What Does It Take For Established Companies To Innovate

Tendayi Viki
3 min readOct 15, 2024

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One question I often get asked is — what does it take for an established company to create a world class innovation engine? As I dive deeper into the conversation, I realize that what people are really asking me is whether they can drive innovation from the bottom up (i.e. from innovation teams without leadership support). The overall answer to that question is that bottom up innovation is possible, but it’s hard to sustain over time.

When we dive deeper, I tend to break my answer into two parts:

  1. What needs to happen for a company to have a world class innovation engine? The answer to this question involves the algorithm and mechanics for managing a portfolio of ideas.
  2. What does it take to put in place the innovation engine so that it takes root within the company? The answer to this question involves the role and importance of leadership support.

The Engine

The challenge with a bottom up approach to innovation is that teams can only work on one idea at a time. Due to resistance from the company, they will spend a lot of time and energy protecting this idea. This forces teams to pick one idea to focus on from the beginning. And what we know about innovation is that you can’t pick the winning idea on day one. You have to make multiple small bets at the beginning.

To have a world class innovation engine, companies need to establish a portfolio of these ideas in which they have made small bets. Over time, leaders can then increase investment but only in those ideas that are showing progress and divest from those that are not making progress.

As ideas move through this innovation funnel, new ideas enter the portfolio, unsuccessful ideas are taken out of the portfolio and successful ideas are scaled as part of the core business. This is the basic algorithm for established companies to find scalable business ideas again and again. This is what needs to happen for a company to have a world class innovation engine.

Leadership Support

Once we agree on what a world class innovation engine looks like, it becomes self-evident that a purely bottom-up approach cannot work. While leaders cannot pick the winning ideas, what they can do is to create the right environment for the innovation engine to thrive. In my experience, this is not something that can be done by innovation teams sitting at the bottom of the organizational chart.

Leadership support is absolutely essential to help deal with corporate politics and blockers. To drive an innovation engine, leaders need to do the following:

  1. Provide clear strategic innovation guidance and ensure that everybody in the company knows it.
  2. Provide institutionalized and protected resources for innovation, including protected time for teams and dedicated time from leaders.
  3. Pioneer and invest in an innovation pipeline of small bets and make follow-up investment decisions based on teams showing evidence of progress.

Conclusion

To build a world class innovation engine you need to have both a bottom-up and a top-down approach. Innovation teams by themselves cannot transform the culture of a company. Leaders by themselves cannot design and test business ideas. But if both sides work together, companies can create something special.

If you want to assess how well your company’s culture supports innovation, you can download and use Strategyzer’s Innovation Culture Assessment Tool.

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Tendayi Viki
Tendayi Viki

Written by Tendayi Viki

Associate Partner at Strategyzer. Author of Pirates In The Navy. Thinkers50 Innovation Award Nominee 2017 - Radar Thinker 2018. Learn more: www.tendayiviki.com.

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