How Can Corporates ‘Do’ Innovation?
Why read this?
You want to take a Startup approach what do you need to consider?
Are there some guiding principles we could follow?
Tesh Srivastava
April 10, 2025
5
min read
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Its time to think like a Startup
Innovation, contrary to popular belief, isn’t the sole preserve of the startup, small business or ‘disruptor’. Larger businesses can and do innovate - but it’s also true that they can often struggle with how exactly to do so. There’s often a drive from within a corporate structure to ‘behave more like a startup’ in pursuit of innovative thinking - but what does that mean, and is it the right way of thinking about things?
When corporates want to act like a startup, what they tend to be thinking is ‘how can we move fast and break things, and build new products, services or systems without impacting revenue?’ - which is easier said than done.
There is a fundamental difference in the reality of innovating within a small business and a larger business which is born out of organisational complexity. In a startup, innovation can often be as simple as ‘person A has an idea and discusses it over coffee with people B and C; people B and C agree, and so person A gets to work and gets on with developing and implementing the idea.’
By contrast, within a larger business or corporate environment, the number of stakeholders, obligations and priorities means that this level of agility is simply not possible - leaving aside questions of organisational complexity and institutional politics, and the fact that in many cases these are companies managing large quantities of other people’s money and which therefore have a duty of care when it comes to ensuring the security of said money
So, how can Corporates ‘do’ innovation?
First, let’s clarify what we mean by ‘innovation’ in this context. Put simply, it refers to ‘doing something new’ - whether that’s altering day to day processes (or creating entirely new ones), or the creation of new service lines or revenue opportunities via new methods, processes or new technology (innovation doesn’t have to be technology-led, but it often is).
A practical current example can be seen with AI - the big innovation question is ‘How do we embed generative AI into our business and processes so as to increase efficiency?’ - this can be answered in a variety of ways, some product-led and others process-led, but all are examples of ‘innovation’.
Here we can see some of the contrasts writ starkly - a startup can just start experimenting with LLMs, whereas a larger company needs to consider a myriad set of questions around integration with existing workflows, data security, potential union pushback…and the list goes on.
The 9 principles of Corporate innovation
Determine who in the organisation wants to apply innovation and why. Are they aiming for efficiency, revenue growth, or fulfilling specific job responsibilities?
his is important both in terms of working out how the innovation will be assessed, but also when it comes to identifying supportive stakeholders and champions within the business (more on this later).
Innovation within a large business benefits hugely from an internal champion that moves it along and makes it happen - because, oftentimes, if no one needs to make it happen (if, on some level, their job doesn’t depend on it) then it won’t.
Evaluate potential innovation opportunities based on their value (revenue or cost savings) and complexity (ease of implementation). Focus on initiatives that fall within the high impact/low complexity quadrant - this might sound like an obvious thing to say, and in some respects it is, but it’s remarkable how often this step is ignored.
While it’s impossible to perfectly assess ‘impact’ and ‘complexity’ exactly, even developing a rough model can be exceptionally useful in assessing value and determining priorities. That said…
Innovation involves a degree of uncertainty. Corporates must be willing to operate with incomplete data and unknowns, which contrasts with the structured approach they are accustomed to - everyone knows that large businesses like the reassurance of a strong evidence-base, but that’s not necessarily possible when you’re truly innovating…and that has to be OK.
Communicate the innovation plan to stakeholders to secure buy-in and budget. This includes financial modeling and setting KPIs for a proof of concept (PoC).
After testing the PoC in a sandbox environment, review the results against the KPIs. If successful, move to a minimum viable product (MVP) stage.
This iterative process should be expected to take 8-12 weeks per stage, depending on company size, sector, and the nature of the innovation - and it can take longer.
Again, this is in stark contrast to the smaller, more agile world of the startup - but it’s just a fact of life.
If during the ‘Review and Iteration’ process you figure out that that all this innovation isn’t quite appropriate for the specific use case that you had in mind, it’s worth bearing in mind that there can often be opportunities to repurpose it or spin it out into a separate business, product or service.
Determine if the organisation has the necessary skills and capacity to innovate internally. If not, consider seeking third-party assistance. Does the business have the budget to make it happen, whether in terms of allocated budget or allocated time.
Gather input from target customers—both internal and external—to ensure the innovation meets their needs and expectations. Innovation shouldn’t happen in an ivory tower.
If it looks like you’re going to need to work with third party organisations to innovate, engage the procurement team early to address potential hurdles. Having a dedicated champion for the innovation project can facilitate this process.
Working with Third Parties
If your innovation process does require third-party support, how should you go about selecting who to work with - and what sort of partner?
There are plenty of ‘innovation consultancies’ out there who will offer their services to help you, but it’s important to find partners who have experience not only of ‘coming up with’ innovation but also of deploying innovation, and who have both an understanding and experience of the peculiarities of making innovation work within large corporate structures.
There are plenty of people out there who can develop a Minimum Viable Product, but who haven’t ever had to then integrate that MVP into an existing, complex product/service ecosystem; similarly, many consultants are able to make the business case for innovation, but don’t then have the technical resource or chops to turn the business case into reality; or who can design a product or service, but who can’t code it or sell it internally.
Work out what it is that you need from a partner, and ensure that you find an individual or organisation to work with which is able to fill in the necessary gaps.
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