Raise the curtain on Innovation Theater yet again!
We know that to create meaningful innovations that can move the needle for the companies that sponsor them, attention, resources and commitment needs to be sustained. But in too many organizations, innovation gets started, gets some traction and — just at the brink of discovering something useful — gets cut. Welcome to the world of innovation theater.
Layoffs are in the air
Predictably, firms that spent like drunken sailors during the low-interest-rate free-for-all that we’ve just been through are now reconsidering their spending as the economy looks a little soft, inflation has become a thing and investors are asking for — — egads — — a route to profitability!
We have seen this movie before, and it is one of the most devastating patterns that afflicts internal corporate venturing, or ICV. It’s worth bringing back some original research by Stanford’s Robert Burgelman and his colleagues to understand it.
The mystery of corporate innovation cycles
Years, ago, Robert Burgelman and co-author Liisa Vilikangas came to a perplexing conclusion. Despite all the talk about innovation, all the energy and money thrown at it and all the noise about accelerators, studios and labs, companies find it extraordinarily difficult to stick to an innovation program.
Indeed, as they observe in this article, “many major corporations experience a strange cyclicality in their ICV (Internal Corporate Venturing) activity. Periods of intense ICV activity are followed by periods when such programs are shut down, only to be followed by new ICV initiatives a few years later. Like seasons, internal corporate venturing programs begin and end in a seemingly endless cycle.”
They identify two influences on how an innovation process can come to grief. The first predictor is how healthy the existing core business is in terms of growth prospects. The second is how much a company has in terms of uncommitted resources — whether that’s cash or people. What you get when you juxtapose the two is a lovely 2x2: