Expert opinions, TECHNOLOGY

The most popular tools for innovations among corporations

Innovation helps business – it is an undeniable fact. It helps not only generate revenue and cut costs, but also survive turbulent times. How to find innovative solutions? You can start scouting startups from outside, or you can try to “grope” the innovative potential for own employees and create a project that will be 100% customized for your corporation. What tools help stimulate domestic entrepreneurship and why are companies from different industries choosing them?

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Innovation horizons and tools

To maintain your position in a rapidly changing market, dynamically emerging companies today are engaged in innovation on three horizons:

  • Horizon 1 Expansion of the main business areas and their protection against negative impacts.
  • Horizon 2 Creating new lines of business.
  • Horizon 3 Developing realistic opportunities for the future.

Various tools are used within these main horizons of innovations, as open ones with investment or implementation of already existing solutions on the market, as well as internal ones with a focus on development of internal solutions:

  • creating own research teams;
  • creation of scientific and innovation centers or internal development centers;
  • launching venture studios;
  • opening innovative hubs and laboratories;
  • investment or purchase of startups (in Russian practice such cases occur infrequently);
  • internal entrepreneurship programs for employees (workshops, intensives).

All of the tools listed above provide for a certain budget, and it is sufficiently substantial if we are talking about creating our own venture studio (which Russian companies do infrequently) or about acquiring one startup or another. However, the market trends of the last three years are as follows, that many companies are cutting innovation budgets and favoring the use of internal resources, which leads to an increase in the relevance of programs for development of corporate entrepreneurship. Similar practices are being introduced by X5, Rostec, Otkritie, etc.

What tasks do internal entrepreneurship programs solve?

Corporate entrepreneurship programs solve simultaneously two main tasks:

  • Help improve your business. As part of such programs, participants are working on ideas and projects to improve customer experience, optimize current business processes, launching new products, and creating new business models.
  • Help prepare employees and businesses for the rapidly changing reality. Innovative thinking and flexibility are important not only for company managers, but also for all employees. Finding non-standard and sometimes even bold solutions in crisis situations is especially important for the company, if it wants to stay “afloat.” Domestic entrepreneurship helps develop a corporate culture, making it more flexible and adapted to external changes. Historically, all innovation is driven by leaders – people in companies that are not afraid to think boldly, looking a few steps forward, seeing not only the picture of “today,” but they also clearly imagine what can be tomorrow.

How to measure program results

Internal entrepreneurship programs help companies enter new markets, improve customer service, directly influencing financial metrics such as revenue growth or optimization. So, for example, general economic effect of 2021 projects proposed by employees of X5 Group in the horizon of 2 years, is estimated at + 1 billion roubles of EBITDA, forecasted economic effect of projects in the program of development of the entrepreneurial thinking of Protek employees in 2022 exceeds 1 billion rubles.

On the other hand, programs help change the culture and increase its flexibility, form new leaders who are ready to act and undertake responsibility, which entails new appointments and rotation of employees to more responsible positions, “retention” of young and creative people, that increases the attractiveness rating of the employer as a whole.

Corporate entrepreneurship programs can open internal potential of employees – hard or soft skills that can affect their further development in the company’s contour.

Analysts at the IIDF Center for Corporate Innovation studied partner cases and came to the conclusion that domestic entrepreneurship programs affect immediately for several key indicators in the company:

  • growth of key business metrics such as revenue, EBITDA, increased market share;
  • reducing operating costs;
  • growth in the number of customers;
  • changing the corporate culture and perception of the company by employees – satisfaction index;
  • Internal rotation of employees to new roles/positions
  • building new leaders ready to grow businesses and drive change.

Corporate cases

Internal entrepreneurship programs should ideally be customized for each company. This is explained by different levels of innovative development, specificity, field of activity, readiness of teams, level of innovative culture, etc. Accordingly, the timing of the implementations and key elements may also differ.

Otkritie Bank conducts its program in four main stages: workshop in closed phase format with business customers; start educational intensive and selection into the program; acceleration program for study of projects and demo day. The best projects can be implemented in the perimeter of the companies. X5 Group decided to encourage financially the best projects:

the program itself is similar in stages to that of Otkritie Bank, but X5 decided to note the most promising ideas, allocating funding for the pilot project and a prize in amount of 250 thousand rubles. Teams whose pilot will show a successful financial result for the company will receive a prize of 750 thousand rubles. Rostec and CV Protek also continue to develop entrepreneurial employee culture.

Such incentive tools always work well. But opportunity of implementing a project of your own team in the company can also strongly motivate.

The open innovation model is still widespread, but it is not the only option to take the company to the next level. Internal innovations have a high potential for project development, that can result in solutions with real measurable results and strong employees motivated for the success of the company as a whole.

By Anna Rusakova, Head of Internal innovations and corporate entrepreneurship at Center for Corporate Innovation, IIDF

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