Giving corporate innovation a jolt

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Armin Prommersberger

Contributor

Armin Prommersberger is senior vice president, Technology — Lifestyle Audio Division, HARMAN International.

Today’s competitive business world demands innovation. Corporations need to innovate to inspire, compete and survive. However, the burden of innovation has largely rested on startups. Large corporations and established businesses are expected to out-think their rivals, but more often we see that they rely on minor product updates or acquisitions in place of home-grown innovation.

Startups are moving too fast these days for a complacent strategy to be enough. No longer can companies and business leaders rely on slow-moving corporate or product strategies to withstand the attack from disruptive upstarts. Corporations need to take a hard look at the challenging business landscape that surrounds them, identify internal weaknesses and create action plans to truly innovate and empower employees with the right tools to deliver success.

The challenge

“Disruption” and “exponential” are some of the most commonly used buzzwords. Now combine them with “corporation” and it becomes quite a conundrum. Sometimes it feels like they are natural enemies. On one side, you have entrepreneurs and disruptive minds who want to tackle a situation from a completely different perspective and create something unseen for a desire formerly unknown. And on the other side, you find well-known corporations with established business models, five-year sales plans and processes tailored for incremental product improvements to avoid scaring off a loyal customer base.

Broadcast television is a prime example of an industry struggling with this paradox of desire for innovation versus incremental development. Until a few years ago, we looked primarily to broadcast networks and channels to find interesting content. Though media networks continued to introduce new material for consumption, their mode of delivery remained stagnant. Audiences seemed satisfied, given that no greater options were even presented, throttling any need for innovation. Change was introduced when consumers started using their mobile devices as second screens while watching TV. This set the barrier of entry considerably low for outsiders with business models that could further appeal to consumers.

Over-the-Top (or OTT) entrants such as YouTube, Netflix and Hulu deliver content via the internet in an inventive and affordable format, without requiring users to subscribe to a traditional cable or satellite TV service. And now, after initially creating additional subscriptions, they have started eating into cable’s subscription base.

OTT services offer value with greater flexibility and personalization, which leads to disruption, not only for the broadcasters but eventually to anyone using traditional TV as a channel to address target customers. We are still awaiting a significant effort by the “disrupted” parties to deal with this challenge, but Comcast and Netflix may soon embrace the convergence.

The need to spur innovation

Too many industries keep slowly “evolving” a product or service in search of perfection, as opposed to going out on a limb to develop something truly revolutionary. Although iterations and 2.0 products are important, making mere updates the norm could be a fatal mistake.

Innovation doesn’t ask us to reinvent the wheel — it asks us to create something better. Real innovation is challenging, and having a great idea alone is not enough — finding the right way to execute innovation requires a tremendous amount of R&D, capital and collaboration. What’s even harder is that organizations looking to break through the mold of iteration must embrace risk. And this is where creative strategy can make all the difference.

For example, Google doesn’t rely on one innovation strategy, it deploys several to weave an innovation ecosystem. Just within the artificial intelligence realm, Google routinely acquires early-stage startups, actively partners with the scientific community, funds more than 250 academic research projects per year and invites about 30 top scholars to spend sabbaticals at Google every year.

A few of these scientists were interested in a new brand of artificial intelligence, called deep learning, and decided to work on their project at Google X, the company’s internal incubator. The result of this work was an actual product that became its first-generation machine learning system, and was incorporated into various Google products like Google Maps, Google Translate and YouTube. The team working on this project has now grown to 100 researchers, and they have built more advanced innovations with real applications — like making Google voice search faster and more accurate.

Filling the gaps

Most of us remember when innovation was a matter of small and dedicated R&D departments, top-notch specialists who were kept in isolation and asked to think about what the world needs. The digital age begged for a better model, as we quickly realized that innovation can’t exist, let alone flourish, in a vacuum.

Today, it is essential to develop an internal infrastructure to foster and implement innovation without sacrificing an established consumer base of relevant size, unless your moonshot idea is so transformative that it instantly replaces your old income stream with a new one — but that is not what we are talking about here.

The digital domain can help drive this progress. Crowdfunding platforms can be a powerful tool, even stronger in combination with crowdsourcing. Organizations should look inward and enable staff to effectively brainstorm concepts embracing social network best practices of collaboration. An intrapreneurial program that offers motivated employees the platform and resources to innovate can also be a great option, like Adobe’s Kickbox and LinkedIn’s Incubator initiatives.

In the age of information with a looming successor — the age of user experience — companies can quickly and easily curate an internal infrastructure to establish an innovation-friendly environment that provides a pipeline of potential products and ideas while mitigating risk.

But a company doesn’t just have to look internally for innovation; external options also can be leveraged. One route is through investment, which is used by companies like Intel Capital to fund early-stage startups using direct corporate investments. Partnering with external accelerators or incubators is another option, and there are many doing interesting work in this space, like Singularity University, Runway, 500 Startups and Betaworks.

Think also about where the action is, e.g. hackathons. Tapping into developer communities and external knowledge pools provides additional resources. Partnering with startups or universities offers the ability to fill gaps in any organization’s established infrastructure, with the benefit of a targeted investment and faster time-to-market compared to building internally from the ground up.

But be aware: The concept of partnering with another organization for development and manufacturing can be unsettling — especially within heavily competitive industries. The biggest threat in collaboration is the slow death of a project due to the everlasting “Not-Invented-Here” syndrome.

Another excellent way, especially when dealing with multi-disciplinary products, is to transfer engineering processes into the virtual domain, starting with multi-physical simulations to reduce the need for physical prototypes. This eventually creates a holistic virtual engineering environment that enables collaboration, breaking location and time-zone barriers.

Mastering execution

Beyond all the tools, methods and processes we use to improve innovation in our organizations, execution is still the key. Focused execution and cutting-edge innovation are complementary. True innovation is an idea that becomes a successful product or implementation. This means you need to bring together a group of team players and individualists, subject matter specialists and system designers, technologists and product thinkers… you need to build a “strange team.” Dan Cable from London Business School summarizes it nicely in his latest book, Change to Strange: Create a Great Organization by Building a Strange Workforce.

These teams don’t only consist of internal team members. We recently partnered with Under Armour to provide athletes additional tools to work with as they train. The set target was to reduce the complexity of training gear by jointly developing highly accurate heart-rate sensing in ear headphones. This was not a licensing deal — but an innovation collaboration in its purest sense, and with Kevin Plank’s key talents involved throughout the full ideation, development and testing cycles. Either could have tackled such a project independently, but both parties concluded it would be better to take on a partner with experience in the space, alleviating risk, to develop the envisioned product. This innovation on Under Armour’s part now helps them extend the brand to our loyal consumers, and vice versa.

These moments are transformational as you realize that innovation doesn’t have to stop at the company, customer or product level — innovation should be extended to all stakeholders and transform your company culture.

A call for change

One thing is fundamental though; the right to fail in innovation is healthy. If you provide your teams the opportunity to take risk, it induces excitement and motivation, but also helps create tangible results from people that feel accountable and want to deliver against all odds. Any of these steps can mitigate a considerable amount of the cost and risk attributed to successful innovation, because it is calculated risk distribution over a variety of work streams. Innovation can be truly ignited with a multi-layered approach — increasing focus and investment in R&D, collaborating with best-in-class organizations and pursuing strategic acquisitions.

Though in recent years, iteration has become the new norm in corporations across industries, with innovative concepts being blocked in favor of steady profits from marginal upgrades. Innovation has become a task for startups, but there is nothing stopping an organization of any size from making use of all the tools out there to change this perception and behavior immediately.

Let’s be fair; knowing what you can do is one thing, implementing is another — so keep trying new ways to foster innovation.

Some attempts will fail, and some will be less efficient than others. But understand this: Innovation is not a function of engineering only, but a matter of culture.

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