Markets change fast – new consumer and business needs appear every day across all sectors. The startups, once unknown to anyone, become serious competitors to the players who have been on the market for decades. They do it by offering better and more innovative products no one could think of before and penetrating their market niche at a high speed. Some of them manage to do it without a big investment, by raising capital in a smart way.
For most successful startups, the cost of developing a website to showcase their product is no longer an issue – they can quickly prototype a landing page at a low cost, show it to potential customers, collect feedback, and come up with a great product that the market wants to buy. Can corporations do the same?
It took Hilton over 90 years to scale to 610,000 rooms in 88 countries, while Airbnb outpaced them (650,000 rooms and 192 countries) in just 4 years. Another example is Kodak that decided to stick to analogue cameras. Concerned of the fact that the market adoption of digital cameras would take too long, they procrastinated innovation while focussing on an established business model; and eventually lost the game to digital cameras.
These examples teach us a good lesson – innovation is irreversible and business models that once were profitable can no longer work under a different time, market situation, and with new (often indirect) competitors.
For corporations, It’s important to keep an eye on the change, identify problems and solutions fast, and introduce the right innovation at the right time – all this not only to keep a solid position on the market, but also continue growing by identifying new revenue streams.
In this article, we want to give you a better understanding of how corporate innovation works, how a corporate accelerator can help bring innovation forward in your organization, and their benefits. So what exactly is corporate innovation?
What is corporate innovation?
You can think of corporate innovation as the process of large enterprises plugging in new innovation opportunities into existing business models. Usually, corporations pull together a dedicated team responsible for introducing innovative ideas internally. They are called innovation teams.
These teams work on introducing proof of concept (POC) and pilots – within a research and development (R&D) unit or by working with corporate accelerators. They carefully examine the new challenges their market faces, using market research tools and utilizing a customer feedback system.
Innovation teams are just one of the examples of how corporate innovation can work. There are various models corporations can choose from – they fit in the two main categories of innovation accelerators.
Two types of innovation accelerators
You can boost corporate innovation in different ways and use different tools for it. That’s why it’s so important to understand the subtle differences among those from the very start.
1) External accelerators (startup accelerators)
Corporations are using various tools to recruit top talent at scale. However, the men of the future who bring innovation forward usually prefer a startup environment where they can test their brave ideas instead of a corporate setting. With external accelerators, corporations can engage startups to work on business concepts with support and coaching from the accelerator. For example, they can give advice on go-to-market strategy, B2B marketing strategies, or lead generation tips.
Startups have a certain amount of time to perform their projects and come up with some results. The reward for a successful project implementation is getting equity in return. Y combinator can serve as an example of an external accelerator. Usually, a startup applies to enroll for the program and there is a competition aspect involved.
Driving innovation through external accelerators opens the door to attracting startup talent and utilizing its potential to solve corporate challenges.
2) Internal accelerators (corporate accelerators)
The acceleration programs run internally engage the human resources that a corporation already has – its employees. Unlike, by engaging startups through external accelerators, internal innovation teams work on building innovation capabilities within the corporation. They usually use various tools and tactics such as visual collaboration techniques to conceptualize their hypothesis about market needs and come up with a way to validate it. Google Ventures is a good example of this type of innovation accelerator.
The goal of corporate teams is identifying the scope of market problems related to the corporation's market focus and offering. By working on defining market problems and solutions, innovation teams are able to come up with some solid research to support a launch of a new product or a better and a more efficient process that brings value for the company. These teams usually work at high speed and urgency.
In this article, we are going to talk about how you can benefit from using internal accelerators (corporate accelerators).
6 Ways Corporate Accelerators Boost Innovation
So what’s in it for you? We have covered some of the benefits corporate accelerators can bring for your company. Let’s have a quick look.
1. Become more adaptable
The world had been changing at an enormous pace for the last two decades – camera phones, Bluetooth, USBs, and two major social networks – YouTube and Facebook – appeared in the beginning of 21st century.
It seems that the pace of change is not about to slow down. From corporations, it requires building the skills to adapt to ever-changing market dynamics, new competitors that pop up like mushrooms, or shifting consumer preferences and tastes.
Corporate accelerators can help introduce the culture of innovation and digital transformation to an established company. Your internal teams can work on identifying new market trends and respond to them by building an improved product or a solution from scratch.
By giving innovation units an important part to play in your organization, you will avoid the fate of Kodak and set a solid foundation for future growth.
2. Gain speed and momentum
By building cross-functional innovation teams within your organization, you can achieve a similar velocity of introducing innovation to the one startups have. Corporate accelerators are not bogged down in long cycles of approvals and procedures, they offer more freedom to experiment and, as a result, there are more chances for innovation to emerge and prove itself valid to introduce on a larger scale. Innovation team can quickly build and validate concepts.
Thanks to the available tools facilitating idea validation, you can avoid risky investment. By using the tools startups use such as team canvas, go-to market road maps, or business model canvas, your team can find out if the business concept makes sense and if people will be willing to pay for a solution. With the right tools and processes, innovation teams are able to bring new products to markets fast.
3. Meet consumer needs better
Within a corporate accelerator, you can scope and explore problems your market is dealing with and ideate solutions to answer those problems better. Let’s take the mobility market as an example. When some market problems are effectively dealt with – for example, through ride-hailing apps, some other problems appear – people still spend a lot of time commuting.
The expansion of Bird, an electric rental scooter company, is a good example of the disruption in the mobility market that dealt with this new challenge better than Uber or Lyft. e-Scooters have reduced people’s reliance on cars (both private rides and ride-hailing), especially at the peak hours, and made it more convenient and faster to move from point A to point B.
The appearance of micro-mobility startups such as Bird shows that there is a place for innovation even in one of the most competitive sectors such as mobility. Should corporate companies such as Ford or Fiat have noticed the potential for such disruption in their sector early enough, they could be another Bird taking a big chunk of a micro-mobility market and generating a new revenue stream.
4. Thinking beyond target market
Your business challenges and competitors can change over time as the world is changing extremely fast. By introducing innovation with the help of a corporate accelerator, you can focus on identifying future trends you can face in just a couple of years from now and learn about your indirect competitors who might take a chunk of your core market. For example, Amazon is examining the possibility of delivering packages by drones (instead of regular delivery) or Uber is investing in self-driving cars.
Thanks to corporate accelerators, you can start thinking out of the box and see the things, processes, changing market dynamics you would not normally recognize when focussed on your current goals, competitors, and market.
5. Attract fresh talent
Young talent looking to work for a company nurturing creativity, offering a space for brave ideas, and a lot of freedom and ownership might not consider corporations as their next employer. This is because they can perceive corporations as organizations with a strict set of processes, procedures, and defined structure – a conservative setting that doesn’t welcome brave ideas and ownership.
By introducing innovation labs, corporations can attract the talent which startups usually attract. With corporate accelerators, you create an image of a forward-looking company where there is a space for brave ideas and new ways of thinking.
6. Grow your business
Within corporate accelerators, innovation teams can come up with new innovative products and services achieving product-market fit within a short span of time. As a result, you can expect better financial outcomes – you can find more efficient ways to deliver your product and serve more customers at the same time.
For example, now, consumers don’t think of shops as only a brick-and-mortar shop – they want to shop online as well. For retail giants, enhancing their presence online, offering a faster delivery, and better customer support, has resulted in an untapped opportunity to reach many more customers worldwide and overcome the limits of a local brick-and-mortar shop.
While online shopping is nothing new now – the first eCommerce business that was launched in 1982 was a genuine breakthrough that has revolutionized retail. The thing is its appearance coincided with the beginning of the Internet. Now, 4.9 billion people are using the Internet daily and the consumer behavior are much more different from the one 30 years ago. With new needs appearing, there is always a way to grow thanks to innovation brought forward at the right time and place.
7. Brand development
Being associated with new progressive ideas is beneficial for a corporation's brand image. Corporate accelerators can be perceived as new and shiny and, as a result, they get people to perceive the company as the one at the forefront of change and visionary. It all translates into a more positive perception of the company. Even though one can consider brand building as a side effect of corporate innovation, it’s important to keep this benefit in mind.
The market dynamics change fast – new market needs and competitors appear much faster than it was a few decades ago. By introducing internal innovation, your organization can keep up with the pace of change better, become more adaptable, efficient, and help break the misconception of a corporate environment as the one averse to change. By introducing a corporate accelerator within your company, you can establish the right processes to bring new products faster to the market and avoid risky investments. All this will result in faster growth and help you become a magnet for the best talent.
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