Multinational corporations often talk about innovation and staying ahead of the curve. However, implementing a true culture of innovation that leads to new products and services is far more challenging. Many companies sponsor accelerators or send technology scouts to Silicon Valley, and label these efforts corporate innovation. As Steve Blank famously put it, this is often innovation theater. After nearly two decades of working with multinationals on innovation initiatives, it’s clear that to counter the virtue signaling of innovation theater, establishing an Innovation Research Framework (IRF) is imperative.

The IRF is a bottoms-up research process starting with making sense of the startup markets and working upwards to a deeper understanding of emerging capabilities. This process focuses on the key technologies and features of the startups and their unique differentiators from each other, which represent the real substance of innovation. This approach significantly differs from other innovation research and scouting processes which are generally based on vanity metrics such as funding amounts, investor pedigree, and press coverage. The IRF produces an actionable view of the innovation landscape, enabling corporations to make strategic decisions that can move the needle. Here’s how it works.

Step 1 - Startup Categories: Identify the startups in the market and organize by functional categories

The first step involves identifying the startups in a relevant market and organizing them by their functions. This provides a clear overview of the functional categories of innovation in the market and the companies, laying the foundation for deeper analysis.

Step 2 - Product Capabilities: Study and use products to define key capabilities in the market

The next step is critical and requires digging deep into the products the startups offer, focusing on the functionalities and technologies they bring to the market. This involves hands-on trials of products and thorough reviews of product documentation. By understanding the product innovations down to the feature level, you can uncover the emerging trends.

Step 3 - Company Scores: Score companies' product capabilities versus one another

After defining the key technologies and product innovations, the next step is to assess and score the companies in the market. This enables you to understand where each company stands in relation to the others. This scoring provides a view of the leaders based on objective product analysis and not simply the vanity metrics often used to shortlist startups.

Step 4 - Use Cases: Highlight case studies of emerging capabilities

In order to bring this analysis to life for innovation stakeholders at your company, the next step is to highlight case studies that showcase emerging capabilities. These real-world examples offer concrete evidence to broad stakeholders on how emerging capabilities are being successfully commercialized, even in their earliest nascent stages.

Step 5 - Trends: Synthesize market and product trends

Finally, to engage in appropriate discussions and make strategic decisions, the last step is to synthesize findings into overarching innovation and product trends in the market. This step is crucial for initiating real debate on actions to take—from simply continuing to watch specific trends, to launching internal development efforts, to exploring collaborations, investments, or acquisitions with specific startups—all based on real insights from the ground up, not the top down.

It’s important to note that the IRF is not a one time project; it is an ongoing research process that should be ingrained in the operations to continuously monitor and identify the innovation signals to act on. We can help as a research partner or guide in this process. Reach out to nader@daybreakinsights.com to discuss breaking out of innovation theater and creating real innovation outcomes.