The Corporate Innovation Canvas

What’s the Corporate Innovation Canvas?

This is a canvas a corporation can use to explore, organize, and, most importantly, focus their target innovation outcomes. The audience I’ve tested this with are corporations with a market cap >$1B USD who are looking to incubate a portfolio of innovations as part of their plan for both short and long term organic growth.

The Canvas fits on a regular sheet of paper (though for workshops I print it in large form on a wall):

Corporate-Innovation-Canvas-v6-sml

Why would a corporation use it?

Often, the charters for innovation projects leave the  teams in charge of them confused or (worse) stuck. Most managers find it challenging to communicate innovation goals in a way that balances alignment with outcomes that matter to the corporation with the autonomy and freedom innovation teams need to do good work.

Additionally, corporations are spending heavily on innovation (particularly when you include acquisitions) with mixed results. This canvas creates the opportunity for improved focus, testability, and general management of innovation decisions.

What’s in it?

Together, the Canvas elements bring a corporation’s target innovation outcomes into focus:

  1. Customer Segments: Who are the customers? What’s on their mind?
  2. Problem Scenarios: What jobs, needs, desires, are important to your customers (regardless of solution)?
  3. Disruptors/Catalysts: What’s changing the industry landscape and/or alternatives your customers are preferring to deliver on their needs?
  4. Big Innovation Goals: What innovations would improve your corporation? How does that vary in the short and long term?
  5. Innovation Investment Charters: How will the corporation invest in innovation and with what timelines and success criteria?
  6. Innovation Metrics: The metrics we know work for an existing business are not useful for measurement and decisions about innovation investments- and yet, structure and decisions are crucial. What are the right metrics for your innovations?
  7. Intrapreneurial Investments: What internal investments will the corporation make in fostering short and long term innovation?
  8. Entrepreneurial Investments: What external investments will the corporation make in fostering short and long term innovation?
  9. Key Assets & Capabilities: What does the business have now that might significantly contribute to future innovation?

The Canvas doesn’t immediately tell you exactly what to build, but that’s not how innovation works. By definition, innovation is a process of exploring unknowns and uncertainly. However, that doesn’t mean a disciplined focus and process doesn’t work or isn’t needed.

What will I get out of this tutorial?

After completing this tutorial and the related practice (on your own corporation or one you know), you will be able to:

  1. Focus a corporation’s need for innovation into clear, discussable, and testable elements
  2. Avoid waste by focusing on problems worth solving and jobs worth doing for customers as opposed to flashy solution ideas
  3. Translate a corporation’s innovation goals into discrete innovation charters which are actionable for individual teams

How do I get started?

Corporate-Innovation-Canvas-v6-smlYou can download a PDF here: Download the Corporate Innovation Canvas. I’ll have a Google Slides version soon, but I recommend starting with pencil and paper.

The most important part of getting started is…starting! You’ll feel unsure, but my top two tips are: 1) just start writing and 2) be ready to revise. If you do both, you’ll move quickly and ultimately get to a good outcome.

Step 1 (of 10): Customer Segments

Customer-SegmentsThis is where you define the customers you want to serve. These may or may not be customers you currently serve. In either case, I would consider organizing your segmentation around needs and behaviors the customers have in common as opposed to traditional metrics like size of a company or age of an individual. The reason is that these needs-based segmentations tend to be more innovation-friendly.

Here are a few items I would be sure to cover:
1. Segment Description
Can you think of specific individuals or firms in this segment? Is there a way you could consistently reach them (through media or direct in person contact)? What is a screening question you could ask any company or individual in the segment to assess whether or not they’re in the segment.
2. Individuals in the Segment
You may have several per segment, or, if your segments have to do with individuals (as opposed to firms), this may be 1::1 with your segments. Regardless, it’s crucial to drive to empathic details using personas, which are humanized descriptions of your target customer. What shoes do they wear? What’s the first thing they do when they wake up in the morning? The last thing they do before they fall asleep? Here too testability is important: Make sure you have a factual screening question you can use to decide if a person you’re interviewing does or does not map to a particular persona.

Finally, if you’re not sure how much detail and granularity makes sense on your first draft, go with less and layer in more detail as you complete the Canvas and test your point of view.

Output: A list of Segments with segment Personas if there are multiple personas per segment.

Step 2 (of 10): Problem Scenarios

Problem-ScenariosThese are the underlying needs, jobs, and desires you want to fulfill. For example, a live band, a DJ, and an iPhone playlist are all ways of delivering on the underlying problem scenario of ‘playing music at a wedding’. If you’re familiar with the ‘job to do be done’ concept, this is the same basic idea. For more, see this tutorial: Problem Scenarios.

While it’s human nature to jump ahead to solutions (and solutions are ultimately the point), a disciplined program of innovation focuses on understanding these problem scenarios and what’s good vs. bad about the customers’ current alternatives. This will help you and your teams a) focus on what matters to the customer vs. the corporation 2) consider non-obvious ideas c) anchor ideas in a highly testable formulation so you don’t over-invest in ideas that aren’t competitive.

Output: A list of Problem Scenarios.
Pro tip: make sure your Problem Scenario descriptions are equally applicable to both the current alternative as well as your new idea. This keeps them unbiased, testable, innovation-friendly.

Step 3 (of 10): Disruptors/Catalysts

Disruptors-CatalystsThese are social and technological advancements and forces that are changing your industry. For example, the availability of Internet-delivered video is disrupting (or growing) just about every type of firm in the media industry.

In the example of the firm that produces equipment for the poultry farm, examples might be a) large finished goods producers like Purdue developing their own proprietary technology and equipment for their suppliers and b) a surge in backyard chicken coops at residences.

Output: A set of Disruptors/Catalysts for the firms current business or (in some cases) businesses the corporation wishes to enter.

 

Step 4 (of 10): Big Innovation Goals

Innovation-Goals-v2These are the goal point for your innovation program (and that’s why they appear in the center!). These should be outcomes as opposed to specific solutions.

For example, let’s say you are a firm that produces equipment for industrial poultry farms. Your diagnosis has led you to believe that the market for backyard residential chicken coops is a high growth opportunity that’s a good fit for the corporation. Rather than ‘build an automated chicken feed dispenser for the residential customer’, ‘deliver a solution to the residential customer’ would be a better innovation goal.

Output: A set of Big Innovation Goals.

 

Step 5 (of 10): Innovation Investment Charters

Innovation-Investment-ChartersIf the Big Innovation Goals are the ‘what?’ the Innovation Investment Charters are the ‘how’. Corporations often fund large projects that are ‘too big to fail’. These deliver a sense of certainty and purpose that’s useful for the management of a large corporation with many internal and external stakeholders. Unfortunately, because of uncertain nature of innovation, they’re not a good use of time or money or energy/attention.

The right answer is to pursue a portfolio of innovation investments, internal and external, short term and long term, allocated against the corporations Innovation Goals. For example, ‘Fund early stage ventures in residential poultry care’ is a charter. ‘Incubate internal teams’ is another.

Crucially, these are not mutually exclusive- there may be several charters associated with a given goal (and each charter might have multiple investments). Just like a venture capitalist will fund multiple investments in a space they believe is high growth, the corporation should pursue a portfolio of charters against their most important innovation goals.

Output: A set of Innovation Investment Charters.

Step 6 (of 10): Innovation Metrics

Innovation-MetricsThese are the metrics you’ll use to evaluate a given Innovation Investment Charter.

These are important: while a disciplined program of innovation will maximize returns and minimize waste, there will still be many more discarded programs than in a mature business. This is due to the inherent uncertainty with innovation and balancing energetic exploration with the ability to ‘pivot’ away from an idea that’s not working is probably the innovator’s most important emotional skill.

These metrics are not the same as the profit & loss metrics you’d use to measure a mature business. In fact, within the context of innovation programs, they differ substantially based on whether the innovation program is:

a) A tactical innovation meant to improve performance of an existing business on a 3-12 month timeframe
b) An extension of existing technology or business models on a 2-3 year timeline
c) A disruptive new business on a 5-7 year timeline

All of these can and should be assessed regularly (at least quarterly), but will have different metrics.

Output: A set of Innovation Metrics linked back to Investment Charters.
Note: you’ll later tie these to the Innovation Investment Charters (see step 10).

Step 7 (of 10): Intrapreneurial Investments

Intrapreneurial-InvestmentsThese are internal investments the corporation makes, tied to an Innovation Investment Charter. For example, if our fictional poultry equipment manufacturer has the charter ‘Fund early stage ventures in residential poultry care’, it might set tie this charter to an internal incubation program to fund teams that will explore new ideas for this Customer Segment and Problem Scenario.

Step 8 (of 10): Entrepreneurial Investments

Entrepreneurial-InvestmentsThese are external investments the corporation makes, tied to an Innovation Investment Charter. For example, if our fictional poultry equipment manufacturer has the charter ‘Fund early stage ventures in residential poultry care’, it might also tie this charter to corporate venture capital investments.

Step 9 (of 10): Key Assets & Capabilities

Key-Assets-CapabilitiesOf all the items so far, this one is the most dependent and that’s why I’ve listed at the end. The most common/natural starting point for assessing this is to list what the business sees as key assets & capabilities for its current business. That’s a mistake. There are probably lots of senior managers at auto manufacturers who see their expertise on internal combustion engines as a key capability, even though these aren’t relevant to the (hopeful) future of electric vehicles.

Your corporation almost certainly has assets & capabilities that could enhance disruptive innovation. It’s crucial to identify these and link them to your Innovation Goals- just make sure to start from those Innovation Goals and not what’s key to the existing business.