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Part 3: Building an Innovation Supply Chain

Capturing more value from your innovation ecosystem.

calendar icon August 26, 2019

With today’s post we wrap up this 3-part blog series where we’ve covered best practices for managing the innovation supply chain. Insights were drawn from a workshop focused on understanding what high functioning innovation teams look like — part of the Innovation Leader Field Study in San Francisco, where over 60 innovation practitioners participated. 

We’ve been using the supply chain metaphor as a way to describe the three domains that we believe are essential to building effective external ecosystems:

  • The internal network – the executives and business units that create demand for innovation in the enterprise (Part 1);
  • The external network – startups, VCs, accelerators, universities, and other partners  that supply the emerging technology solutions to meet enterprise demands (Part 2);
  • The innovation team – the people, processes, and activities used to discover, optimize, and align the needs of the organization with the supply of new technology in the market – which we’ll cover in today’s blog.

Learning and Insights: The Innovation Team

The innovation team within an enterprise is broadly responsible for setting an innovation strategy, scouting best-fit innovation partnerships, and raising the innovation IQ of the organization. Innovation teams are at the nexus point of two very different (and equally complex) worlds – the fast-moving world of startups, VCs, and accelerators as well as the internal network of innovation “consumers.” These two networks often operate at a vastly different pace.

Each of the workshop participants represented an innovation function within their organizations, which were at varied stages of maturity. Many were getting their programs off the ground, while others had years of experience from which to draw. Thanks to this diversity of perspectives, we were able to capture a solid look at which practices and tools were working – and which were not – in building and managing an effective innovation program.

Best practices

The biggest challenge identified by the group was how to coordinate innovation efforts across different parts of the organization. More companies are working to create a “culture of innovation,” in which everyone is encouraged to adopt an innovation mindset around discovering new technologies and experimenting with new products and solutions. With this comes the risk of duplication and lack of transparency. “We had two teams working with the same startup on similar pilot projects without even knowing it,” said one workshop participant. This redundancy can waste time and resources.

We asked the group to break the work of an innovation team into five areas, and then to identify the practice or tool that is having the most significant positive impact in their organizations:

1. Process

In a culture of innovation, multiple teams are often working with external partners to solve problems specific to an initiative or a business unit.  However, without company-wide processes in place for tapping into the broader startup ecosystem, innovation efforts can stumble. A clear and transparent process helps every team member measurably understand their responsibilities, and holds them accountable to the same purpose. It also ensures that team members know how to respond and resolve redundancies, such as when two separate initiatives conflict with each other at a company level.

Top practice: Create a framework for partnership. Define clear ground rules that business units and innovation teams can use when working with outside startups, VCs, accelerators, or universities to simplify the path to collaboration and accelerate co-innovation discovery and prototyping.

2. Tactics and Activities

For innovation teams working to scale innovation, the biggest hurdle is often managing the flow of conversations and activities within an extensive network of partners – both internal and external. Teams are drowning in data, and managing an overwhelming volume of communications. It’s hard to stay on top of what’s happening in the market while attempting to manage large numbers of active innovation projects. Our workshop participants were all working on improving the ways groups, and teams of all sizes, work together to achieve shared goals.

Top practice: Define open values. In a culture of innovation, ideas flow freely, and leaders reward “fast failure.” In this fluid and fast-moving environment, openness improves collaboration by aligning partners (internal and external) with shared goals. Transparency makes it easier for team members to clearly see connections between their activities and the organization’s overarching innovation vision.

3. Research and Signal Gathering

Workshop participants spend a significant portion of their workweek conducting market research and keeping current on what’s happening in their networks. Most innovation teams are responsible for sharing data about market and customer trends, potential external partners, and emerging technologies with internal stakeholders. The goal is to create actionable intelligence that executives and business units can use to innovate faster and more efficiently.

Top practice: Social media review. Our workshop participants favor social media tracking as a way to tap into customer sentiment, validate a potential partner’s “social credibility” or keep in touch with the ideas of thought leaders and influencers.

4. Networking

Building the right network is key to the success of innovation team members. In Part 1, we captured the idea that a customer-driven mindset is essential for innovation teams within the enterprise. By understanding the goals and needs of internal stakeholders, innovation teams are more effective in matching innovation supply with demand in their organizations. The truth is: innovation is all about solving problems. Finding solutions to complex problems is best accomplished by people who see themselves as knowledge brokers.

Top practice: Embedded teams. When embedded into day-to-day activities of the organization as well as the larger ecosystem, innovation team members become knowledge brokers — able to contribute that critical insight or connection when needed. Effective communications, shared goals, and continuous information sharing are all critical skills for innovation team members seeking to embed themselves into  internal and external networks.

Key Take-aways

We appreciate the work of 60+ innovation practitioners who contributed their ideas and insights, and to Innovation Leader for hosting our workshop. We learned that today’s innovation teams are actively focusing on three interrelated practices:

  • Developing a deep understanding of the business, and where to best align innovation with operational and strategic goals;
  • Building a healthy innovation pipeline by mapping externally sourced ideas and technologies to the needs of the business;
  • Creating internal frameworks to track and manage the flow of innovation across the company openly and responsively.

The field of innovation is continually evolving. It’s been enlightening to ask in-the-trenches innovation professionals what they are doing to improve the impact of their innovation programs and to get a snapshot of what’s working today.