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Last week I had the honor of participating in the Innov8rs SoCal 2024 conference. This is a regular gathering of the ‘innovation tribe’ from across the globe where executive intrapreneurs get together to share what’s working and what isn’t in the world of corporate innovation and enterprise venturing. Senior innovation leaders, academics and professors, and service providers and vendors gather and share their insights from their corner of the enterprise innovation world.

The importance of these gatherings is underrated. In many professional fields it’s a requirement to synthesize new offers, practices, narratives, and strategies to better understand the tools, techniques, and strategies being used by the largest organizations in the world. All in service of growth, transformation, evolution, and resiliency in the face of a rapidly changing world. In the world of corporate innovation, gathering to better understand what’s working and what isn’t is mandatory.

During each gathering I notice and observe various trends and patterns in the corporate innovation world that I share with our members and colleagues. During this conference I noticed five distinct signals across the corporate innovation spectrum that include the effects of AI, corporate venturing and startup engagement, the maturity of innovation labs, inflation and its long term effects, and the maturing of open innovation and collaboration. Not as pronounced although present were the risks enterprises and large organizations accept through the lack of innovation efforts and the sophistication and maturity of growth models. Let’s dig in.

AI, or what I’ll refer to here as Augmented Intelligence using Automated Intelligence is here and already having profound effects. Of course this technology is automated yet the practice of utilizing AI in the corporate innovation environment is being adopted to augment practices, processes, and other behaviors that are able to be automated. Brian Solis, during his keynote presentation to open the conference, discussed the various waves of AI and that we’re well along the maturity curve. He shared that we will experience several phases of AI throughout the course of the technology’s adoption, perhaps setting the stage for a new “Moore’s Law 2.0’ that will break the mold of 1.0.

One distinct pattern within corporate innovation AI is doing things faster and more efficiently. U+ with their new venture FifthRow, released only in late 2023, is conducting the research phase of new venture development with this new technology (among other capabilities). This is sure to significantly reduce time to market, substantially increase the number of possible new business concepts, and reduce much of the costs associated with the research phase of new venture development. This tool can do much more than described here but in the context of corporate innovation and how enterprise can utilize AI to innovate and grow this is one application.

Zooming out, CEO’s and C-suite leaders are couching their narratives as it relates to the effects of AI on their businesses. Unrelated to the conference yet in-line with general corporate innovation trends, Prof G (Scott Galloway) recently outlined a number of examples where corporates have unleashed an AI strategy that is already producing results. The AI isn’t coming for our jobs, it’s already here and will continue to exert its influence. To read Prof G’s piece on his blog No Mercy, No Malice “Corporate Ozempic” is a peak into the front lines of enterprise AI.

Anyone who has spent any time either directly involved with corporate innovation, is an intrapreneur, or serves these leaders knows how difficult it is to get innovation done within large organizations. The constant proving of your value (and existence!), fighting for resources continuously, influencing internal and external customers; creating, developing and executing on a portfolio of experiments searching for that breakout offer - this only scratches the surface of the difficulty corporate innovation leaders face. Some organizations have embraced the challenges of driving internal innovation and growth and have turned to external startups to get the job done.

Enter Corporate Venturing. An Innov8rs SoCal participant asked me why there was such heavy programming focused on startups. This made me pause for a moment as this community is about corporate and enterprise innovation. Startups and new venturing is merely one tool in the toolbox to get growth done. I responded that this wasn’t necessarily intentional although it does reflect broad trends in the corporate innovation space to grow within the constraints of organizations, structures, and cultures.

As startup studios continue to evolve and compete with incubator and accelerator models to build new ventures, corporations have noticed and want in on the action. Personally, I believe that building purpose-built ventures with entrepreneurs and intrapreneurs working closely together to unlock new value is as close to magic as you can get in business. Both of these constituents bring such special and unique qualities to the table- when they are able to effectively collaborate, create, and develop new ideas and concepts that borrow from their strengths, tremendous value can be unlocked.

High Alpha Innovation and Future Foundry, two of Innov8rs SoCal more engaged partners, take a similar fundamental approach to corporate venture building yet offer unique approaches to what they build and how they build it. High Alpha focuses on creating new SaaS businesses that can thrive in the enterprise environment, while Future Foundry takes an approach that’s been used to build startups in Silicon Valley. U+, another Innov8rs partner, also takes a unique approach to corporate venture building and has unlocked billions in new value for their clients.

The third signal I’ve noticed recently and was reinforced during the conference was the sunsetting of innovation labs. Two recent examples of this are the shut down of Store No. 8, Wal-mart’s innovation lab, and the workforce reduction at Google’s Moonshot unit ‘X’. Both organizations announced these closures and reductions as a maturing of their innovation function. Walmart announced they were closing Store No. 8 due to the innovation capabilities being ‘graduated’ into the organization. Mission Accomplished - fair enough. But Google, a company known for spending lavishly on breakthrough innovations including Google Glass, self-driving vehicles, and other far out, sci-fi sounding initiatives, cutting funding for innovation is a signal that it’s no longer producing the value it was intended to produce.

If you are running an innovation lab or contemplating launching a new innovation unit, I would suggest learning more about these cautionary tales and design your approach to avoid their fate. Unless of course, innovation is temporary or has an expiration date. A shorter than expected shelf life of innovation units is part of this game and should be expected if the promise of innovation isn’t delivering. If you find yourself in an innovation unit that may be cut or have already been cut, the Innov8rs Community is a great place to connect with colleagues and a global network of corporate innovators and intrapreneurs.

The fourth trend I noticed during Innov8rs SoCal 2024 was the effects of inflation - they are real. Regardless of the origin of inflation, whether it’s massive money printing, government deficit spending, or spiraling debt, it’s all leading to increased costs across the board. These costs are being embedded in the global economy driving prices for goods, services, production, labor, transportation and almost everything required to bring new concepts to market.

I believe the inflation will reestablish costs and prices at a higher level and will remain there for years to come. There will be no hard or soft landing - there will be no landing unless of course a massive economic downturn occurs which is entirely possible. Extreme inflation will involve a fundamental reset of our economic models that will have profound short, medium, and long term effects on new innovations. As mentioned above, AI can play an important role in keeping some costs and expenses in check although this ‘trade off’ and approach will have downsides that need to be considered. For instance, if corporate innovation units are operating on a limited budget and need to conduct research, produce insights, and create new concepts will these teams turn to low-cost AI or expensive research teams? Rationality usually wins in large enterprises - buyer beware. Some organizations have already embraced this new reality and are addressing the new threats, obligations, and opportunities presented with increased inflation.

The fifth signal I picked up at the Innov8rs conference was the deployment of open innovation and collaboration. Not so long ago external engagements, partnerships, and collaborations were mostly ad hoc. Yes, some organizations properly structured these engagements - tech and IP transfer is one domain that has benefited from an organized approach to external engagements. But what’s occurring now is a continuous and prolonged effort to utilize open innovation as a serious practice within the corporate growth portfolio.

There are hundreds, thousands, of case studies for open innovation. To some degree every organization that exists utilizes some form of open innovation even if those efforts are solely concentrated on sales and marketing. But, what we’re witnessing now is a more sophisticated and dedicated approach to engaging customers, colleagues, academia, researchers, competitors, adjacent industries, research labs, government, to advance the corporate innovation and growth agenda. Innov8rs is an excellent partner in the corporate innovation ecosystem to connect you with everything you need to get corporate innovation done.

There were several additional signals that I picked up at the Innov8rs SoCal conference although not as strong. A pattern that emerged is a belief that the corporation isn’t safe from competition, startups, or other pressures that could threaten their existence. Startups especially can usually do what an enterprise does although they can do it cheaper, faster, and more effectively. Legal monopolies withstanding, enterprises should be on notice that their cheese could be moved in an instant. It’s incumbent upon corporate innovation, growth, and transformation teams to be acutely aware of these threats and to stay well ahead of them or suffer the consequences.

Another weak signal yet strong pattern that surfaced was the maturing and increasing sophistication of enterprise growth models. Innovation capabilities are being embedded within large organizations and being deployed in crafty and compelling ways. According to our research conducted over the course of the previous 15 years by the Innov8rs CoLab, approximately 30% of large human organizations (primarily enterprise although this does include government and NGO’s) have a dedicated innovation and growth function. Within that 30% less than half are able to produce reliable and repeatable growth. What this means is that to the winner goes the spoils. A very small percentage of large organizations are able to dependably produce growth their shareholders expect. If you need any more evidence that investing into a properly structured, organized, and funded corporate innovation and growth effort is worthwhile, look no further than the opportunity presented by your competition not organizing their growth efforts.

The most significant trend I picked up on at Innov8rs SoCal is the undervaluation of the Corporate Innovation function. Not every organization can perform this function well, in fact - for many organizations innovation shouldn’t be considered. In some cases it’s better/less risky to focus on incremental growth within a narrow band. For other organizations, especially where margins are vulnerable and disruption is expected, innovation should be at the top of the corporate priority list. Innov8rs is an excellent resource to better understand where your organization resides on this spectrum and can be a network to get the help you need to advance your growth, transformation, and resiliency agenda.

The global marketplace - driven by knowledge, computers and technology, networks, and new offers - continues to change in radical and transformative ways. One of the most important tasks of the ambitious business professional is to understand how these marketplace drifts - thrust into the open through innovation and changes in technology, demographics, politics, and economics - changes the competitive landscape for our industries, organizations, and teams. Connecting to and collaborating with colleagues who share our vision, values, and insights can enable us to lead through this change and come out the other side intact and thriving.

Innov8rs next in-person gathering will be hosted on June 12-13th in Milan, Italy (CLICK HERE to RSVP) where we will continue the conversation about what works and what doesn’t in the field of corporate innovation. If you can’t wait that long to engage with your innovation peers and colleagues please join us for one of our upcoming virtual programs or participate in our community (CLICK HERE).

If you have innovation in your title, Innov8rs is your tribe.

Onward.