Innovation Insights explores how global organizations are taking novel approaches to manage innovation. In this article series, we delve into the key areas of the modern innovation process, look at the trends shaping the future of business, and give organizations an understanding of what it takes to run a successful innovation program.
As the global technology market has become increasingly diversified and fragmented, staying on top of emerging technologies and innovations needs to be a top strategic focus for corporations. How are companies at the forefront of innovation managing the often challenging task of sourcing startups with viable solutions? And, how do they manage validating innovations?
In this chapter of Innovation Insights: A Guide to Managing your Innovation Process, we give you an understanding of how to develop a foolproof innovation scouting program.
The Startup Innovation Landscape
From the 90s to the early noughties, a global tech phenomenon was taking place. The World Wide Web had entered into public discourse and quickly entrepreneurs were seeing ripe opportunities to capitalize on this shiny new technology. The rapid emergence of internet-based companies led to the widespread adoption of the term ‘startup’. Whilst this was a term that could be traced back to the post-war era, it was within this particular time period that startups made their way into popular business rhetoric.
Since then, startups have emerged at the forefront of the global innovation landscape. The modern startup ecosystem is an expansive and highly profitable fragment of the business market. Globally, startups generate almost $3 trillion in value. Astoundingly, this is a number equal to the GDP of a G7 country.
Startups are in a unique position to foster innovation at a rapid pace due to their agile working models. More and more well-established organizations are recognizing the value their technologies bring. Today, sourcing external technologies and finding startups to partner with or acquire has become an incredibly important strategic approach for established organizations that are keen to explore opportunities to foster innovation.
However, due to the large size of the startup ecosystem and the rapid pace at which new technologies emerge, companies often find it challenging to identify startups that represent a good fit for their business. In today's ever-changing marketplace, companies must engage in a coordinated and vetted innovation scouting process to assist them in finding external solutions to meet internal needs, enabling them to effectively identify market trends and opportunities to stay competitive.
Managing your innovation scouting program
Innovation teams often grapple with the best approach to manage their innovation scouting programs. A myriad of questions come to mind: how do we define our objectives? How will we reach global startups? How do we best evaluate these startups? And, importantly, how do we integrate startup innovation into our organization?
Ivan Cazzol, Head of Innovation at SkipsoLabs, works with leading organizations that are fostering innovation on a global scale. We asked him to breakdown the core steps innovative companies take to manage innovation scouting programs that produce real results:
Map your weakness
For most organizations, the process of innovation scouting begins from the same starting point; by identifying areas for improvement. While some organizations have a well-defined process to identify yearly innovation objectives, others identify ad-hoc issues within their operations, processes, products, or services and recognize the need for innovation to improve these functions. To ensure you have a comprehensive overview of areas to improve, remember to engage frontline workers in the process. In this way, you can match the views of top management with the perspectives of your workforce.
Now look at Identifying innovation trends:
In the next step of the innovation scouting process, the Innovation team begins an exploratory phase to acquire knowledge about innovation trends in specific areas. The team does an extensive search to find reports, articles, interviews, new startups, incubators, and accelerators, to understand what are the latest innovation and technology trends that have the potential to influence and change industries.
Define your key focus areas:
With a clear understanding of an organization's core areas for improvement, innovation teams can start to prioritize them based on forecasted impact. An organization can pinpoint the main focus areas based on their strategy. The focus areas are very specific topics that are related to general areas of business. Remember to focus on what results you want to achieve and not how.
Launch your call for Innovation (with a great platform like SkipsoLabs!) :
The call for innovation is the path through which organizations seek to identify solutions to address their focus areas. The focus areas give startups a framework from which to apply for open calls. Innovation teams engage in marketing activities and one-on-one scouting activities to bring startups to the call. By running an open call for innovation, corporates have an opportunity to uncover new ideas and solutions that have the potential to completely disrupt their industries.
Engage the innovation committee in startup assessments and evaluations:
The innovation team, supported by experts from different business units, works with startups on an individual basis to determine whether their solutions would deliver value to the organization. As part of the selection phase, company executives evaluate each startup's strategy and determine whether its solutions fit into its business model. During this final stage organizations will also have the opportunity to assess what they can provide to the startups to help accelerate their growth.
Bring on the Co-design phase!
The startups evaluated with high priority and high Impact are chosen to participate in a co-design process with the organization. Co-design aims to define a shared partnership scenario between startup and company and to develop a proof of concept plan to validate the opportunity. At this stage, companies evaluate not only the feasibility of technologies but also the improvement.
Continue fostering Innovation:
Upon completing the co-design phase, the innovation team presents a concrete plan for aligning the partnership, budget resources, timeline, etc. between the startup and the company, to integrate the startups and to achieve and sustain real impact.
Companies that are caught up in stagnant processes and procedures are often unable to keep up with rapid developments in technology and innovation. As a result of their agile working models, startups can overcome many of the challenges corporations face daily when it comes to developing innovative ideas.
Through the strategic process of technology scouting and running open calls for innovation, corporations have an opportunity to accelerate innovation by looking for external innovators and startups which can complement their business offerings. Through this process corporates can discover new startups that are developing technologies or new products and services that are still undiscovered in the market, offering companies a serious edge above their competition.