With the rise of corporate innovation and entrepreneurship, new terminology and concepts keep emerging. We teamed up with our Head of Corporate Innovation, Jan Alpmann, to bring light into darkness and provide tips for those looking for the right format to foster innovation in their organization.
Corporate innovation means that companies integrate new innovative methods, products, ideas, services, and opportunities into their existing business models or use them to create new business models. Fostering innovation is important for enterprises in order to evolve, to be relevant in future markets, or to create new markets. Additionally, being innovative is vital to keep and attract talent.
There are many different ways to foster corporate innovation, which can be clustered into two main approaches. The inside-out-approach, where the company develops innovation from the inside to the outside; and vice-versa the outside-in-approach, where the company incorporates external innovation, for example through mergers and acquisitions.
I recommend engaging both in internal as well as external activities: internally through Intrapreneurship Labs and externally with market screenings of interesting startups.
Corporate incubation means that companies build in-house business units that focus on the development of radically innovative ideas. These so-called incubators allow teams to work in startup-like structures that resemble a creative and risk-taking environment, however are situated within an established company.
Often corporate incubators are the place in an organization to focus on projects that are not (yet) accepted among the employees, that conflict with daily business, or even cannibalize the current business model. Many corporate incubators are called Innovation Labs.
Corporate acceleration means that companies set up in-house accelerators, where they support startup teams. The teams can consist of employees, external startups, or a mixture of both. Usually, the established company provides coaching, office space, and sometimes even capital for external accelerator teams or time budget and network access to internal employee teams.
In exchange, the company defines the objectives that the teams have to meet. Of course, the overall motivation for a company to build a corporate accelerator is to foster innovative ideas or to get external know-how for innovative ideas.
While one might think that incubation vs. acceleration is an either-or decision, companies can and actually should have both. Corporate incubators focus on ideas in an early stage, while corporate accelerators are all about pushing and fast-tracking mature ideas. Often, both formats are part of a company’s innovation funnel and connected with each other.
Intrapreneurship stands for ‘internal entrepreneurship’, meaning an entrepreneurial attitude and behavior of employees within a company. The main idea is that employees should behave as if they were entrepreneurs themselves, meaning they should look at a project as if it was a startup, feel empowered to come up with bold, disruptive ideas, think big, act very proactively, and ensure they take responsibility for their actions from A to Z.
The concept of intrapreneurship is often used to foster innovative thinking within organizations. It can lead to positive results, both on an individual and organizational level. While it promotes job satisfaction and commitment on an individual employee level, it also enhances the overall performance on a company-wide level.
An intrapreneur combines customer-centric thinking with access to corporate resources. Companies should foster intrapreneurship in order to improve two factors: the employee’s skill set and attitude, and the company’s opportunities to evolve new business models or improve processes.
Furthermore, intrapreneurs are important multipliers for the “Lean Startup” approach and toolset within the organization and can inspire their other team colleagues, too.
Open innovation is defined by an “open-minded ” that is contrary to a rather traditional “silo mentality.” It specifically refers to the innovation processes of companies or departments, i.e. being open to feedback, input, or collaboration from outside. Through this approach company-wide knowledge gets accessible and can be used to create innovation.
Open innovation can be classified into those forms that are initiated and owned by one player, and those forms that belong to all participants equally.
Examples for open innovation initiated by one player
Inbound innovation: An initiator invites selected partners to collaborate on an innovation project
Crowd innovation: An initiator starts an innovation project in which everyone can participate
Examples of innovation projects which belong to all contributors equally
Value networks: Selected partners work together on an innovation project
Social network innovations: Everyone contributes to an innovation project and owns the project at the same time
A blame culture blames employees of a company for failing. This type of company culture can be seen as a threat to innovation because it hinders employees from speaking out or taking risks for fear of negative feedback.
A symptom of a blame culture is presenting one single person or team as accountable for doing something wrong. In contrast, a culture of failure embraces failure as a valuable chance to learn and improve within a team but also within the whole organization.
Such a culture of failures often feels unusual and challenging to companies and traditional managers and team leaders, but it is worthwhile to create. It creates space for trial and error, quick adaptations, and can have a lasting effect on the organizational culture.