Innovations and Big Corporates

- How to actually integrate innovationinto company operations?

Jukka Märijärvi

Landon Oy

Jukka.marijarvi@landon.fi

Status of todaySuccessful innovations get press coverage -

Hot start-up company hype

Those that succeed receive huge pay checksGoogle IPO share return is 15 500%Supercell – small (staff :130) games

company with huge valuation, 51% sale to Softbank and GungHo brought € 1,1 Billion. 350 M€ to both the founders.

Hunt for the next success is on

Yet - A plethora of Innovation books exist!Amazon book search with ”innovation”

returns 66 886 books

Innovations – Yes but what should I do?

Did you ever read a book on innovation and left confused?

The question seems to be that how to approach innovation rationally and

Implement a solution for achieving innovations in the real life.

Innovation @Wikipedia

Innovation is a new idea, device or process.[1] Innovation can be viewed as the application of better solutions that meet new requirements, inarticulated needs, or existing market needs.[2] This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society.

The term innovation can be defined as something original and, as a consequence, new, that "breaks into" the market or society.

In business and economics, innovation is the catalyst to growth.

Innovations in many context

Personal level

Processes and Work practices, Marketing, …

Incremential

Disruptive

We look innovation mainly from Product and services porfolio perspective (sales you could say)

Core/Context

Blue Ocean Strategy

World veteran – The Cisco approach (from their web site)

Since 1993, Cisco has acquired more than 120 companies, from small startups to large, well-established firms such as Linksys, Scientific Atlanta, and WebEx.

Long term Cisco intent has been to find external innovations and buy those, and integrate into normal business. Way to renew the company.

Only few in 2014

Currently happening …

But also in Finland

Innovation is a must … but not all companies do it

Company can stand still During time Competition, Price erosion hitsPossible to survive longer by cutting and doing cost

savings

Company can buy other (small) companies i.e. Ideas and renew and grow

Innovate internally and grow

One thing is to find innovations, but then if you do, how to keep them alive in a big corporation?

Real stories that I have heard

”Go and experiment innovations with your team” – but Company does not even support the team to create the business model

”In our industry area everything has been invented, only 2% improvement to motors yearly”

Heard on 4th of November: ”yes this is so important that we need to meet immediately mid-January” the sense of urgency.

”After a successful internal start-up -> one SVP declares that that is his business, actually”

Practical observationsStart-up

+idea brings life into the operations, very hectic very high beat, often very good team

- surprisingly much of the CEO time is spent to get funding

+potential rewards are big, on exiting

- Most start-ups fail

+ speed of execution. US start-up starts sales in 48 hours after the start

-there is no-one to turn to. You are yourself IT, F&C, facilities etc expert

Big Corporate

+ sure paycheck and financing run

+ legal, F&C, IT etc support functions

- Internal start-ups not on top mgmt radar screen

-Too often the ”We value innovations” is not walked the talk – same time funding cuts

- Corporate clock ticks slowly

How to do it?

Integrate Internal innovations/ start-ups as a part of normal corporate gearbox, but lesser burden

If the innovation succeeds, team lead is the VP of the new business.

Adjust the soft matters accordingly i.e. Management bonuses,culture, reporting etc.

Top mgmt must use it’s time with the team

Team reward with options? Or cash? Or position?

How to do it?

Hard factors

Soft factors

Tools and reports, IT systems

Part of the Compary ”standard operations”

Not all details are known yet – we will start 2015 a project with some guinea pig companies and start driving this forward.

Contact me if you are interested.