Alex and Anton discussed innovation within the context of an existing organization. Anton consistently referred to the challenge of innovating at an existing company (exploit portfolio) and how to convince stakeholders to assess innovation differently than execution.

Anton Affentranger has been a high level executive of several large, public companies (CEO of Implenia, Executive Management Member of UBS, CFO of Roche, among others). Anton offered an interesting perspective on innovation within existing companies as he and Alex took the stage at our Bootcamp.  Here are some takeaways from Anton’s discussion with Alex.

Innovation metrics:

CEOs are forced to have a short-term perspective. They are bound by quarterly results and expectations.  Innovation is not part of an annual report. As a result, there is a mismatch with stakeholder expectations.

Innovation culture & readiness:

Innovation has always been a difficult thing to do from a management perspective. CEOs must determine if they have the right innovation culture, the right mindset. While the need for change and growth are constantly growing, CEOs must ask if their organization is ready and capable to innovate and can move as fast as the competition.

Innovation vs acquisitions:

Spending money on acquisitions is almost easier than engaging in innovation processes. The acquisition price is typically capitalized on the balance sheet. Innovation investments however need to be expensed through the P&L. Also of note, the cost of acquiring innovative companies has grown, and often, startups do not want to be a part of the corporate culture - they want to remain separate entities.

Innovation processes:

Innovation is a black box. It must be transparent. Executives are often fascinated by innovation but they do not have the toolbox and the confidence to engage in innovation.

Separating innovation teams:

One of Anton’s most successful innovation projects was when he created a separate division, gave them a blank piece of paper and gave them one challenge - growth.

Intrapreneurs:

It is impossible to have an entrepreneurial mindset and job description within a large company. By definition, an entrepreneur is one whose company ceases to exist when their ideas fail. At an existing, large company, an entrepreneurial mindset is often blocked by layers of management and hierarchy.

Hierarchy:

Traditional corporate cultures needed several layers of middle management in order to achieve effective communication. Today, anyone can communicate, can reach out to executives, customers, competition, etc. Hierarchy is no longer necessary and can be a roadblock.

The most innovative CEOs:

CEOs with control over the company are often the most innovative (like Amazon and Jeff Bezos). These CEOs have a constituency/stakeholders that go beyond quarterly earnings. Crisis can also open the door to innovation - in order to survive, innovation is a must  (like Bracken Darrell at Logitech).

For more information on managing innovation in an existing company please check out our blog posts on Execution vs Innovation, Innovation Readiness,  the Portfolio Map and the Ambidextrous Organization.