The Problem with Corporate Innovation

Many established US companies are struggling to innovate effectively and adapt to changing market conditions and consumer demands. Large organizations lack the agility and freedom of smaller entrepreneurial companies. Additionally, executives face the challenge of meeting quarterly numbers while also expected to grow revenue and create new products and services. They must decide how much innovation to pursue, how to allocate resources, and whether to build internal capabilities or outsource innovation. Small pilots and distributed innovation activities may improve incremental innovation but don't change the operating models or culture of the business. To accelerate growth, companies must develop a front-end idea generation capability and link it to a product or service capability for resource allocation. Outsourcing innovation may reduce short-term risks, but it may also make the organization more insular and focused on day-to-day operations. Developing internal capabilities may not pay off in new ideas for quite some time.