New ventures power corporate growth. Firms as diverse as Philips, Johnson & Johnson, and Pearson owe much of their recent success to relatively new business offerings. Yet companies often do not establish programs to nurture innovation broadly in the organization, and they often struggle to sustain a narrower focus on new growth platforms. Innovation capabilities can be difficult to create, and corporate incubation is hard.
New Markets Advisors has extensive experience in helping companies build their innovation capabilities and develop successful corporate incubators. We have firsthand understanding of the many obstacles that new ventures confront: vague strategic direction, narrow bases of political support, shifting mandates, unclear governance, unrealistic expectations, poorly-defined processes for “graduating” ventures, and sub-optimal staffing, to name just a few. We have worked through these challenges to establish a successful track record.
To build broad innovation capabilities in a company, we first help clients establish the strategic context: what sorts of innovations are most critical to commercialize, and what is off-the-table? We then audit a company’s innovation capabilities, assessing how the firm pursues different types of innovation, where the company falls short against benchmarks, and what that might mean in light of strategic imperatives. This perspective underlies the design of a program that might encompass elements such as training, tools, collaboration mechanisms, and process development.
To assist corporate incubators in nurturing a handful of high potential initiatives, we help with both projects and institutional development. We know that “intrapreneurs” who lead corporate incubators often face a firehose of tasks directed their way. When new businesses or joint ventures are in their early stages, the day never seems long enough. It is tempting for the intrapreneur to de-prioritize laying the infrastructure of an incubator in this period – processes for concept development, governance mechanisms, explicit ways in which the unit will function differently from the core business, and so on. However, the lack of these underpinnings is often the source of major problems as incubators mature.
Across both innovation capability and incubator projects, New Markets helps firms create the basis of sustained success while simultaneously building ventures. We assist in developing:
- Clear mandates for innovation, linked to resourcing and portfolio plans
- Strategic “investment theses” that direct where efforts are concentrated
- Processses for creating truly innovative ideas and nurturing them to resist corporate antibodies
- Plans to staff incubators with the right mix of people
- Training for staff in innovation methodologies
- Governance that balances autonomy with necessary linkages to the firm’s core business
- Metrics for success
We believe that there is no single formula to develop successful innovation programs and incubators. The design must fit a company’s operational and strategic circumstances. However there are archetypes of these circumstances, and we are well practiced at helping clients to chose among options that fit their specific situation.
We will not develop process manuals that sit on a shelf, never to be used. There is no substitute for making a process real through using it on actual projects. We have long experience in corporate venturing – as consultants and on the client’s side of the table – and we work with firms intensively or in a light-touch mode as growth ventures percolate through the broad company or the incubator to build momentum.
For more of our thinking on innovation capabilities and corporate incubators, please complete our short form. We would be happy to send you the chapter on this subject from our book Capturing New Markets: How Smart Companies Create Opportunities Others Don't, named one of the five Best Business Books of 2011.