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DIY PODCAST
Design, Innovation & You
A-Z of Corporate Innovation
Vijay Rajendran, Head of Corporate Innovation, Ecosystems Group at 500 Startups
“Corporate innovation has evolved. We’ve transitioned from purely thinking about it from the inside, to the inside-out, and now to the outside-in.”
Have you ever thought of Investing in Corporate Innovation, but not quite sure if your organization is ready for that step just yet? Ever wonder why some corporates succeed at open Innovation with startups, while others struggle to achieve the same? Curious about what differentiates the two? We brought the very best to this podcast to discuss the fundamentals of corporate and open innovation with you.
Welcome to Design Innovation and you, a podcast for innovators, entrepreneurs and design enthusiasts looking to create a better tomorrow. I’m your host, Lavania Anaja, and this is an initiative by Kuglu. Have you thought of investing in corporate innovation but are not quite sure if your firm is ready for that step yet? Ever wondered why some corporations succeed at open innovation with startups while others struggle to achieve the same? Curious about what differentiates the two? Well, we brought on The Best of the Best to discuss the fundamentals of corporate innovation with you; please welcome Vijay Rajendran, Head of Corporate Innovation Ecosystems Group at 500 Startups.
Okay, awesome. So corporate innovation is something we’ve talked about for many years and has evolved considerably. So if you think about the origins and history of corporate invasion, it has its roots and invention, right? And we think of the Bell Labs of this world and firms like that and how that involves including new things, in particular design and the need to focus on customers, but increasingly on more open innovation as it’s being defined by folks like Henry Chesaper and described by others to now look increasingly outside the poor walls of the company. So we think about this continuum; we’ve gone from thinking about it from the inside to inside out to now outside in.
That is very exciting to hear. So, yeah, that’s great. To start us off, I think one question I had to follow up on is just what do you think the state of corporate innovation is currently? And further, why is it that some companies can innovate consistently, and some tend to fail.
So the state of corporate and innovation is pretty good. If you’re inside a corporation, you’re probably thinking about how hard it is to get things done, and things are complicated. But let’s take a step back and consider how many projects and new digital initiatives are executed. How many new products and services get built for customers, and how increasingly UX and UI are things that top management appreciates that they never had to before? It’s never been better. And that’s based on a few things. One is undoubtedly the confluence of something that happened over the last decade around mobile and cloud and increased access to the Internet. And what that did is it changed enormous consumer expectations. It also took consumer expectations and made them be to expectations. Because if it’s so easy for me to buy something on Amazon, why doesn’t my internal procurement work like that? Or why do our internal systems have to be so user-unfriendly? And so I think what that does is it causes a lot of corporate innovation, and that means not just doing new things, the new ways, so the disruptive stuff, but all of the essential incremental things that need to happen in the first horizon the following year where people are doing old things in two ways and sometimes doing some new things in old patterns that allow us to expand new markets to provide more valuable experiences and stuff like that.
And so, I know that’s particularly important to design the innovation community. The critical thing to recognize is that not all companies are equally successful. So why is it that some companies can innovate consistently? It’s not because they can get it right more often. It’s usually that they try more and more experiments. So quantity yields quality over time. In other words, if you are Amazon, and as they often talk about, do thousands of experiments a day in a given day, from small things like, okay, let’s move this thing here to over there in the warehouse, or change the direction we put a label on a package to big stuff like let’s build AWS, let’s put out a phone, let’s give people this black cylinder and have it listen to them in their homes. Many of these things, in fact, the vast majority of things, have probably been unsuccessful. Right. But a few of them are disproportionately successful. And that’s because we’re learning that the results of corporate innovation are that a few things pay off, and we have to accept a lot of failures.
Interesting. No, that makes a lot of sense. I think that was a perfect example. And that highlights the difference between how to be good at innovation and how not to. It’s like any other skill, and you have to build yourself up and get good at it.
Right, sure
Yeah. That’s great to hear. So I think my next question to you would be, what are some of the fundamental building blocks preconditions for innovation to happen?
Yeah. So one of the biggest things that are required is the senior-level commitment to change. Right. In so many places, it’s not that the execution is flawed or that people are sometimes looking at the right opportunity. It’s often one of the poor strategic intents, a lack of correct sponsorship, and saying that something matters. Today, 68% of top companies from the Forbes Global 500 are engaging with startups. Right, and that’s a tremendously high number. But there are essential activities that need to get executive sponsorships. So the CEO’s job is not just like the chief innovation officer or someone responsible for user experience or something like that. The CEO’s job is, can you convene innovative people around a challenge? A challenge? Not just saying, well, we need some AI around here, like really transforming things and giving people the tools and disproportionately rewarding people for taking risks and moving the needle. In terms of change, it isn’t linear, but it’s super important that the space exists for long-term change and for corporate innovation as a culture to develop. It doesn’t happen overnight, but you must create space for it to take shape.
Yeah, that makes so much sense. It’s funny because I was recently having a conversation for another podcast episode, talking about how important it is to cultivate a culture of innovation. Before you can actively think about strategies you want to take, you have to have an open mind.
That makes so much sense. I think my next question would be how many companies do the ideation or brainstorming ideas, like through collecting or session? So how does one raise the quality of submissions for these ideas or brainstorming ideas?
Yeah, I talked to many companies, and they brought us in. They want to speak to 500 startups, and because we’re a VC firm and we have relationships with corporates, they want to connect the startup ecosystem. And I said, well, where are you right now? We’re doing hackathons. And what’s coming out of those hackathons? Well, just a lot of ideas, but there’s no next. So many companies are doing creativity and brainstorming. There are a lot of sticky notes on the wall. The question is, again, do we convene people around a significant challenge? Does it matter? Or are these just like fanciful hackathons saying there’s something next? So there is a program for venture creation. There is a way for people to take 20% time and then maybe even turn it into a whole new kind of business or opportunity for the company. This can’t just be a neat little thing that we do to engage our millennial or maybe now Xenos-like staff. It has to have an absolute seriousness and an intent behind it. So once you signal that, I think that has a disproportionate effect on all these commissions.
The second thing I would add is not just why are we doing it? But I’m.
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Book a Table. Bring along a Team and a Business Challenge. Attend Design Thinking Masterclasses. Apply to your Business Challenge. Consult Design Thinking Coach.
{ Repeat, for 4 weeks}
Leave with insights and Solutions and Design Thinking skills. Starting on the 30th of September!
Action learning session dates for India:
Sessions: 1st October, 8th October, 15th October, 22nd October 2022. + weekly coach office hour
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