Innovation for the current age

Innovation for the current age

Interested in learning more about innovation culture? Leadership and the motivation of innovation teams are among the topics that MaRS Verge will cover in the “Innovation Intensive” sessions at the MaRS Verge conference on March 1. Get the inside scoop on corporate innovation and intrapreneurship by subscribing to Verge Insider.

Many businesses we know today were built or evolved out of the industrialized era. The innovations of the mid-18th and 19th centuries resulted in labour-based mass production alongside improvements in transportation, communication and banking.

In 1955, Fortune Magazine identified the 500 largest companies—a list that’s become synonymous with success. In 2015, only 61 of those companies remained. And in 2015, 17 newcomers joined the ranks of Fortune 500, including the likes of Netflix and Companies that have been around for more than a hundred years can no longer expect to keep the pole position of their industry.

Companies can rise and fall overnight

Welcome to the information age, the knowledge economy, the digital era, the “fourth industrial revolution.” Today the pace of change required to survive (let alone thrive) means companies can rise and fall overnight. Longstanding corporate giants like Kmart, Kodak and Blockbuster no longer exist. The days of those giants—designed on industrial-age principles of command-and-control organizational hierarchy and built on capital infrastructure and a physical presence—are long behind us. Businesses of yesterday have no choice but to serially innovate to remain competitive, let alone to grow at the rates stakeholders demand.

We need to innovate organizational processes and business models, not just products and services

The approach many are taking is to create in-house innovation cells, often with a leader called the “Chief Innovation Officer.” There is no shortage of these innovation units popping up across corporate Canada. Most innovation efforts continue to focus on product or service innovations that will allow the company to remain relevant to its customers. However, re-imagining the company’s own organizational processes, structures and overall business models is also a necessary component of the innovation model. According to Mark Johnson, author of Seizing the White Space, half of the recent additions to the Fortune 500 before their 25th birthday (including Amazon, Starbucks and AutoNation) were business-model innovators.

But how do we do this when all of the business acumen and skills we have accumulated to date were designed and developed for an industrial era of business? For some inspiration, consider how the ideas and concepts that we have seen your peers embrace might apply to your organization’s corporate innovation model:

  • Make space for innovation: Dedicate a portion of each staff member’s time to innovation projects or activities. Do this by formally setting the time aside and funding that time from an innovation fund. Google is often cited as the role model for this concept.
  • Get in the tech innovation game: Create a venture capital fund and invest in future-busting technologies that will transform your industry, and share in the upside when they do. A version of this is being undertaken by Telus Ventures.
  • Incentivize innovation: Make 10% to 20% of an individual’s AND a team’s performance-management grading be driven by evidence of advancing innovation. Kaiser Permanente is known to do this.
  • Have two chiefs running the company—a chief executive officer and a chief entrepreneurship officer: Both get equal voice at the board table. The job of the former is to EXECUTE the current business model to maximize its impact…and the job of the latter will be to design the business that will sustain the organization if (when) the former business model inevitably sunsets. (See this HBR article on the subject). We have yet to find a company doing this…who will be the first Canadian corporation to do so?

This is just a small taste of where you can start. Come to MaRS Verge (February 29 to March 1) for more tangible ideas on advancing innovation in corporate Canada.

And to go back to those sectors that experienced major disruption during the industrial revolution— transportation, communication and banking—well, think Uber, Facebook and Borrowell!