Annette Millner and Søren Bligaard Rasmussen, business design experts at PA Consulting Group, offer their advice on how best to best create and support innovative business opportunities. Many companies, and large corporations in particular, may have an abundance of innovative ideas but struggle to turn them into successful initiatives and scale them up.
When businesses understand the six key factors that define the interplay between the company and the innovative initiative, they can improve the way they organise and develop the initiative. This will make it easier for them to decide whether the initiative is best placed inside or outside the organisation.
Type of innovation
First businesses need to understand what type of innovation initiative they're looking to develop and how they relate to the organisational DNA. For example, by recognising that some innovation types are evolutionary and are introduced gradually, while others are of a more transformational nature.
Investments and risks
The organisation should also recognise what investments and risks are needed to develop and scale up the initiative. It may also be difficult to present a traditional business case due to the unpredictable nature of innovation.
Key internal resources
When large businesses develop innovation projects outside the organisation they often have internal resources that could help develop the initiative quicker than the competition. These resources include assets, capabilities, IT-systems and data.
In line with the above, companies need to understand when it's time to collaborate with outside partners, and define what these partnership should look like.
The organisation needs to understand that developing an existing product and developing innovation are two very different things. They must make sure their existing processes and organisational culture do not get in the way of the initiative.
The innovation initiative may also need the originating company to protect it from the competition to try and ensure its survival in the first few critical years.
Annette and Søren then go on to define three ways to design and organise the interplay between organisation and initiative: Keeping the initiative internally; choosing a satellite organisation which is legally a part of the organisation but placed in a separate location; or taking the initiative outside the organisation by creating a new legal unit.