As I’ve written before, the portfolio is the pivotal tool for innovation. It provides the link to corporate strategy; ensures the desired balance across different innovation horizons; enables and communicates priorities; and with the appropriate communication it reports progress towards innovation goals. It is this final point that I would now like to explore.
A question often asked when considering the fit of innovation within corporate strategy is whether you want to be a leader or a follower. Some examples are fairly clear. Most research-driven pharmaceutical companies want to launch the first medicine in its class and to maintain leadership with ongoing clinical support. At the other end of the spectrum it would be highly unusual for a retailer to introduce the first entrant to a new category as a private label.
Tate & Lyle is a large B2B company focused on speciality food ingredients. They have placed a large emphasis on innovation as a key source of future growth, with a pivotal role for open innovation (OI) and complementary roles for OI partnerships and venture capital initiatives. I had the chance recently to interview Dr John Stewart, Director of Open Innovation, to learn more about their integrated program.
Tell me more about Tate & Lyle
Many words and expressions are clearly relative, such as “larger” or “smaller”. These are easy adjectives as they often invite the word “than” after them. Other words are more subtly relative, like innovation; not grammatically but inherently.
A journey of a thousand miles starts with a single step, as the saying goes. The same is true for innovation. Yet much of the writing on innovation is about leaps, major technological breakthroughs that transform or disrupt markets. Isn’t it all about Apple and Edison? I would argue it isn’t. The bulk of progress and associated hard work on innovation is focused on incremental innovation, the small steps that over time take products and services to new levels. No Nobel prizes, but it’s not all about the glory.
In a previous corporate life, I was on the board of trustees of a very large pension fund. Our role was to ensure income in retirement for thousands of current and former company employees. The key lesson I learned was that the most important decision we had to make was on the mix of investments in the portfolio. The return had to link to the objectives and requirements of the fund, now and in the future. Portfolio management was the pivotal tool for success.
Open Innovation can take many forms, and one manifestation is open source. It’s an area that is intriguing and provides learnings for other approaches to Open Innovation. A recent article by Sarah Johnson of Seymourpowell highlighted some of the potential, and stimulated further thoughts.
A very good friend of mine works for a large, global company with multiple locations around the world, many of which are run as “hot desks”. He is in a position of responsibility, and often finds himself travelling to a different destination on the other side of the world at short notice. It’s the kind of business where looking for ways to innovate is very important, as is time management.
How can large companies regain the innovative drive that made them big in the first place? A new ebook compilation of my articles on the 6Ps of Radical Innovation for Large Companies is now available. Just follow this link to read or download.