In 1995 a large study was initiated by IRI in the US in order to see how large companies ensured that breakthrough innovation could happen at their companies. The companies studied were really big ones such as IBM, 3M, DuPont, Air products, Johnson & Johnson and Shell International. In 2000 the first part results were revealed. In 2005 the next book came, Grabbing Lightning, and the material below is collected from that book. The message was roughly that out of the 12 companies studied, 12 different systems were found. A common denominator was however that the systems to a great extent relied on personal relationships, as the one between the CEO and the CTO of the company.
However, this was shown to be a quite vulnerable situation, because if either the CEO or the CTO would leave the position, the company’s whole innovation system would be out of order. Therefore 11 of the 12 of the companies shifted to a system where a semi-separated function was formed, an incubator, where breakthrough innovations could be developed. This type of organization is called ambidextrous.
The system was a 3-step system applicable in an Exploratory Way of working.
The names of the steps are 1. Discovery, 2. Incubation and 3. Acceleration.
The Discovery phase, as described by IRI, includes basic research, internal and external hunting (licensing, purchasing and investing) in an Open Innovation way. This phase is about fundamental knowledge and about opportunity generation and articulation, similar to what we do when framing Innovation Opportunities to tie initiatives to our agreed business goals. It is also of course about Insighting and ideation.
The Incubation phase includes technicalities, market learning (although in small scale) and market creation semi-separated from the ordinary line work. The word Incubator is also known as Hot House and means that you protect your initiative from unnecessary strain of norms and processes in the own company. These norms and processes, however necessary they are for normal line work, are not only irrelevant for breakthrough innovation but often harmful. The objective of incubation is to nurture the portfolio of opportunities identified in discovery that have uncertain outcomes, but immense possibilities for the market and the company. It is about trying things out well below the radar. This is to see that you get a Business Case and an offer that works technically.
The Acceleration phase includes focus, respond and invest. You need to focus on the customer segment that really has a need, not on a geographical region. What was found in the studies of companies, was that NONE of the initiatives succeeded when they were handed over as a business plan from the incubator to the operative part of the business!! What was thought of as a straightforward recipe for breakthrough success, it was all there obvious in the business plan, was received as something that was perceived as undoable and hence not wanted. The operative parts of the companies seemed to be designed mainly to maintain and hone already ongoing business. The moves of these initiatives were just made too early!
When we commercialize breakthrough initiatives from Incubators/Hot-houses we need to do this in a semi-separated way from everyday line business! Instead, form temporary, full time, cross-functional groups (incl. category + regional staff) capable to take the initiatives all the way out to lead-customers, albeit in small scale, and hence grow the incubator babies to adolescents before handover to become “business as usual”. If not –these venture babies may experience the industrial version to “Sudden infant death syndrome”.
Bengt Järrehult