Since the late 90’s, I have been engaged with corporations consulting on their corporate innovation strategy. For some corporations (3M, BASF, Cisco, Google, etc) innovation is clearly a core competency. For others, it is not.
In tough economic times, I’d see corporations essentially “throw the baby out with the bath water.” They shut down all of their focused innovation activities and moved the efforts into the respective business units, mostly buried into the business unit with the highest margin performance. The CFO is no longer just an influencer in these decisions, but rather the decision-maker. They decide to cut costs AND distractions to focus on the core business.
We are officially at the end of a 10-year bull market. So for those in the high margin business units now: beware of your CEO bearing gifts.
This approach I’ve described is pragmatic. However, it operates under the assumption that, for the last 5+ years, all the innovation investment activities have yielded nothing.
Let’s try something different this cycle.
Assess: Take a look at where you have spent budget during this innovation journey. Organize by expenses that went into internal innovation, external innovation, marketing, and startup investing. Really assess the viability of your teams on whether they would be successful in your organization or elsewhere. Review all special projects in a granular way to check the percentage complete. Bottom line: you invested a lot of money. What did you get for it?
Plan: Create a transition plan. Reach out to venture capital firms that purchase IP from corporations (we do not, but we “know a guy”). You can broker conversations with startups that may value the IP. With a startup, you may not get cash, but you will get equity. There could also be opportunities for joint ventures. A lot of moves can be made here. I think I have done them all, including selling a product team based on their talent and galvanized team dynamic and not the product.
Act: Act fast. IP, teams, and products have a shelf life. Move quickly, and you can wrap this up in 60 days flat. Imagine telling your CFO that you were not only able to recoup your innovation investments, but that you actually made a return.
Questions? Let me know.