Two speeds engine for an evergreen funded corporate innovation
Updated: Dec 23, 2020
We explained in a previous blog post that we spread our innovation efforts between two approaches.
Serendipity Opportunities which are usually quick wins that would help you to buy some credibility to stakeholders and provide initial return on investment
Strategic Focus Fields which requires longer maturation of projects that could lead to significant new business for the company
We call those combined approaches the two speeds engine of innovation. Both complement and compensate each others, the first one able to repay the initial funding and sustain the current expenses while the second one secure major future revenues.
A combined continuous improvement lead then to significant increase of performance.
Illustration : The two speeds engine - a Porsche 911 that tracts a luxury camper
The financial autonomy of the innovation lab is a strong milestone: "being evergreen"
The core business units will not have to support anymore the funding from their budget. Oppositely, the innovation lab will create direct/indirect spillovers to rest of the company that will increase positive perception and stakeholders buy-in to secure more support.
We can represent our two speeds engine using our Exploration-Exploitation framework and connecting our two approaches. We also see that some divestment at the end of the incubation period will generate enough return to fund the acceleration of a few but highly profitable projects.
In the first 5 years of establishing your innovation lab, you should keep working on those two speeds innovation efforts. The Strategic Focus Fields will require a steep learning curve to come to a level of maturity where significant value can be produced. At the same time, the Serendipity Opportunities will require to source as many mature concepts as possible in a two years period, fund a few that could be turned into projects and possibly divested or transferred back to business unit in a couple of years. This short term return would provide enough funding to cover expenses for running activities autonomously toward Serendipity Opportunities while additional funding can be directed to scale Strategic Focus Fields into new businesses.
Of course, innovation executives in charge of the two approaches would run very different activities, process with diverse profile of people. The challenge of the two speeds engine and its continuous improvement come therefore from the capacity of innovation lab distinct teams to work for a joint goal and collaboratively. We have prepared a dedicated blog article on this topic.