Source: BCG Analysis
More recently, corporations have also begun to experiment with other tools for sourcing innovation such as hackathons, start-up competitions and university partnerships to source innovation. Furthermore, recognizing the growing importance of innovation in light of the digital transformation of the enterprise, many corporations have also begun to formalize the role of Chief Innovation Officers (CINOs). I first came across the term Chief Innovation Officer in 1998 – coined by Miller and Morris. The European Institute for Creative Strategies and Innovation headed by Marc Giget conducted an extensive survey of 500 CINOs around the world and found that the role is not uniform and still evolving. The book “Innovation Intelligence” defines the roles as exploring new territories by leveraging innovation intelligence, ideation and experimentation.
At BGV, we have interacted with a wide variety of innovation functions within large enterprises and can confirm Marc Giget’s observation that the actual CINO role varies widely across companies, sectors and regions. In some firms, the role is to bring new ideas to market; in other firms it is to create a culture of innovation rather than creating innovation. We believe that the role of a CINO has to be company situation specific. In some cases, it may be appropriate to look inside the company for innovation by incentivizing employees to think about and contribute ideas for innovation. In other cases, it may make more sense to look outside to the start up eco-system to bring in innovation ideas and the value of start-up behaviors by establishing outposts and relationships in Silicon Valley. There is no one right answer.
While the number of tools for sourcing innovation have grown significantly beyond corporate venturing, it is easy to get lost in the “hype” of the CINO function, the plethora of tools and best practices being offered today in the form of round table retreats, executive visits to accelerators and/or courses offered by Universities. At BGV, we believe that in order to establish a successful CINO-led innovation program corporations need to go “back to the basics”. What does “going back to the basics” mean in this context ? In part two of my blog next week, I will elaborate on what this entails.
Anik Bose General Partner at BGV shares his perspective on the Innovation challenge for Corporations in this first of a two-part blog.
When I was the executive responsible for innovation at 3Com (as SVP Corporate Development) in the late 1990’s my team and I relied on 3Com Ventures as the primary vehicle to source innovation. This was consistent with the innovation practices of many other large corporations such as Intel, Cisco, Qualcomm, Salesforce, GE and Samsung.
Over the past ten years there has been a sea change in the sources of innovation with the rise of modern-day accelerators and incubators such as Y-Combinator, Techstars etc. To take advantage of these new vehicles, many corporations have also launched their own accelerators independently or in partnership with other VC firms – the most notable examples being in Israel with IBM, Microsoft, Citi, AOL and many others. The data in the chart below highlights these trends.