Innovation Ecosystems: Leveraging their Power for Organizational - - PowerPoint PPT Presentation

Innovation Ecosystems: Leveraging their Power for Organizational Success and Strategic Change

Presented by: Phil Budden, MIT Sloan Senior Lecturer and Fiona Murray, MIT Sloan Professor of Entrepreneurship

Moderated by Dr. Peter Hirst Senior Associate Dean, MIT Sloan Executive Education

December 18, 2018

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Budden and Murray teach Innovation Ecosystems: A New Approach to Accelerating Corporate Innovation and Entrepreneurship (two-day, in-person course) and Corporate Innovation: Strategies for Leveraging Ecosystems (self-paced, online course)

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Phil Budden

• MIT Sloan Senior Lecturer in the Technological Innovation, Entrepreneurship, and Strategic

Management (TIES) Group

• He has been an executive in both the public and private sectors
• Budden focuses on taking insights from the frontier of innovation and making them useful

for executives and managers in a variety of industries and sectors Fiona Murray

• Associate Dean For Innovation, Co-Director MIT Innovation Initiative, William Porter (1967)

Professor of Entrepreneurship, and Faculty Director of the MIT Legatum Center

• She is also an Associate of the National Bureau of Economic Research (NBER) and serves
• n the British Prime Minister’s Council on Science and Technology (CST)
• Murray is recognized as an international expert on the transformation of investments in

scientific and technical innovation into innovation-based entrepreneurship

About our speakers

What we will cover

§ MITii definition of innovation and how that informs your approach to innovation § Why “the world isn’t flat” for innovation that thrives in certain ecosystems § Which are the 5 key stakeholders in the most successful innovation ecosystems § What this means for business leaders and especially for corporate innovation § How executives can leverage such innovation ecosystems for their organization

Innovation?

Innovation

§ MIT’s Innovation Initiative (MITii) defines ‘innovation’ simply as the: “process of taking ideas from inception to impact”; § Focusing on process (not products/services), highlighting the entire journey; § Emphasizing that an ‘idea’ is the match between a problem and a solution; § Observing that a range of different organizations engaged in the process— from universities and startups, to corporations and even governments.

Distinguish ‘Innovation’ & ‘innovative’

MIT collaboratively researches and teaches about innovation, both:

• ‘Innovation’ (with a capital “I”), meaning formal processes of taking science,

research, and technology through to impact, and;

• ‘innovative behaviour’ (with a little “i”), signifying a more widely applicable

behaviour/culture in both the public and private sectors. Many of the insights about ‘innovative behaviour’ are informed by research into the practices at the frontier of world-class ‘Innovation’, so the two are mutually supportive…

Spectrum from little “i” innovative behaviour

• ut to capital “I” Innovation

i i i

Innovation?

Important to recall that ‘innovation’ is…

…more than just technology, though new digital technologies (from cutting-edge ‘Innovation’) do enable more ‘innovative behaviours’; …more than just a ‘buzzword’, though there are plenty of those around (e.g. agile, lean, intrapreneurs, sprint, scrum, platform, hackathon, etc.); …and in need of managing and leadership (as it can support change in uncertain times, allow for greater diversity/inclusion, and also empower ‘end users’ to experiment with frontline changes). Leadership of innovation really matters. Without more ‘innovative behaviour’, an organisation will not get a return on its investment in technology, achieve its full potential during uncertainty, or retain/engage the best staff.

An innovative ‘idea’ usually starts with a problem or a solution…

…and innovation comes from the match between a problem and a solution

Where in the innovation landscape is the problem/solution ‘match’?

PROBLEM SOLUTION

Degree of novelty Degree of novelty

Where in the innovation landscape is the problem/solution ‘match’?

PROBLEM SOLUTION

Degree of novelty Degree of novelty

Innovation?

Business As Usual (BAU)

It’s crucial to know which innovation is being attempted and where on the innovation vector it is…

PROBLEM SOLUTION

BAU

Degree of novelty Degree of novelty

i i i

Horizon? Innovation Frontier?

In the new global economy, the world of innovation is NOT flat…

…with a growing number of innovation ecosystems that have unique comparative advantage that can support ‘innovation-driven entrepreneurship’.

MIT sees this with regional partners globally…

reap.mit.edu

Poll: In which part of the world are you?

reap.mit.edu

Even within regions, innovation is highly concentrated in ‘innovation ecosystems’

Even downtown, the Kendall Square innovation ecosystem is highly concentrated

To generate innovation, organizations used to focus internally…

Recent approaches shifted to ‘open innovation’ and emphasized wide global engagement…

Today’s organizations are more geographically focused on specific ‘innovation ecosystems’

Innovation in ecosystems involves five key regional stakeholders

Poll: With which innovation ecosystem stakeholder do you identify?

For large corporations, this means they need to improve engagement with entrepreneurs and universities

This means understanding the innovation process taking place in innovation ecosystems:

§ Entrepreneurial start-ups are critical stakeholders in an innovation ecosystem § They are very effective at driving the early stages of the innovation process § They start with a hypothesis of the possible match between a problem and a solution § They define, order, and test assumptions through a series of innovation loops

Innovation Loops*

Choose the next steps based on the lessons from your experiment—guided by the evidence and emphasizing your assumptions. Test ideas rapidly and effectively so as to maximize cost-effective information gathering and learning. Experiment Evaluate *As in lean start-up, agile, disciplined entrepreneurship, business model canvas…

Many large organizations find these loops challenging to implement internally (so would benefit from iEcosystem engagement)

• Focusing on evidence to prove or

disprove assumptions

• Hard to make decisions with so

little information

• Comparison to “business as

usual” projects is likely to be poor

• Hard to test rapidly if your processes

emphasize precision over speed

• Difficult to talk to customers directly
• Few methods to create “rough & ready”

prototypes for cost-effective information gathering and learning Experiment Evaluate

What this means for business leaders, especially for corporate innovation…

The world of innovation is (rather unfairly) not flat and innovation occurs best in certain key ecosystems § In which ecosystem does your business need to be? § To what specific ends will you engage the ecosystem? § How will you engage the ecosystem’s key stakeholders? § And at what stage in their innovation loops?

What is your organization’s innovation strategy for innovation ecosystem engagement?

Common leadership challenges?

The usual challenges and issues with leading change in a complex

• rganizational system apply to innovation, and they need to be

understood and addressed:

§ A fear of ‘failure’ (the ‘F-word’) § A desire for immediate results § A wish to do things that make a splash § Aversion to small experiments § A lack of clear reporting or “air cover” § Problems of re-integration of successful projects

What we covered

§ MITii definition of innovation and how that informs your approach to innovation § Why “the world isn’t flat” for innovation that thrives in certain ecosystems § Which are the 5 key stakeholders in the most successful innovation ecosystems § What this means for business leaders and especially for corporate innovation § How executives can leverage such innovation ecosystems for their organization

For Q&A

Please submit your questions through the webinar panel

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Related Programs

MIT Sloan Executive Education Webinar executive.mit.edu #MITWEBINAR

Innovation Ecosystems: A New Approach to Accelerating Corporate Innovation and Entrepreneurship (two-day, in-person course) 2019 Dates: April 11-12 | June 13-14 | October 10-11 Corporate Innovation: Strategies for Leveraging Ecosystems (self-paced, online course) 2019 Dates: February 13-April 2 | May 1-June 18 | August 28-October 15 | October 30-December 17 Custom Executive Education Programs To inquire about developing a custom program on this topic for your organization, contact our Custom Programs team at: execed_custom@mit.edu Regional Entrepreneurship Acceleration Program (REAP) Designed to help a region—drawing on all 5 stakeholders locally—to address its innovation-driven entrepreneurship. To learn more, please visit: reap.mit.edu or email reap@mit.edu For information on our portfolio of 45+ Executive Education programs, Custom Programs, and various Executive Certificate

• ptions, please visit: executive.mit.edu

Additional Reading

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By Phil Budden and Fiona Murray An MIT Framework for Innovation Ecosystem Policy: Developing policies to support vibrant innovation ecosystems (iEcosystems) October, 2018 A systematic MIT approach for assessing ‘innovation-driven entrepreneurship’ in ecosystems (iEcosystems) September, 2017

Thank You

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