As the business world is changing rapidly, the practical application of innovation programs can be confusing to organizations that are starting on an innovation path. Some methods are more useful than others depending on the goal of the organization and its particular strengths and weaknesses. Following are five of the most effective programs you can use to grow innovation.
Internal innovation teams
These are organic teams that apply new practices, models or technologies to solve business challenges in unique ways. These teams can be centralized or decentralized depending on the needs of the organization. Often, in more mature organizations, they are a hybrid approach of centralized and decentralized to capitalize on the benefits of having both a strategic vision for the entire team, and a business focus for the different lines of business or functions.
Venture investing
This involves using investments to purchase or acquire equity shares for early stage ideas and companies. This is a useful strategy to identify emerging startups and technologies that have promise without having to use internal resources. Citi Ventures is an example of a large company working with startups to create new innovations.
Labs/Incubators
Laboratories and incubators are internal or external structures that develop and mature ideas in a protected environment. They are especially useful for disruptive ideas that require protection in the early stages of development. Tata’s Prototype Factory is an example of an on-demand lab type capability that leverages best-in-class resources to rapidly build prototypes both internally and externally.
Partner innovation
Partner co-innovation is a mutually beneficial arrangement between established companies. It can be a powerful force when two established companies unite to solve a common business challenge. Military insurer USAA partnering with IBM for artificial intelligence to answer customer questions is an example of large companies partnering for a common business challenge.
Open innovation
Open innovation can be both internal and external innovation that employs the resources of everyone. Crowdsourcing is a common practice for open innovation whereby a larger population is encouraged to shape and develop new ideas.
The above practical approaches to innovation encompass the major ways that established organizations are going to successfully reinvent themselves and their businesses. Any organization that is employing an innovation strategy will need to follow one of these innovation paths in order to create positive change.