Where corporate innovation attempts go wrong

A somewhat ominous statement that’s often shared in the business world is “Disrupt or be disrupted.” Companies of all sizes are under pressure to constantly innovate and adapt to changes in customer behaviors and demands, and the necessity to transform is often greater for larger corporations.

In fact, 52% of Fortune 500 companies have “gone bankrupt, been acquired, or ceased to exist” since 2000 due to digital disruption, and 75% of S&P 500 companies today will likely be replaced by 2027. The biggest companies now are not the same as those from 10 years ago, and corporations need to keep up with the changes lest their customers go elsewhere.

The good news is that most corporations are well aware of the importance of innovation. According to Cyrus Daruwala, managing director of financial services at market intelligence firm International Data Corporation (IDC), most companies and business leaders are in the process of undergoing some kind of corporate innovation process.

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And a new study from the IESE Business School reinforces this notion. The study found that many corporate giants such as Toyota, Samsung, Alibaba, and Lenovo are already innovating with startups in the deep-tech field, seeking to explore creative solutions to new challenges, and that many other businesses are looking to work with such startups on their own innovation projects.

Despite this awareness, however, many corporate innovation attempts don’t bear fruit.

“Most of our clients’ senior executives understand the importance of innovation but many are dissatisfied with their companies’ performance in it,” shares Darren Yuen, a senior analyst at management consulting firm Boston Consulting Group.

The lack of a roadmap

There are several reasons why corporate innovation attempts don’t live up to expectations. In Yuen’s view, one of them is that businesses often lack a clear innovation strategy.

“I have found that many seldom articulate clear strategies to align their innovation efforts with their business strategies. There is no thesis or framework as to what innovation is supposed to do,” he explains.

Often, companies have generic goals in mind for their innovation objectives, such as “innovating for growth” or “innovating to differentiate ourselves.” However, such generic objectives fail to provide a helpful road map as to what exactly corporations want to achieve and what needs to be done in order for them to do so.

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After all, innovation doesn’t just happen at the snap of a finger – a lot of time, money, and manpower has to go into the process.

“It’s important that businesses start with what the market, citizens, or consumers are expecting out of their products, services, and apps,” says Daruwala. “[Businesses also need to] factor in the implications to their other internal and external processes, systems, and solutions.”

Too many eggs in too many baskets

Another common reason for failure is that in a bid to mitigate the risks involved, corporations don’t funnel enough resources into their innovation projects.

“Many corporations love the idea of generating as many ideas as possible and seeing if one could be successful,” explains Yuen. “It is a common tendency to try and lower risks as much as possible, but there just isn’t enough resources to execute all of the ideas.”

Innovation requires time and effort, but many companies are unwilling to commit the necessary assets to drive new ideas and developments, often placing current growth above innovation.

Indeed, the costs of innovation are often what holds companies back.

“Cost could be the biggest stumbling block. After all these changes and all these expenses, will [the company] see a dramatic cost improvement, the business take off, or some tangible matrix that would justify this investment?” shares Daruwala. “That is a difficult assessment [to make].”

It starts from the top

Arguably, one of the biggest inhibitors to a company’s ability to innovate is a lack of buy-in from its leadership.

“There has to be a unanimous management-level CxO level buy-in,” Daruwala emphasizes. “If the towkay (big boss) is resistant to change, then the corporation suffers. They are guilty of the ‘wait and see’ syndrome.”

He puts forward Singapore’s largest telco Singtel as one example. The firm has made several attempts at launching new digital products and services over the years. However, a large proportion of its digital bets failed due to a lack of innovation support from upper management.

The company’s DNA was also not wired for innovation, with an approach that was largely “top down,” involving strict approval processes that held back and delayed new projects and led to missed opportunities.

Innovating for the future

Despite the common roadblocks that companies face in their corporation innovation journeys, many still succeed.

And there are plenty of resources out there to help business leaders get their strategies on track. One example is the upcoming Corporate Innovation Summit and Global Matching (CIS), organized by the Hong Kong Science and Technology Park.

Photo credit: Hong Kong Science and Technology Park

Events like CIS provide corporations with a place to gain deeper insights into the world of innovation. The summit in particular involves a series of workshops and panels covering a range of topics, such as understanding how companies in Asia can better collaborate with deep-tech startups and how businesses can innovate for a sustainable future. Additionally, innovation strategies and actionable practices will be shared by the likes of innovation influencers and leading futurists, including Alex Osterwalder, a veteran entrepreneur.

CIS also involves a business and investment matching program, where corporates can connect with rising startups across the globe and work together to develop new solutions.

Such events provide opportunities for firms to continually explore and work toward innovation.

“Innovation, digitization – they are not a one-time one-project initiative. They are a continuous process cycle of assessing, innovating, implementing, and refreshing,” says Daruwala.

After all, today’s disruptor may be tomorrow’s disruptee. Corporations, therefore, need to make the effort to make innovation a focus in their business and use it to drive further growth.

The Hong Kong Science and Technology Park’s Corporate Innovation Summit brings together corporates and disruptive solutions from around the globe to help businesses stay ahead of the curve. Its 2021 edition runs from May 26 to June 2, and it aims to offer insights from visionary speakers who will cover global macroeconomic, sustainability, and corporate innovation trends.

Sign up for the Corporation Innovation Summit here.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.