To generate new competitive advantages and grow profitably, companies today are more dependent on innovation than ever before. However, the rapidly changing, complex world presents them with a major challenge: classic tools such as product development, R&D, etc., are no longer sufficient to meet the needs of the new world with digital business models, customer-centric offerings, and rapid marketing. Current studies show that the importance of research and development departments for innovation will decline from 69% in 2020 to only 29% in 2025. In contrast, 71% of companies (internationally) expect innovation units to be the most important source of innovation in 2025. Just 5 years ago, these were only mentioned by 2% of companies. This trend can also be observed in Germany. There are now over 250 innovation units listed here. There are likely to be significantly more, as internal units are difficult to capture in such statistics.
71% of surveyed companies expect innovation units to be the top source of innovation in 2025 - compared to only 2% five years ago!
Thompson, Bonnet and Ye, Sloan Management Review, 2020, & Thompson, Bonnet and Jaballah, Research Policy Journal, 2020
However, the high expectations of innovation units are rarely met in reality. Numerous studies now indicate that the father of the Lean Start-up approach, Steve Blank, was right when he said that this is mostly just "innovation theater" without any value contribution to the organization.
Impact instead of innovation theater with "networked-ambidextrous" innovation units
In order to create real impact for the company instead of innovation theater, there is no need to abandon established forms of innovation management and current approaches for innovation units. Instead, smaller changes in organizational design and procedural approaches are often sufficient to achieve strategically relevant new business with these instruments. Three changes are particularly noteworthy in this context:
- From opportunistic to planned innovation logic: The introduction of an agile management system aligned with corporate goals creates a strategic framework that makes successful innovations plannable. The classic innovation funnel is replaced by a strategic, targeted control system.
- From separate to networked structures: Instead of operating detached from the company, it is important to create suitable formal and informal organizational interfaces and clearly regulate responsibilities.
- From explorative to ambidextrous process: Instead of operating as far outside the core business as possible, those market opportunities must be identified and addressed which both meet the new requirements of the market and leverage the traction of the existing core business.
Instead of separate innovation units or purely indirect, integrated innovation management, the establishment of these mechanics succeeds in so-called "networked-ambidextrous" innovation units. Although these operate independently, they are strategically and operationally networked. They develop new opportunities based on existing competitive advantages and assets and implement them or transfer them to the appropriate place in the company.
