GELLIFY has released a path-breaking report on venture-building “9 TYPES OF CORPORATE INNOVATION VEHICLES: HOW TO DRIVE INNOVATION”.
Innovation practitioners are familiar with the concepts of innovation labs, R&D centres, corporate VC, Venture builders, etc. Although these all work in different ways, they have one thing in common: they all are organisational structures with the aim of driving innovation. However, the “innovation vocabulary” is still missing a word that brings all of these under a single umbrella label. GELLIFY aims to change that by popularising the term “innovation vehicles”.
The newly released report also provides a comparative insight into the venture-building and innovation landscape of the 90s and today, illustrating how corporates’ legacy approach to innovation worked in stable environments versus what types of “innovation vehicles” are needed by the corporates to thrive today.
According to Statista, the S&P 500 companies’ lifespan in the 80s was over 40 years which meant less pressure to innovate and traditional methods of innovation – which GELLIFY classified as four – “old school vehicles” typically comprised of M&As, joint ventures, R&D/tech labs, and internal innovation (processes & tools) were enough to keep up with the competition.
While today, corporates do operate and adapt to markets with low entry barriers, fast changing technologies, and more customer power, they also need to adopt faster and more agile ways to innovate, via what GELLIFY terms ‘modern innovation’ vehicles, in order to avoid being disrupted, especially as the average age of a company listed on the S&P 500 has now fallen to less than 20 years.
“20 years ago, innovation was mainly an R&D game in scientific fields, businesses were changing by a very rational re-engineering process, often driven by the intent to adopt existing best practices in years’ time. Today, innovation is a creative exercise that has become a continuous process of inventing new ways of working and disruptive business models, to beat the competitors, in months!” – says Massimo Cannizzo, CEO & Co-Founder at GELLIFY Middle East.
This can be enabled by setting up “new” innovation vehicles, what GELLIFY classifies as “organisational entities that manage and execute different types of innovation with purpose and structure”, as the old vehicles already have a more defined structure, while for the new ones, this does not always happen. This will allow corporate innovation to be focused, clear, repeatable, and measurable.
Each innovation vehicle is a permanent unit (e.g., it is not a project or task force) and has a specific set of objectives, a dedicated team, funding, etc. An innovation vehicle goes through a process where each characteristic of the vehicle is carefully designed, depending on several factors, such as resources, existing culture, and corporate objectives. These entities can be more or less tied to the core business ‘mothership’: in terms of culture, physical location, funding, legal structure, etc.
Without a well-defined innovation vehicle, a corporate entity risks falling into the trap of the 4 innovation sins and of the ‘innovation theater’, namely: lack of structure, lack of strategy and purpose, poor execution, and lack of innovation culture.
Most importantly, we must not forget that corporate Innovation is a journey. The destination of the company, goals, path, pace, background etc. could suggest different vehicles for different journeys. Creating an innovation vehicle that is efficient and perfectly suits the needs of the corporate is not immediate and does not have to be the “Rolls-Royce”, but building & launching a vehicle quickly and refining it over time is the right approach to success.
