What is Corporate Innovation and Why Does it Matter?
Dec 06 , 2016 | By Omar Hassan
The term ‘Corporate innovation’ is problematic.
Whilst it doesn’t contradict itself, it suggests a difference in definition between innovation in corporate organisations, and the innovation of other groups, such as startups.
Actually, whether you are a startup or a corporate brand, innovation is essentially the same thing- the profitable implementation of creative ideas.
That’s a simplistic, but none-the-less appropriate, definition. However, there are 2 terms which leave room for confusion here- creativity and profitability.
Creativity is not the same as innovation- after all you can be very creative without innovating in any sense of the word- but innovation cannot exist without creativity, with creative processes such as idea generation being a vital element of it.
Likewise, profitability can be misunderstood as an entirely financial outcome- but not all innovations lead directly to an increased profit, and an exclusively financial perspective can stand in the way of meaningful innovation.
With this in mind, the case is that valuable innovation in both startups and big businesses will deliver cost-saving or money-making benefits, regardless of whether this was their initial intention. For example, a new way of rewarding staff might not seem to hold any direct financial benefit, but given time, common sense would say that it may increase profits and therefore prove to be a valuable innovation.
Startup Innovation Vs Corporate Innovation
The major difference between corporate innovation, and that which might occur within a smaller business, is the scale on which it takes place. Large businesses need broad organisational innovation for anything meaningful to be achieved, whereas in startups this can usually take place freely on an individual or narrow level.
In recent years, the rise in innovative entrepreneurship has driven organisational innovation to the forefront of corporate discussions.
The creative spirit and simplistic organisational structure often seen in Startups, contrasts starkly with working cultures in larger businesses, and this has prompted many of them to take stock of their own day-to day-practices.
Progressive corporates have realised that the obstacles discussed require creative and unconventional solutions to overcome.
Working collaboratively with startups, not only brings an immediate injection of creativity, but can help to alter the organisational culture and create an environment where innovation can be more easily achieved. Entrepreneurial spirit, a sense of work ownership, and creative problem-solving are all things that can be nurtured within the workplace, and the presence of a startup can have a very positive impact.
But why is corporate innovation so important?
Looking at the business world as a whole, the need for creativity and innovation has always been obvious, but ‘corporate innovation’ as a distinct process has become an increasingly popular topic of discussion.
There is no doubt, that the world is becoming a more competitive place- and for few has this been more clearly demonstrated than large and well established businesses. The arrival of the ‘digital age’ has led to accelerated innovation, as new technologies have drastically, and even fundamentally, changed how the economy and businesses within it operate on a daily basis.
Such rapid change creates a favourable environment for emerging businesses to flourish, but perhaps less so for the corporate, with their long-established traditions and protocols, which can be an obstacle to change.
In addition, an ever more global economy means that challenges to market dominance, which usually came from regional competitors, now can approach from anywhere in the World, and often from newly developing countries, where local conditions have primed businesses to innovate at a rapid pace.
If a corporate is to maintain, and develop its place within this competitive landscape, they must be in a position to continually challenge what they do, from the most basic day-to-day operations to the very business model under which they operate.
Only those who accept and embrace the opportunity to innovate, will be able to withstand the pressures of a dramatically altered business landscape.
Inevert is a global innovation platform bridging the gap between ecosystems, feeding innovation by bringing startups and corporates together, all on one platform.