According to the latest research, 131 large corporations currently operate their own accelerator programs. Another hundred or more operate innovation labs and incubators. Clearly, companies are researching and experimenting with new technologies to find faster, more intuitive and smarter ways to beat the competition. While the accelerators and incubators have noble aims and are run with valiant effort, it does not guarantee that the corporation will succeed in finding a new product or answer to its competitive woes.
So, should companies stop launching accelerator programs? Is this all just hype? The answer is no. The crux of the dilemma is expectations. Innovation is often thought of as end goal. Corporations in their “FOMO” moment, quickly setup these programs, sometimes spending millions of dollars. Executives are hawk-eyed with the expectation that, after funding a few startups or tinkering with new gadgets, product ideas will quickly convert into business lines delivering millions in revenue and shareholder value. But this is often not the case. Very few innovation successes have resulted from these 131 corporate programs.
Innovation is not a coin operated vending machine, but rather a journey. Accelerators and incubators are a first step in that journey. They open doors to new opportunities, expand networks and create an exchange of ideas. But the journey also requires deep involvement from those responsible for running core businesses. Leadership across all functions needs to be involved in discussing, understanding and experimentation. The innovation team may be the one with daily responsibility for startup engagement, but ultimately the business unit leaders must adopt these new ideas, create new products, test them in the market and launch them. Corporations should deliberately create bridges between these teams and make sure that new ideas are appropriately piloted.
In addition to open innovation, corporations are using design thinking led approaches. This involves building a very deep understanding of customer needs and then looking for ways to improve or build a product based on that understanding. Such projects depend on multiple customer touch points, observation and trials. Again, it is a process of learning, listening and experimenting, without guarantees. A product might still fail. Market demand might not be sufficient. Customers may not want to pay for the improved feature. But even in these less than perfect scenarios, the company walks away smarter, with strengthened customer connections.
Through these various programs, employees develop a curiosity that becomes part of the corporate DNA. While it might feel like a cost drain when a workshop ends with no “a-ha” moment or the accelerator cohort doesn’t produce a single product pilot, they are still good investments. The payoff comes down the road. A salesperson may discover a new product idea during the course of a routine client meeting, because she was taught to ask and listen. A service rep might think of a better process for handling complaints, because he felt encouraged and bold enough to be creative. A finance executive might answer that email from a venture-backed company because they have more practice in speaking to startups. Long after the accelerator cohort is finished and the design project is over, people involved in these teams will walk away with an empowered and open mindset.
Executives, understandably, have a difficult time with this. They must forecast revenues and measure ROI. Corporations are designed for efficiency. But innovation doesn’t follow any of these rules. It requires constant feeding and yet there is no promise that any single project will deliver success.
Perhaps the most frustrating aspect of innovation is just that. It is inherently wasteful and sometimes expensive and time consuming. A watched pot doesn’t boil but that doesn’t mean you turn off the flame.
This article was written by Falguni Desai from Forbes and was legally licensed through the NewsCred publisher network.