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Six Questions to Ask before Opening an Innovation Outpost

Gather your leadership team together and run a diagnostic test of your company’s innovation goals and needs before establishing an innovation outpost.

In an effort to stay on top of market trends, companies will set up an innovation outpost—a corporate offshoot located in an innovation cluster, like Silicon Valley or Hollywood, that taps into the cluster’s ideation ecosystem. Before deciding whether your company should follow suit, corporate innovation authors Steve Blank and Evangelos Simoudis recommending asking these six questions:

  1. Should “startup-driven” innovation be part of the corporate innovation portfolio? Including “startup-driven” in the corporate portfolio may make sense if a company is being disrupted now, will be disrupted in the near future, cannot keep up with the pace of innovation in its industry, or wants to promote intrapraneurship to retain creative employees.
  2. What is the timeline of ROI and the amount of risk we are willing to assume? An innovation outpost makes the most sense when a disruption is expected to happen within 5+ years, and the outpost can be created with a relatively modest investment.
  3. What would be the charter for our innovation outpost? Senior managers should address the one or two big strategic problems that can be addressed through a day-to-day presence in the innovation ecosystem.
  4. How quickly can we explore and validate the ecosystem? You and your leadership team need to get out of the building and visit the ecosystem to be assured the reality on the ground matches the corporation’s innovation changes.
  5. What is our company’s strategy for successfully integrating an innovation outpost? Innovation outposts most often fail when they come up with innovations no operating division wants and/or the company refuses to fund. There needs to be an agreement on what happens if the division develops disruptive products that do not fit the existing company’s business model.
  6. How do we establish and staff the innovation outpost? Leadership must determine how the outpost will leverage innovation, whether that’s through partnering, acquiring, incubating, or inventing. They also should find out the timeline to ROI for an innovation outpost.
Published Jul 8, 2016

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