innovation project or initiative accordingly,
experts. Collaboration and knowledge sharing with labels such as type of innovation,
are the two key elements when understanding innovation ambition, etc.
future change and developing opportunities
based on those changes. After the internal investments and innovation
projects are gathered and organized,
The question you should be able to answer at create an Innovation Graph and connect all
the end of this step is, “Where to Play?” emerging trends and technologies with all of
your company’s current projects. Applying
Tip for collecting external data: unsupervised machine learning can help
• Look beyond only patent or IP data, use identify possible areas for optimizations and
scientific databases, news, and startup cost savings.
databases with the idea to have more of a
far outlook about emerging change. The purpose of this step is to answer the
• Use patterns to identify what’s going on question, “How to Win?”

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Step 3: Spotting Optimization Areas using requiring action but with no linked initiatives or
AI-Based Recommendations activities to drive the needed innovation. You
The question to ask in this step is, “are we are searching for innovation projects ranked
(still) doing the right things?” Using AI-based as a high priority with low investments. This
recommendations, you can discover areas evidence-backed approach helps find new
that are low priority investments to focus on opportunities that increase your market fit.
spot area optimization within your innovation
pipeline. Using an Innovation Graph, you can After finding opportunities, you can use AI
visualize external change drivers concerning bots for each discovered opportunity to
internal innovation projects to determine if continually scan and analyze external data for
and when action is needed. emerging trends and application examples
and receive alerts with the findings on a set,
Suppose you discover that there are reoccurring schedule.
several activities related to the change
driver not requiring action. In that case, you Benefits of Discovering Opportunities with
can shift resources to projects that have a the Help of AI
higher likelihood of success based on your • Increases market fit for your current and
company’s future goals. future products or services
• Increases project transparency among
The question you should be able to answer at employees by helping them understand
the end of this step is, “What to Execute?” their contribution to the company’s
innovation success.
Step 4: Discover Opportunities Using AI- • Increase the likelihood of a new opportunity’s
Based Recommendations success by relying on evidence-backed data.
This step is all about discovering new
opportunities with the aid of AI-based methods Keep in mind: while AI is great for sifting
or recommendations that will likely promote through data to quickly identify areas of
growth. The question to ask is, “Where to interest that require a closer look, humans must
Play?” Use an Innovation Graph to visualize still be a vital part of the later stages of driving
external change drivers and the related innovation to interpret and analyze these areas
internal innovation pipeline to identify projects and determine what actions to take.

The Imperative for

Inclusive Innovation

Maulie Dass, Senior. Director and Global Lead

for Cisco Innovation Labs, believes that the Maulie Dass
innovation community must work with urgency Global Lead for Cisco’s
to address inclusivity in innovation. Innovation Labs at Cisco

Some product users often get a feeling that

some products are made for them, while most inclusivity, and innovators are uniquely situated
others are not. This feeling is a sign of non- to serve a role in slowing the spread of bias.

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Non-Inclusive Innovation perspectives and ensure representation
The concept of non-inclusive innovation is not of underrepresented communities.
something in the abstract but instead is clear These groups are well suited to provide
in examples throughout history. Examples of feedback and serve as focus groups.
historically non-inclusive products include It’s also important to know the passions
college desks which were made for right-handed and background of those on your team.
users instead of both right and left-handed Innovation doesn’t always need to be led
students, vehicle safety tests such as the by the smartest person in the room but
infamous “crash test dummies” test did not rather the most passionate.
represent women, and the first automatic hand
soap dispensers that did not recognize dark skin. • Process: Process is a key contributor
to inclusive innovation and enables
The introduction of artificial intelligence (AI) repeatability. Start by ensuring that the
into technology has highlighted the potential playing-field is level for all to participate.
non-inclusivity of tech. Humans create Embed these practices in everyday
algorithms and existing bodies of data are environments, such as inclusive language
used to teach AI. Because humans are biased, in coding environments. Strive for
these tools are also biased. equitable experiences as employees
return to work and include teammates
Biased AI is not speculative but already a regardless of where they are.
reality. Amazon created an AI recruiting tool
that showed a strong bias against women Once you have a level playing field, create
candidates. Police departments use a tool group ideation scenarios that strive for
that defines areas for policing based on inclusivity. Organize a call for “passionate
location which has the potential to proxy for participation” that requires contribution
race or socioeconomic status. and outside-in perspectives during
workshops and breakout groups. It helps
As AI becomes more prevalent in technology to have clear expectations and ground
and innovation, it has the potential to amplify rules for all involved and to include user
bias at speed and scale. If we aren’t aware of interviews and different populations as
the potential bias in systems, bias will increase you ideate on problems. Create safe
with direct impact to humans. spaces to share ideas and get feedback.

Creating an Environment for • Tools: Familiarize yourself and your team

Inclusive Innovation with available frameworks and tools for
To alter the direction of bias in technology and documenting biased results and preparing
innovation, innovators must design with inclusivity correction plans. Some companies
first and not as an afterthought. Inclusivity won’t prepare their own, internal template
simply happen but instead requires intention. that assists innovators in identifying
There are three main factors to consider when bias. Public tools exist as well including
moving toward inclusive innovation: the AI Fairness 360, an open source
industry toolkit.
• People: Inclusive innovation starts with
the people involved in that innovation. In the end, it’s essential for us as corporate
Companies often have communities innovators to realize that we serve a critical
of interest or employee resource role in enabling inclusivity and slowing the
groups that can provide unique spread of bias.

The Innovator’s Handbook 2022 123

 Finally, A Framework For How To
Build Businesses From Innovation

Frank Mattes, the author of “Lean Scaleup”

works with large companies (up to Fortune Frank Mattes
10) on solving one of the biggest problems in Author of Lean Scaleup
corporate Innovation: How does a company and CEO at innovation-3
create new businesses from Innovation?

Several studies show that when a company

launches a corporate startup or invests in a
greenfield venture with the intention to scale The second big idea is to adapt the
them, the chances of building a sizable and proven principles of the Lean Startup to
profitable business are only 10-15 percent. the corporate business-building context.
This adaptation is mandatory to succeed
With more than 20 industry-leading in corporate business-building. The Lean
companies and 2 globally leading business Startup was designed for greenfield startups,
schools, Frank co-created the Lean Scaleup not for the corporate context. Consequently,
framework to solve this “corporate business- although 80 percent of large companies say
building problem”. that they use the Lean Startup, their results
are disappointing, as stated above.
The Lean Scaleup has two big ideas. The first
one is to build a “gearbox” between the core The Lean Scaleup adapts the Lean Scaleup
business and the corporate startup/venture in two ways: (a) it guides companies on
that the company wants to take to scale. the whole end-to-end innovation journey,
Core and Innovation are two different and from idea to scale, and not just in the very
incompatible value-creation systems under early stages; (b) it adds a fourth dimension,
one corporate roof. Scaling up will not work “Contextuality,” to the three dimensions
without this gearbox since the “corporate Desirability, Viability, and Feasibility.
innovation antibodies” will eat the innovation
ambition for breakfast. In the incubation and acceleration stages,
Validation must answer (within the corporate
The “gearbox” consists of three parts. The context - you are not building a greenfield
end-to-end methodology instructs how to startup) two questions:
validate innovation concepts in the corporate
context, how to facilitate the transition to 1. Is this innovation concept worthy of
scaling-up, and how to scale up the corporate being scaled?
startup/venture. Secondly, the actions that
Senior Management needs to take to balance 2. Is it ready to be scaled?
“Winning the NOW” with “Creating the NEW” –
in other words, to future-proof the company. Once you have found solid proof points to
And thirdly, the culture and collaboration answer these two questions, you need to
between Core and Innovation and inside the conduct eight activities in the transition to
high-growth scaleup. scaling up:

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• Pressure-test the critical assumptions on • Build an outstanding scaling up team. The
scalability. Innovation teams are naturally people who conducted Validation with
going to fall in love with the solution that scientific rigor are typically not people
they have created. Since scaling up is who have the entrepreneurial drive scaling
expensive, it is good to revisit some of the up requires.
most critical assumptions on scalability.
It might even make sense to conduct this • Define docking points to the core business.
pressure-test with external, non-biased Companies need to ensure that risk
experts. This pressure-test intends not to management, regulatory compliance, etc.,
kill the corporate startup/venture - the are properly taken care of, and the scaleup
intention is more to have a clear view of wants to have efficient access to corporate
the company’s leaps of faith. assets and capabilities.

• Decide on the pathways-to-scaling-up • Ensure proper governance and funding.

and the post-scaling pathways-to-value. Create a lean governance and a metered
Should you scale up the corporate startup/ funding scheme. A governance board
venture inside the company or outside? with 20 senior managers means that the
Should you re-integrate it after scaling up scaleup is doomed for failure.
or have it as a separate legal entity in the
corporate group? Every option will have • Establish product ownership. When the
pros and cons. Which one you take, though, scaleup uses corporate systems, it will
will affect your scaling up journey. inevitably run into portfolio management
discussions during scaling up.
• Establish the collaboration model between
the core business and the scaleup. This The last piece of the puzzle is to develop an
refers to aligning KPIs, a clear definition initial scaling up plan. This plan substantiates
of which party does what, and helping the scaling up budget, outlines the milestones
the people from both sides to work for metered funding, and establishes an initial
together productively. alignment as the scaling up journey begins.

How to Design an Incubator

for Growth

Corporations have the talent, ideas, and

resources to drive meaningful growth and Edward Ross
beat startups at their own game. The trick CEO Chief-of-Staff and VP
for corporations, though, is figuring out how of New Markets at Mach49
to unlock that potential.

Ed Ross, SVP of Worldwide Operations at new venture inside an established corporate

Mach49, knows how hard it is to create a culture. But why is it so hard?

The Innovator’s Handbook 2022 125

It’s because the core business has to allow a company to institutionalize and scale
appreciate that new venture creation is vastly growth efforts for decades to come. To do
different from operating a mature business. it right, you need to focus on methodology,
Businesses also need to work hard to identify talent, and leaders.
and harness their internal entrepreneurs
effectively. The existing infrastructure of the Methodology
core business can end up starving the internal
startup or killing it entirely. Attaching an old Ideate
way of working to a new venture is the fastest Some companies have a huge portfolio of
way to kill it. That doesn’t mean the company ideas, but they need help assessing and
playbook is wrong, it just means that it needs prioritizing them. If a company is lacking
to follow a different methodology for new ideas, they could consider starting a
venture creation. company-wide venture competition. Be
careful, though, because you could end
Ed believes that corporations are making up with way too many ideas and no way to
venturing more difficult than it has to be. The incubate them all. Source the ideas carefully
key to creating a successful new venture is and manage expectations about what you
a skill you learned in middle-school science can do. Use a standardized system to sort
class. Create a hypothesis, identify an through the ideas and move the most
experiment to test that hypothesis, run that promising into incubation.
experiment, learn from your results and then
figure out what to do next. Incubate
Incubation should occur over a 12-week
New venture creation is essentially a risk period broken into three months. In the first
reduction factory. You have a lot of unknowns month, find out what customers really need
(customer, product, business, mothership,). through rigorous customer research. In
Rather than guessing at THE answer, it’s the second month, determine the product
your job to validate or invalidate hypotheses or service that will meet that need. In the
through many experiments. Following this third month, design the business model.
approach also allows you to stay small and The outcome of the 12-week incubation
nimble through venture creation as you process should be a fundable business with a
don’t have to throw millions of dollars at new milestone-driven, detailed execution plan.
ventures. Only after you have validated your
customer, product, business, and mothership During the incubation phase, the New Venture
hypotheses through numerous experiments Team should conduct between 150 and 300
do you ask for capital to build the venture in customer interviews. Initially, these should
an offering that is ready to scale. be 30-minute conversations. The team will
ask open-ended questions to discover the
It sounds straightforward, but then why do pain points of the customers. Once they
corporate incubators fail so often? Because start hearing the same pain points over and
there is friction with the core business, the over again, they can brainstorm solutions.
executive decision-makers fail to grow, and Storyboard those solutions and present
there is no methodology within the corporate them in customer interviews, narrowing down
structure to make the venture a success. the ideas to the top three to five. The team
can then start prototyping, taking a high-
That doesn’t mean it’s impossible. There are level concept and drilling down into product
ways to build an internal incubator that will discovery, use, support, etc. workflows.

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If you have done a good job of identifying to be intellectually curious, comfortable with
pain and building a product to solve it, you ambiguity and able to work like they are a part
will have interviewees asking to be pilot of a scrappy startup. Look for the doers, not
customers. When you hear this, you know you the delegators.
are onto something and are ready to move
from incubating to accelerating. Leadership

Accelerate Building a new venture inside a big company

This is where the rubber meets the road, and is like fighting a war on two fronts. You have
you take your product to the market, seeking all the risks and uncertainties of building a
product-market fit and first revenue. Most startup while also navigating the different
companies want to jump straight into building groups within the core business. A political or
the final product in this stage, but that’s a huge financial shift in the core business can easily
mistake. Instead, start to place those series of undo what the New Venture Team has spent
small bets and find out exactly what customers months building.
want and how you are going to build it. Then
automate, standardize, and scale it with a To counteract that, the executive leadership
repeatable revenue model. By the end, there has to identify and manage potential
should be a proven business model ready to go. challenges to venture-building within the
company. One of the ways to do this is
Talent to establish New Venture Advocates in
core departments. These are the people
Venture capitalists say that market size is the empowered by leadership to make changes
biggest determiner of success. The startup and exceptions to standard rules and
team is a close second. Incubation labs need procedures. For example, find someone in the
to spend time sourcing the right people. You legal department who will write a one-page
need to build a core team that will support term sheet for a deal with a startup instead of
new venture development. You also need a using the standard 40-page term sheet. Or
specialist team that can parachute in when find someone in HR who is willing to fast-track
needed, including subject-matter experts. employees needed for the new venture who
might not look like the typical employee in the
For the New Venture Team, Ed recommends core business.
having five to seven people working on the
12-week incubation full time. How many people There must be a New Venture Board, too.
you put on the team will depend on the This is the executive leadership team that’s
number of segments to be explored and the championing the efforts of the new venture.
team’s experience. Whoever is on the team This should be the team that can deliver a go
needs to be 100% committed for those three or no-go decision at any stage of incubation or
months. The goal will be to have 2-3 members acceleration. They also need to have access to
stay with the venture post-incubation, while seed funding for the team and be able to help
others may return to their previous positions remove friction within the core business.
or start working on another new venture. Using
this system is a great opportunity for employee The ultimate goal isn’t to build one new
engagement and leadership development. venture. It’s to develop a venture capital
mindset and drive sustainable corporate
When sourcing talent, look for characteristics, growth. With the right methodology and team,
not areas of expertise. Team members need corporates can fasttrack these efforts.

The Innovator’s Handbook 2022 127

 Scaling at Speed: A New
Approach to Business Building

When a major corporation changes

strategic gears, innovation has to become Cathal Hughes
a core enabler. Cathal Hughes, investment Investment Associate at
associate at bp Launchpad, discussed bp LaunchPad
how the global energy giant’s innovation
effort has allowed it to scale new ideas fast
and sustainably.

A New Strategy at bp

The background at Launchpad has to come The new strategy aims to account for all of
with the larger organizational context. In these beliefs through aims like reducing
2020, bp announced a new strategy that methane, increasing investments into non
would see it becoming a net zero company oil and gas businesses, and becoming an
by 2050, transforming its business from an industry leader in clean energy and caring
international oil company to an integrated for the planet. To get to that point, the
energy company delivering solutions rather organization took a comprehensive look at its
than producing resources, reimagining energy innovation ecosystem.
for everyone on the planet.
The Three Innovation Units at bp
Six core beliefs drove the strategy shift:
In light of its new strategy, bp considers its
1. The world will electrify, with renewables innovation ecosystem as a three-way front.
at the center. Each piece interacts with the others, but has
2. Customers will redefine convenience very different priorities and emphases to
and mobility. contribute to the greater whole:
3. Oil and gas will remain part of the energy
mix, but its nature will change. 1. bp ventures operates as a traditional
4. Energy systems are becoming venture fund, through minority
increasingly complex. investments focused on high-growth
5. Customers, countries, cities, and technology. The fund invests from
industries will demand bespoke seed all the way through Series D,
energy solutions. looking for the traditional CVC exit
6. Digital solutions will continue to returns model. To date, bp ventures has
transform our lives, driving innovation and invested in 40 startups, resulting in
market value. 9 successful exits.

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2. Incubation is designed to bring new ideas To convince others to work within that
from 0 to 1. It’s designed for early-stage framework and for the benefit of bp,
ideas and concepts, designed to reach Launchpad presents a three-fold offer:
MVP status through business model
testing. Its 3 to 6 month program is 1. Capital injection, designed to
open to both internal and external ideas, enable accelerated growth with multi-
with successful candidates graduating year funding opportunities based
into Launchpad. on milestones.

3. Launchpad aims to get conceptualized 2. bp’s unique capabilities, including

ideas to commercialization. Its focus immediate opportunities to sell within
combines deep business building support bp, access to real-world data sets,
with rapid scaling, designed to build established domain expertise, and
and scale a portfolio of new energy global relationships.
businesses. The focus is purely digital,
with products only relevant when they are 3. Access to business building experts,
adjacent to BP’s business model. including anything from HR to operations,
procurement, commercial growth,
The innovation ecosystem also consists of marketing, tech, and finance and
internal expert groups and R&D groups, along legal consulting.
with strategic partnerships, accelerators,
incubators, and even academic relationships. To receive these benefits, startups have to
Ideas come into the incubation project, be digitally enabled, generate product-based
before Launchpad brings those that have revenues, and operate in growing markets
proven successful as initial concepts from where bp can provide a strategic advantage.
1 to 100. To date, that has led to a portfolio of five
companies, with three more planned for 2021.
Launchpad: An Innovation Driver to
Get Ideas From 1 to 100 7 Lessons Learned From the New
Innovation Process at bp
Launchpad’s mission statement is simple:
to generate sustainable change by scaling With Launchpad only three years old, bp
a progressive portfolio of digitally-led has drawn some crucial learnings that are
businesses and disruptive startups that applicable for any other internal innovation
reimagine energy for people and the planet. commercialization programs:

In other words, this is a project designed 1. Willingness to change is a top priority. Not
to invest in disruptive tech, with a focus on all will be perfect, and failing fast as well
scaling and speeding up startups and ideas as adapting as you go is vital to success.
to multi-million dollar revenues and global Launchpad learned this the hard way when
operations. The ideal timeline for that process: its own structure had to be adjusted to
two to five years. account for its more narrow focus.

The Innovator’s Handbook 2022 129

2. Culture is key. That culture must be 5. Stay in tune with the outside world.
intentional, with clearly defined and Internal silos can be fatal for innovation.
demonstrated values that are different Engaging with startups, investors, and the
from the core business. For Launchpad, corporate community helps to spread
that culture revolves around hustle, your message, builds credibility, and tests
energizing, love, and pioneering. your assumptions. It also happens to
be the quickest way to get ideas, deals,
3. Define your why. A clear mission and opportunities.
statement allows the team to align
correctly, minimizing varying interpretation 6. Scream and shout. Spread the message
of why the innovation team does what about the innovation program far and
they do. The team needs to have broader wide, honing your elevator pitch to truly
ambitions than the core business, to avoid bring home the value. The whole team
incremental in favor of disruptive change. should feel responsible for building the
program’s value, which can be helped by
4. Expect a challenge of the internal celebrating successes.
dogma. Doing something new will
inevitably cause friction, requiring The seventh lesson is more general: even
time and dedication to spreading the through initial growing pains, remain positive
word. Patience, diligence in closing and believe in the value the innovation
communication gap, and pragmatism to program can create. Failure, after all,
understand the resistance to change is nothing but an opportunity to learn
are key. and improve.

The Secrets of
Taking Moonshots

How does Alphabet’s famous moonshot

factory uncover and pursue groundbreaking Karen Roter Davis
ideas like Waymo, Wing, or Dandelion? Director, Early Stage Projects
X’s Karen Roter Davis, Director of at X, the moonshot factory
Early Stage Projects, shares a few
secrets behind the complex process of
breakthrough innovation.

X’s moonshots are at the intersection of three As a moonshot factory, X’s culture is focused
ingredients: a huge problem that, if solved, on repeatedly generating new innovations
would improve the lives of millions or billions that can have an impact on the world in the
of people; a radical solution that could lead next 5–10 years. These secrets help them
to a 10x improvement on things today; and get there.
a sci-fi-sounding, breakthrough technology.

130 The Innovator’s Handbook 2022

Secret #1: 10X, Not 10% That doesn’t mean the hardest part is the
most expensive. But it is the most challenging
At X, there’s a saying that “10X is easier than and frustrating, and part where you’re most
10%” – because thinking 10X forces the likely to fail — which means it’s the most
kind of creativity and audacity that leads to valuable for learning. If it proves impossible,
breakthrough innovation. The organization you’ll have gained valuable insight; and if that
looks to move the needle significantly, groundbreaking hurdle is successfully cleared,
looking beyond incremental improvements it will show you the way to more change.
within the current context to the radical new
concepts and technologies that can lead to Secret #3: Fall in Love With
transformative change. the Problem

That means focusing only on big problems Looking at technologies that have had a
that affect lots of people. It’s about looking transformative impact on the world — like
at the critical problems of our time, like Google Search and Maps, which are found
how we can grow our food in a more almost everywhere today — it’s easy to
sustainable, resilient and equitable way, as believe that they began as solutions. But
X’s Project Mineral is focused on; or how to those technologies didn’t magically appear;
close stubborn connectivity gaps affecting instead, they sought to solve fundamental
underserved communities, as X’s Project problems first.
Taara is exploring. But that doesn’t mean
the problem has to be obvious; sometimes, Innovation is unpredictable, and focusing too
even the most non-obvious problems early on one solution can prevent you from
offer insight into ways we can support exploring other and potentially better ideas.
societal improvement. X’s teams look to fall in love with the problem
instead: Rather than solving it in a particular
Secret #2: Work on the Hardest way, they keep an open mind — running
Thing First experiments, prototyping, and iterating to
keep them efficiently working towards a
If you want to teach a monkey to recite solution, whatever it might be.
Shakespeare and stand on a pedestal, which
do you teach first? It might be tempting to Secret #4: Embrace Learning
start with the easy part. But at X, teams start
with the toughest piece first. Any innovation leader knows about the
importance of failure to the iteration process.
When a problem is easy to solve, it doesn’t But that only matters if failure leads to
teach you anything about getting to learning, in which case any funding and
your potential breakthrough. Building a time investment into that failure can still be
solution for an easy problem might just be considered well-spent.
incremental improvement. Working on the
hardest piece of a problem first instead This can only be achieved with a supportive
ensures that, once the first hurdle is culture that prioritizes long-term success over
cleared, teams have a good signal on their short-term achievement. X operates on long
progress and have learned more about their time horizons, developing technologies that
path forward. might have an impact in the next 5–10 years —

The Innovator’s Handbook 2022 131

but focuses on building tight learning loops to applications is vital to the long-term success
find the fastest way there. From Loon balloons of any project.
exploding in labs to the hook design of Wing
drones, X’s engineers continuously innovate Secret #6: Build in Diverse
and de-risk their projects. Keeping X’s culture Perspectives
focused on rewarding learning processes
keeps X’s teams resilient enough to keep Different perspectives enable more innovative
trying for 10x technological breakthroughs. ideas. X brings together people with different
areas of expertise, skills, functional, and
Secret #5: Make Contact With the personal backgrounds to maximize the
Real World number of different ways teams can attack
a given problem. Especially with moonshots
In a lab, ideas can be immensely successful. that have the potential to affect billions of
But in the real world, you need to be prepared people, this diverse, collaborative approach
for the unexpected – like monkeys banging is vital.
on Project Taara’s terminals – disrupting the
high-speed internet being beamed through That process, in turn, helps in a wide range
wireless optical links. . of ways. Even unique perspectives based
on personal hobbies can help to breed
Only moving the project into the real world success in unique ways, like shaping potential
can anticipate these types of problems. In solutions inspired by fly-fishing. With diverse
the case of Project Taara project, engineers perspectives, strengths and ideas, Xers can
developed safety cages around the keep each other motivated through tough
equipment deployed in rural India. Taking challenges, bring out each others’ creativity,
care not to be too removed from real-world and ultimately help find a path to the moon.

132 The Innovator’s Handbook 2022

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138 The Innovator’s Handbook 2022

 The Corporate-Startup
Playbook: Innovate With
Startups the Right Way

As innovators, you balance exploration

efforts with solving today’s problems, Nate Nasralla
which is what Nate Nasralla, Chief Growth Head of Global Partnerships
Officer at GAN, refers to as the innovator’s at GAN
dual mandate.

In order to do this faster and faster, to Build Internal Buy-In

increase your velocity, you need to increase Outline a plan of expectations and obstacles
the number of experiments you run each year you’ll encounter when building startup
(your “shots on goal”), and you need to build portfolios. Executives should be involved
a frictionless process for managing each in the startup engagement and share the
engagement better, to fully capture learnings. progress from engaging with startups with its
Here’s a number of suggestions from GAN’s employees. Once you have top-level support,
Corporate-Startup Playbook. business units should be created by finding
willing advocates for the experiment rather
Start with the Right Intentions than focusing time on convincing skeptics
Clarity about the commitment from both about the benefits of the new opportunity.
startup and corporate teams is the key to Then build on-ramps and highways to direct
a successful partnership. While it is about startups to navigate the process with ease.
reciprocity each can offer, the focus is to
help the startup win. Begin with the following Creating this roadmap helps startups connect
motives in the first step: with the right people at the right time. To
ensure the engagement stays on track, you
• Faster product development should maintain a clear set of innovation
• Early insights into emerging technology criteria. After the startup makes a successful
• De-risking internal innovation connection for the engagement, lower the
• Collaborating with top talent amount of friction to complete the launch
with ease.
Lead with Vision
Create a compelling vision that everyone is Develop Transparent, Time-Based Goals
going to embrace. It should describe what If you can align startup metrics with corporate
the world will look like when working with a incentives, you can greatly reduce friction in
particular startup. Get them excited about the process.
being part of the innovation involved in
creating that future, as your financial returns • Determine if there are conflicts
typically won’t inspire them to engage with pursuing the engagement and
with you. corporate’s goals.

The Innovator’s Handbook 2022 139

• Work backward from the desired • Create owners, not committees. Have a single
outcome to clearly define the timeline to contact responsible for communicating
commercial success. with the startup and coordinating the dates,
• Determine an agreeable gateway metric access, and data needed.
to know the riskiest assumption that
must be validated before scaling the Overall, while there are several factors for
pilot. Determine a drop-dead date developing a successful process for innovating
for meeting the metric before moving with startups, empathy plays a major role in
to the next phase of the corporate- making startup relationships work. Think of a
startup relationship. jet landing on an aircraft carrier at sea, with the
aircraft carrier being the corporate operating
Communicate Throughout the at scale, while the fast and nimble jet is the
Entire Process startup. The two require the help of the signal
It may seem obvious to add that officer on the deck of the aircraft carrier to
communication is a critical enabler for successfully make the connection.
successful partnerships, but since most
partnerships aren’t successful, we still have a However, to be a signal officer, one must
long way to go. understand what the jet pilot is going through
and be empathic throughout the situation for a
• Over communicate and schedule regular successful landing. To develop empathy, it could
check-ins. be worthwhile to engage with startups more
• Establish quarterly planning sessions. informally, beyond our actual pilots and projects.

Avoiding Pitfalls in Strategic

Partnering & Open Innovation

Open innovation and building strategic

partnerships fuels disrupting from the Kevin Ye
outside in rather than just focusing on the Partner, Corporate Investing
inside out. Kevin Ye, partner at Mach49, is an at Mach49
expert in corporate investing and execution
processes that make corporate-startup
partnerships work. become working projects.
• Corporate Venture Capital (CVC) is the
Below is a quick overview of a typical strategic natural next step when examining the
partnering and open innovation process: strategic value and financial performance.
• Corp Development/M&A is the final
• Scouting/partnering to inspire open step because it allows corporate to
innovation. Find mutual win-win situations keep up with business globalization by
from working with startups. using the new technology to develop
• Corporate accelerators are the next step new markets or transfer it to help fuel
as you become more involved as ideas innovation growth.

140 The Innovator’s Handbook 2022

Expanding on this process, Kevin shares what Don’t ‘Move Fast’ to the Impairment
to avoid when diving into strategic partnering of Internal Alignment
and open innovation and best practices
to follow. There is a fine balance between not
moving too slow and moving too fast.
Don’t Lose Sight of the Big Picture However, striking that balance is essential
for a successful strategic partnership.
Many strategic partnering and open Oftentimes, innovation groups suffer from
innovation groups are reactive because the moving too fast and neglecting to get all
startup is approaching a business unit with a the appropriate internal controls without
well-liked idea while the corporate side finds realizing it. To help prevent this, follow these
ways to use the technology. While this may best practices:
lead to successful innovation, companies
could more effectively execute the idea • Understand the incentives, bandwidth,
if they were proactive in their strategic and capacities of your business units:
partnerships by organizing all their open Incentivize people for supporting
innovation efforts. partnerships within their time constraints
and resources and ensure they have a
• Establish clear objectives and decision- genuine interest in the technology the
making frameworks: Doing this first startup has to offer.
ensures all teams understand the
goals of strategic partnerships and can • Gauge internal temperature and be
communicate the process to startups on top of your approval process: fully
interested in working together. understand how high up the chain of
command needs to go for everything
• Frame activities in an “opportunity ranging from a PLC to a go-to-
universe” context: Since all ventures market strategy.
are both reactive and proactive, you
must start the partnering process by • Get top-down support and leadership
taking the time to examine all innovation advocacy: Approval from the C-suite for
hot spots happening that could benefit the value a strategic partnership can have
your company in the future. You can is essential because they are the ones
then prioritize them based on your set who can help make things happen.
criteria to determine which startups and
technology are a best fit. Don’t Neglect VC-Style
Due Diligence
• Establish internal communications:
This is essential to building effective While VC due diligence is already lightweight,
partnerships because you want to prevent make it even more lightweight by removing all
duplication of anything else happening the financial return considerations. However,
across the organization. You want to the three main questions a VC due diligence
become the “Nexus” or go-to resource should answer are important.
for startup partnerships, so you can
effectively vet and evaluate strategic • Is the company the best of all the
partnerships to ensure a company fit and options available?
within the established framework priorities • Is the company going to stick around for
before engaging in pilots. multiple years?

The Innovator’s Handbook 2022 141

• Are they going to be able to survive until • Draw clear lines of delineating
their next fundraising round? and understand internal process
dependencies upfront to show
Best practices ensuring you do your due startups what to expect when talking
diligence with a strategic partnership include: with various innovation groups within
your organization.
• Understand the business health and • Stay involved and up-to-date
future roadmap of the startup. with conversations.
• Talk to the existing investors.
• Work with the ventures team to avoid Don’t Forget to Put Yourself in the
duplicative efforts (where possible). Shoes of the Startup

Don’t Unintentionally Silo As a large corporate, your established

Strategic Partnering from Other processes will often seem foreign and
Innovation Initiatives restrictive to a startup. Therefore, to keep a
good reputation among startups, you should
Coordinating with other teams within empathize and adapt to their situations when
a corporate is very important because creating a strategic partnership.
unintentional siloing of strategic partnerships
often happens, which is detrimental to • Don’t waste startups’ time, and don’t take
innovation over time. your time just because you can.
• Monitor requests to make sure
• Share and request existing knowledge to they’re reasonable.
prevent meeting the same startup multiple • Be empathetic and respect their goals
times for each team with different focus and timeline.
areas. This can also help accelerate the
overall process.

Collaborating With Startups –

How We Bridge The Scale Gap

Tammy Butterworth, Chief Foresighter

Tammy Butterworth
Cocoa Cobeana & Global Breakthrough
Chief Foresighter & Global
Innovation Lead at Pepsico, works in Breakthrough Innovation Lead
the PepsiCo Greenhouse Collaborative at Pepsico
Accelerator. With an open innovation
approach, PepsiCo Greenhouse
collaborates with the change-makers of PepsiCo is a massive corporation.They
the future to help lead the transformation collaborate with purpose across the
to make a difference in the world of food scale gap, with the goal of working with
and beverage. entrepreneurs to enable food systems

142 The Innovator’s Handbook 2022

of the future. PepsiCo is bringing scale, The Benefits and Learnings
network, and efficiency to the collaboration. The benefits go both ways. The entrepreneurs
The entrepreneurs are bringing agility and get a mentor program, monthly training,
flexibility, the exact things PepsiCo wants grants, and access to subject-matter experts.
to learn. PepsiCo benefits as well, with new sources
of inspiration and infectious energy. Working
Overview of the Program with entrepreneurs broadens internal thinking
The vision of PepsiCo Greenhouse: The and can help accelerate progress within
entrepreneurial spirit of innovation + the corporation.
collaborative spirit of a community
garden = business impact via expertise PepsiCo is still learning, too. They are learning
and connectivity new tools to deliver bolder outcomes and
new ways to work within teams. They’ve also
PepsiCo Greenhouse uses an open learned to focus on agility and how to reduce
competition to support breakthrough startups the resources they need. They are discovering
and innovators. They decide on a focus area the ways in which they are still siloed and
and then start looking for applicants through how they can provide training in a more
press releases, social media, and networking. optimized way. Through the process, their own
Hundreds of startups apply per challenge. community is getting stronger. Entrepreneurial
Each submission is screened and assessed people within the corporation are helping to
to ensure they can substantiate claims made change the culture with more idea sharing
about their science and technology. They and “how could we” thinking.
select ten finalists, and each one gets a
$20,000 grant. Bridging the Scale Gap
PepsiCo Greenhouse is marrying the scale
The finalists then start a six-month and innovation of a big company with an
mentorship program. Each company will entrepreneurial mindset to seed future
get two mentors from PepsiCo, selected growth. They are supporting startups and
for them based on the areas in which the helping to give them a stronger foundation
entrepreneurs say they need the most help. to move forward from. PepsiCo wants to
Mentors are selected based on their skills, bring that entrepreneurial thinking and
but they also need to be open thinkers. way of working into the larger corporation
They commit about an hour a week to their to enhance future growth. The mutual
mentorship duties, though they can also mentorship that happens helps build on
attend the accelerator training sessions if diversity and brings more voices into
they want. These monthly training sessions the conversation.
are like a mini MBA program, with sessions
on foresighting, business models, and For programs like this, starting is the biggest
discussions with subject-matter experts. challenge. People in leadership have to see
the need for it. As such, it’s essential to show
At the end of the six months, PepsiCo them mutual benefits- a program like this has
Greenhouse chooses a winner who gets to move the agenda forward, for both the
$100,000. They pick the winner based on entrepreneur and the corporation. If you build
metrics like merit, how effectively they used a spirit of collaboration and get people who
their initial grant, and how well they used the want to share ideas and help each other grow,
resources within the program. everyone can land in a good place.

The Innovator’s Handbook 2022 143

 Creating a “Win-Win-Win”
Situation Through Open
Innovation With Startups

How does a global corporation like SAP

Alexa Gorman
successfully partner with startups all over the
SVP, Global Head of SAP.iO
globe? Alexa Gorman, Global Head of SAP. Foundries & Intrapreneurship
iO, explains how her program has created a at SAP
situation in which everyone involved wins.

The Basics of SAP.iO

Short for small input, large output, SAP. • Customers receive access to curated
iO was created specifically to deliver new innovative solutions that are integrated
partnerships and products for SAP by with their SAP systems so they can be
accelerating and scaling startup innovation as used out of the box.
well as incubating employee ventures. SAP.iO
brings together innovators from every region, • SAP is able to fill whitespaces that the
industry, and line of business to transform how company cannot or will not pursue
businesses run. Since 2017, SAP.iO has helped through internal innovation, along with
330+ startups in 10 locations including San feedback on its APIs and technology to
Francisco, New York, Berlin, Tel Aviv, Munich, continuously improve its offerings for
Paris, Singapore, Bangalore, Tokyo, and all customers.
Shanghai as well as ventures accelerate their
growth while enabling thousands of SAP An Independent Structure to Drive Freedom
customers to access innovation. and Trust
While SAP.iO started as part of the Office of
The goal: scout innovative B2B SaaS the CEO, it has moved to the innovation team
companies that complement SAP’s as an independent business structure. The
products, offering them the chance for a resulting freedom has provided the team with
partnership that opens up SAP’s more than crucial autonomy in making faster decisions,
450,000-strong customer base and enables developing processes and branding unique
intrapreneurs to build ventures. to working with startups and creating a
partnership-focused innovation program.
The Win-Win-Win Situation of a Corporate-
Startup Partnership Significantly, though, the team still works
SAP.iO succeed because of clear and within the larger SAP structure. Innovation
succinct value propositions for each of the programs are partnerships with different
three parties involved: departments, as are decisions on which
whitespaces partnerships with startups can
• Startups get access to SAP’s global fill to begin this. That set-up allows SAP.iO
customer base, SAP’s technical resources, to avoid working with startups only to later
and mentorship available within the develop a similar or identical solution
core business. in-house.

144 The Innovator’s Handbook 2022

At the same time, the independence provided team is built through a healthy mix of former
through the setup, especially the separation entrepreneurs from the outside and former
from internal innovation and R&D teams, has SAP corporate leaders on the inside, bringing
built a vital amount of trust between both a diversity of perspectives in both the startup
sides of the partnership. While contracts world and within the corporate environment
protect both SAP internals and startup IP, that has been invaluable.
that trust has been invaluable in finding
entrepreneurs to partner with. SAP, of course, has the advantage of being a
relatively innovative organization in which the
The same autonomy also allows SAP.iO to mantra of it needs to be developed in-house
set its goals according to what makes the was already outdated by the time SAP.iO was
most sense within its structure. General created. Still, the ability to bring in external
goals around adding value for customers organizations and set up the structures to
still have to be followed. But within that make that process as easy as possible has
structure, the team is able to determine supplemented the cultural aspects of making
just what KPIs actually help to achieve it, this effort successful.
from customer adoption of startup-founded
solutions in the SAP Store (marketplace) That success can be found everywhere.
to the integration of startup solutions, Startups have started to be adopted as
and more. core players within the SAP marketplace.
But no qualitative measure may be better
Creating a Culture of Support for Open than the continuous enthusiastic feedback
Startup Innovation of former members of the program who now
The final factor in the success of SAP.iO in the recommend it to other entrepreneurs as “one
four years since its founding is its culture. The of the best programs I’ve ever been with.”

How Corporates Benefit

From Billions of Dollars in
Venture Capital

Venture capital investments started

Sabrina Jones
surpassing R&D spending in OECD countries Strategic Partnerships
around 2017. In every vertical, you’ll find & Open Innovation at
startups with hundreds of millions of dollars Robert Bosch Venture Capital
in venture capital investments.

The resources Bosch has internally can’t corporate world. Can we even be competitive
match what’s out there for startups. There with new technologies?
is a big discrepancy when compared to the
individual products in a single vertical within Dr. Sabrina Jones from Robert Bosch Venture
Bosch. That can raise legitimate fears in the Capital, responsible for building up a global

The Innovator’s Handbook 2022 145

startup partnership program for the Bosch 2. There is a lot of expectation
group, suggests however that we have to stop management for both the startups and
seeing venture capital investments as a threat within the corporation.
and start seeing them as an opportunity.
We have a chance to partner with these 3. You have to battle the not-invented-here
companies and benefit from the disruptive syndrome. Internally, people may think
power of venture capital. they can do it themselves in a couple of
years. By then, though, the startup will be
How to Benefit From the Disruptive light years ahead.
Power of Venture Capital
Leading Indicators of a Successful
There are different venturing methods out Partnership
there. When you look at Corporate VC, it has a
high cost per opportunity and requires many After three years, Open Bosch has consulted
months to realize that opportunity. Venture over 500 teams internally. Many of the
clients can do it five times cheaper and three discussions end early as they move through
times faster. the funnel. But there are currently over 50
proof-of-concepts running or finished. Out
A Venture Client means the corporation of those, there are at least nine partnerships
becomes the client of the venture by testing so far. They’ve shown high business impact,
or buying into the solution of the startup. The either through revenue potential or savings.
goal is to use this as a vehicle to engage in a We may only see the final numbers in a few
substantial partnership later on. years, but showing that kind of potential
already is a huge success.
What are the benefits and challenges of
this method? Looking back, these are leading indicators of
Top three benefits: a successful partnership:

1. We become a one-stop shop for • Make sure the startup is top-in-class and
startups. There are people there to mature. At a minimum, they need seed
help them navigate and translate the funding, and it’s better if it’s Series A
corporate environment. or later.

2. It improves services for the core business • The business unit needs to put a dollar
units. They get better processes, amount on the impact of their problem. If
templates, knowledge, and support. they can’t do that, then at the end of the
day the problem isn’t as big as they think,
3. There are synergies within Robert Bosch and they might not be as committed to
Venture Capital, including deal flow, fixing it.
contracts, needs, and search fields.
• There needs to be a customer for the
Top three challenges: solution. Don’t let business units just try
something new for the sake of it. Have a
1. We have to extend the corporate specific project where there is a customer
network to operational levels with asking for a solution.
400,000 employees.

146 The Innovator’s Handbook 2022

• The pilot scope needs to be clearly in their own solution to entertain
defined, in terms of time and goals, with a anything else.
business unit ready to support a decision.
• There is a clear decision path for go or
• The startup solution can’t compete with no-go after the pilot. Management needs
other in-house approaches. The in-house to know when they’ll need to make a
team may have too many resources decision and be committed to acting on it.

How P&G Ventures Collaborates

With Startups

P&G Ventures partners with entrepreneurs

Lauren Thaman
who have great products in categories that
Senior Director of
P&G is looking to work in. They bring into Communications at
the partnerships what the partner needs, P&G Ventures
such as supply chain, R&D, branding, and
endorsements. Making all that accessible to
entrepreneurs is where the magic happens.

Lauren Thaman is the Senior Director of P&G Ventures has a number of ways
Communications at P&G Ventures, an internal of attracting entrepreneurs, including
venture startup studio within Procter & both push and pull approaches, such
Gamble. She notes that five or six years ago, as social media, innovation challenges
P&G hadn’t fully recovered from the economic and relationships with venture capitalists
downturn and the company wasn’t growing. and accelerators.
They knew they needed to grow and focus
on what they were good at, which is creating They are looking for technology everywhere,
big billion-dollar brands. So they started P&G and the partnerships they’ve had have been
Ventures as an evolution from New Business global. It can be anything from one person in
Creation. They focused on taking the best of their garage to 50 people working on their
Procter and the best of entrepreneurs and own company.
creating a win-win situation.
Startups aren’t just in it for the money.
P&G Ventures isn’t a funding mechanism. Entrepreneurs often want to use a startup
Instead, it partners with startups and provides as a way to build their reputation or as
the things that they lack. If you ask startups a springboard to the next thing. Many
what they need, they start with money. If you entrepreneurs know they are good at doing
ask what they need that money for, though, one thing, and they need someone else to
the answer is often that it’s for something that come in and help with the other parts of the
they don’t have experience in. There are a lot business. That way they can keep doing what
of things that entrepreneurs shouldn’t have to they are good at. Some go on to have joint
learn on their own. Instead, P&G can bring the development ventures with P&G while others
resources that entrepreneurs really need. want to sell out and move on.

The Innovator’s Handbook 2022 147

There is no one path for any of them and Startups have clear objectives that they’ll
no two partnerships are alike. They all need need to meet before they can move onto
something different. For example, one brand the next phase. As of today, P&G Ventures
came to P&G with great technology focusing has stood up four businesses that are
on the area of eczema and psoriasis skincare. growing nicely in the build phase. P&G itself
They had the product for sale online, but sales is designed for the scale phase because it
were stagnant. When P&G started working with can develop a lot of high-quality products
the company owner, he had the science and very fast.
the IP, and P&G Ventures felt they could help
with the marketing arm of it. They found the P&G Ventures has learned a lot throughout
sweet spot for the brand and its customers, the process. They learned how to become
which ended up being marketing on a more faster and right-size their processes. This
personal level. P&G helped him scale from involved learning how to write contracts
small to large, while also helping with quality quickly, speed up internal processes like
control and supply chain. purchase orders, and even how to pay
people faster. They also learned to look for
P&G Ventures uses a four-phase process with the indicators of what will make a successful
each startup: partnership, which is usually some kind of
exclusivity within the startup. Ultimately,
• Discover they are looking for a hero item, brand,
• Create technology, or idea that gets to a billion
• Build dollars globally.
• Scale

When to Partner and How to

Make it Successful?

Toby Smith-Cullen serves as Fintech

Partnership team lead at ING, providing the Toby Smith-Cullen
ING businesses with scouting and advisory Lead of the Global Fintech
with regards to Fintechs. For Toby, it’s team at ING
obvious that being in a service industry,
specifically a financial service industry, is
all about the customers and providing the • Develop your own from idea to scale-up.
best products and services. That is why • Take a minority investment in Fintechs that
partnering with a fintech can help provide are in line with the company’s strategic
customers with a better service and/ direction and have a positive financial
or product. return outlook.
• Partner, or rather collaborate with
In essence, there are four ways of how you FinTechs that can really help a specific
can interact with a FinTech: business or function.

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• Acquire or leap-frog straight into a solution left with the best one-two Fintechs for your
of another company and make it your own use case, leaving the final step of validation
which is done by means of a POC, with clearly
The reason why you would want to partner defined success criteria. Finally, if there is a
depends on various factors. How quickly do positive outcome from the POC you will work
you need to get a solution? How big or urgent together to set-up a commercial contract.
is the problem? Is the solution already out
there? Do you have or can you develop the The above sounds straightforward however it is
knowledge inhouse? The answers to these important to take the following into consideration:
questions inform your strategy.
• You need to understand a company’s
Setting Up a Partnership — What needs and be aware that business AND
To Look Out For? fintech priorities can change.
• You need to make sure you stay up
In order to have a commercial partnership to date with the latest trends and
with a Fintech that really delivers impact to developments (including regulation).
your organisation there are certain steps you • You need to decide quickly if there is a
could follow. potential match with the partnership –
that goes for both the organisation and
First, help with the ideation by coming up for the Fintech.
with ideas based on (Fintech) trends. Second, • The whole process can take a while
conduct a general and targeted scouting depending on the use case (e.g. a fintech
to develop an initial long list of potential will have to meet the risk and technology
candidates for the envisioned solution. requirements of the firm in order to
provide their service/product).
Next, based on a predefined criteria, you • You need to agree on upfront measurable
further refine your short list and deepdive on KPIs for the collaboration and keep
the ones most relevant. By then you should be the findings.

Why Do Most Business

Ecosystems Fail?

Ecosystems are, in many ways, the holy grail

of customer engagement and partnerships. Ulrich Pidun
As a dynamic group of largely independent Partner at
economic players that create products or Boston Consulting Group
services together constituting a coherent
solution, they require close collaboration
between independent players but ultimately Unfortunately, they fail far too frequently.
can unlock significant levels of engagement In fact, 85% of business ecosystems fail.
on behalf of both the individual players and When that happens, significant issues
the customers they serve. begin to emerge. Ecosystems tend to

The Innovator’s Handbook 2022 149

fail late, after they have already required Crucially, ecosystems can start out as one
millions in investment. In fact, most of of these types but transform into the other.
them fail after launch, and an analysis by The Google Play Store may have started as
the Boston Consulting Group showed that a transaction ecosystem, but has evolved to
failed ecosystems have spent an average of become more of a hybrid since its inception.
$16 million before that failure became evident.
The 6 Steps of Designing a
Avoiding similar traps becomes crucial for any Business Ecosystems
organization looking to build an ecosystem
structure. Ulrich Pidun, Partner and Director To succeed, ecosystems need to follow six
at Boston Consulting Group, explains exactly distinct steps in the right order:
why business ecosystems fail, and what can
be done about it. 1. Find the problem you want to solve. It
needs to be big enough, and be the right
Ecosystems in the Larger choice for an ecosystem over a more
Business Environment centralized business model. Companies
who start with their existing solution rather
At their core, business ecosystems compete than the problem, or who cannot identify
with other ways of organizing. Generally a problem big enough to satisfy all the
speaking, they succeed when modularity players in the ecosystem, tend to fail.
is as high as the need for coordination;
otherwise, with high modularity and a low 2. Design the blueprint of the ecosystem.
need for coordination, an open market That includes defining the activities you
model becomes more likely to succeed. Low need to make the value proposition happen.
modularity with a high need for coordination The activities can lead to the links between
calls for a vertically integrated model, while the activities, and the players required
low measures on both tend to work best in a to fulfill them. When all relevant players
hierarchical supply chain. are identified, it’s crucial to identify the
orchestrator, which tends to be a role that
If both elements are high, two types of every player wants to play. Only the partners
ecosystems tend to emerge: in the system can choose the orchestrator.

• A transaction ecosystem, in which the 3. Define the initial governance model. This
orchestrator becomes a matchmaker step revolves around the question of how
between suppliers and customers. open your ecosystem should be. An open
Marketplaces like eBay, Amazon, and ecosystem can grow faster, while a close
Airbnb orchestrate the ecosystem from a ecosystem creates more control but can
central perspective. also tilt the balance away from the many
players involved.
• A solution ecosystem, which is more
complex because its main value 4. Capture the value inherent in the
proposition is a coordination between ecosystem. While the value question tends
individual offerings to a total solution. to be easy for a single product or service,
Operating systems like Windows or iOS, it’s much more difficult and complex in this
in which the orchestrator coordinates context. It’s vital to understand exactly what
different complimentary offerings, are the you would charge customers, and who
perfect example of this type. should be charged at what point.

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5. Solve the chicken-or-egg problem. • 34% fail because of wrong governance
Ecosystems need to achieve critical choices, making this the most important
mass quickly, which means needing to reason ecosystems fail. A more open
understand exactly what your minimum system means allowing access to more
viable ecosystem will look like and which people when it comes to input and
side of the market you should focus on. process control, which can lead to
Ecosystems are built on network effects, fast growth and a greater diversity of
which can result in reliable growth but offerings and innovation. However, it
also delays the initial growth stage. might also cause the orchestrator to lose
control of the quality of the ecosystem,
6. Ensure your ecosystem’s evolvability. and the value capture may not be
You have to make sure that the ecosystem as efficient.
doesn’t drown in complexity as it evolves,
and that scalability is built into the initial The other reasons for failure tend to be
proposition. Planning early for how to relatively insignificant. 5% fail because
defend against potential competitors is of inadequate monetization, while 8% fail
absolute key. because of a wrong launch strategy and 10%
fail because of weak defensibility. 15% of
Where Ecosystems Tend to Fail ecosystems fail because of bad execution.
Here, one point is both relevant and
Knowing that business ecosystems have to surprising: in business ecosystems, you need
follow this process, where do most of them to scale before you extend the scope.
fail, and what can we learn from that?
Most companies are used to an approach in
• Only 10% fail because they have an which an MVP leads to a pilot, building out
insufficient problem to solve. Think B2B the value proposition fully before a large-
marketplaces following Amazon’s model, scale launch. In an ecosystem world, though,
which discovered that supply chain the process needs to happen in reverse.
relationships were too important for a A narrow core value proposition needs to
more ad-hoc matchmaking system. scale quickly, and additions to the value
proposition can only be added once the
• 18% fail because of a wrong ecosystem network effect has taken hold. Think LinkedIn,
configuration. That may include both which started as a simple professional
finding the right partners to ensure that matching platform before rolling out services
every part of the problem to be solved like publication and recruiting after it had
is taken care of, and choosing the wrong seen initial success.
orchestrator. The right orchestrator, in
turn, has to match four criteria: they Finally, ecosystems can only succeed with
need to be an essential member, they the right demand-side economies of scale.
need to occupy a central position in These economies of scale have to balance
the ecosystem blueprint, they need out their counterparts on the supply side,
to have strong benefits from building leading to a sustainable network effect that
the ecosystem, and they need to be can grow without overwhelming the partners.
considered a fair or neutral partner by the Growing fast, in other words, only matters if
other players. the ecosystem can support that growth.

The Innovator’s Handbook 2022 151

 Axel Springer’s Ecosystem
Strategy to Become the Leading
Digital Publisher in Europe

Axel Springer started as a traditional print

Sebastian Voigt
media company and has made a successful
Senior Vice President at
transition to become a significant player in the hy – the Axel Springer
digital media space. Sebastian Voigt, Senior Consulting Group
Vice President of hy Technologies, a subsidiary
of Axel Springer, reflects on the journey so far.

The company was founded in 1946 and

published “BILD,” the newspaper with the Reinvention of the Company
largest circulation in Europe. Axel Springer’s
traditional publishing business model has The motto at Axel Springer is now “Disrupt
been disaggregated and attacked by digital yourself.” The company decided to
disruptors. The company’s classic product is completely rebuild itself and, as a result,
composed of three, primary business models: has rebuilt the company into a tech
journalism, advertising, and classifieds, all of ecosystem company.
which have been disrupted.
The company took the time to understand
Two of the models have gone to completely what was making new models successful.
different players. Advertising has gone First, it is important to coordinate supply
to companies like Google and Facebook. and demand. Platforms reduce friction in
Classifieds have gone the way of digital markets and lower transaction costs for all
disruptors like Monster, Indeed, and local real parties involved. Second, most successful
estate platforms. new models have limited inventory, such
as Alibaba, Facebook, Netflix, Airbnb,
If Axel Springer were to remain true to its core and Uber.
business model, journalism remained its only
opportunity area, which would primarily consist With this in mind, Axel Springer focused on
of transforming the printed business into the investments in ventures, and models that
digital world. That isn’t effective because the did not exist in the classic portfolio. The
number of paid digital users is much lower than transformation of the company was driven
the number of printed subscription subscribers by investment in early stage and growth
15 years ago. The pricing model also doesn’t stage companies, which resulted in a reverse
make sense. In a printed model, the company takeover of the entire company.
would receive €30.00 per month for a
subscriber, but in a digital model a subscriber There are several key takeaways from the Axel
only pays €4.99 per month. Springer transformation:

152 The Innovator’s Handbook 2022

• Axel Springer’s digital growth content and classifieds media helped the
story comes from the company’s company become the European market
ecosystem strategy and successful leader in both segments.
digital investments into growth-stage
companies, which were non-core to the • The company’s biggest business model
news business. changes are still ahead as the media
landscape continues to move rapidly.
• Axel Springer missed out on some
investment opportunities, including • Platforms are a truly global game which
Google, but the strategic focus on requires strong investments.

Innovation Ecosystems Enable

to Tackle the Grand Challenges

Why are innovation ecosystems needed?

Johanna Fräki, leading Innovation Johanna Fräki
Ecosystems at Neste, says that the pace of Innovation Ecosystems at
innovation is accelerating year after year. Neste Corporation
We are also now trying to solve such big
problems, like mitigating climate change,
that the scale of the challenge is too big for
one company. Neste didn’t achieve these changes on their
own, says Johanna. The company partnered
No single company can survive these with airlines, plastic producers, and customers
pressures without the help of external to make the change happen. They made the
partners. Working together with partners transition from a closed innovation model
who represent different parts of the value to one that embraces the creation of an
chain helps us find solutions to these big innovation ecosystem.
challenges faster.
In a closed innovation model, everything
Neste began over 80 years ago as an oil is internally focused and done in-house.
refining business. Recently, the Harvard Companies developed a product and then
Business Review named it as one of 20 sold it to customers one by one. The days of
companies that have achieved the highest- using a closed innovation system are over,
impact business transformation over the past though, and not only for Neste. When it comes
decade. That’s because today, 94% of Neste’s to solving problems like climate change, all
profits come from renewable businesses, and possible solutions are needed because the
they are the fourth most sustainable company global challenge is so enormous. To find
in the world according to the Global 100 those solutions, there has to be a new way of
Index 2021. They are now in the business of working, and that’s through the development
fighting climate change. of innovation ecosystems.

The Innovator’s Handbook 2022 153

This goes beyond the traditional open finding solutions. Those solutions are what
innovation model. Open innovation translates into new business opportunities.
encourages partnerships or innovation
value-chains, but there is still a one-product, Johanna says that an innovation ecosystem
one-solution focus. Innovation ecosystems is a great tool if the goal is to solve big
are bigger than that. They involve a much challenges like climate change. To get started,
bigger collection of partnerships, with more you have to be very clear about the purpose
innovators and a higher degree of openness. of the ecosystem. Once the purpose is clear,
Game-changing innovation ecosystems will then you can start carefully selecting the
welcome a lot of different partners, from areas partners you want to engage. These partners
like the corporate world, startups, research should be passionate about the purpose of
organizations, or municipalities. They will the ecosystem. Reiterate that purpose often
also include the end-users, which might be to keep everyone aligned with the goal.
consumers, companies, or governments.
This shouldn’t be about organizations.
Innovation ecosystems can solve much bigger Organizations need to change and be willing to
problems by sharing a joint vision. Within change. What it should be about is people, and
the model, companies become platforms bringing people with diverse competencies
for change. They become the places where and professional backgrounds together. That’s
discussions are taking place and people are what is required to solve these big issues.

154 The Innovator’s Handbook 2022

Culture, Talent
& Teams

The Innovator’s Handbook 2022 155

 Is Your Company Culture
Killing Innovation?

For innovation to thrive, everyone has

to contribute. But how do you set up a Gustavo Razzetti
culture that enables this mindset and Founder and Culture Design
systems? What roadblocks do you have to Strategist at Fearless Culture
clear in order to optimize your culture for
innovation? For Gustavo Razzetti, Founder
and CEO of Fearless Culture, there is no
simple answer. Instead, a number of factors
have to interplay in order to avoid your Getting all three of these elements to align
culture consistently killing innovation efforts. means overcoming siz cultural factors that will
otherwise inevitably cause innovation to fail.
Culture is abstract. Different organizations
might even have different definitions of Factor #1: Subcultures vs. The
the concept. Some believe it’s driven by One-Size-Fits-All Approach
leadership, while others believe in a bottom-
up approach. At the same time, a strong grasp Every organization consists of multiple
of the real culture within an organization, subcultures that can have very different
the culture, beliefs, and core values, is approaches, mindsets, and even norms. They
vital to create a system that enables and might be in service of a larger organizational
supports innovation. culture, but require an approach that is much
more nuanced than simply pushing cultural
That means paying specific attention to three change or an innovation mindset on the entire
cultural elements that, together, influence the cultural ecosystem.
success and failure of innovation efforts:
For example, it makes sense to support
1. Alignment on the company’s purpose, innovation differently in different subcultures.
priorities, values, and rewards system. Some, especially when they have less to lose
and more to gain, may be more open to new
2. Belonging encourages making mistakes, ideas and change. These subcultures deserve
experimenting, providing feedback, and the room and space to become centers of
learning from each other to grow. This innovation within the larger organization.
includes rituals and project celebrations,
as well as failure recoveries and learnings. Factor #2: How the Organization
Deals With Mistakes
3. Agility focusing on the norms and rules
within the organization. It includes how We’re taught in school that mistakes are
meetings are managed, how authority bad. Unfortunately, too often, that leads to
is distributed, and supporting systems a low-tolerance culture even in some of the
of innovation. largest global organization. A low tolerance for

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mistakes, in turn, suppresses the urge to try Factor #4: The Purpose and
something new, experimenting to come up with Practice of Feedback
new ideas or test assumption, for fear of failure.
Trial and error, a crucial part of the ideation and How the organization shares feedback
incubation process, becomes a no-no. can go a long way towards its potential for
innovation. By design, its purpose is to propel
On the other hand, research shows that the organization into the future. Unfortunately,
better leads tend to be those who have more too many companies use it to look backwards,
documented errors. They don’t necessarily rehashing past mistakes rather than
make more errors, but are more willing to looking forward.
both admit and document them, fostering
both a culture of more fearless ideation Spotify has looked to correct this natural
and better ability to learn and improve on tendency with its 70-20-10 model. In its
their mistakes. Failing becomes failing with feedback sessions, only 10% of time is spent
a purpose, embracing the resulting learning looking at what happened, while 20% of time
opportunities and avoid repetition of the is focused on what’s going on in the present.
same ignored or suppressed mistakes. Meanwhile, 70% of the time is spent looking
forward, towards what the organization
Factor #3: The Reward and wants to achieve and what the future might
Punishment System look like.

It doesn’t matter how much a company recites Factor #5: Rules and Norms Within
that they’re purpose or innovation-driven. the Organization
The culture reliably proves whether the
organization is able to put their money where Rules and norms, in many ways, make up the
their mouth is. functional part of an organization’s culture.
The problem is that the way they’re applied
Rather than punishing anyone who fails, it’s can often hamper innovation.
about rewarding both effort and successes.
That means promoting managers that are In many organizations, a mistake tends to lead
willing to embrace risks as long as they’re to a new rule. That rule, in turn, is applied to
well-guided, as well as rewarding a general the entire organization, punishing the majority
willingness to experiment for the sake of of employees. But here’s a truth: according
bettering the company. to research, 97% of employees in an average
organization want to do the right thing to
At Tata Motors, this reward and punishment help the organization thrive. Rules need to
system has become a part of the cultural encourage, not discourage this supermajority.
fabric. Leadership treats mistakes as
goldmines of opportunities, while an award Rather than punishing well-intended failure,
called Dare to Try rewards employees for rules should give employees the freedom
relevant ideas, regardless of success or to act in the organization’s best interest.
failure. Through systematic rewards, as well While not every employee may be part of the
as the courage to avoid punishments for actual innovation team, each can contribute
well-intended mistakes, the organization has actively or passively when giving the right
comprehensively built its innovation efforts. environment to thrive.

The Innovator’s Handbook 2022 157

Factor #6: Authority vs. Authority, of course, cannot be unchecked.
Empowerment Leadership still needs to drive innovation,
but it needs to come from every level of the
Finally, it’s important to go beyond the organization in equal measure. Distributed
corporate-speak empowerment of employees, authority to express ideas, and move
which tends to be more a belief than an these ideas forward, can go a long way
actual, actionable piece of the culture. towards creating a culture that nurtures and
Employees are inherently powerful. What encourages innovation.
they need instead is the authority to make
decisions, test assumptions, come up with
new ideas, and so on.

The Imagination Machine: How to

Compete on Creativity

Every great company was founded on an act

Martin Reeves
of imagination—an idea that went against
Chairman at BCG Henderson
conventional wisdom at the time. But many Institute and Senior Partner
companies have lost the ability to imagine. and Managing Director at BCG
BCG Henderson Institute’s Martin Reeves
explores how organizations can reignite
imagination and keep it alive systematically.

We are used to thinking in terms of two incumbents can no longer think in terms of
types of companies. On the one hand, there optimizing a settled business model because
are the small, high price-to-earnings ratio competitive advantage is now fading faster
companies with very high growth and no cash, than before. In the 1980s, outperforming
90% of which will fail, and some of which companies used to sustain their advantage
will eventually become the big companies for a decade, and sometimes longer than
of tomorrow. that; now, they regress to the mean in a year
or two. As a result, the number of companies
On the other hand, there are the large exiting the Fortune 500 annually has risen by
incumbents who have been around for a long 36%. In short, big companies can no longer
time and are expected to stick around for rest content with the business model that
longer than the working life of the average delivered yesterday’s success.
employee. The small startups are seen
as focused on innovation and disruption, The good news is that companies large and
whereas large incumbents are supposed to small can renew their future growth potential
focus on optimizing stable business models. by becoming ambidextrous, optimizing
today’s business model while self-disrupting
However, this is no longer a tenable view and re-imagining themselves in search of
of the business environment. Established tomorrow’s sources of competitive advantage.

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Companies that become ‘imagination seduce us out of our routine way of looking
machines’ have the power to increase their at things into the realm of counterfactual
growth option value and defy the gravity of thinking. Cognitive science tells us that
average performance. imagination is triggered by surprise. To
effectively seek and pursue surprises, it is
AI Will Force Businesses to important to reflect on accidents, investigate
Compete on Imagination anomalies, and find analogies that can stretch
or challenge one’s mental models.
With the rise of AI, human work will
increasingly focus on higher-order The Idea: We might encounter inspiring
cognitive capacities. AI is already capable of accidents, anomalies, or analogies, but
surpassing humans at correlative thinking: these won’t amount to much if we don’t
if this happens, what else happens? But put effort into developing an idea. To
humans, unlike machines, can think at a level harness imagination, we need to turn
above noticing correlations. We can engage passing thoughts – triggered by surprise –
in causal thinking and, most importantly, into starting points for rethinking our
counterfactual thinking. Humans are uniquely mental models, to develop new, valuable,
able to think about what isn’t yet, but counterfactual models.
could be.
The Collision: A new mental model remains
Eventually, as routine management tasks just an individual indulgence unless we act
are taken over by AI, we will have to migrate upon it – to collide the idea with reality, spur
human labor to more uniquely human types of our imagination again, and drive the further
cognitive activity, like counterfactual thinking evolution of the idea. Action can accelerate
and empathy. This is why imagination – imagination by probing early, selectively,
the ability to create mental models of playfully, and iteratively.
what doesn’t yet exist- is critical to future
competitive advantage. The Epidemic: An idea which is not
communicated, evolved by others or adopted
Imagination Can Be Harnessed can never create new realities and be of
Systematically economic value. Since an idea cannot be
directly observed, we need to share ideas
There is the widespread misconception that socially by creating prototypes, sharing the
imagination is a “mysterious” capacity that experience of developing them together, or
a few gifted individuals exercise in passing hearing and being motivated by a narrative
moments of mystical enlightenment. In fact, that underscores their significance.
everyone has the capacity for imagination,
and imagination can be harnessed as a The Encore: As they grow, businesses face
collective activity within an organization. the challenge of being mentally ambidextrous:
on the one hand, having the corporate
Below you’ll find concrete actions that you machinery to exploit developed ideas; on the
can take to unlock imagination throughout the other hand, being able to continually explore
six stages of the idea life cycle. new ideas. Businesses need to be able to
harness imagination repeatedly to become
The Seduction: For imagination to be true “‘imagination machines”: organizations
harnessed in business, it first needs to be capable of transforming themselves by
triggered or inspired. Something needs to discovering new paths for growth.

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 Psychological Safety for
High Performance

Similar to Maslow’s hierarchy of human

needs, a hierarchy of team needs guides Laura Delizonna
organizations in reaching their greatest Executive Coach, Author,
potential. At its foundation is the emotional Speaker, Stanford Instructor
intelligence of the leader that facilitates
an environment of psychological safety.
This climate of psychological safety Conversely, when psychological safety
allows for true collaboration, which, in is high, and accountability is lacking, a
turn, fosters mastery and innovation, as ‘comfort zone’ is created where individuals
Laura Delizonna outlines. are not challenged, and creativity does not
flow. But when accountability is high and
Psychological Safety: What is It & psychological safety is high, teams operate
Why is It Necessary? in the ‘performance zone’ where there is
cognitive diversity that keeps ideas flowing
According to Amy Edmondson of The Harvard and a rapid learning environment that
Business School, psychological safety is ‘a facilitates innovation.
climate where people feel safe taking risks
and being vulnerable.’ Here are some reasons The 4 Cs of Psychological Safety:
to cultivate a culture of psychological safety Fueling High-Performing Teams
in your organization:
Understanding the importance of
• Essential for high-performing teams psychological safety is a fundamental first
• Allows people to get on the same page step to your team’s success, but having a
and engage in honest dialogue plan to create this environment within your
• Increases team members’ belief that organization (both in-person and remote)
others are ‘on their side,’ which can is paramount.
lead to the freedom to take risks, take
responsibility, positive conflict, open and Care
thoughtful communication, all of which are Caring It is about letting people know they
behaviors that lead to innovation. are more than a cog in a wheel. Relating to
people on a human level creates bonds and a
In the fast-paced, high-accountability sense of belonging.
environments of our modern-day businesses,
psychological safety is vital. When Benefit for innovation: A caring atmosphere
psychological safety and accountability are increases motivation and allows individuals to
low, team members are apathetic and not do their best work.
engaged. Also, employees do not feel safe in
high-pressure settings where performance How you do it:
expectations are high but psychological • Get to know each other: Engage in small
safety is low. There is no freedom to express talk, create checking in/celebration rituals,
opinions, which can kill a team or organization. and be deliberate about follow-up.

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• Support team members’ development: How you do it:
Provide opportunities through coaching, • Express appreciation: Verbalize
mentoring, access to training, uncover appreciation to employees and do
members’ goals/challenges, ask curious it often.
questions about how you can best
support individuals in their jobs. • Solicit input: Lead the charge in
developing an inclusive team. Draw out
Courage voices that may be silent. Purpose to ask
Create a culture where it is acceptable for more than you are telling (use open-
team members to make mistakes. ended questions and pose statements
that promote feedback). Communicate
Benefit for innovation: When employees are in a way that validates and encourages
assured their work environment is safe, they those who speak up. Be deliberate about
have the permission to experiment, grow, creating team procedures that support
and learn. candor (small group settings, oral and
written feedback)
How you do it:
• Model vulnerability: Convey that you do Commitment
not have all the answers but are excited to Developing a strategy for implementing the
learn with the team. You can express this actions mentioned above will increase the
action in phrases such as, “I don’t know,” likelihood of your plan’s success.
“I haven’t.
Benefit for innovation: Committing to
• Admit mistakes: Reframe mistakes as a creating a psychologically safe environment
learning journey. Share your challenges/ will demonstrate your significance on the work
growth journey and own mistakes publicly and the person.
and immediately.
How you do it:
Co-Elevate • It is really up to you and what fits with
Utilize your position as a leader to elicit the culture of your organization, but at
greatness within your team members. minimum commit to trying at least one of
the methods mentioned each day.
Benefit for innovation: When individuals feel
valued, it further enhances the relationship
bonds, allowing them to be at their best and
fully contribute to the shared vision.

The Innovator’s Handbook 2022 161

 Building Innovation Culture
with Tiny Habits

In order to change a corporate culture

to cultivate innovation, you must focus Tristan Kromer
on changing what people do. Culture is Innovation Coach &
composed of the methods and approaches Founder at Kromatic
used to tackle organizational problems.
Culture dictates the way that recurring
problems are addressed and defines
the priorities given to different types of • Retrospectives
problems. When a culture is customer- • Peer to peer coaching
centric, you see it in everything the • Root cause analyses
company does. • Radically candid feedback
• Sprint demos
Culture is a learned behavior and is about • Knowledge sharing
what people actually do. When we see people • Post and pre mortems
doing something, it impacts what others
consider normal and acceptable solutions. To influence culture change, you need to think
Culture is developed as a result of the small about shared behaviors rather than individual
things that everyone in the business does behaviors. Change of behavior at an individual
on a regular basis. These tiny habits range level won’t shift the organizational culture.
from the language used within the business Instead, focus on behaviors that are beneficial
to the process in place for solving day-to- for everyone in the company to adopt.
day problems.
These behaviors need to become habits.
Kromatic’s Tristan Kromer outlines the need to A habit is a settled or regular tendency or
create habits around behaviors that serve an practice, especially one that is hard to give up.
important job that drives the overall purpose The goal is to create something so pervasive
of the desired culture. in the culture that it is almost impossible not
to do.
Culture Behaviors
One of the most powerful ways to develop
A healthy culture is made up of consistent, habits is through the Fogg Behavior Model.
positive behaviors by all employees. The basic premise is that for any behavior that
Choosing the right behaviors involves you want to implement, you need some sort of
looking at different variables and ensuring prompt or trigger. The lower your motivation,
you’re tailoring the approach to your own the easier you need to make the habit to do.
organization, not just choosing the ones that Otherwise, the prompt won’t have any effect.
work for other businesses. An example of a naturally occurring trigger
and subsequent action could be:
Behaviors that often demonstrate a healthy
innovation culture include: 1. Every time a meeting ends

162 The Innovator’s Handbook 2022

2. You write down one good thing and one • What should happen if the behavior is
area of improvement from the session adopted as a group?
• What should the impact be?
Once the action is accomplished, there must
be a reward. As a rule for creating the right The answers to the above should be strongly
behaviors, having a naturally occurring reward linked to the functional and emotional job of
is best. It’s okay to create artificial incentives, the identified behavior. Only by doing this will
but if the habit cycle is self-sustaining, it’s you be able to actually gauge if what you’re
much easier to let it run on autopilot. doing is working. Having metrics in place from
the start is the best way to ensure you don’t
The Job of Culture waste time, money, or resources.

The problem with many corporate culture Continuing with the example of 1:1 meetings,
statements is that it is not always clear what there are a number of ways to measure
the purpose is of the behavior, how it is whether the meetings are serving the
visible, or how it will be measured. functional and emotional job they have been
assigned. First, you can secure qualitative
Purpose feedback from a group of employees or run
The purpose of work culture is to align a broader survey to gauge their reaction
teammates to achieve a certain goal. If your to the meetings. You could also look at
team is not aligned, the culture is not serving the percentage of the 1:1 meetings that
its purpose. An example of a culture that are canceled or delayed. This will provide
does not serve a purpose is blame culture. insight into whether the meetings are
The intention may be to encourage a change being prioritized. If not, they likely aren’t
in employee behavior, but the more likely accomplishing either the functional or
result is to cause individuals not to speak out emotional jobs.
or volunteer.
Based on the measurable feedback from a
To help identify the purpose of organization behavior, you need to be prepared to take
habits, work to identify the functional job and action. If a behavior is not serving its desired
social/emotional job of the habit. For example, functional or emotional job, it should not be
having 1:1s between a direct report and line allowed to continue as-is. The behavior either
manager is a behavior. The functional job is to needs to be improved or eliminated.
promote bidirectional communication in the
hierarchy, and the emotional job is to ensure Forming the right culture within your
the direct report feels heard and support organization isn’t something that happens
social bonding. overnight. It takes time and effort, but
it’s possible. By forming tiny habits, and
Measuring the Behavior encouraging the right behaviors within your
If every cultural behavior has an objective, business, you can create an innovation
then the outcomes should also be culture that goes beyond the buzzwords
measurable. From the beginning, you need and generates authentically productive
to understand: work culture.

The Innovator’s Handbook 2022 163

 How to Build an
Innovative Culture

You can’t have an innovative culture

without leaders whose behaviors align with
Alessandro di Fiore
the desired culture. Culture and leaders’ Founder & CEO at ECSI
behaviors are two sides of the same coin.
Culture is a pattern of shared assumptions
about beliefs and acceptable behaviors, and
an organization’s culture reflects the values
and behaviors of its leaders. change that. Corporations lack a workable
framework that empowers organizations to
If you want to have an impact on culture transform. One requirement for a successful
and change it, the most actionable lever is culture change program is something to
to think about the behaviors of the leaders. measure. Without measured progress, there is
Alessandro Di Fiore details the behaviors a perception of failure.
required to build innovative culture at
an organization. Five Paradoxes of Innovative
Cultures
Failure of Culture Programs
There are five paradoxes that are required to
There are two primary downfalls of programs support an innovative culture.
attempting to drive a shift in organizational
culture: (1) lack of consistency between 1. Tolerance for failure but intolerance for
the espoused values and actual leaders’ incompetence
behaviors; and (2) a program that is simply a
communication initiative on values. • Corporations must create a culture
that simultaneously values learning
Many culture programs consist of a published through failure and requires outstanding
manifesto that doesn’t actually anchor to individual performance. A good start is
a social commitment of the leaders. The for senior leadership to articulate clearly
people in the company see the disconnect the difference between productive and
between what the leaders are doing and the unproductive failures.
manifesto. The program then simply becomes
a communication initiative cascading down 2. Willingness to experiment but
in the organization. The more the cascading highly disciplined
is effective, the more the disconnect
becomes visible. This visible disconnect • Organizations that embrace
too often results in employee cynicism experimentation are comfortable with
and disengagement. uncertainty and ambiguity. However, they
should select and design experiments
Culture change is hard, and it takes time. carefully, with clear criteria at the outset
Most employees are still in an industrial age for deciding whether to move forward,
mindset, and it takes a true investment to modify, or kill an idea.

164 The Innovator’s Handbook 2022

3. Psychologically safe but brutally candid • Survey to assess the as-is culture using
the five paradoxes.
• If people are afraid to criticize, openly • The survey should have individuals
challenge superiors’ views, debate assess their leaders anonymously.
the ideas of others, and raise counter This quantifies the baselines.
perspectives, innovation can be crushed.
At the same time, the feedback and • Social contract workshop
discussions should be frank and direct. • Level 1–2 leaders focusing on the
five paradoxes and split in teams to
4. Collaboration but individual accountability
discuss each paradox and related
concrete behaviors
• Too often, collaboration gets confused
• Which leaders’ behaviors need to
with consensus. And consensus is poison
be stopped, which ones need to
for rapid decision-making and navigating
be started?
complex problems associated with
innovation. Ultimately, someone must
• Townhall or fair
make a decision and be accountable for it.
• Level 1-2 leaders present the work
5. Flat but strong leadership done on the five paradoxes and
participants discuss, build and vote on
• In culturally flat organizations, people the results
are given wide latitude to take actions, • Develop an overarching “slogan”
make decisions, and voice their opinions.
Lack of hierarchy, though, does not mean The results of the above model allow for
lack of leadership. Paradoxically, flat a visual assessment and display of the
organizations require stronger leadership. behaviors and comparison of the “as is”
culture to the “to-be” leadership behaviors.
The crux is that you cannot focus on only one
or two of the paradoxes. The balance between Once the desired “to-be” state is determined,
each of the paradoxes is important. it can be communicated to the company.
There must be mechanisms to ensure the
Developing a Social Contract behaviors are sustained including regular
meetings with feedback on the behaviors and
For true culture change, corporations need a “walk the talk” moments. The behaviors must
new model. One new approach is to develop be embedded and then measured at regular
a social contract among leaders. The social intervals to see progress versus the baseline.
contract is an agreement governing the
behaviors of the leaders. The assumption There is a continuous need to evaluate
is that cultures develop based on a pact innovative culture and develop tools to
among individuals about what kind of support cultural change within corporations.
environment they want to live in and need for Recent efforts focus on development of
performance. The leaders at different levels benchmarking tools for innovative culture
must comply with the social contract in order to support future research on innovative
to generate traction. cultures and similarities and differences
across industries. These tools will better
The following series of steps can be used enable organizations to assess the progress
assess the leaders’ proposed behaviors: in developing an innovative culture.

The Innovator’s Handbook 2022 165

 The Power and Pitfalls of
Self-Appointed Idea Teams

Ownership is one of the core success

factors in innovation. As Jesper Müller-
Jesper Müller-Krogstrup
Krogstrup, Founder and CEO at Nosco CEO at NOSCO
explains, self-appointed teams can go a
long way towards building that sense of
ownership; as long as some key pitfalls can
be avoided and mitigated. idea, and have the power to execute that idea,
they can make all the difference in building
Innovation as a whole can fall into countless more dynamic, successful, and all-inclusive
pitfalls. One major issue is frozen pipelines, innovation cultures and results.
with current projects not truly moving
forwards or backwards and making it That requires facilitation. The ideal innovation
impossible for new ideas to move forward team consists of four distinct roles:
due to a lack of resources. Especially in
large organizations, it can become almost • The team CEO, keeping the team together
impossible to kill ideas that people have been and on the same page, building individual
spending years and significant resources on. strong suits into a greater whole.

At the same time, organizations tend to • The team CMO, focusing on relationships
struggle to build a true innovation culture through communications, presentations,
in which everyone wants to contribute, and and negotiations. The CMO also engages
participates in the larger process. Enter self- the larger network and motivates relevant
appointed teams, a natural way to counter stakeholders to buy in or participate.
both of these common issues.
• The team COO, who focuses on handling
Moving Towards a Team-Driven the project, getting and managing
Innovation Challenge resources, ensuring deliveries, and
ensures the overall progress of the idea.
Innovation challenges standardize the
process, moving potentially thousands of • The team CTO, ensuring that the team get
ideas into a streamlined process that builds and develop the necessary knowledge
buy-in and forward momentum. They require and technology to meet the ambition of
mobilizing the entire organization, from the project.
the c-suite to every level of management.
They also require a standard process for Each innovation team needs each of these
incubation, turning ideas into action and roles buying into their responsibilities entirely.
tangible business concepts. Failing in any of them is a major pitfall of
a self-appointed team, which can only be
But above all of these challenges, there is avoided if each team member voluntarily
one key to success: self-appointed innovation buys into their role based on their individual
teams. When people fall in love with the right strengths and belief in the idea.

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Pitfalls and Solutions of Self- During the Incubation Challenge
Appointed Innovation Teams at When ideas begin to move into incubation,
Every Step of the Journey too many organizations treat the debrief using
their typical methodologies for innovation
Innovation challenges focus on four major including weekly standup iterations, and more.
steps: mobilization, the innovation challenge All teams are treated the same, following the
itself, a subsequent incubation challenge, same processes on top of everything they’re
and the handover to the core business. Each already given. And once again, autonomy can
of them comes with pitfalls, but also with cause teams to fail not knowing what steps
relatively straightforward solutions. to take.

During Mobilization The solution is simple: self-appointed teams

In the early stage, too many CEOs and still need guidance. That includes different
business leaders think that a good idea is processes depending on the idea and team
enough for execution. They may also take a makeup, along with dedicated time spent
wait and see mindset, or even think that it specifically on the new idea. Coach teams
won’t be possible to take key people out of can help with that guidance, and sponsors
their daily work. can take place in real project meetings to
continue buy-in. For managers losing their
Working on that organizational mindset is the team, an added budget can help avoid work
biggest solve early on. Department heads overload on either end.
and shift managers have to be able to free
up their people, and budgets have to be During the Handover Stage
assigned early. To address the first pitfall, The last step of the innovation process can
it also pays to have a fixed start date and come with a significant danger: believing that
a clearly-set plan for designating the right it’s over. As the project moves back to the
teams to execute the ideas. organization, much of the work still needs to
be done. The innovation project cannot be
During the Innovation Challenge anchored too far down in the organization,
During the crucial ideation stage, innovation and projects should only be handed over
can fail when the decision process is kept when they’re truly ready. Finally, the idea team
separate from sponsorship or ownership of should, as possible, stay together to execute
the project. It’s also dangerous to leave team the idea.
formation entirely up to idea authors, because
most will focus on extroverts without keeping To prevent these pitfalls, sponsorship
the defined roles in place. Finally, giving remaining in the c-suite can be a vital
teams too much freedom can be dangerous solution. So is repeating incubation multiple
to execute even the best ideas. times until the project is truly ready for the
hand-off, and taking a central look at the tea
In this stage, the solves focus around to ensure it continues being optimized for the
organization and training. Bringing in task at hand.
leadership early into the decision-making
process builds buy-in, while training teams Self-Appointed Teams Could Cause
can prevent the issue of too much freedom. a Cultural Shift
Finally, a structured platform and guidance
process during the team-building stage is Working with self-appointed teams brings quite
absolutely vital. a few surprises to light. For example, many of the

The Innovator’s Handbook 2022 167

best intrapreneurs are actual introverts. Teaming earlier? When teams are in charge of their
up with extroverted sellers and promoters helps own ideas, they will shut down projects far
them stand out, where in other environments earlier and easier.
they would not have the chance to shine.
When teaching intrapreneurs entrepreneurial
Intrapreneurs, when appointed to their own skills, and providing them the right support,
teams, also begin to change the culture of they begin to learn. They build an informal
the organization. By taking full ownership of contract between leadership and innovation
their own ideas, they’re able to create a true teams, trusting each other to get the work
innovation mindset and become ambassadors done. As such, self-appointed teams become
for that mindset across the organization. The one of the strongest innovation assets an
difficulty to close projects down mentioned organization can have.

3 Strategies to Nurture
Relentless Curiosity

We like the status quo. This natural

Francesca Gino
suppression of curiosity also suppresses the Professor at Harvard Business
drive to iterate, innovate, and change. Driven School and Author of
by interviews and studies of organizations Rebel Talent
and leaders across the world, Francesca
Gino, professor at Harvard Business School,
has shaped her insights into curiosity as
an essential part of innovation into three
actionable strategies any leader can take to
maximize opportunities.
Change can be difficult. While curiosity is
Curiosity impacts innovation and the a natural component of any childhood, it
ability to adopt in a few central ways. When goes away as the perceived judgment and
we’re curious, we end up nurturing deeper impressions we make on others become more
relationships, impacting decision-making central. The cycle repeats for almost any
quality across the organization. Curiosity professional joining a new organization: we’re
leads to more diverse networks, fewer curious as we join, but that curiosity drops by
stereotypes, and a more open mindset for at least 20% within nine months of being at
everyone involved. the same position.

The result is simple: communication It’s that shift in mindset that’s vital to avoid.
becomes more effective, and so does team If everyone remains curious, the door to
performance. It’s a natural win-win. So why innovation remains wide open. These three
isn’t everyone curious? strategies can help to get there.

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Strategy #1: Embrace the Taking this step counteracts the typically
Unexpected opposed directions of curiosity and expertise.
Traditionally, the more expertise we acquire,
Every leader will encounter unexpected the less curious we become. Through learning
situations. How we react to them is defined goals individualized across the organization,
by our curiosity about the situation. Instead leaders and employees alike can retain their
of looking at the mistake, or the constraint curiosity long-term.
of an accident, are you able to look at the
opportunity that comes with the unexpected? Take the 2009 Miracle of the Hudson as an
example. On that fateful evening, Captain
It’s about turning mistakes into learning Chesley “Sully” Sullenberger flew into a swarm
experience, abilities to improve and innovate of geese just seconds after taking off from
seemingly out of nowhere. LaGuardia Airport. What saved his life and the
life of 150 passengers was Sully’s relentless
At its most simple, think about the COVID-19 commitment to learning.
pandemic. Saying “we can’t wait to get back
to the office” implies the inevitable. Truly His decades of flying experience would have
innovative leaders, though, were able to made it easy to rely on what should be done.
look at the new constraint of virtual work, What made his actions heroic, though, was
and see opportunities to improve the ways the ability to avoid that tunnel vision, and
their company is operated far beyond this continue thinking about new possibilities
singular event. to save his plane and passengers. He had
walked into his cockpit every day, committed
Another example occurred at Osteria to learning something new. In those fateful
Francescana, a three-Michelin star seconds, it paid off.
restaurant in Northern Italy owned by chef
and owner Massimo Bottura. When a usually Strategy #3: Create Conditions for
detail-oriented sous chef dropped what Everyone’s Curiosity to Thrive
would be the last dessert of the evening,
Bottura didn’t admonish the chef or use Finally, curiosity for leaders is not just about
it as a learning experience. Instead, he themselves. It’s about creating an environment
saw an idea for a new dessert. Today, the that allows every member involved in the
deconstructed lemon tart is the most decision-making and innovation process to
popular dessert at the restaurant. embrace their own curiosity and thrive.

Strategy #2: Create Continuous That means being curious enough to know
Learning Goals about everyone’s environment, conditions,
and needs to remain curious. It means
Professional development is a natural part continuing to ask questions, discovering more
of almost every organization today at every about others, and modeling these behaviors
level, from leaders to ground-level employees. for everyone else in the organization
It’s usually tied to performance goals. But to embrace.
what if a second step was adding learning
goals to continue embracing new knowledge, It might be an unusual example, but pirate
expertise, and opportunity? ships in the 16th, 17th, and 18th century

The Innovator’s Handbook 2022 169

embody this model of curiosity. At the time, The Contagious Nature of
because they took in anyone with skill, they Relentless Curiosity
were among the most diverse organizations of
their time. But they also elected their captain, That last example also uncovers the final
who had to make sure they would create the truth about curiosity: at its best, it’s highly
right environment for everyone to thrive in contagious. A curious mindset by leadership
order to stay in power. shows everyone how valuable it can be,
allowing it to spread through all levels of
Unlike so many other organizations of the the organization.
time, race or gender were not part of the
equation. A commitment to the mission, Relentless curiosity is about embracing
and the skillet, was all that was required. opportunity within the constraints. It’s about
Because trust and respect was earned being willing to learn continually, never tiring
instead of expected, the captain needed to ask questions, and modeling that behavior
a healthy amount of curiosity to create a for everyone else. Done right, it doesn’t just
successful environment. lead to innovation; it allows us to become
more resilient, enhance our productivity,
and work better together to create a better,
healthier, more forward-thinking mindset.

People Innovate,
Not Companies

Today’s world is moving fast. Speed is of

the essence in a VUCA world that has been Peter Daels
magnified by the COVID-19 pandemic. Managing Director at
Ambidextrous organizations, who are able INNDUCE.ME
to combine operational excellence and
efficiency with innovation excellence, will
win. As Peter Daels, Managing Director at It’s about the people.”
INNDUCE.me explains, that requires one
thing above all: a focus on the people The Essential Skills of
making the innovation possible. Successful Innovators

We’ve heard of innovation as a necessary Research on the qualities that make

combination of leadership support, an innovators successful is surprisingly sparse.
innovative culture, and a strategy supporting Fortunately, in a co-commissioned scientific
a long-term future vision. But the truth is that study, Prof. dr. Frederik Anseel from the
without the fourth pillar, a strong innovation Industrial & Organisational Psychology
team, those three will not be enough. In the department at Ghent University found
words of Steve Jobs, “Innovation has nothing a specific set of skills that tend to make
to do with how many R&D dollars you have... innovators stand out.

170 The Innovator’s Handbook 2022

That research found that it’s about more than significantly do better on one of the three
just being creative. Successful innovators basic competencies of innovation and fall
need amongst others to be curious, open- into one of three categories within that
minded, able to use their resources correctly, generalist role:
communicative and have a strong will to
persevere. At its core, though, innovation is • Innovation contributors have a basic
the combination of three basic competencies: level of ideation, championing &
implementation. When selected for an
• Ideation innovation team it is for their specific
• Championing knowledge, expertise and/or functional
• Implementation skills rather than for the strength of
their innovation skills.. Because of their
We’re all familiar with the first part, the functional expertise & knowledge they
person who recognizes, analyzes, and solves take up a very important role within an
challenges. But the ideator can only work innovation team
alongside a champion, who builds the story
to create support within the organization • Innovation partners have an intermediate
to drive towards a green light. That’s when level of the three core competencies of
the implementer steps in, a more practical innovation. As they are not strong enough
mindset that might not be the most creative yet, Innovation Partners work primarily in
part of the organization, but is able to translate support of the ideator, champion and/or
creative ideas into real-world business implementer of the core innovation team.
applications. Seldomly you will find the 3 basic
competencies of innovation to be at expert • Innovation masters are at expert level on
level in one and the some person. This makes all three core innovation competencies
innovation per definition a team discipline. and are the ideal candidates to
lead drivers of innovation within the
The Interplay of the Three organization. However, only 8% of those
Innovation Roles who have taken the assessment fall into
this category.
All three of the roles tend to exist in most
organizations. The key, then, is getting them to The best innovation teams, then, are the
interact and work together from start to finish ones with a healthy mix between all three
to drive towards organizational success. skill sets, and all three roles. Innovation at its
best is teamwork, all contributing according
The reality is that, after an analysis of the to their best skills and towards the greater
results of the INNDUCE.me assessments, whole. The innovation dream team becomes
only 16% had a specialist innovation one that is dedicated to a single team, with
profile excelling in ideation, championing all 3 basic innovation competencies working
or implementation. The remaining 84% together from start to finish. That’s what is
of innovators are have a generalistic needed to accelerate innovation together
innovation profile meaning that they don’t with your people.

The Innovator’s Handbook 2022 171

 Innovation Talent Predicts
Business Results. Are You
Using Yours?

During the Industrial Age, companies

needed talent that could specialize in a Suzan Briganti
specific task. The end goal was to reduce Founder, CEO & Head of
errors while maximizing manufacturing Product at Swarm Vision
output. So the most desirable talent within
the mass production environment needed to
be reliable, efficient, and predictable.
reducing diversification within the company.
In the Innovation Age, companies need a Now companies are begging for more
different type of talent. Employees need to diversity in their workforce, but the issue is a
be adaptable and agile with the ability to reflection of how they’ve been hiring for years.
problem solve as part of a team. Innovation
talent needs to have a growth mindset while Companies lack recognition of the
thriving in uncertainty. importance that talent plays when it comes
to innovation. No matter what approach to
But how do we cross the chasm from hiring corporate innovation an organization uses,
operating for the Industrial Age to operating the approach largely ignores the fact that
for the Innovation Age? innovation can only come from people.

The problem, says Suzan Briganti, CEO of Moreover, it’s about having the right
Swarm Vision, is that we’re still largely staffing people. Many companies attempt to staff
for the Innovation Age in the same way we were for innovation by relying on their technical
staffing for the Industrial Age. A lot of hiring departments. They might move a product
today is based on extrinsic factors. These are team into their new innovation center, or draft
things like academic background, job titles, high-potential workers from the core business
and previous employers. Companies are hiring into the innovation team. Being good at
based on scientific and technical backgrounds product development or excelling within the
as imperfect proxies for innovation skills. The core business doesn’t mean you’ll be good
problem with hiring based on extrinsic factors at innovation though. So companies look for
is that 46% of new hires fail within the first 18 creative types within the organization. Then
months. 89% of that failure is due to intrinsic they end up with a lot of ideas but no one
characteristics, not functional skills. who can execute them.

Hiring for fit isn’t any better. It leads to hiring So how does a company find the right
people who are like the management team, innovation talent?

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Swarm Vision set out to answer this question • Control: Competitiveness, Financial-
by asking: “is it possible to predict the orientation, and 360-Degree Orientation
business outcomes from innovation based
on who is involved?” Their research ended • Think: Information capacity, Rapid pattern
up being the world’s largest study of serial recognition, and Reflection
innovators, identifying the traits and skills that
predict business success from innovation, • Deliver: Contextual goal-orientation,
with 99 percent reliability. Through four Resourcefulness, and Adaptability
rounds of research on four continents, Swarm
found that the answer to its question was a • Give: Benefiting others, and Making the
resounding “Yes!”. It is absolutely possible world better
to predict the business outcomes from
innovation based on who is involved. The When Swarm tests employees inside large
predictive power is strong, too. organizations for these skill sets, on average
22% of employees have a high degree of
Through the study, they identified all eight innovation talents. They can deliver
eight innovation skill clusters shared by Horizon Two and Three innovations and take
successful innovators: them to market. About 75% of employees
score high in at least two of the eight skills, and
• Drive: Ambition, Initiative, Intensity, those people can play a very important role in
and Persistence innovation. You can build successful innovation
teams by putting together individuals with
• Disrupt: Boundary-breaking, Thriving in talents in one or two skills, building a team with
uncertainty, Self-confidence strengths in all eight areas.

• Create: Novelty-seeking, Problem- Knowing the traits of successful innovators

solving, Uncommon Connections, and allows organizations to identify talent at a
Growth mindset granular level. They can use the information
to improve existing teams or build stronger
• Connect: Relating, Persuading, ones in the future. They can also hyper-target
Team-building, and Social- innovation training to upskill where it’s needed
Organizational intelligence the most within the organization.

The Science
of Innovation

Dr. Alan Cabello from Sparkademy offers

a look at how to develop innovation over Allan Cabello
time. There are three basic dimensions to Co-founder and CEO at
innovation: the individual, the team, and Sparkademy
the context. They must work together for
effective innovation efforts.

The Innovator’s Handbook 2022 173

The Individual: Neuroscience The Team: Psychological Safety
and Innovation
Amy Edmondson has developed
At its core, innovation is a science. This a team learning model with four
is demonstrated by the fact that you can essential components:
measure an individual’s innovation potential
by tracking their brain activity. Four brain 1. Team Structures: Team leader coaching
functions have been identified as critical to and context
innovation: attention control, working memory,
planning and generatively, and cognitive 2. Team Safety and Efficacy: A team that
reflex and abstract thinking. A brain scan can feels safe and has trust in each other
measure the important functions while an
individual is performing a task. 3. Team Learning Behavior: How a team
receives feedback, discusses errors, seeks
The four functions all operate in the feedback and information from customers
neuroplastic part of the brain, which means and others
they can be trained. While a person might be
operating at a certain level for any of these 4. Team Performance: Satisfied customer
functions, the brain can be trained to perform needs and expectations
at a higher level.
While many companies focus solely on team
To develop any of the four functions, the performance, the three preceding factors
individual must apply themselves and must be present to create a high performing
“exercise” the brain function. While some team. For example, team safety and efficacy
people are more predisposed to develop is necessary for members to trust each other,
these functions, training the functions allows learn, grow, and ultimately practice innovation.
an individual to develop higher innovative
skills. This development will take time, but it The Context: Persistence
can be measured over time.
Persistence is key for innovation. Companies
Measuring these four functions enable that have continuously worked on innovation
companies to assess individuals who are are the ones that show the highest level of
better equipped to spark innovation and innovativeness and profitability over time. The
transformation within the organization. It most difficult barrier for companies is filing
is also not necessary for all members of a their first patent. After that first patent, the
corporation to be high on the innovation rate of filing increases dramatically.
spectrum. A company should assess its roles
and desired balance The Measurability of Innovation

Additionally, innovative individuals and With a better understanding of the individual,

companies must strike a balance between the team, and the context, the next step is
looking for new opportunities and then to understand how innovation is measured.
exploiting them. This requires an ambidextrous Historically, innovation was measured with
approach, switching between exploration research and development expenditure. This
and exploitation. is not a sufficient measurement of innovation.

174 The Innovator’s Handbook 2022

A company with a different R&D model and • Corporate Venture Capital: Deal flow that
low expenses can still be innovative. Other results in exits
corporate innovation indicators include: • L&D: How many hours per person that
results in retention of talent
• Innovation hubs
• Innovation initiatives To measure the innovation of a team, it is
• Corporate venture capitalism important to assess team psychological
• Learning and development safety. There is a psychological survey
available to assess the psychological safety
The key question is: is your organization of the team, including rating statements like “It
continuously investing in different innovation is difficult to ask other members of this team
strategies over time? for help” and “People on this team sometimes
reject others for being different.”
There are a number of options for measuring
innovativeness at your organization: For individuals, an assessment should focus
on ambidexterity and understanding of human
• Innovation Department: Number of pilots needs. Ambidexterity is tested by measuring
or MVPs that result in new products an individual’s ability to recognize patterns and
or services make decisions. The understanding of human
• R&D: Number of patents that result in new needs focuses on emotional intelligence and
products or licensing the ability to identify the motions of others.

Building the Teams for Solving

Hard Problems

The Studio team at Citi Ventures focuses

on solving hard problems. That studio is led Valla Vakili
by Valla Vakili, Managing Director & Head Managing Director, Head of
of the Studio team. These hard problems Citi Ventures Studio at Citibank
are things like eliminating poverty and
hunger, providing everyone with quality
education, or creating economic growth. It
takes extraordinary measures to solve these
hard problems, and traditional innovation Valla says he’s optimistic about our ability to
teams aren’t equipped to deliver those create the new teams, models, and methods
solutions. To solve hard problems, we have required for this. His optimism comes from
to completely break with old innovation the massive market of people who want
methods and create something new. to buy sustainable, safe products. That

The Innovator’s Handbook 2022 175

market will make demands and innovation through trust that will have a competitive
teams will learn how to deliver on them. This advantage in the market.
market is also where all the talent is going.
Younger generations want to work on the Diversity is most important in product teams,
hard problems and find solutions that benefit which is where exclusion has historically
society. The next generation is educated, been the strongest. The in-built practice of
diverse, and setting expectations that traditional innovation is to hyper-focus on
products and services meet citizen needs. a customer profile. When they do that, they
end up with products that exclude rather
The young are coming to power. They are than include.
going to run new businesses and deliver
different outcomes. If we want to build Mainstreaming Sustainability
innovation teams that can start doing this In the new model of innovation, teams have
now, says Valla, we have to build teams that to consider sustainability from the outset.
can excel at two things: scaling inclusivity and The business model has to incorporate
mainstreaming sustainability. sustainability from the beginning instead of
dealing with it at the end as an afterthought.
Scaling Inclusivity To do this and make sustainability mainstream,
If the teams creating the products to leaders have to be great storytellers. When
address societal challenges aren’t made up they can tell a story that encompasses
of the people experiencing those societal sustainability attributes, they are able to
challenges, it won’t work. Groups need show how those attributes can command the
greater representation in the development of market. After all, customers will pay a premium
products and services if they want to meet for products and services that deliver on a
the needs of the market. Teams that are broader range of needs.
inclusive in their composition excel in a way
that traditional innovation teams (which were The data team is key in this storytelling
primarily white and male) cannot. process. In traditional innovation processes,
teams don’t start collecting data until they
The key skill to scaling inclusivity is to be test their prototypes. The majority of data
able to build trust. Leaders are often met comes in after launch, and it’s geared towards
with skepticism when they want to bring more the idea of optimization and scale. In the
diversity into their innovation team. It’s often new innovation model, data needs to come
assumed that they are doing this because in much further upstream. Data needs to
someone told them to. In reality, they may help define what society’s expectations are
be trying to solve a problem that depends and what value looks like to that society. This
on having the right representation to find changes the landscape before a product is
the right solution. While everyone is trying to even conceived. Data teams can help shape
build more diverse teams right now, it’s the the scope of work and inform the process to
leaders that are able to attract diverse talent deliver a new business model.

176 The Innovator’s Handbook 2022

 Swiss Post’s Innovation Culture –
Snapshot of a Journey

Swiss Post is a state-owned organization

that once had healthy financials, happy Roland Keller
customers, and 50,000 employees. Head of Innovation Culture
Recently, though, there have been at Swiss Post
major changes in the key markets they
served. Customers wanted their services
personalized, mobile, and instant. New
players in the market were changing things,
too, with companies like Uber Eats and • Eliminating a central innovation team.
Amazon Prime now playing in the key areas Instead of an innovation team, all units
that Swiss Post once did best. were given the mandate to innovate. The
business units have the money and the
This started to put a lot of pressure on the power to develop their own innovative
organization. Volume and margins were taking solutions, and they each set up their
a big hit, with overall net income falling by 37%. innovation process in the way that works
best for them.
Swiss Post had to innovate or face extinction. If
the business environment was changing, then • Building an internal culture of
Swiss Post had to change, too, says Roland collaboration and entrepreneurship.
Keller. As Head of Innovation Culture, he They set new priorities for business
believed that a dynamic country like Switzerland units to boost creativity and curiosity
needed an equally dynamic postal service, and for new business ideas. By reducing
so his team started to reinvent the service. governance and encouraging innovative
thinking, business units feel empowered
They started by creating a new vision and to research and try new ideas. They
strategy that put growth at the core of the are tracking the effectiveness of these
business. They set clear goals and began cultural changes through surveys, send
to make major changes to the organization. out the first one before they launched the
Some of these changes included: changes, and doing several throughout
the transitions.
• Implementing a new organizational
structure. In doing so, they raised digital • Hosting Boost Camps. Boost Camps are
capabilities to the corporate level to make three to five-day workshops where teams
space for new digital products. This change can present their ideas to experts from
in structure also required changing some legal, IT, and finance, and other areas of
people, such as a new CEO and new Head the organization. If they are accepted,
of Digital. Every manager had to reapply for they go into a testing phase right away
their job to ensure they were the right fit for to start gaining those early wins. Then
the new strategy and focus. They also got they start looking for sponsors within
rid of performance incentives and replaced the business to take validated ideas
them with team incentives. into production.

The Innovator’s Handbook 2022 177

• Promoting external partnerships up innovation, they adopted a lean
around the world. Swiss Post is now startup methodology and created an Early
working with startups, universities, brand label for all new products. Using
and public institutions to develop new the Early label, they can release products
solutions within their key focus areas and services for market testing while still
of communication, logistics, passenger allowing customers to rely on traditional
transport, and financial services. services. The label helped Swiss Post
manage customer expectations while
• Speeding up internal methods and protecting its reputation. It also helped
processes. Meeting their high quality reduce internal governance, giving people
standard required putting a lot of time the freedom to innovate quickly and
and money into new products. To speed fail fast.

Connecting The Dots – Creating

an Innovation Network at the
Core of an Innovation Ecosystem
Inside a Global Life-Science
Company

Major, established global corporations

don’t always take well to innovation. Their
Henning Trill
culture tends to be built around efficiency VP Innovation Strategy at Bayer
and control, naturally suppressing creativity.
But that challenge is far from impossible to
overcome. Henning Trill, VP of Innovation
Strategy at Bayer AG, explains how his was about introducing the idea that everyone
effort to create an innovation network in can contribute. Convincing a workforce of
one of the largest life-science companies about 100,000 employees to focus not
in the world has succeeded through just on daily goals but rather on a broader,
culture change. customer-focused mindset.

The Opportunity to Include The challenge, though, was not just to bring
Everyone in Innovation at Bayer new methods for innovation and creative
thinking into the teams. Within the R&D
How do you expand a mindset that is departments, the idea of someone from
focused on efficiency and where innovation the corporate centre coming in and telling
is traditionally relegated as an R&D topic? At them how to innovate moving forward was
Bayer, the answer was about shifting mindset not always received enthusiastically. It
with a program called Innovation Agenda. It took convincing, participation in numerous

178 The Innovator’s Handbook 2022

workshops, and a gradual introduction to new Enablers and Blockers
methodologies to get it done right. The final step in the cultural analysis and
strategy was to identify the mind-set that
To get there, Bayer focused on the three would block cultural shifts towards innovation.
dimensions within the Culture Map, first Natural blockers in large organizations
created by Dave Gray and Strategyzer: such as Bayer are slow decision-making,
outcomes, behaviours, and enablers risk avoidance, a short-term focus, a silo
or blockers. mentality, lack of digital and innovation skills,
and a heavily regulated environment are not
Defining Outcomes that Drive Innovation ground-breaking aspects for anyone looking
The first step was to identify ideal outcomes to make the same shift, but identifying them
through the impending cultural shift. Together allowed the innovation team to understand
with a broad representation from the just how big the challenge would be.
organization, the innovation team defined the
following three outcomes: Moving to an Innovation Ecosystem

1. Growth from new products, services, and All of the preceding analysis led to what Bayer
business models. now calls the innovation ecosystem. The
employee is at the center, with every effort and
2. Innovation that creates value for the initiative designed to help them express their
company and the customer. ideas. Three levers can help to accomplish that:

3. Contributions of all employees, from • An internal resource and crowdsourcing

research to sales. platform that includes background
information but also the opportunity for
Changing 4 Key Behaviors anyone of its 40,000 visitors to submit
To define desired behaviors within its culture ideas, collaborate with colleagues across
map, together with the HR team 4 key the globe, and more.
“behaviors” (all part of Bayers LIFE values) to
enable that outcome were identified: • An innovation network of more than 1,000
employees and leaders to promote the
1. Customer Focus platform inside the company, provide
2. Experimentation mentorship and coaching, and support the
3. Collaboration innovation effort in every way possible.
4. Trust
• An entrepreneurship program with about
These behaviors were designed to bring 500 employees to apply the Lean Startup
more flexibility into an organization that has methodology to ideas relevant within the
to reliably and efficiently produce products scope of Bayer.
of excellent quality. Customer Focus to
make sure the outcome of the customer is On top, Bayer runs a multitude of programs to
on peoples mind, on top of internal process connect with the external innovation ecosystems,
excellence. Experimentation as a way to like the LEAPS by Bayer Venture Fund, the
try out new routes with small risks instead #G4Ahelath initiative for start-up engagements,
of pure execution. Collaboration and Trust Life Hubs as innovation spaces in Ecosystems
are essential when working together across like Boston and Berlin, The Grants4 Initiative to
organizational boundaries. collaborate with universities and many more.

The Innovator’s Handbook 2022 179

5 Key Insights from Bayer’s 4. Embrace the dark side to innovation.
Successes, Failures, and Learnings Tolerance of failure only matters when
there is an intolerance for incompetence,
What has Bayer learned, and what can be experiments need to be disciplined, and
applied to other cultures who may be naturally speaking up has to mean being honest.
resistant to change?
5. Innovation is not a purpose in itself.
1. It is most important to focus on people, Innovation is always a way to serve the
not just on strategies or initiatives. business strategy and has to be an
integral part of it.
2. It is key to Work hand in hand with HR
when driving a transformation. Of course, innovation is unique to every
organization, every culture, and every situation.
3. With local leaders in the driver’s seat And yet, these insights are globally applicable,
you see results across your subcultures helping to drive even the most resistant
much faster. cultures towards sustainable, positive shifts.

What Co-Creation Means for

IKEA and How To Leverage its
Value to Kickstart a Co-Create
Movement
The COVID-19 pandemic has been a
Cindy Soo
challenge across industries, but large-box
Global Innovation Lead /
retailers have especially felt its impact. As Innovation & Co-Creation
Cindy Soo, leading the Innovation & Co- Matrix Manager at IKEA
Creation teams remotely for 25 countries
and regions globally at IKEA, explains that
the solution to revenue and employee success measure, the process itself, and
security challenges at IKEA have been the goal of creating more value for both the
straightforward: bring all employees – end user and those involved in that process,
from retail floor to the Service and Global becomes the core focus.
Head office – into the ideation and
innovation process. IKEA saw the need for that shift as a pattern
of customer behavior. While most of its stores
For IKEA, co-creation is a natural evolution are in the suburbs or countryside, people
of collaboration. It empowers the collective across the globe are moving into the cities,
wisdom, insights, and aspiration of the many, unwilling to travel to its stores to find their
especially employees who were not previously furniture and home decor items. The only way
involved in the design or ideation process. to get closer to consumers was to innovate
Rather than looking at the end result as a across every level of the organization,

180 The Innovator’s Handbook 2022

building a more entrepreneurial spirit in out activities and communication programs,
the company. nudging employees to turn a set of mindset
shift tasks into behaviors, and behaviors
The Challenge of Creating Value for into habits.
IKEA Employees
Just how this shift is rolled out also matters.
The value equation for IKEA customers is Rather than building complex activities or
obvious. The more challenging part was using complex language based on design
in rallying employees into this new way of thinking, which employees are not familiar
thinking. They are busy working diligently on with, IKEA kept it simple. The goal: to
day-to-day tasks and may not always see the understand consumer needs, pain points, and
value of thinking beyond the short-term. aspirations. Tools such as “Stinky Fish” and
IDoARRT” allow everyone, across every level
So, IKEA realised that innovation required of the organization, to work together at the
not only a new process or new tools, but same level and in a safe environment.
a shift in mindset of both its employees
and the innovators at the head of the co- If that feels obvious, that’s exactly the point. The
creation process: simple nature of the process allows everyone
to come to the table, reducing artificial barriers
• All employees, from the retail floor to the that can so often be created through complex
head office, are encouraged to bring new processes, terminology, and hierarchy.
ideas to the table, and that their ideas
would be celebrated. The other tactic was just as simple: IKEA
• Managers work towards focused goals looked at teams that had performed well in
with new success factors and KPIs identifying a problem and testing a solution,
to allow them and their employees to and analyzed what helped them succeed. Not
explore, test and be creative in order for surprisingly, it was a combination of Mindset,
the company to progress quickly. Skillset, and Toolset that was built upon a
• The co-creation team will put in place foundation of a psychologically safe working
a mindset shift to an environment of environment. Communication is key to allow
humility and humanity, with a mutual employees to digest this new way of thinking
degree of trust that criticism would be over a long period of time. Culture does not
welcome, heard, and constructive and that change overnight. And so, a programme of
“Failing Well is better than Failing Fast”. communication touchpoints (videos, posters,
online training, in-person workshops, etc)
To accomplish that undoubtedly complex goal, were identified, along with the creation of an
IKEA has put in place eight key mindset shifts Engagement Strategy.
that move the internal culture from exclusive to
inclusive. Rather than bringing finished designs Early returns have been positive. The mindset is
or concepts to production, employees would beginning to shift, as evidenced by a number of
bring insights from their experiences helping activities to kickstart the Co-Create Movement
and speaking with customers every day. in Italy and the UK. With the setup designed
for continuous ideas and innovation, it seems
A Gradual, Intuitive Mindset Shift like these first successes are a harbinger of
things to come for IKEA. As IKEA’s founder,
Making that shift, of course, is not possible Ingvar Kamprad once said, “Most things remain
overnight. Instead, IKEA is continuously rolling undone. [We have a] Glorious future!”

The Innovator’s Handbook 2022 181

 What Got Us Here, Will Not
Get Us There
Who owns culture? For Louise Kyhl Triolo,
VP Global People Development, VMware the Louise Kyhl Triolo
answer is not a simple one. Her lessons on Global People Development
culture development, especially as it relates at VMware
to leadership mindset, are valuable for
anyone looking to shift collective mindset,
values, and beliefs at their organization. on the current culture, making the need to
change obvious. The resulting epiphany
Lesson #1: Don’t Change Culture; about the need to change, a commitment to
Change Mindsets transparency, ultimately led to an org chart-
spanning passion for culture change.
Organizational culture is an intangible
concept, and it can be incredibly difficult to Lesson #3: Leadership Still Drives
change. The lesson: changing the mindsets, Cultural Change
behaviors, and practices of every member of
the organization has to become a priority. As much as the grassroots matter, don’t
underestimate the importance of top
There are many theories on how to organizational leadership. Leadership can be
accomplish that feat. None is inherently better either the biggest barrier or the biggest lever
than the other. From top-down to bottom-up in this effort.
and even middle-out, each approach has to
work in concert with the other to work. The barrier equation is simple: in most
successful organizations, especially those
Lesson #2: Don’t Underestimate with a strong tradition, the leaders at the
the Grassroots top have been responsible for the current
culture. They believe they lose by changing
Many would consider CEOs and top leaders what made them successful, and naturally
acknowledging the need for culture change be resistant to changing the culture that got
to be an ideal environment to make that shift. them where they are now.
However, as one initiative at Airbus showed,
letting the information about the state of Get that change in place, though, and
the organization and the need to shift sit at the results can be just as significant.
the top is far from beneficial. Culture shift is A comprehensive leadership mindset
a movement, not a mandate, with everyone shift, through a mirror that creates buy-
needed to buy into the new culture, and the in for comprehensive change, can bring
ways in which it will help the organization a full organizational commitment to the
achieve its goals. effort. Through efforts that align business
transformation with leaders; personal
At Airbus, Louise took the information transformations, helping them to understand
to the people. Strategic placements in that what got us here won’t get us to tomorrow
transformation rooms led to 20,000 eyeballs can be the catalyst for lasting, positive change.

182 The Innovator’s Handbook 2022

Lesson #4: Structures Matter in Lesson #5: Finding the Right
Making the Shift Success Measures is Key

Even the best mindsets among leadership Culture shifts don’t always come with an
and the organizational grassroots won’t matter easily measurable ROI. And yet, the ability
if the wrong structures are in place. Take the to measure whether or not it has been
ATM as an example; a great innovation was successful is vital. The ability for the culture
saved only because of a process shift that to impact and influence the organization’s
distributed money after returning the debit success and, ultimately, its bottom line can
card, resulting in fewer customers forgetting help keep leadership and management
their cards. engaged in continuing to embrace change.

Put differently, cultural challenges are There is magic in new beginnings. There is
not always the fault of personal mindsets no template for getting it right, not tutorial
or attitudes. The structures and systems or 12-step program guaranteed to work.
in which we operate can drive and Organizations are living organisms, and
motivate behaviors, and need to be a core changing their culture can only work through
consideration when looking to make an passion, persistence, drive, and commitment
impact on culture change. from people across the organization.

Top leadership might own culture. But

ultimately, it’s everyone’s responsibility to live
that culture, driven by committed change
agents that help key stakeholders make key
decisions to shift for the better.
Not just learning
but doing Are you struggling with
boosting creativity, fostering
customer centricity or
becoming an agile organization?

Top 5 skills of the future

According to the Future of Jobs 2020, World Economic Forum

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Climate &
Impact

188 The Innovator’s Handbook 2022

 What are the Secrets of
Sustainability Front-Runners?

There isn’t a day that goes by without

David Young
a company announcing new climate
Senior Partner and
commitments, or asset managers talking Managing Director at
about their plans for ESG integration, or Boston Consulting Group
regulators putting together new proposals
for new forms of disclosure. Corporate
coalitions have been forming to solve
sustainability challenges. Employees The opportunity space for business as usual
and consumers are calling on employers is shrinking, and companies and investors
or brands to take climate and social need to be able to transform their business
challenges seriously. models for sustainability and to make it an
advantage. This requires deep innovation in
It is clear we are entering a new era for strategy, business models, and ecosystems.
business. David Young and the Boston Companies can widen the opportunity space
Consulting Group are focused on helping to create value and advantage by solving
companies, investors, governments, and environmental and societal needs. This is
NGOs in their strategies, organization, where innovation is integral.
management, and transformation for the
future including sustainability agendas and Sustainability as an Opportunity
embracing the changing business context to
put sustainability as an advantage. Here’s an Companies are making bold commitments, but
outline of what sustainability front-runners are it’s unclear if they will be able to deliver. BCG
doing better. looked at approximately 500 sustainability
initiatives and found that 80% lacked a link
Changing Business Context to business value creation and competitive
advantage. It is a set of things that are lacking:
The business context is changing, and
stakeholder demands are rising, including: • Not focused on value for external
stakeholders
• Growing demand for transparency on • Not embedded in strategy and operations
ESG performance • Not directly tied to P&L benefits
• Rising standards on social license • Not led and executed by the business
to operate • Externalities of existing business model
• Escalating investor and social activism not addressed
• Expanding demand for products that • Not funded by the business
do good
• Mounting urgency to address Sustainability requires sustained profitability
climate change for a corporation. You cannot scale the ability
• Rising expectation for a powerful of the company to be a positive force for
corporate purpose sustainability unless there is a return on those
efforts. It can’t be on the side.

The Innovator’s Handbook 2022 189

Sustainability Scarcities • Expand the business canvas
• Innovate
Sustainability scarcities are things that • Link to drivers of value and advantage
are going to emerge that will further limit • Scale
companies’ ability to deliver and include:
To expand the business canvas, the
• Scarce Factor Inputs: For example, only company must work from the system in
1/3 of necessary inputs available to meet by asking questions like “what are the
2030 demands for batteries ecosystems my business is a part of?”
• Race to Secure Offsets: Net supply of and “how will they be impacted by the
carbon credits in 2030 as demand outstrips societal and environmental trends?” and
supply, with 60 MtCO2e gap by 2025 “where does my business model fail in the
• Significant Gaps Between End-of-Life world?” Having the insight of those potential
Capacity and Targets: Estimated share of break points and shortcomings of the
demand for rPET that will be unmet due to business model will allow the corporation
shortage of recycled plastic supply in 2025 to think about where and how to innovate.
Innovating with the model seeks to expand
Each of these is a chance for innovation to both the basis of business resilience and
bring two worlds together – the world of what advantage while creating environmental and
creates value and the notion of environmental societal benefits.
and social responsibility. This requires
companies to identify the overlap in these The model strives to create environmental
two models: and societal benefits along six dimensions –
for both internal and external stakeholders:
• Business Outcomes: Create business
value for shareholders through • Economic vitality: Create livelihoods
competitive advantage, increased and economic benefits for employees
shareholder value, to create and workers in the supply chain and
business resilience create economic value for communities
• Environmental and Societal Outcomes: and society.
Create environmental and societal
benefits for stakeholders through • Environmental sustainability:
economic vitality, environmental Improve environmental footprint of
sustainability, lifetime well-being, ethical company’s operations and improve
capacity, societal enablement, and access environmental footprint of company’s
and inclusion. products and services in their use and
disposal phases.
These two engines can and should overlap to
drive innovation that matters. • Lifetime well-being: Generate well-being
for employees and workers and general
Sustainable Business well-being via company’s products and
Model Innovation services for consumers and society.

SBM-I is BCG’s structured and four- • Ethical capacity: Strengthen and enforce
step approach to unlock and maximize ethical practices in operations and
sustainability advantage. It requires promote ethical practices in communities
companies to: and society.

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• Societal enablement: Ensure well- • Access and inclusion: Ensure inclusive
functioning governance and management and equal access for employees and
and promote a well-functioning society workers to opportunities in careers,
through a company’s activities, products, development, and advancement and
and services. promote access and inclusion of
consumers via products and services.

A Decade of Transformation:
How the Climate Crisis Redefines
Sustainability in Business

Sustainability has been a core, and very Raz Godelnik

public, priority for countless businesses Assistant Professor of Strategic
in every industry. But has that priority Design and Management at
Parsons School of Design –
actually made an impact? Raz Godelnik,
The New School in New York
Assistant Professor of Strategic Design and
Management at Parsons School of Design,
examines the current state of affairs and the core goal of driving profits. Sustainability
what corporations in any industry can do to efforts are real, but as long as they don’t lead
shift their mindset. to fundamental shifts in that mental model,
they will not be enough.
A Bleak State of Affairs
5 Categories of Sustainability-As-
Publicly stated priorities don’t always matter Usual
much. Every year, we pump more CO2 into the
earth’s atmosphere, accelerating climate change. We see this pattern everywhere in modern
In the process, half of the carbon expelled into business, to the point where according to
the atmosphere through fossil fuels has come in global polling and research, five distinct
the past 30 years. Despite enough organizations categories of well-meaning but not sufficient
pushing sustainability stories that Bloomberg sustainability efforts have emerged:
Business News now has a Bloomberg Green
section, that trend hasn’t changed or even More Good, But Not Less Bad. How much do
begun to slow down. Everything has changed, sustainability initiatives matter if they don’t
and yet nothing has changed. remove the bad existing patterns within a
company? Think JPMorgan Chase, which is
The reason: we haven’t actually transformed funding new “green economy” initiatives but
core business models. Business-as-usual has still remains the biggest funder of fossil fuel
merely become sustainability-as-usual, still projects over the last five years, or companies
subject to shareholder capitalism as its core who embrace climate policies while financially
underlying mental model. Sustainability is supporting politicians trying to obstruct the
all well and good, as long as it’s aligned with same policies.

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Vagueness or Greenwashing. We know that works shapes not just how we think, but who
customers increasingly want more corporate we are and what we do.
responsibility from the brands they support. But
at the same time, a company promoting the fact To truly make a difference, shareholder
that it’s purpose-led without defining what that capitalism cannot be the mental model
means, or touting its carbon-neutral burgers underlying sustainability efforts any longer.
even though the production still produces Maximizing value and profits for shareholders
carbon and the brand merely participates in will still lead to the fallacies outlined above.
offsetting, is not actually making an impact.
Instead, a new mental model that puts
Incrementalism. Yes, making the packaging sustainability at the foundation of any
of a given product more sustainable is a decision-making process could and should
great step. But does that truly matter if the arise: Awakened Sustainability. Here, the
product for which the packaging is built is a question is not what the business case
one-time use, disposable razor? Sustainable for sustainability could be, but what the
innovation should be about changing the sustainable case for business should be. The
value proposition more fundamentally. pursuit of profit comes only after sustainability
optimization has been achieved.
Not Paying Attention to Critical Material Issues.
This involves not truly analyzing where a In that process, a framework from Lawrence
company can make the biggest impact against Lessig at the University of Chicago comes
climate change. Despite its well-publicized in handy. Moving away from sustainability-
sustainability efforts, Netflix is not using its huge as-usual has to include an emphasis on
reach to urgently educate its audience, nor is social norms, regulations, markets, and
Amazon taking steps against the consumer organizational culture. The good news: the
culture that it has helped to introduce. early signs are already there, as social norms
develop towards less tolerance for politicians
Social Justice. Simply put, companies who who oppose climate change, insurance
think about climate plans without thinking companies are moving away from insuring
about social justice are not taking it seriously fossil fuel projects, and young employees
enough. Both concepts are indisputably demand the prioritization of DEI.
related, and need to be addressed in an
integrated way. We can do more. Through the power of
narratives, we can inspire collective action to
How to Change Fundamental Systems and finally move to a mental model that sufficiently
Mindsets to Encourage Sustainability addresses the urgency of sustainability.

All of that leads to a central question: what can Ask yourself: are you still operating in the
companies actually do to change things from sustainability-as-usual space? What are your
a more systemic perspective? It’s absolutely guiding principles, and are you leading from
vital to look at the underlying structures and the future? Are you looking deep enough at
mindset, considering not just the tip of the the fundamental aspects of change, and what
iceberg but the whole massive structure. is your theory of change?

Here, mental models can become a hugely The right answers to those questions
beneficial process to embrace. Understanding can go a long way towards sustainable,
how we understand reality and how the world fundamental change.

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 Delivering True Sustainable
Growth – Why Eliminating Silos
Across Strategy, Sustainability &
Innovation Functions Is Key

Investing in sustainability is no longer a

tax on performance for companies, nor is it Sandra Steving
optional. It has become imperative, and in Partner at
fact investing in sustainable growth is now a Founders Intelligence
key way to unlock entrepreneurial forms of
growth, retain customers and drive long-
term market outperformance.

Nearly two-thirds of people worldwide want with different reporting lines on different
CEOs to lead on change rather than to wait agendas. We need to go back to first
for government or policy. There is not just principles and challenge these entrenched
permission, but explicit expectation to act, silos and power dynamics, because while
and that means the case for sustainability these models worked to deliver business as
is clear, says Sandra Steving, Partner at usual, they are no longer fit for purpose when
Founders Intelligence. But what kind of it comes to delivering the next generation
operational blueprint is needed for companies of growth.
to actually deliver against their sustainable
growth agenda? If companies are serious about competing
in a world where sustainable growth will
We’re seeing enormous momentum in terms of become the key metric for corporate
companies setting ambitious carbon targets success, they have to align their ambition
and sustainability goals. But the challenge with their capability to deliver against it.
lies in the fact that many companies are And this means breaking down the silos,
making commitments that they don’t have rivalries, misaligned incentives and lack of
the mechanisms for how to deliver. Less than cooperation across Strategy, Innovation and
2% of companies achieve their sustainability Sustainability functions.
targets. We can no longer afford such a low
success rate. Shifting this is not about a A new blueprint is one where these three
pipeline of ideas, it’s about the operating functions break free of conventional silos
model required to deliver on sustainable and align both their mandates and their
innovation at scale. capabilities to bring together their respective
expertise, tools, resources and talent pool
Together, strategy, sustainability, and towards a common purpose.
innovation are the building blocks for
sustainable growth. These functions are While no one is doing this perfectly, there are
present in most companies, but historically, consistent principles in the businesses that
they have operated with different leaders are doing it well. In those companies:

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1. They make sustainable growth mission- 6. They establish clear metrics and
critical to the CEO’s legacy. They set out a standards for accountability both
clear sustainable growth agenda, aligning internally and externally. Transparency
their purpose and their profit, which is and accountability to sustainability
integral to the CEO’s vision and legacy. targets needs to be taken as seriously
as quarterly financial reporting has been
2. They claim a seat at the corporate strategy in the pastThe company sets metrics
table for sustainable growth, understanding and benchmarks to track performance in
that corporate strategy sets the agenda for terms of impact.
what gets done in a business. They demand
deep alignment between sustainable Some of the companies doing a good job
growth targets and the strategic objectives with sustainable growth in their sectors are
of the core business. Enel, Unilever, Adidas, and Kering. These
companies are currently demonstrating the
3. They operate with a truly open ecosystem six principles and making commitments that
mindset. The challenges are too large for a align with their capabilities. They can provide
single organization to crack. When it comes how-to examples to other companies looking
to sustainability, collaboration is the new to invest in sustainable growth and begin to
competitive advantage – laterally across create change at scale that is fully embedded
industries, and vertically, down value chains. with the wider corporate agenda.

4. They deploy a broad toolkit of build, Like sustainability, digitization started off as a
partner, and invest activities. They fringe agenda item. Then it gained urgency until
recognize that solutions will come from it was a burning platform and eventually became
multiple sources and different tactics will core to the function of the business. Sandra
be needed to deliver each of them at scale. predicts that sustainability will have a similar
trajectory. It was once a fringe agenda item that
5. They act entrepreneurially and collaborate is now gaining urgency, too, so how long before
to sweep aside silos. They break down it becomes a core platform for business?
traditional organizational infrastructure to
create transversal initiatives that connect To embrace sustainable growth, start
the company in new ways and create new breaking silos and rethinking the
forms of commercial value fundamentals of business.

Business Models That Work in the

Circular Economy

The circular economy has moved far beyond

a buzzword. But how can businesses actually Kevin Shahbazi
make it work? How can large, multinational Circular Economy Innovation
organizations turn to meaningful innovation Lead at Board of Innovation
through business models designed to move
away from more traditional linear models?

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Circular business models and value chains have Evaluating Business Opportunities
certainly increased in popularity. Compared to Within Your Competitive
linear business models, they can save costs, Environment
access new markets, and increase resilience to
shocks. Board of Innovation’s Circular Economy Within that ecosystem, where does your
Innovation Lead Kevin Shahbazi explains how organization fit in? The easiest way to
organizations have been able to come closer and answer that is to evaluate the environment
closer to meeting the Sustainable Development both competitively and across the
Goals 12 and 13 set forth by the U.N., even value chain.
outperforming less sustainable and more linear
competitive businesses on a profit level. It starts with defining the five different stages
of a typical value chain: Take and Make,
The Three Basic Players of the Return and Recycle, Use, Reuse and Repair,
Circular Economy and Waste and Disposal. The key is starting
with the Use stage at the center, and build
Compared to the linear economy, circular outwards. Two arrows point upstream, with the
value chains create loops. They naturally ability to have a positive, neutral, or negative
limit the resources needed to produce impact. Two point downstream, with the same
and distribute products, while also limiting impact possibilities.
waste by creating additional value through
processes like repair, reuse, return, and At each stage, you can define specific KPIs
recycling. That can happen downstream or that allow you to evaluate where on the
upstream from the business, with three basic impact scale your organization lays compared
players making up many circular value chains. to its environment. For example, you can
evaluate the Return and Recycle impact
1. The product businesses deliver actual based on how many of your own product
physical products that evolve from a linear you get back, and can recycle back into
model to more circular alternatives, like the market. Benchmarking yourself against
Adidas, Philips, Volvo, and others. They are other players in your industry on the same
responsible for 80% of the circular impact, KPIs, and across the same stages, allows
with product design driving much of what can you to find strengths and weaknesses for
be recycled or how waste can be minimized. each player, allowing you to spot gaps and
potential opportunities.
2. The solution providers focus specifically
on a single stage of the circular economy This process is evident in an example in
to help product businesses transition to the fashion industry. MUD Jeans is a brand
the circular economy. They’re refurbishes, that has embraced the circular economy,
recyclers, or other organizations along with specific strengths in the Return and
those lines. Recycle as well as the Reuse and Repair
stages. That allows it to stand apart from fast
3. The facilitators provide services to fashion brands, who through low customer
support the whole ecosystem or a relations limit their return opportunities
significant part of a value chain, typically and through their low cost limit recycling
through connecting other companies potential. The result is significantly more
with each other. These are data brokers, waste, even for a brand claiming to source
government platforms, and similar services. products sustainably.

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The fashion industry is beginning to recognize absolutely has to avoid a few all-too-common
these gaps. In addition to upstart brands like pitfalls, though:
MUD Jeans, established brands like H&M are
making changes. H&M now partners with a • If your circular economy strategy isn’t
brand called I:CO, allowing it to offer return and your business strategy, you’ll innovate in
recycling opportunities not typically available circles. It cannot be driven by a small and
in fast fashion. Weaknesses in the downstream separate team, but has to be a core part
value chain still exists, but the brand is of how your business operates.
beginning to close some circular gaps.
• Avoid any vagueness in your innovation
The Principles, Ingredients, and focus. Instead, get specific to give your
Pitfalls to Avoid When Building teams proper guidance. That could be
Circular Business Models launching a new business, switching
your business model, redesigning your
Based on these types of analysis and product, setting up a partnership, or trying
benchmarking, these 3 principles can help to monetize energy side-streams.
to build a business model designed for the
present and future of the circular economy: • A bold, lofty long-term vision statement
is not enough to lead to tangible change.
1. Source from the economy, not Instead, set a specific time horizon
ecological reserves. and scope, and chop up your circular
2. Add value to existing products economy strategy into smaller chunks to
and materials. make them more tangible and attainable.
3. Create valuable inputs for businesses
beyond your customer. • Never go into a project without KPIs.
They should be specific to your
Based on these principles, organizations can situation, but have to connect directly
take two very different angles to innovate back to your business and circular
their ecosystems: follow a product-based economy goals. It could be the purity
value chain, or mix the value chains of of products and materials, amount
different products. To design the actual of products recycled, or anything
business model, then, three ingredients are else connecting directly with your
absolutely crucial: innovation focus.

1. Identify the players and stakeholders • Don’t bother to innovate if you’re not
in your industry, including customers, aiming for a 30% leap forward. Too
suppliers, and others. often, the change sought is incremental
2. Take a look at the incentives and value and doesn’t actually make a tangible
transactions, especially on materials but difference. Aim for 30% to incentivize
also within money flows. teams, realize untapped opportunities,
3. Based on the first two ingredients, and challenge your entire organization to
brainstorm alternative business make the leap.
models including revenue models that
maximize success. Finding the right business model is not easy.
But the potential benefits of the circular
That may mean going the process alone, or economy are significant enough that it’s worth
partnering with others in the value chain. It going through the process.

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 Impact-Driven Design: Expanding
the Design Toolbox to Address
Tomorrow’s Challenges

User experience (UX) is at the heart of

successful innovation, as in its simplest
Nina Valkanova
terms, is the way people interact with UX Director at MING Labs
systems, products, services, and related
touchpoints. The UX design toolbox is
an essential part of the current process.
However, expanding it is necessary to fully is setting it up for failure because you
address tomorrow’s challenges. cannot effectively execute it.

Nina Valkanova, the global lead for UX design • Commercial Viability: If there is a desire
and strategy with MING Labs, offered some and one can effectively build the idea, you
insight into expanding the design toolbox for must ask how sellable it is. Ask yourself if
impact-driven results. you can create a business out of it.

How to Expand the UX Design 2. Consider All Negative Impacts

Toolbox for the Future While expanding technologies and
technological innovation should share
Expanding the UX design toolbox addresses desirability, seamless usefulness, and be
future challenges because it creates products commercially viable, one must consider
or services built to handle the most unlikely all overall impacts. The positive impacts
scenarios. inspire innovation, but the negative
impacts are what determine the success of
1. Find the Innovation Sweet Spot technological advances.
Three key pillars make up the innovation
sweet spot and lay the foundation of products 3. Using Futures Thinking in the Design
and services for the future. Ideation Process
The premise of foresight and future thinking
• Desirability: The central focus is is that while there is a list of probable things
desirability. If there is no desire for your that will happen in the future, there are also
idea for a product or service, it is not an a lot of different possibilities. Environmental,
efficient use of time and resources to ethical, social, and political considerations
create it. play into those possibilities and also affect
the final design decision. Applying futures
• Feasibility: Establishing a concept to thinking to the design ideation process will
address consumers’ desires is the first create a viable and longer-lasting product.
step to successful innovation. However,
then you must ask if you can actually Ask what-if questions
build it. If it is not within your capabilities Kick off the future thought process by asking
and talent, moving forward with the idea questions about all possible scenarios.

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Regardless of the likelihood of something Conduct a Future Ethics Assessment
happening, you should ask what if it did
happen and address how your product or The three-step process assesses the
service would overcome it. Start with the ethical and future ethical implications of
immediate future. Then, move on to what-if digital products.
questions about situations and impacts faced
years from now. 1. Identify the research and trends around
relevant technologies. During this step,
Find the Preferable Scenarios analyze these relevant trends and factors.
As you go further into the future, you find Put on an ethical lens and focus on your
more possibilities for each scenario. There company’s core values to determine if the
will be a lot of probable and plausible idea is a fit now and in the future.
possibilities, but remember that everything is
possible. Therefore, the end goal is to think of 2. Conduct scenario building, which is the
the different scenarios and identify the most core of the foresight and futures thinking
preferred ones for your company. Including methods. In this step, anticipate what
foresight thinking with all possibilities will could happen and work on destabilizing
result in more sound innovative designs. your product. Then during design
ideation, choose the preferable future by
Expand on the Current Digital creating prototypes that align with these
Product Development ideal scenarios.
Dig deeper than identifying a problem
before building a solution. After determining 3. Backcast to build strategies that will
the problem, you must create a holistic connect the desired future to the present.
understanding of the context and applications Roadmap your long-term goals and
by looking systemically at current events in changes or what must happen to ensure
the world. Gaining a greater understanding of you reach your preferable futures.
why there is a problem will allow you to build
viable products with maximized suitability. Expanding the design toolbox helps fuel a
Your goal should be to focus on product- digital transformation to create a future where
planet fit instead of just product-market fit. people, planet, and business are in harmony.

Making the Sustainability Shift

at Sandvik: 100,000 Ideas or
Innovations by 2030

Sustainability presents a huge

opportunity for innovation, but it Simon Hill &
requires individuals and companies
Mats Lundberg
CEO & Founder at Wazoku / Head
to take a problem-centered mindset. of Sustainability at Sandvik Group
Rather than tackling huge challenges,

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problems must be broken down into • Be more than 90% circular — products,
bite sized chunks of work to ensure including packaging material, to have
innovators are able to effectively connect at least 90% material circularity and to
with relevant stakeholders and across require the same of key suppliers. The
broad ecosystems. current state of circularity is above 80%
on average for our steel production
The motivating force for innovation in
sustainability must be driving from the C-level • Halve the CO2 impact from company
or even the Board-level. If leadership isn’t production, for transportation, and from
directly behind the work, the sustainability key suppliers
message will not be as prominent as needed
to achieve ambitious goals. To meet these goals, sustainability is integrated
within performance management and governed
Mats W. Lundberg, Head of Sustainability at internally as well as for partners and suppliers.
Sandvik, an engineering group in mining and They also launched an idea hub to crowdsource
rock excavation, metal-cutting and materials sustainability ideas or innovations by 2030.
technology, and Simon Hill, CEO at Wazoku,
break down how Sandvik is tackling big Sustainability Ideas Hub
sustainability goals across the company.
The Sustainability Idea Hub is an idea
Focus on Sustainability generation space that works in all 160
countries, meant to engage everyone at the
Sandvik is a global company with sales in company, not just engineers. It was developed
over 160 countries, with 40,000 employees, with Wazoku to be simple but flexible and to
and running 55 R&D centers globally. promote the following guiding purposes:
They have identified sustainability as one
of the six strategic focus areas going • Sustainability is everyone’s responsibility
forward. The company has long-term 2030 • Democratize the process
sustainability goals related to the areas of • Open up the silos
climate, circularity, people, and fair play • Build engagement
and is committed to using engineering and • Inclusion
innovation to make the shift. • Enabling big and small ideas
• Insights
Sandvik understands that sustainability isn’t • Goals with teeth
just a metric to be reported on but, when
done right, it gives the company a business One of the key principles is that all ideas
advantage by allowing stakeholders are good ideas, and there should be a mix
to become both more sustainable and of big and small ideas. As the hub gathers
more profitable, making Sandvik the first traction, it should create a chain reaction that
choice for customers, and improving allows employees to feed off each other’s
talent retention. ideas. Making the ideas visible to the entire
company ensures that there is full visibility
Sandvik has set bold, transparent across divisions and functions – better
sustainability goals, including: enabling collaboration.

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The ultimate goal of the hub and all of want and need. It is key to integrate the
Sandvik’s efforts is to move towards ultimate business benefit into the company’s
more sustainable products and practices ways of thinking about sustainability. The
but ultimately to benefit the customer. only thing that can beat a great product
Innovating on sustainability will also drive with great properties is a great sustainable
the creation of products that customers product with great properties.

Sustainovation – Insights
from Sensing, Seizing and
Transforming Opportunities

The travel industry is at a breakneck pace

of innovation, particularly in light of climate Tino Klaehne
change and COVID-19 coming together Head of Strategic Design at
to create unique and comprehensive Lufthansa Innovation Hub
challenges. Tino Klaehne, Head of Strategic
Design at the Lufthansa Innovation Hub,
describes how one of the largest airline
groups in the world has endeavored to
tackle the problem.
The Three Innovation Muscles
The Lufthansa Innovation Hub is Lufthansa Within the Dynamic Capability
Group’s primary unit for the development of Framework
new business in the digital context. Its efforts
focus on what the group calls “Travel and Under that vision, the Innovation Hub is
Mobility Tech”, defined tightly in scope but structured within the Dynamic Capability
reaching beyond the core business strategy Framework. Three core capabilities, or
of the airline giant. The mission: create and innovation muscles, drive the process and
capture value beyond flying. structure: sense, seize, and transform.

As such, the Innovation Hub walks between Sense

two worlds. The Lufthansa Group’s primary The sense capability describes being able to
purpose matters, but so does the larger travel spot opportunities or threats in the business
mobility tech ecosystem. Positioned between environment early, continuously, and in
the two, the Innovation Hub looks towards a systematic fashion. For Lufthansa, that
the long-term future on the third innovation meant making sense of the larger system of
horizon. It was created with a vision to own a sustainability, and understanding the players
share in every trip, regardless of whether that and category as a whole, before really digging
includes flying or any other mode of travel. into the opportunities presented within.

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Within this muscle, the Lufthansa Innovation Transform
Hub developed a few core activities: Finally, sensing and seizing only work
with the third capability of transformation,
• An innovation hypothesis that described describing the organization’s ability to change
exactly how Lufthansa should contribute and rearrange the resources to support
to sustainability. sustainable innovation. No matter how great
the opportunity and venture model to seize
• A systematized approach to research it, corporate has to be on board to bring it
and signal scanning, using tools like through to conclusion.
aggregation tools like Feedly, venture
capital partnerships, Google search Lufthansa’s Innovation Hub has plenty of
trend analysis, media sentiment analysis, activities built-in to support this innovation
and more. muscle. A dedicated team focuses on
promoting and embedding both innovation
• A knowledge-sharing system, using the and sustainability across all levels of the
public tnmt.com website, to drive not just global corporation. Activities include:
Lufthansa but the entire industry forward
on the topic of innovation. • A custom tool kit, including anything
from a business model canvas to a
Seize custom card game, freely available
The second capability, seize, frames for anyone participating in events
Lufthansa’s capability to turn opportunities and workshops.
sensed into actual benefits. For Lufthansa,
this means building ventures, taking ideas • Workshops for Lufthansa Group
to execution, and partnering with existing management trainees, embedding the
solutions to take them further. concept early in the training stages.

For example, Lufthansa built Compensaid, • Virtual events for all levels of
a flight offsetting platform that allowed the organization.
customers to offset their carbon impact of
flying through CO2-neutral aviation fuels. A • A corporate-wide innovation forum with
130,000€ investment resulting in 23 million 600 attendees listening to keynotes,
Euro in media value equivalency through attending workshops, viewing exhibits of
news coverage and industry awareness. Other existing innovation work, and more.
projects, like an offset API designed to help
travel platforms like Booking.com offer their The 9 Factors of Success at
own offsetting models, is following the same Lufthansa’s Innovation Hub
success path.
Lufthansa’s Innovation Hub has been
Seizing can also include external partnerships. successful due to nine factors, derived
For example, the 2019 Open innovation from learnings and lessons over its course
Challenge for startups, in partnerships with of existence:
companies like Google, Uber, and Expedia,
resulted in more than 150 applications from 1. A holistic setup with a full stack of
41 countries, with five finalists invited to innovation capabilities.
pitch their startups to the partners, jury, and 2. Fast timing that ranges from finding ideas
senior management. to start and iterate quickly.

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3. The right toolset, skillet, and mindset. 8. Connections across and outside of the
4. Formats and channels that scale organization to identify and acquire
easily, with a mix of broadcasting and early adopters.
1:1 penetration. 9. Humility and an enablement spirit that
5. Over-communication to demystify follows the golden rule.
innovation, educate, and inspire.
6. An entrepreneurial spirit designed to With these factors, the whole becomes bigger
place bets that win big. than the sum of its parts. It’s how Lufthansa
7. Grit and persistence to turn has been able to drive innovations in
innovation from a one-time gig into sustainability that have the potential to shape
continuous success. the travel industry for decades to come.

The Business Case

for Purpose

The next revolution in business will be

purpose-driven, says Daniel Nowack, Daniel Nowack
Managing Director & COO of Yunus Social Managing Director at
Business (YSB). This purpose-driven Yunus Social Business
revolution will be a disruption that will
render companies irrelevant if they don’t
put purpose at the heart of their work and shift. How do you bridge the gap between
embrace social innovation. those who have embraced it and those who
aren’t sure it’s good for business? This is
Purpose-driven companies currently where the language of ROI can help.
outperform the market by 42%. But many
companies are already struggling to meet In 2019, YSB started conducting research
the purpose-driven commitments they made with more than 50 social intrapreneurs who
in corporate pledges in 2020. They simply implemented social innovation initiatives
don’t have the background to follow through, within corporations around the world. When it
so even if they want to make a change, they came to impact, YSB found:
don’t know how to do it. They need concrete
examples of change from other corporations • 77% reported a significant improvement in
that have succeeded with social innovation engagement and talent acquisition
initiatives. These examples can show other • 61% observed a change in mindsets and
corporations what social innovation looks like corporate culture
in the context of daily business. That drives • 50% realized an impulse for corporate
change in the organization and ultimately innovation
leads to a cultural and mindset shift. • 39% were able to reach new markets for
future growth
Within every organization, though, there are • 32% reported a measurable increase in
people at different stages within this cultural brand equity

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Most intrapreneurs made a “hybrid case” job descriptions, with one referencing the
of financial and non-financial values when social innovation initiative. This testing allows
lobbying for social innovation. Typically, companies to correlate the social initiative
the financial return of the initiative falls with its impact on the quality and quantity
short of expectations. To make up for the of the applicants. It also demonstrates if
shortfall, social innovators make the case social innovation can help lower the cost of
that things like employee engagement and talent acquisition.
new market access come as a result of the
social innovation initiatives. The challenge is From experiments conducted so far, YSB
that most of the arguments for non-financial found that:
values are based on anecdotal evidence.
Executive leadership is looking for hard facts • Employees are 34% more likely to be
and hard numbers. highly engaged when they are aware
of Covestro’s Inclusive Business social
So how do you provide hard evidence for innovation initiatives.
non-financial value creation? By designing the • Customers that read about Essilor’s Eye
right experiments. Mitra Initiative were 10 times more likely to
buy a product from them.
YSB designed a series of experiments to • 82% of customers were willing to pay
show a correlation between social innovation more for a sustainable product from a
and key business metrics. This toolkit of global retailer.
experiments moves social innovation from
a moral argument to a business argument. That’s significant commercial and financial
They measure the impact of social innovation value that comes as a result of social
on human resources, marketing, finance, and innovation. These experiments create hard
business development. data to argue for social innovation within a
company so that it’s no longer anecdotal.
For example, YSB took the hypothesis that That can help erase doubt for stakeholders
inspiration from social innovation leads to a within the organization and encourage them
company being able to hire better talent. They to embrace social innovation and become a
created A/B testing with two almost identical purpose-driven business.

Using Social Innovation to Drive

Diversity, Equity, and Inclusion

Companies can use social innovation to

improve products and services while also Joan Bohan
driving diversity, equity, and inclusion. Joan Social Intrapreneur &
Bohan experienced this when she launched Innovator, Dyslexia Advocate
a social innovation project at Disney
focused on dyslexia.

The Innovator’s Handbook 2022 203

How it Started • Increased awareness around dyslexia
• Bringing the community of dyslexics
There are many extraordinary people who together at Disney
were successful not despite their dyslexia • Having dyslexic Disney employees serve
but because of it, including Joan’s son. When as mentors to show dyslexic children the
Disney put out a call for projects that drove light at the end of the tunnel
social impact and also business upside, Joan • Partnering with experts in the dyslexia to
proposed a project focused on creating ensure informed decisions
dyslexia friendly products, inspiring content
and engagement with the dyslexic community. After Joan’s pilot received approval for certain
regions, it began to make an immediate
Dyslexia is an invisible disability that causes impact. Some results of the project included:
difficulty for individuals in reading, spelling,
and writing. Dyslexics also, however, have the • Creation of accessible and innovative
ability to see things others don’t because reading products, including books,
their brains are literally wired differently. audiobooks, and enriched eBooks
• Including examples of dyslexic individuals
Research has shown that the same forces that in content, including a spotlight of an
create struggles with reading and spelling accomplished dyslexic individual in a
for dyslexic individuals are also behind an Disney magazine and a TV series with a
abundance of strengths including creativity, dyslexic character.
out of the box thinking, and problem-solving.
Many of these strengths and skills are the Outcomes and Insights
ones being sought out in the 21st century.
First, the call to solve societal challenges
While dyslexia can create entrepreneurs and with business benefits led to a diverse draw
visionaries, the approximately 10% of individuals of participants and an inclusive approach
with dyslexia still struggle while growing up. to collaboration. The project cohorts had
School is a challenge for Dyslexics and their great representation in gender, culture,
entourage is often ill informed and they tend and seniority. Participants brought unique
to have low self-esteem and are more likely experiences, ideas, and were able to point
to drop out of school. Products and services out blind spots in each other’s projects. They
geared at assisting and raising awareness for also had the business knowledge to make
dyslexic individuals could have a profound the social issues relevant to the business.
impact on this large population of learners. Designing products with the underserved in
mind strengthens the community within the
What Happened company while also benefiting the consumer.

When Disney put out the call for social impact The initiative itself was also positive internally
projects, Bohan put together a blueprint for at Disney. The project itself raised awareness
Project Dysnie meant to help dyslexic children of dyslexia. This knowledge enabled
stay on track and unlock their potential. Key employees without a connection to dyslexia
components of the blueprint included: to view products and content with a more
inclusive eye. It helped individuals learn to look
• Accessible products at disabilities through a business lens. These
• Content that brings dyslexia into types of projects serve as an opportunity to
the mainstream engage talent and develop future leaders.

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Ultimately Project Dysnie drove strong learning disabilities, non native speakers
business outcomes for Disney. The and reluctant readers.
company found that creating inclusive
and accessible products brought positive Joan’s experience shows that when a
business results. The innovative reading company prioritizes social impact while
products didn’t just resonate with dyslexic requiring business benefit, it can benefit
children but also children with other employees, the company, and consumers.

Product Management for Social

Impact 101 – Lessons from
Disrupting Hunger

Innovation is required to reverse recent

Bernhard Kowatsch
hunger trends. Currently, there are 811
Head at UN World Food
million hungry people globally, but without Programme Innovation
significant change in the way we do Accelerator
things, we are projected to bring down
the number of hungry people only to
660 million by 2030, missing our goal of
Zero Hunger.
countries where the solution will operate.
The challenges of COVID-19 make When a team applies techniques like human-
innovation even more important. It is centred design, the end solutions can be built
important to remember that these efforts to support the real community needs.
are happening in developing countries with
complicated circumstances like war zones or Example: EMPACT is an online training
natural disasters. program for vulnerable people. It connects
refugees, displaced people, and people in
Bernhard Kowatsch, the head of the United vulnerable host communities to the future
Nations World Food Program Innovation of work through short and focused digital
Accelerator, discusses six tips for social skills training. The design team made an early
impact innovation. decision to focus their efforts on the most
vulnerable populations, not those who already
#1 Aim At Social Impact From Day have some level of education.
One And Use Human-Centred
Design Thinking #2 Build A Strong And Cohesive
Core Team
Building inclusive solutions starts at
the design stage and should not be an A founding team is the backbone of any
afterthought. In the design stage, the emerging startup. Everybody must clearly
team needs to consider the realities of the understand the project goals and their

The Innovator’s Handbook 2022 205

roles to work effectively. This is particularly Example: Building Blocks is a blockchain-based
important when teams are remote. Startup cash distribution system, and the development
founders too often think that the idea or pitch team made sure that when testing the MVP,
deck is the most critical component to their there was a back-up plan with another version
effort when in reality it is the core team. that would work. It is inherently challenging
when your target audience is vulnerable
Example: The start-up Sanku provides because you can’t think of the product as
micro-fortifying devices for foods in Tanzania. simply a great learning if it fails. Failing fast is
Because of COVID-19, the founder was not only good if people aren’t put at harm.
in the country and had to rely on the team
for implementation. #5 Don’t Forget To Create A Path
To Sustainable Funding
#3 Solicit Honest Feedback
Early On Financial sustainability is a prerequisite for
continued social impact. Make sure your plan
Early feedback is critical to determine the includes a path to sustainable funding.
effectiveness of the design. Reach out to
experienced mentors who will not hesitate Example: The Farm to Market Alliance is a
to provide direct feedback to social impact group of public and private institutions that
ventures; feedback can be crucial to a aims to reduce hunger and poverty by providing
project’s success. smallholder farmers an opportunity to engage
in structured, gainful and self-sustaining food
Example: Share the Meal is an app that systems. It can be hard to determine the
allows mobile phone users to donate to feed sustainable funding for these types of programs.
children with the touch of a button. The team You might need to sell seeds for profit while you
asked focus groups if they would take the provide advice for free.
action of donating, and the team realized
they weren’t getting realistic feedback when #6 Integrate A Pathway To Scale
no one said “no.” You need to signal that you
are open and are asking for ideas to secure Scaling up solutions to tackle real world
honest feedback. problems is often the difference between
a good idea and a game changing one. For
#4 Build An Mvp++ That Considers global impact, a project needs to reach scale.
The Most Vulnerable
Example: H2Grow is a hydroponics innovation
The humanitarian principle of “do no harm” that trains smallholder farmers to grow
is a cornerstone of social impact innovation. vegetables or animal feed using simple
Innovators must find safe ways to test a hydroponic systems. The scaling pathway
minimum viable product (MVP) and have was to train people more efficiently on using
back-up plans in place to support the these simple systems through a digital
community if the MVP fails. learning platform.

206 The Innovator’s Handbook 2022

Saving the planet —
one website at a time

Did you know many websites today use unnecessarily large

amounts of power and contribute significantly to global warming?
If the internet was a country, it would be the 7th largest polluter.
But here is the good news: Companies are adopting a more
sustainable approach to IT. Because saving energy is good
for the planet – and for business too.

We at MING Labs believe that the We help organizations build

internet is far more beautiful when and maintain websites that
it is green. And we have made it save resources and money
our mission to change this. at the same time.

Let’s work together to make a positive

impact on the environment. Your website
can be part of it. #GreenUX

Design for a brighter future. minglabs.com

Careers &
Personal
Development

208 The Innovator’s Handbook 2022

 Overcoming Obstructionists:
The 5 Laws Of Intrapreneur
Empowerment

Innovation, as it is currently practiced, is why it

Greg Larkin &
isn’t working. There is a pandemic of executive Stephanie Trunzo
cognitive dissonance around innovation, as Transformation Advisor and Author
at Punks & Pinstripes | GVP of
Greg Larkin and Stephanie Trunzo observe, Transformation and Offerings at Oracle
and this is what’s causing the entrepreneur’s
exodus. There has been a huge increase in the
number of Fortune 100 executives who have but typically, the more mature an organization
left companies to launch their own startups. or company is, the more likely it is that they’ll
There will be more post-pandemic, as hiring see intrapreneurs as a threat. The alliances
is picking up and companies are trying to an intrapreneur makes and how they protect
mandate people back into their cubicles. The themselves is what differentiates a successful
resulting startups will end up disrupting the intrapreneur from a good entrepreneur.
industries that these executives left behind.
Companies operating under this model
In light of this exodus, every company should are seeking to build an empire. They aren’t
be innovating with urgency. Is it possible working to solve a problem.
to change the way corporations innovate,
though? Yes, but it requires a shift in the New Power Grid
power structure.
There are two systems of power competing
Power Transition Theory in the business world. The traditional
power source is hierarchical, works on a
Power transition theory is a theory about closed system, and has a scarcity mentality.
diplomacy created in 1959 by A.F.K. Organski, Everything is internally focused, including the
political scientist from the University of measurement of performance.
Michigan. The theory says that the source
of conflict is a disruption in the hierarchical In the new power grid, the focus is on the world,
structure of nations. The root cause of war not the company. It is merit and values-based,
is when a weaker power believes it has the operating on an open system with an infinite
strength to challenge the supremacy of growth mindset. Instead of competing internally,
another. This theory can also explain how the company competes with the market and
innovation works inside an organization. teams work towards a common goal.

When an intrapreneur launches a new venture What power grids are companies today using
or transforms an old venture, leadership within to grade themselves against? Companies
the organization is going to see the intrapreneur operating on the old power grid want to
as someone who wants to dismantle the benchmark themselves against what they did
empire, even if their intentions are pure. Some a year ago. This internal measurement breeds
organizations handle this better than others, complacency. You might have made enormous

The Innovator’s Handbook 2022 209

leaps as an organization, but those leaps might 3. Convert your skeptics into supporters.
be inconsequential in terms of total disruption. Convert the skeptics with value. Do that
Grade yourself against the industry as a whole, by showing them the data. You don’t want
instead. How did you compare to what everyone to ignore your skeptics, but instead, make
else is doing to solve the problem you are them a part of the story. This process
working on? That’s the measurement that matters. takes patience, so don’t be tempted to
give up.
5 Laws of Intrapreneur
Empowerment 4. Make space in the system. Within an
existing power structure, the company will
1. Plug into the new power grid. Companies want to pigeonhole someone into sales
can’t survive on the old power grid. They or marketing or IT. That’s the language
have to rewire or become disrupted. the company speaks. Intrapreneurs have
Intrapreneurs operating inside the old to make space in the system so the
power grid, but who believe in the new company sees what they are doing, and
power structure, will feel like caged birds. can reward and empower them. Start by
They are the people who end up leaving a finding a champion in leadership who
corporation to launch a startup. believes in what you are doing and can
help you break down walls.
2. Rule of 20 and indispensable ROI.
Intrapreneurs have to build financial 5. Speak to power like you are willing to
leverage. You can’t manage power transition leave. Be brave enough to have difficult
theory without proving you can deliver conversations, especially in moments
ROI. At the same time, the company has to of extreme transformation. Speak up
follow the Rule of 20. This means that for to leadership about the 300-pound
every 20x growth of a new venture, there gorilla in the room, which is the thing
is a 20% turnaround in a legacy business. that scares everyone and no one
Innovate while dragging the legacy wants to acknowledge. People respect
business along with you. If you don’t, you someone who can bring up those
end up innovating without scaling. uncomfortable conversations.

Permanent Reinvention
Mindset

Change is a characteristic element of our

Aidan McCullen
existence, yet it is an aspect that garners
Principal at Edge Behaviour,
resistance for many people. In part, this Host of The Innovation
struggle may be due to the conventional model Show Podcast
used to explain change. For example, when it
comes to how we think about life, we generally
ascribe to a linear framework that says we are
born, things happen, and then we die.

210 The Innovator’s Handbook 2022

We believe in similar ways about innovation; there of the butterfly? Consider the S-curve.
is a starting point and an endpoint. But a better This framework is useful for explaining
way to think about change is in cycles; even the phases of many things from a cyclical
nature demonstrates how change is cyclical. perspective. Traditionally, there are three
Aidan McCullen shares insights from his new stages (introductory, growth, and decline) that
book “Undisruptable: A Mindset of Permanent outline this approach. But what if we were to
Reinvention for Individuals, Organizations, and reimagine the S-curve to apply it to business
Life”, offering a new perspective on change. and the process of trying to introduce
change? Below is the model reconceptualized
The Lesson of the Butterfly as it might apply to organizations:

We often admire the butterfly’s beauty but • Phase 1 (Development): Introduction of a

rarely acknowledge the changes the creature product/idea, garnering interest.
endured to become a butterfly. So, let’s
look at the butterfly’s life cycle and how this • Phase 2 (Introduction): Evaluating
example can inform our view of change and whether customers exist for your concept.
present a new perspective.
• Phase 3 (Growth): Confirming that a
The initial stage in the caterpillar’s life begins market exists for your concept, getting
with birth (at the organization level, this is more funding, hiring more people, scaling.
equated to the introduction of a concept).
As the caterpillar emerges from the egg, it • Phase 4 (Maturity): Continuing to hire
turns to the shell that once protected it and more people, increasing marketing.
consumes it as fuel.
• Phase 5 (Decline): Establishing the
During this time, the caterpillar experiences business, increasing automation, bringing
incremental growth (in business, comparable in consultants to evaluate how to increase
to the iPhone iterations process). At profit, creating strategies for competing
a certain point, pre-programmed cells in the marketing space, reduction in
(called imaginal cells or, in business terms, creativity/ingenuity. This phase can
“innovators”) initiate a process that changes be dangerous as leaders can become
the caterpillar’s DNA and overcomes the protective/defensive. This behavior cuts off
caterpillar. These cells induce the caterpillar creativity/generation of new ideas. However,
to become a chrysalis. It is inside the chrysalis the way to continue to thrive is in Phase 6.
where metamorphosis occurs, and the
caterpillar must sacrifice what it is, to become • Phase 6 (Jumping the Curve): This is
what it is going to be. counterintuitive as it involves starting
over again. Jumping to a new S-curve
During this stage, an enzyme melts the always looks like taking a step backward
caterpillar into a soupy fuel, and the imaginal (ex., Getting to the top of your career
cells spur the growth of wings for the sake of and switching industries to begin at the
the butterfly’s development. bottom or starting a new revenue stream
when the business has existing revenue).
Reimagining the S-curve However, the key is to jump to a new curve
before it becomes necessary; in other
So, how can we translate the principle of words, reinvent ahead of necessity. To do
innovation inherent in the development this successfully, you must build capacity

The Innovator’s Handbook 2022 211

 before you make the jump, such as experiences a crisis, such as a temperature
investigating possibilities/options to build change or the intrusion of a predator, it
up your muscle. reverts to an infantile state by discarding
parts of its body that are no longer useful
Established businesses often forget their and starts over. Again, for most of us, this is
beginnings and don’t invest in regular counterintuitive. But for the jellyfish, it is the
capacity building. However, it is essential to secret to immortality.
recognize that there is a return on capabilities
and to value what has been built as a part of Gratitude & Letting Go
the process. When we reach a level of success, we often
cling to that success; this is a downfall.
The Immortal Jellyfish Instead, we need to practice reflection and
reframing to free us from unhealthy mindsets
As you can see, the decline phase is not and behaviors that hinder us. Reflect on the
the end. It is merely a point in the process. bad experiences and the ‘good old days’
If you can adapt to a mindset that envisions and reframe them as tools that shaped your
your ‘old’ organization as fuel for the ‘new’ journey and led you to where you are today.
organization, you will be able to successfully But then allow yourself to let go of what is
‘jump the curve’ and discover the key to no longer needed and embrace a vision for
permanent reinvention if you don’t succumb the future.
to a common pitfall.
In business, this manifests as clinging to an
The Turritopsis Dohrnii (also known as the old business model, which is in turn clinging
immortal jellyfish) begins life like other to an old mental model. To change business
jellyfish. But when this type of jellyfish models, we must first change mental models.

Becoming a Rebel in
Your Organization

Most employees believe that today’s

workplaces are terribly broken. As a result, Pim de Morree
they want to stand up to the status quo Co-founder at
and lead towards a better way of working Corporate Rebels
that is more motivating, engaging, and more
successful for businesses.

To be clear: becoming a rebel within the As a result, to become this rebel, you need
organization is not about growing your hair first to understand where the problem is
or putting on a Rock & Roll t-shirt. It’s about in the company and the company’s way of
being concerned with how you can improve thinking. For instance, although many people
the way organizations work, explains Pim de are feeling burned out, frustrated, and not
Morree, Co-founder at Corporate Rebels. engaged at all with the work they are doing.

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It does not have to be this way. More people For these reasons, organizations now
need to understand that work does not have need to adapt differently so that they
to be the way that most are experiencing can make changes more quickly based
it at that moment. There are other ways to on the complexities they are facing and
approach work, where employees actually the continuous changes they will face in
enjoy what they are doing and are having a the future.
good time. Unfortunately, most people are not
aware of that. Are Corporate Innovators
Corporate Rebels?
That is why understanding the problems of
today’s workplaces and how broken they are Corporate innovators are all about change,
and then educating yourself in alternative so it is common sense to consider them
ways of working can help you become a corporate rebels, even though most of these
corporate rebel and start contributing to the innovators may not even consider themselves
organization by making it better. a rebel. This is because most innovation
departments are trying to make organizations
Why Are Organizations The Way better, more innovative, and as a result,
They Are? more entrepreneurial.

If you go back in history, during the That is why it is customary to assume that
Industrial Revolution, many people all many people drawn to these departments
started working at very large corporate and teams are intrinsically motivated to make
organizations at the same time. As a result, a company more efficient and are focused
the “factory line” was formed, where a on implementing newer ways of working and
significant number of people who were not thinking, and are more open to experiencing
highly educated came into the workplace these alternative working structures.
and had to do a substantial amount of
manual labor. Consequently, these large How Do You Identify Others in
organizations became used to having the Company That Want To Be a
employees do the same thing every day, Corporate Rebel?
which led to a structure and organizational
setup that was focused on efficiency Becoming a corporate rebel can be a lonely
and standardization. journey, primarily because you feel stuck in
an organization that you want to transform
And unfortunately, over time, although there for the better but don’t really know how to go
were many changes in the workplace, the about it or which people feel the same way as
basic principle of focusing on standardization you do. That is why many of these corporate
and efficiency is still present. Yet, today, rebels often look for ways to bring these like-
everything changes exceptionally quickly, minded individuals together. And the best way
and these changes are happening every to connect with these individuals is to reach
single day to lots of people, especially in the out to them, whether through social media,
workplace. That is why standardization does meet-ups, or other events.
not make much sense anymore, since the
moment you try to create these efficiencies, However, the main goal is to connect with
things have already changed to such an people interested in the same topics as
extent that these efficiencies do not make you and have the same goals and purposes
much sense anymore. as you. Because if you want to create a

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revolution and impact how your organization way of thinking in about two to three
works, it’s vitally important to find those years, while large organizations can take
people. Since the more people you attract, significantly longer.
the more people you can bring into your
movement, and the better chance you have of Most of the time, these changes start in a
changing the way the organization works. specific business unit or department. They
then will begin to spread to other parts of
How Long Does it Take To the organization until the whole company
Change an Organization as a has finally transformed. However, these
Corporate Rebel? changes are not small, they are rather
radical transformations. For instance, these
Unfortunately, changing a company’s changes often involve companies overhauling
fundamentals won’t take months. However, their traditional structures and moving into
it should not take decades either. This self-managing structures or those that
timeline rests somewhere in the middle. get rid of layers of intermediaries to give
So although a lot depends on numerous their teams a lot of entrepreneurial power.
factors, most medium-sized companies As a result, they are changing their entire
can generally transform their beliefs and organizational structure.

The Next Step: Lessons on

Embracing Change and
Continuous Improvement

At its simplest, disruptive innovation is a silly

little thing that takes over the world, says Whitney Johnson
Whitney Johnson, CEO at human capital CEO at human capital
consultancy WLJ Advisors. It’s what Netflix consultancy WLJ Advisors
did to Blockbuster and what Uber did to
taxis. Disruption isn’t just about products,
services, companies or countries, though.
It’s also about people.

Personal disruption is the cycle where we the thing disrupted. We are both Netflix
learn, leap, and repeat. The big difference and Blockbuster. You are disrupting you.
between company disruption and personal To support in that process, Whitney
disruption is that when it comes to personal has developed the Personal Disruption
disruption, we are both the disruptor and Framework, as outlined below.

214 The Innovator’s Handbook 2022

1. Take the Right Risks constraint of a deadline. When examining
startups, the number one reason funded
There are two kinds of risks. The first startups failed was that they ran out of cash.
is a competitive risk, where there is an For unfunded startups, though, that reason
opportunity, but there is also a lot of was #10 on the list. They found a way to do
competition. This might be something it without money. We have to find success
like a job posting for a position you want, in spite of constraints, and sometimes even
but you know you’ll be one of 50 people because of it.
going for it. The other kind of risk is market
risk. There is when you don’t know if there Ask yourself: What constraint is helping
is an opportunity, but if there is, there is me create?
no competition. Amateurs compete, but
professionals create. 4. Battle Entitlement

Ask yourself: What am I creating? To battle entitlement, we have to examine our

expectations. Look for the word “should” in
2. Play to Your Distinctive Strengths your vocabulary, such as saying something
should be different. These statements put
A distinctive strength is something you do you in the position of being a victim of your
well that other people don’t. If you aren’t sure circumstances instead of acting on what is.
what your distinctive strength is, ask yourself You have to close the gap between reality and
what exasperates you. What do you feel like expectations by focusing on reality. You make
is common sense, and you can’t believe other progress by asking yourself how you create
people haven’t figured out how to do yet? with what actually is instead of what you think
That exasperation is a signal that this is a should be.
strength of yours. Another way to discover
your distinctive strength is to pay attention Ask yourself: What will I co-create with
to the compliments you get. We’re often reality?
uncomfortable when people compliment us
because we don’t value that thing they are 5. Step Back to Grow
complimenting. We don’t value it because it’s
easy for us. When you know what you do well, Personal disruption can make you step back,
though, you can leverage your strengths. sideways, or down. To outside observers, it
might look like you’ve lost your mind. When
Ask yourself: What strengths have you are willing to step back or sideways,
emerged this year? though, it can become a slingshot for
personal growth. Stepping back can allow you
3. Embrace Constraints space to assess a situation or create a better
strategy. You might want to take a step back
We often feel like we could do something just to take a break, too, and that’s important.
if we just had more time, or more money, Breaks and vacations can be progress, and
or more support. According to the laws of they can help slingshot you into who you
physics, though, we need friction to make can be.
progress. For example, we might be more
productive when we’re under the time Ask yourself: What step back will I take?

The Innovator’s Handbook 2022 215

6. Give Failure Its Due started. You have to recognize the importance
of being willing to be driven by discovery. Take
Failure happens, but it’s not failure that’s the a step forward, gather feedback, and adapt
problem. The real problem is the shame that from there.
we attach to that failure. If we buy into the
shame, we’re allowing a mistake to become a Ask yourself: What is my next step?
referendum on our identity. Separate shame
from failure, because it’s shame that limits Disruption is, by definition, scary and
disruption, not failure. lonely because you are out there playing
where no one else is. You might feel a loss
Ask yourself: Did I fail? Or am I learning? of identity and have moments of free fall.
That doesn’t mean you shouldn’t disrupt. It
7. Be Discovery-Driven means that if you are scared and lonely, you
are on the right path. Keep climbing... Keep
70% of all successful businesses end up in a disrupting yourself!
different place than they expected when they

How to Be a More
Effective Catalyst

Being a Catalyst is hard work. When well-

Shannon Lucas &
supported though, this change agent can Tracey Lovejoy
drive entire organizations forward, on both a Co-authors of Move Fast. Break Shit. Burn
Out. The Catalyst’s Guide to Working Well
product innovation and a cultural level. How and Co-CEO’s at Catalyst Constellations
can you get there?

Shannon Lucas and Tracey Lovejoy, Co- That can be synonymous with the term
CEOs of Catalyst Constellations, and best- innovator, but it doesn’t have to be. Catalysts
selling authors of Move Fast. Break Shit. are innovators, but they can also be rebels
Burn Out. The Catalyst’s Guide to Working and troublemakers, pushing the status
Well, explain. quo relentlessly.

What, Actually, Is a Catalyst? The Six Key Attributes of Catalysts

Originating from chemistry, the traditional All Catalysts are change agents, but not all
definition of the term catalyst describes a change agents are actually Catalysts. What
person or a thing, or even an event, that sets this group apart are six attributes that
quickly causes change or action. Within drive that relentless pursuit of change:
organizations, it’s a change maker with an
unstoppable drive to action, brimming with 1. Catalysts piece together information
ideas to make the organization (and the quickly, seeing pieces of the puzzle come
world) better. together faster than those around them.

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2. Through that process, Catalysts have often means no opportunity to pause, rest,
many ideas and see countless possibilities and recharge.
to make the world better.
Another common and perhaps the biggest
3. Catalysts use these opportunities not in challenge for Catalysts is the lack of stopping
isolation, but to piece together a vision, a to clearly articulate a vision, helping the
new destination that’s better than today’s process of bringing people along. Catalysts
status quo. can move into action before they take the
time to externalize their vision, which means
4. Catalysts go beyond visionaries, because others may be unclear of the destination
they manifest that vision with their drive and not understand what is asked of them.
for action that transforms. That’s especially challenging in internal
environments, where collaboration is a vital
5. Catalysts have a naturally experimental part of bringing about actual change.
mindset that relies on constant
information intake and learning to Becoming a More Effective Catalyst
optimize even while in motion. through Rejuvenation

6. Catalysts are typically perceived as being Fortunately, the two challenges of burnout
comfortable with risk and ambiguity by and not slowing down enough to articulate
those around them. a clear vision can both be prevented
through a single mindset shift: mindfulness
Within these attributes lies a spectrum. Some & rejuvenation. It means taking time to
Catalysts might be ultra Catalysts within a self-regulate each day which allows us to
single day, other might take a bit more time slow down and be more empathetic – not
but still move faster than those around them, only externally with customers but also with
Some Catalysts may not consider themselves colleagues to understand them. This allows
risk takers because to them it feels more risky us to more successfully understand what
NOT executing on the vision they distilled is important to each stakeholder, and their
from all the data they collected. But they all relationship to change, so we can align our
share at least some level of each of these goals and get their buy-in and enthusiasm.
attributes to fall within the category.
This includes getting more intentional about both
The Challenges of Being a Catalyst visioning and actioning. Even within the iteration
that leads to new and updated visions, a mix
In this type of mindset, burnout is a constant of compassion, empathy, and connection with
danger. Catalysts tend to lose themselves others can play a vital role in both bringing others
into projects, constantly looking to overcome along and reducing the chances of burnout.
organizational resistance and working to
bring people along, cheerleading new visions Compassion and rejuvenation doesn’t only
and projects. extend to co-workers, of course. It’s just as
crucial to focus inward, taking the time and
Over time, a cycle of excitement and energy and resources to focus on yourself and
exhaustion can easily lead to burnout. Being building your vision for yourself. Finally, even
a Catalyst isn’t a choice; they are driven by an exchanging ideas and concerns in forums with
innate -almost physical- desire to see a vision other Catalysts can go a long way towards
realized in the world. Not stopping, in turn, too becoming a more effective version of yourself.

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In short, it’s about removing isolation from the
process. Through a more intentional approach
building on your own and others’ feelings and
emotions, you can become a more effective
Catalyst of positive change.

Slow Innovation: Decelerating in

a High Speed World

In a corporate world that prioritizes speed,

Jennifer Tsitsopoulos
and often at all costs, how can you slow
Principal, Innovation Strategy
down? And, more importantly, how can you & Business Design at Board
slow down in a way that actually makes you of Innovation
more productive? Jennifer Tsitsopoulos,
Principal of Innovation Strategy and
Business Design at Board of Innovation, digs
deeper into the modern need for speed and Innovation methodologies built on speed
the opportunities to decelerate for the good can lose track of the big picture in service of
of both personal and business goals. immediate, tangible business results.

The Need for Speed We’ve seen the dangers of innovating too
fast. General Motors launched an electric car
We’re addicted to going fast. Ideas need to in 1996, but the market wasn’t prepared for it.
come quickly. Those ideas need to iterate WeWork rushed its process and crashed as a
even faster, to get into market and scale result. Speed traps exist in every industry, and
at speed. Every second we slow down is a they can be devastating.
second lost towards profitability.
Slowing Down
That innate need for speed actually lies
deeper than just the corporate and innovation As the antonym of fast, slow tends to carry
environment. Even though the internet is as a negative connotation. When we think slow,
fast as it’s ever been, we still want it to be we think lazy, slacker, or giving up. But it’s
faster. We cheer for the fastest sprinters, buy impossible to ignore that slow is also having
the fastest cars, and prioritize fast growth at its own cultural moment, with slow food,
all costs. Pausing to think and reflect almost slow fashion, and slow travel all playing an
doesn’t seem to be worth the effort. increasingly important role in our lives.

In the corporate world, part of the problem So why not translate that concept
is an embrace of startup methodologies, like to the corporate world?
sprints and hackathons. It’s about breaking
things and learning from it, as quickly as Think of Apple, and you’ll likely think of an
possible. But, done wrong, it can backfire. innovator and a category disruptor. But in

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reality, Apple was hardly ever first to market. what might fail and why can prevent many
It thrived by taking an existing concept, ideas that sound good in theory but wouldn’t
learning from it, and perfecting its design or work in practice from moving too far.
user experience. Rather than moving fast and
breaking things, it knows when to slow down It’s about balancing the ideas of speed and
and let others do the initial world. deceleration so that each can work in its
ideal situation. It’s combining type 1 thinking,
Of course, there’s always a danger of going which is intuitive, automatic, and effortless but
too slow. The key, then, is slowing down in comes with low reliability, with type 2 thinking
the right moments to maximize your chances that is more analytical, deliberate, effortful,
of success. and rigorous.

Practical Applications of Slowing Critical thinking skills become vital. Pausing

Down Strategically and reflecting on any situation can help
you get there. Each helps to find barriers
The traditional innovation process tends to execution early, to prevent unnecessary
to follow a common pattern: ideation for (but fast) work. Three lessons can help in
solutions happens as quickly as possible, that approach:
before the main corporate business slows
down the execution from building to scaling 1. Slow down for decision-making, taking
to a crawl. But what if that process was the time to make important decisions
reversed? What if innovation would take its regardless of whether they’re affirmative
time to develop the right solutions, aligned or negative.
with the business? In that case, execution
could be much faster, ultimately, leading to 2. Slow down to think system-wide, going
more successful business cases. beyond customer first to take the entire
ecosystem into account. All potential
It’s a practical approach of the Roman impacts and ripple effects that stem
Festina Lente, or “hurry slowly”: let your from an original decisions are important
body and movements be quick, but keep considerations.
your mind at a graceful and reasonable
pace. The automations of executions, and 3. Slow down proactively to get ahead.
the typical roadblocks, can be circumvented Scan for signals that show potential
much faster when innovators take the time opportunities, keeping a long-term vision
to think through the process, and do some in mind to not just disrupt but build better
due diligence. solutions for future problems.

That means, for instance, taking compliance None of these steps are easy. But, in a
not as the typical annoyance or roadblocks, world obsessed with speed, they can make
but as an initial qualifier for successful the crucial difference of getting important
innovation ideas. Bringing in the commercial ideas to market, and allow each level of the
aspect from the beginning helps to break business room to breathe in order to truly
down barriers, as asking the core business make a difference.

The Innovator’s Handbook 2022 219

 The Dark Side of Corporate
Venture Building

Entrepreneurship and venture building are, Misha de Sterke &

by nature, uncertain. New, creative ideas Leo Custers
need time to mature. Furthermore, it can Managing Partner at Innoleaps /
Psychodynamic Counsellor,
be difficult, especially for big companies, to
Crisis – and Change Manager
identify profitable business opportunities.
We need to find a way to successfully
navigate through the fog of confusion and
myriad of choices that entrepreneurs face There is a common theme in today’s
on the venture building journey. entrepreneurship and hustling gospel, to
always focus on the happy side and create
Although venture building is meaningful work, good energy and trust. However, you need
if you take up this role you are going to face to work with and value the dark side of
many challenges and encounter tension all entrepreneurship, manage the distrust,
along. This work requires a massive emotional uncertainty and anxieties, in order to bring
investment- one that can cause some to more power to the innovation and venture-
unconsciously push above their own limits building activities of your organization.
and boundaries.
If entrepreneurship were easy, everyone
Venture building is about so much more than would do it. It takes a lot of grit, nerve,
developing products. There are emotional and perseverance to build a business. The
aspects (e.g., anxiety, fear) that must be innovation process is intense and forces
managed as well. In fact, of the most common the mind and heart to go places they’ve
causes for startup teams to fail, 70% is never been before. You have to postpone
related to these aspects, as Misha de Sterke, other endeavors, open up to things you’ve
Managing Partner at Innoleaps, and Leo never experienced before, and build new
Custers, Psychodynamic Counsellor, Crisis – relationships while letting go of others. Think
and Change Manager, explain. about cash flow and at the same time manage
your new customers and onboard them. One
Part of the Game challenge after the other.

Even if you are an experienced entrepreneur, Can You Be a Leader With Dark
when creating a new business, things will Feelings?
go wrong. The fact is, it is hard to pull off a
successful multi-faceted organization that A lot of feelings come into play during venture
also wins in a dynamic and competitive building. It is easy to know what to do during
market. As hard as the tangible factors are to times of humor and happiness. However,
manage, it is the ability to manage our own many people become uncomfortable when
psychology and the psychology of others that emotions take a turn to the dark side. Yet, dark
is the most challenging obstacle to overcome. emotions should not be seen as negative.

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For example, introducing fear into a team can How do you handle instances of distrust not
be just the motivator to make it work. There’s only with yourself but within your teams?
nothing like the feeling of failure to produce Despite common thought, distrust is a
success. What kind of leadership do you perfectly normal and healthy feeling, so long
practice in times of dark emotions? Can you as it is handled correctly.
make the tough choices to make the venture
work? Or are you afraid of the consequences Domination
and that you might end up alone? As a leader This is a very common emotion you see in
you need to have the capacity to ‘be alone’, venture-building teams. As your company
and tolerate your own fears and those of grows, team members, senior management,
others. There are three main categories of investors, or stakeholders may try to force
dark feelings that venture builders and their your business to go in a specific direction
teams experience during the journey. in order to build a product or launch a new
service. The more your company grows, the
Fear higher the stakes and the more players that
Fear comes in various forms. It may be the fear enter the game and have opinions on the best
of achieving team targets and goals or maybe next steps to take. Understandably, feelings of
the risk of losing professional relationships. It domination can be extremely overwhelming.
can also be about ambitions, drives, desires, and
human judgment. Every organization is unique, Embrace the Dark Side of
and the fear that goes along with it will be Corporate Venture Building
unique as well. Typically, we don’t talk about fear
in teams. It’s always, “We can do it!” However, The dark side of corporate venture building is
what is seldom talked about is that fear can be a not a negative. Embrace the full spectrum of
source of creativity and intelligence. emotions that you and your teams feel and lead
with confidence and be OK with unconfidence.
Distrust There are no bad emotions. Acknowledge the
Whenever you bring multiple people with feelings, spend some time on them. If they had
different personalities together, there will be a voice, what would they tell us?
differences of opinion. This is entirely normal.
In fact, at times, there may also be distrust. If we discard the dark side of
You or your team members may wonder if entrepreneurship, we lose our creativity, our
someone on the team has a hidden agenda. independence and power to create.

The Paradox of Innovation

Leadership

A lot of leadership literature features Alf Rehn

simplistic thinking. Journals and books tend Professor of Innovation, Design
to set forward specific traits, tips, and tricks and Management at the Faculty of
Innovation and Design Engineering,
as if they are the essence of leadership. University of Southern Denmark
However, leadership can never be made
so simple, suggests Alf Rehn, Professor of

The Innovator’s Handbook 2022 221

Innovation, Design, and Management at the there always will be an element of chaos to
University of Southern Denmark. be managed.

Leadership is hard. Period. And there are no magic tips, tricks, or methods
to deal with surprises. Just as bad leaders
Leadership isn’t a linear path in which you “do will change their leadership styles according
the right thing,” but is instead a continuous to the whims of fashions, Chief Innovation
fight with contradictions. Officers may find it hard to resist the
temptation to breeze home from conferences
Contradictions: Problems to Be filled with the latest approaches, spouting
Solved? exciting innovation buzzword. Such “innovation
leadership” will suffer from the same
Some contradictions are actually not solvable, problems most leadership ideas suffer from: a
and true leaders can recognize when that’s continuous search for the next big thing.
the case.
Moreover, such an approach belittles the
Instead of trying to fix the unfixable, they learn fact that we actually need some form of
to live with and manage the contradiction. They authenticity in our leadership, if we are to
adopt mindsets in which they can accept that create the kind of trust that makes people want
they will always partially fail, because not all to follow us forward in innovation initiatives.
things will always turn out perfectly. They find a
way to manage this “good-enough” logic, so that The Trick to Innovation Leadership
they can handle continued contradictory work.
The trick to innovation leadership, of course,
In this way, leadership isn’t necessarily either/ is that there is no trick.
or. On the contrary, it is often both/and.
As innovation leaders, we need to move away
• Masculine and feminine strengths from the notion that we can define innovation
• Hard and soft touches through a checklist, through a simple model,
through a canvas, and instead, start seeing
Such continuous contradictions should not that our role as innovation leaders is letting
be seen as issues; instead, they generate go of the belief that we can control this.
a richness of experience only found in
paradoxes and contradictions. Successful innovation leaders were never
the ones with the most detailed processes
Paradox Does Not Equal Leadership that they stuck to methodologically. They
were the ones who are capable of living
While good leaders can manage to lead with the contradictions of this world. They
through paradoxes, that does not mean were masters of the most basic ingredient of
paradoxes equal leadership. innovation leadership, namely humility.

Continuously chaotic behavior is not a strength. As innovators, it is quite humbling to realize

there is no final trick, and there is no one true
However, in the truly confusing world of path, and there is no one right way.
innovation leadership, one of the challenges
is that the only thing we truly know about No matter what you do, you will never hit a
innovation is that it’s going to surprise us. So perfect score- and that’s ok

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