Bet All or Nothing on your corporate innovation lab !
Updated: Jun 25
Last autumn in Paris, one of the most prestigious Entrepreneurship Business School in Europe, EM Lyon, has launched their “Institut for Intrapreneurship”, chaired by Professor Véronique Bouchard.
At the same time, one of the most prestigious Entrepreneurship Business School in USA, Babson College, was launching its Corporate Innovators executive education program, chaired by Professor Gina O'Connor.
The fame for Corporate Innovation labs and Intrapreneurship Programs is grabbing more and more attention in large companies. While their ambition is to generate tangible value such as new sales or cost savings, most of return they hardly provided so far were intangible including talent attraction and retention as well as improving the company reputation via external communication of inspiring and visionary messages. Today Corporate Innovation and Intrapreneurship have a huge problem ... while they spend millions dollars per year, they barely provide any Return On Investment.
Adapt in time of crisis
Today, fall 2020, while the COVID19 pandemic is mutating into a financial crisis, there is no more money and time to spend in supporting non core activities in corporations. Either you close your Innovation Lab, or you invest with the ambition that it will develop your next level business.
This is going to be a difficult decision and there are a few trends that, we believe, will shape the next decade:
- People and investors are back to the basics: healthcare, agribusiness, energy and telecom, connected electronic devices, entertainment...
- People start to trust more science, engineering and technology to solve the major challenges of our society such as pandemics, environment, poverty...
- Many companies need to re-invent themselves to survive and reshape interconnected value chains which requires to move fast to grab opportunities...
In a recent blog article, Philippe Meda defines that Innovation has become the new business as usual: https://www.icopilots.com/corporate-culture/innovation-will-is-now-the-new-business-as-usual-19867
And as today you have two directions where you can drive your innovation efforts.
Exploitation - to reinvent your current business, move from product to services.. reposition your product to new customers.. extend your existing customers offering with new products....
Exploration - to identify the next breakthrough by scouting, testing, learning and understanding before everyone else what would be the next market drivers...
For both, if you don’t have experienced corporate innovation managers, neither ROI driven Intrapreneurship programs.... (see Babson College and EMLyon intro)...You don’t stand a chance. Better you hold your Innovation Lab efforts during the crisis. Like Tik Tok generation would say .. “You ghost it”...
On the other hand, if you are capable to develop a key enabling technology that would have a major impact to the society, it is time to throw some of your remaining cash and place a few bets for the future. So, you may laugh at a Ghostbusters Plasma Series Spelgler’s Neutrona Wand.. but it could turn into billion dollars industry.
For that you should be ready to explore deeptech opportunities and start considering to operate in basic industry. This is exactly what Kodak has been recently doing after they announced their shift in pharmaceuticals during summer 2020 with their stock price raising. https://www.ft.com/content/de9c3b4e-6c6d-40b1-868a-8f5366f59074
Tesla Business Case
A strong signal of this logic is the outstanding valuation of Tesla above 400 billion dollars and announced last August 2020. https://fortune.com/2020/08/26/tesla-soaring-stock-market-value-above-400-billion/
Over the last decade, Elon Musk has unlock two or three deep technologies that now combined give him a huge strategic advantage. As an example, Tesla has unlocked electric mobility and self driving car. Both combined have tremendous impact on reducing the CO2 released to the environment and the decrease of death and injuries by car accidents.
COVID19 brings with it another challenge about the investment required for car manufacturing companies to have successful transformation toward electric mobility.
Oppositely, Tesla has already invested tremendously in powercell giga factories. Therefore, many of the car industry giants will start to in-license tesla technology within their manufacturing platform. At this time, Tesla will turn to its initial ambition, become an energy supplier. Even smarter... they will manage their energy grid based on the information provides by the self driving car softwares. And in case you missed an episode... Elon Musk second revolution, Space X, is doing exactly the same with the Starlink fleet of internet provider satellites.
Now, think about biotechnology companies working on new therapeutics. The new generation of RNA based vaccines will unlock many technical bottlenecks for gene therapy while reducing the manufacturing cost and affordability. Precision robotics for assembling oligonucleotides, AI driven drug discovery, DNA scissors, are among the converging technologies that will take medicine to a new frontier.
So my true belief is that the next decade will be driven by amazing science, engineering and technology companies. Within those companies, corporate innovation labs and intrapreneurship will create, grow and scale new business faster than they ever did before ... and despite a very volatile and uncertain environnement.