CHAPTER 6

Corporate Infrastructure

Managing innovation and intrapreneurship is not an ad hoc task. It is a disciplined process that requires systematic management. To build sustainable innovation, you need to assemble the infrastructure within your organization to cultivate intrapreneurship. Without the right infrastructure, innovation can be chaotic and hard to manage, as many leaders have told me.

This is why some leaders remain skeptical of intrapreneurship. They are afraid that there is no control over what employees are doing. Having creative people as intrapreneurs means that they require a lot of freedom to explore the unknown and this, they worry, might result in a waste of time. But, in my experience, innovation is only chaotic when there is a lack of discipline. While creativity does require freedom, innovation requires discipline and discipline requires the right infrastructure.

Infrastructure is a very broad term. In the context of this book, corporate infrastructure refers to procedures, protocols, policies, and systems that support intrapreneurship. Sometimes this is given a name, although different corporations use different names. Some call it an intrapreneurship program, some an innovation program, and some have even given it their own branding (e.g., Procter & Gamble’s (P&G) GrowthWorks, Citi’s D10X^SM, and Dupont’s “$eed”). Providing the infrastructure for your people to develop themselves as intrapreneurs reinforces the message that they are not navigating the organization alone and that avenues for support are in place.

The starting point for developing an intrapreneurship program is your corporate strategy. The corporate strategy defines the business objectives and sets out how those objectives will be achieved to keep the business ahead of its peers. These are based on the corporation’s unique strengths, assets, and competitive advantages, as well as challenges and disruption to the market. The strategy influences all decisions, including business, operations, technology, human resources, and, of course, innovation. You should put together an innovation strategy based on your corporate strategy. An innovation strategy should include five main components:

1. Why. The reason for innovating and the vision of the corporation

2. Who. The customers you are innovating for

3. What. The external forces of change and their influence

4. How. The capabilities that the corporation has and is going to build

5. When. The frequency of capturing the ideas and the timeline of moving the ideas forward

Let’s look at each of these components in turn.

Why. Leaders need to form a vision for innovation. From the vision, you can identify the gap between where you are and where you want to be. It sets a roadmap to the desired future state of the corporation. Seeing the gap gives you a reason why you need to innovate to achieve the envisioned state. This also provides your employees with strong sense of purpose for innovation.

Who. Identify the customer segment that you are innovating for. What are the corporation’s competitive advantages today in this segment? What are the customer’s unmet needs? For any idea raised by the employees, it should always serve this customer segment by either solving their pain points or discovering new value for them.

What. In the innovation strategy, corporate leaders need to capture the future themes they would like to explore, focus on, and/or invest in. Themes are not specific solutions. Themes could be high-level trends that influence the market dynamics or emerging technologies that might change the competition landscapes. Corporate leaders can brainstorm and lay out themes that they have seen in the market using the following questions:

• What are the trends that are influencing my customers?

• What are the emerging technologies that are relevant to my customers’ industry?

• Who could be a new competitor in the future? What enables them?

For example, a corporation in the health care industry might find the following themes relevant:¹

• Personalization of care

• Virtual care and telehealth

• Agile supply chain

• The Internet of Medical Things (“IoMT”)

• Application of data analytics and artificial intelligence

• 5G network

• Augmented, virtual, and mixed reality for health care

All of these themes are influencing the future of the health care industry.

How. What innovation capabilities does the corporation already have? Take an inventory of what you can leverage. What tools can you provide your employees for them to carry out innovation activities? To achieve the vision, what’s missing? How do you plan to acquire those capabilities?

Using the innovation strategy, you can create a system of strategic intrapreneurship with a specific focus. As Professor Bulent Güven described in his article “The Integration of Strategic Management and Intrapreneurship,”² strategic intrapreneurship is the process of promoting innovation and creating policies according to the organization’s competitive advantages and core competencies. It enables employees to turn discoveries and opportunities into advantages.

You should widely discuss the innovation strategy with employees to keep them informed and inspire them to explore the possibilities. Broadcasting the innovation strategy can make them feel involved and engaged. Sharing the areas of focus allows employees who aspire to become intrapreneurs to understand where they should invest their efforts. They can then prioritize problems or solutions that are better aligned with the corporate strategy.

When. Innovation is not a one-off exercise. The timeliness of capturing and moving ideas forward is crucial to the success of your organization. Imagine if you review ideas only once a year and so happen that an employee with a brilliant idea missed the round. The idea might be brought to you a year later but the opportunity might have been missed. Even worse, the employee might have left your organization and brought the idea to another company.

To manage the timeliness of innovation, you need to decide the appropriate frequency of reviewing the following five areas:

1. Idea capturing

Ideally, idea submission should be open at all times. Some organizations manage the idea capturing by hosting events or campaigns. With that, idea capturing is more dependent on the occasional events and the cost of capturing ideas also increases.

2. Ideas funding

To create a robust pipeline of innovative projects, you need to review and fund ideas promptly. A quarterly review is a good basis to start with. If this is done less than two times a year, you would be at risk of losing competitiveness and time to market.

3. Progress of funded ideas

Once the idea is funded, a regular review of the progress is required. This is to ensure that the project is moving forward. If the project is not progressing as expected, the review would provide the opportunity for the founder team to escalate the roadblocks and seek support to clear them. A monthly review would be a good frequency to start.

4. Innovation management

Leaders should review the efficiency of the innovation management, preferably every six months. This is to evaluate whether the approach leads to the desired results or target of innovation.

5. Innovation strategy

Changes across the various industries have been accelerated. Corporations are facing rapid disruptions. The innovation trends that your team has identified at the beginning of the year might not be relevant at the end of the year. The competition might have changed. Therefore, a yearly review is required to understand the landscape that your corporation is in.

Idea Management

In the daily interaction in a corporation, too many good ideas are left unspoken or raised but lost. Ideas need to be managed in a systematic and structured way to give you visibility of the idea pool and its potential.

Idea Funnel

To better manage the ideas in the corporation, you need a mechanism, the idea funnel, to generate, capture, assess, and track the progress of ideas. The idea funnel provides you with the opportunity to:

• Generate new ideas in the organization. Using events like hackathon, innovation workshops, or bootcamps, corporates can lead employees’ engagement to generate ideas to solve specific problems. The ideas are outcomes of the event and will be captured in the idea funnel. The funnel also acts as the pool to capture ideas coming from all sources in the corporation.

• Gain visibility of ideas across silos. Once the ideas are captured in a pool, people from various departments and teams can view the ideas, see where the ideas sit, who the founders are, what problems they are trying to solve, what themes they fall under, and so on.

• Build synergies among similar ideas. With the visibility of other ideas in the corporation, corporate leaders or employees can reach out to build on each other’s ideas. This is particularly important in a large organization as typically teams are working on similar ideas or ideas that leverage similar technologies. The sharing of learnings and building collaboration can help the team to expedite the innovation process and avoid overlapping efforts.

• Evaluate ideas easily. Having the ideas in one place allows leaders and relevant stakeholders to discuss and evaluate ideas on the same platform. It also provides a good track record of decisions made, who made them, and the rationale behind them. Plus, it helps build up the corporate knowledge of idea decision making.

• Increase transparency of progress. Mostly after ideas are sponsored, progress-tracking relies on the project team themselves and it is made visible to the close stakeholders. It also depends on the proactiveness of the team members to update their progress. Having a tracking system in place requires the team to report the progress, at least on a high-level basis, in the funnel. This information is important for leaders. You have to be aware of the innovations that you expect to be launched in the near term and form the strategy accordingly.

To manage the idea funnel efficiently, you can deploy idea management software out of the box, customize an existing offering, or build a proprietary one. Mature idea management software includes Agorize, BrightIdea, IdeaDrop, and Viima. In a corporate that I worked with previously, the idea management software was developed in-house. It was a small build and launching it took around six weeks. Depending on how tailored you want the software to be and the available resources, a build versus buy analysis will help you decide how you deploy the idea management software.

The scope of a basic idea management software includes:

• Capture idea: founder(s), sponsor(s), department, relevant product, theme, date, potential impact (revenue/cost saving), or any other information required by the management.

• Capture keywords of an idea to identify similar ideas.

• Evaluate idea: reviewer’s input, decision vote: approve/reject/more validation needed, justification field.

• Progress tracking by stage: ideation, prototype, proof of concept, solution launch, and scale.

• Web access is simplest, compared to an application or software being installed.

Idea Evaluation Framework

To guide the evaluation of ideas, you will need to develop a framework. It is an agreed list of lenses and criteria that apply to all ideas submitted. The framework guides which ideas should be approved or sponsored to proceed to the next stage. Without a framework, the stakeholders would likely rely on their instincts to assess the idea and lose objectivity. Once you have the framework in place, communicate it to your employees and make it transparent. That can help them in their innovation process as they can conduct self-assessment and prepare accordingly when they put up an idea.

An idea evaluation framework should capture all the key criteria that are used to evaluate the idea. A good framework should be comprehensive and help review ideas through the lenses of design thinking, solution readiness, and alignment with the corporate innovation strategy. Yet it has to be simple enough and not so intimidating that it deters people from submitting an idea.

Here are some criteria that you can consider putting into the framework. For each of the points below, you can apply a scale of 1 (lowest) to 5 (highest) for the evaluation team to provide their scoring individually.

1. Customer centricity. How does the idea address a key customer problem statement? To what extent does the customer want this problem solved?

2. Killer idea. How well does the idea address a key customer pain point? Is this a painkiller or a vitamin solution?

3. Technology capability. How mature is the required technology for building the idea?

4. Innovation alignment. To what extent does the idea align with the innovation strategy and the focus areas?

5. Unique value proposition. To what extent does the idea differentiate your corporation from competitors and provide a unique competitive advantage?

6. Proprietary assets. To what extent does the idea leverage the corporate advantages of the core businesses?

7. Commercial viability. How big is the opportunity (in revenue or cost saving) for the corporate?

8. Speed to market. How long would it take to launch the solution?

9. Scalability. To what extent could the idea scale across the markets in which the corporation operates?

Figure 6.1 is a template of the idea evaluation criteria. Each organization is unique in terms of its desired goal of innovation, and the criteria can be tailored to fit your corporate strategy.

Figure 6.1 Idea evaluation criteria template

The framework would help the team that evaluates the ideas to break down the analysis from a different perspective. These scores provide an estimate. However, the analysis should not be simply about approving the ideas with the highest scores. The shortfall of the scoring is that it might not be able to capture the entire picture of the idea and sometimes it is too subjective. As a best practice, an evaluation panel should be formed and each member should submit their scoring (including total scores and the breakdown). A deliberation session should then be hosted. All the scores would be shown as references and there should be a time-bound discussion on each idea. Based on the point of view of the panel, they should collectively agree on the ideas to proceed with. Sometimes the best idea might seem difficult to digest. A diverse group on the panel helps when it comes to understanding the opportunity presented. That’s why deliberation is very important on top of the actual score.

Idea Evaluation Panel

It is best practice to have diverse representatives on the panel to consider all aspects of the idea. You should always strive to have a panel instead of an individual deciding on new ideas. That can avoid individual biases limited by one individual’s experience or mindset. Having a panel gives the process credibility. Employees will feel that their ideas are taken seriously and not controlled by one person alone.

The next question is: who should sit on the panel? To form a strong panel, you need people who are senior enough to sponsor ideas, people who understand customers, people who understand the implications for the business, people who can contribute their subject expertise, and people who can view ideas from an entrepreneurial perspective. A good panel would consist of a team with:

1. Senior sponsor: A highly influential leader who is powerful enough to sponsor the idea. This person sees the strategic direction of the company and helps support the idea using their influence.

2. Business or sales head: A leader who is overseeing the profit and loss (P&L) of the business or a leader with a strong understanding of customers’ needs. This person can evaluate the opportunity from a commercial angle.

3. Technology head: A leader who is overseeing the technology capability and architecture. This person can evaluate the relevant technical requirements and see whether there is any existing capability that the idea can leverage.

4. Subject matter expert: A specialist who is experienced in the field to which the idea is relevant. The specialist would have a thorough understanding of the existing process and can give their opinion on whether the idea is solving the right problem.

5. Innovation lead/entrepreneur in residence: Someone who can view the idea from an outsider’s perspective and provide entrepreneurial input. It could be a person who is hired to innovate or someone who has been an entrepreneur. This person would provide input based on their experience of innovation or building a new business.

6. Customer community (optional): What could be better than getting direct feedback from your customers? If possible, having a customer community or representative on your idea evaluation panel would bring tremendous value. With real customers involved, the team no longer has to “guess” whether the customers are receptive to the idea.

Figure 6.2 shows the key personnel to be included in the idea evaluation panel.

Depending on the different types of ideas and the associated products, you can bring in other relevant stakeholders to the evaluation panel. However, do note that the optimal panel is a nimble one. The more people you have, the more group think could occur. The decision process would be slowed down because too much agreement is required.

If the idea pipeline is robust, you can consider having decentralized idea evaluation panels instead of a single team to consider them. Having multiple idea evaluation panels means that evaluation takes place more frequently and this speeds up decision making. As you can imagine, if ideas are only evaluated on a half-yearly or quarterly basis, you might miss a window of opportunity to get the idea sponsored. The panels could be organized along business lines or geography, and different ideas could be allocated to different panels.

Figure 6.2 Idea evaluation panel

What Does Sponsorship Mean?

Before you fire the starting gun and ask people to pitch ideas, you must answer one major question: what does sponsorship mean? Employees who pitch ideas want to know what it will mean for them if their pitch is successful. I have seen situations in which the sponsorship was not well defined or there was little commitment from the organization. The intrapreneurs in these cases became disappointed and frustrated and eventually walked away from the idea they were once passionate about.

I urge you to think through the commitment you want to make for innovation to thrive. If the ideas are worth your sponsorship, what kind of support are you willing to provide to your intrapreneurs? Consider all of the following commitments:

• Time investment. Do you expect intrapreneurs to work extra hours on top of their day jobs to push the idea forward? Naturally, intrapreneurs would be driven to do so. Building a new idea can be an intensive task, especially once it gets through the initial ideation stage. Expecting intrapreneurs to work full-time as well as build a new business might not be entirely realistic or sustainable. It might cost the corporation with the intrapreneur either not handling their original job well or not making good progress on the new idea. On the other hand, it might not be practical to invite the intrapreneur to walk away from their day job and focus solely on their new idea. It is too risky for both the corporation and the employee. When employees are asked whether they would opt to become full-time intrapreneurs, most of them are skeptical when an idea is at an early stage as it lacks job security. Consider providing a commitment to a percentage of time you want the intrapreneurs to work on the idea. 3M uses the 15 percent rule to invite its employees to devote about 15 percent of their time to experimental doodling or work on self-initiated projects.³ Alphabet, the parent company of Google, applies a “20-percent time rule” for projects that would benefit Google.⁴ If you interpret the percentage of time during a workweek, 20 percent is one in five workdays. So Google is allowing employees to use one day per week to explore and work on their own ideas.

• Seed funding. For intrapreneurs to proceed with discovery and development, there are often resources required. Consider providing a small amount of funding for the ideas that successfully obtained sponsorship. To support the new ideas, set aside a pool of funding that people can bid for each year. There should be strict rules and accounting for the funding usage, for example, for research, product development, or technology capability relevant only to the idea raised. Consider providing the grants in a staged manner so there is lower risk associated with investing too much upfront. Refer to “Innovation pipeline management” in this chapter for more information about managing ideas through different stages.

• Mentorship. Intrapreneurs require extensive support to move things forward. Assigning mentors who are subject matter experts or senior management can help them navigate and expedite the process. Having a highly influential leader as a mentor or advisor on the team can help open doors for them and foster collaboration across various functions. Communicate clearly with mentors, setting expectations for their roles and responsibilities.

Whatever commitment you have decided upon and broadcast to your organization, do stick to it. You might not see change overnight or new products invented in three months. It will take time for employees to test the water, observe examples, and build faith in the new system.

Ideas That Might Self-Cannibalize

When you open the funnel to capture ideas, there’ll often be some ideas that could cannibalize your old business. As an example, let’s consider a travel agency that earns most of its income from booking air tickets for customers over the phone. Customers call the agency’s staff, who check ticket availability for them. The turnaround time is long and the commission fee is opaque. With the new technology available today, there’s bound to be a better way of doing things.

The idea for a digital self-service system comes from an intrapreneur, who suggests that customers could go to the agency’s website. There, they could check all air tickets online and book in real time. For the sake of this example, let’s assume that no competitor (like Expedia) has launched before and, if the corporation pursues it, it might be the first to market.

What are the pros and cons? Well, the commission on digital booking could potentially be lower as the cost of operation is lower than the phone system. The customer experience would definitely be better, given the quicker response and seamless checkout. However, the idea would certainly cannibalize the current phone-based business and affect profitability, since that existing department is the company’s bread and butter. What should you do?

Cannibalization sounds scary. Many corporations are skeptical about launching new products because they might impact existing ones. However, while in the short term this might work to protect existing profitability, in the long run, it is going to endanger the company’s survival.

If you don’t cannibalize yourself, someone else will.

—Steve Jobs

It might seem ideal if you can stop the new idea from eating your existing lunch. However, you are only able to stop those within your company. In the external world, your competitors and other startups are innovating relentlessly to seize market share. It is only a matter of time before they launch the innovation that you did not.

The recommended approach is to embrace cannibalization.⁶ However, that’s more easily said than done as it feels unnatural to replace a profitable business. The key is to focus on what customers really need (refer to “Create a culture with strong customer obsession” in Chapter 5), evaluate the impact of cannibalization and the time taken to launch and scale up the new product, and make a decision and move forward.

Innovation Pipeline Management

Capturing and evaluating ideas are great starting points. But ideas remain ideas until they are developed and implemented. To help your intrapreneurs make progress, you need to have a system, the pipeline funnel, to progress the idea.

The innovation pipeline funnel is used to manage sponsored ideas. There are multiple stages within the funnel and each stage has associated inputs and outputs. The stages include discovery, proof of concept, minimal viable product (MVP) launch, and scale-up. Figure 6.3 illustrates how an idea flows through the innovation pipeline funnel.

1. Discovery. After the idea has been sponsored, the team needs to do more discovery work on the problem and solution exploration. Refer to Chapter 7, “Problem-Solving by Design Thinking,” under “Disciplined Innovation” for more information about the process. At this stage, the team needs to assess whether the idea has legs. It also requires the team to form a well-crafted concept to explain how the idea works from end to end. Some prototyping will happen during this stage to experiment with the design of the product and to test customer receptiveness.

Figure 6.3 Innovation pipeline funnel

Key inputs: Problem statement, hypothesis, high-level idea

Key activities: Research, customer interviews, crafting of solution concept, crafting business model canvas

Key outputs: Validated problem statement or hypothesis, design of solution concept, high-level business model, target customers

2. Proof of concept. With the solution concept crafted, the team has to prove that the concept actually works. They can break the concept down into various experiments to test the components before they assemble the solution.

Key inputs: Design of solution concept

Key activities: Design of experiment, testing via experiments, iteration of experiments

Key outputs: Proof-of-concept results, validated or invalidated solution concept

3. MVP launch. After the team confirms that the solution can be built, they need to decide on the key features to include in the first version of the product. This requires them to form an MVP that can deliver the desired function and experience to the customer without excessive build. Some refer to this stage as the pilot stage.

Key inputs: Validated solution concept, high-level business model, target customers

Key activities: Defining MVP, developing the MVP, finalizing business model, design of production services, go-to-market

Key outputs: MVP delivered to target customer

4. Scale-up. Depending on the feedback from the MVP launch, the team might go through a few pivots of launches before they move on to the scale-up stage. Pivoting is required when the team discovers that a major direction change is needed to achieve success. Examples of pivots include:

• Change in key solution features

• Change in targeted customers

• Change in the platform, for example, an application or software

• Change in business model to increase monetization

• Change in technology to lower cost or create a more robust product

By learning from pivots, the team gets a better understanding of what a successful product looks like and is in a better position to replicate it across different markets and customer segments.

Key inputs: MVP or pivoted MVPs, customer feedback, product, market roadmap

Key activities: Planning for the scale-up, forming long-term strategy, transitioning pilot to expansion

Key outputs: Scaled solution across markets or customer segments

The time taken to proceed from one stage to another varies and it might not necessarily be a linear process. If the team has done sufficient work before the pitch, some activities might have already been catered for during the early stage and they can skip ahead. The main purpose of having a funnel is to help the team expedite the process by visualizing the innovation activities and understanding the checkpoints. The skills required to navigate the process are covered in more depth in Chapter 7, “Essential Skills of Intrapreneurship.”

The Pause, Pivot, or Kill Switch

Not all ideas can proceed through the stages and finally come to scale. The pausing and termination of an idea or project is also part of innovation pipeline management. Corporations have finite resources to invest in new ideas. There is an opportunity cost if you linger on ideas that have a low chance to succeed and keep deploying resources (be it money or person-hours) on them. At each stage of the funnel, validation is required for the idea to proceed to the next stage. Ideas that fail the validation in a time-bound period should be put on hold until new findings are available, pivoted for new tests, or even dropped. If you observe below, consider pressing the switch at the end of each stage before the project proceeds to the next stage:

1. Discovery

• There is no articulated problem statement or opportunity area.

• The hypothesis is not validated.

• The target customers are unclear.

2. Proof of concept

• The solution has not been proved technically feasible.

• The design of the solution does not create a good customer experience.

• The proposed business model is unclear.

3. MVP

• The business model has been proven not viable.

• The pilot result is not satisfactory (depends on the success criteria set for the pilot).

• The customer feedback is negative.

This list is a general reference for determining whether a project should move forward. Usually, for each project, there are unique assumptions at each stage that the team would seek to validate. Discussing the pause, pivot, or kill mechanism upfront and having a clear mechanism can help increase transparency and provide strong motivation to the founder team.

Upon Scaling Up

When an innovation project moves toward the right end of the funnel and scale-up, the leader will have a decision to make: what is the long-term strategic plan for this project? You should always consider including this discussion when the project moves along the funnel, not toward the very end of it. In that way, both the founder team and the relevant stakeholders can have time to plan the relevant deployment or handover if required. Toward the right side of the funnel, this discussion is much more needed and enriched as the project has a higher chance of success.

Asking about the long-term strategic plan allows the leader and the project team to think through:

• What role does this new solution play in this organization in a long run?

• Where should it sit within this organization?

• Who should be managing it in a long run?

• What is the roadmap for this solution?

There are several ways that the corporate can handle the new solution upon scaling up:

1. Absorbing the new solution into an existing product line

In this case, the new solution launched is adjacent to an existing product line and shares similar operating characteristics, including factors that influence sales and profit, talents required, and business model. There is an existing product team that excels at expanding the rollout of launched solutions and maintaining the product at scale. It would be best to integrate this new solution into the existing product line.

The founder team should be given a choice to become the product manager of this new solution, reporting to the management of the existing product line.

2. Create a new product line

In this case, the new solution launched demonstrates distinctively different characteristics from any existing product of the corporate. It is not quite suitable to manage the solution under any existing product line. However, the corporate sees the potential of a new product line being formed. The management also believes that this new product line would become a strategic initiative that is crucial to the corporate’s development in the future.

The founder team should be offered leadership positions for this new product line. The management might need to hire or transfer people to assist or lead along with the founder team, depending on the business opportunity.

3. Spin-off the project into a new company

In this case, the new solution launched also demonstrates distinctively different characteristics from any existing product. More than that, the management believes that it is not the best fit for the new solution to be managed as part of its business. There are several potential reasons:

• Commercial independency: The new solution might be relevant to other industry players and would perform better if this solution is commercially independent.

• Consortium: The new solution is solving a problem that requires collaboration from other players and the corporate alone does not have sufficient effort to further scale it. Other players should be invited to the table and form a consortium.

• Strategic alignment: The new solution does not demonstrate strategic significance to the corporate in a long run. This concern should be eliminated before scaling the solution. However, it is understood that potential management or strategy change could result in relevant change along the funnel.

• ROI (return on investment) of corporate investment: The ROI of a startup, funded by venture capitalists, justifies its development but the ROI of putting it under the existing corporate business does not. It would be rather uncommon in this situation, as usually the cost of capital for corporate would be lower than those of venture capitalists. However, there could be exceptions due to the nature of the industry, the type of project, or the accounting rules.

The new solution will be spun off into a new company. In most cases, the corporate would continue to hold a minority stake in this new company and enjoy the return of investment as a reward.

This new company would be run independently. The founder team should be invited to assume the leadership positions of this new company. The team would no longer be an employee of the existing corporate.

Innovation Portfolio Management

Not every innovation is created equal. Innovation is a very broad term and optimizing a workflow is very different from introducing a brandnew business model, as is the potential risk and return associated with each one. That’s why you need to look at your current innovation portfolio and review whether the investment aligns well with the corporate and innovation strategy. Is the investment directed in the best way to generate the outcome set out in the corporate vision?

As an example, let’s say that an automobile company aspires to be the leader in autonomous driving. All its current innovation projects focus only on increasing efficiency in the production line. There is no project or any planned investment in IoT and artificial intelligence (AI), which enable autonomous driving. It is obvious that there is a gap in the innovation portfolio.

In most cases, the gap won’t be so obvious. That’s why you need a structured innovation portfolio management framework to show you what innovations the corporation is investing in and where the gaps are. A framework for managing an innovation portfolio is the Innovation Ambition Matrix.⁷

The Innovation Ambition Matrix was developed by Bansi Nagji and Geoff Tuff. In the Harvard Business Review article “Managing Your Innovation Portfolio,” they discussed how corporations should manage innovation strategically by categorizing different activities.⁸ They discovered that companies with the strongest innovation track record not only had a clear innovation ambition, but also struck the right balance of core, adjacent, and transformational initiatives across the enterprise.

• Core innovation: Optimizing existing products for existing customers, for example, small upgrades of existing product offerings, launching updates to keep up with regulatory change, and new packaging design.

• Adjacent innovation: Expanding from existing business into “new to the company” business, for example, introducing a new product with a different value proposition for entering a new market.

• Transformational innovation: Developing breakthroughs and inventing things for markets that don’t yet exist.

To illustrate how the three types of innovation are categorized under the Innovation Ambition Matrix, here are some examples of Coca-Cola’s latest innovation activities.

Core Innovation: Orange Vanilla Coke^{9, 10, 11}

Coke is the classic signature drink that Coca-Cola has in its product line. However, there is always intense competition from other soft drink brands. To encourage existing customers who are seeking more variety to stick with Coke rather than pick up a different soda, Coca-Cola constantly launches new flavors like Orange Vanilla, which was introduced to the market in early 2019. Kate Carpenter, brand director for Coca-Cola Trademark, said that the new flavor also comes with new graphics for a “bit of a facelift.”

Orange vanilla-flavored Coke is considered a core innovation, introducing a slightly new element to an existing product for existing customers. In the first quarter of 2019, Coca-Cola reported 6 percent retail value growth in its flagship markets, thanks to the strong performance of both Coke Zero Sugar and new flavor combinations including Orange Vanilla Coke.

Adjacent Innovation: Coca-Cola Energy^{12, 13}

In general, anyone can be a target customer of a soft drink brand. But if you look closer, there are particular types of people portrayed in Coca-Cola’s advertisements. The three particular personas that Coca-Cola has been targeting are progressive people, people who have fun and enjoy every minute, and people with stylish looks.¹⁴ Using these personas, Coca-Cola has successfully captured an audience of young, active, and social people. And Coke has been selling well to these groups.

However, Coca-Cola realized that the personas they target do not cover a large market of the working class: the type of people who are always busy. They don’t just work from 9 to 5 and call it a day. Their lives are full, and they’re doing so many more things after “work.” They have a lot of work and little fun time. Their need for a drink is to take in energy instead of enjoying themselves. They are not the typical customers of Coca-Cola beverages as they’d prefer an energy drink to a Coke. But at the same time, they do not really fancy most energy drinks in the market as the taste is usually not good.

Coca-Cola identified this gap and the unmet needs of this customer segment. It launched a Coke-branded energy drink in 2020 to offer the kick people wanted with the Coke taste they were familiar with. The Coke-branded energy drink is an adjacent innovation as Coca-Cola was using this new product to venture into an energy drink market dominated by companies like Red Bull GmbH and Monster Beverage Co.

However, sales were disappointing. At the end of 2020, Coca-Cola Energy represented just 0.7 percent of U.S. energy drink sales, according to Beverage Digest. The failure of this innovation could be attributed partly to COVID-19.¹⁵ The product entered the U.S. market in January 2020, but the pandemic soon interrupted its rollout. When people are working from home and paying fewer visits to stores, they tend to order products they have tried before.

Coca-Cola constantly evaluates the performance of its innovation and since the sales of Coca-Cola Energy were not satisfactory, it decided to discontinue Coca-Cola Energy in the United States. During this period, two other adjacent innovations, Coca-Cola with Coffee and AHA-flavored sparkling water, performed well and the company continued selling them.

Transformational Innovation: Direct to Consumers¹⁶

Both the core and adjacent innovation examples above were initiated by Coca-Cola by listening to their customers and understanding their preferences. These innovation activities affected the flavors and features of the beverages. But innovation initiatives of Coca-Cola go further. Coca-Cola is a global business that sells via local communities. Its products are sold in more than 200 countries. But Coca-Cola does not fill all the bottles or own all the retail outlets. To get its products to local supermarkets and stores, many intermediaries are involved. There are approximately 225 bottling partners worldwide, to which Coca-Cola sends its concentrates. The bottled beverages then go through the distribution system of wholesalers, who help sell the beverages to supermarkets, stores, restaurants, or e-commerce retailers. The system has worked well and provided the scale that Coca-Cola needs to serve millions of customers around the world.

Many companies, which operate in the consumer goods space, rely on similar distribution systems with many wholesalers as intermediaries. However, the system has its problems:

• Lower profit margin. Intermediaries earn profit as middlemen, which means part of Coca-Cola’s profit is shared with them.

• Slow to market. On average, a new product launch takes between 18 and 36 months from the point of inception to the point when the product reaches the shop floor.¹⁷

• Inconsistent customer experience. Coca-Cola has no control over the customer experience. It does not own any last-mile touchpoint so it cannot guarantee a consistent experience from order to consumption.

• Lack of data control. Coca-Cola only has access to limited data captured from its distribution system. It can get sales data but not any of the precious data about customers’ preferences, behaviors, and feedback.

Given that, manufacturers and consumer goods companies are rethinking their business models to go direct to consumers and eliminate the intermediaries. Yet the uncertainty of this innovation is high as it requires extensive digital and logistics infrastructure and might risk the existing relationship with wholesalers.

In 2020, the COVID-19 lockdowns in Latin America put tremendous pressure on all retailers, particularly small, independently operated stores in high-density urban areas that depended almost solely on foot traffic. Coca-Cola viewed it as an opportunity to test the direct-to-consumer model. At its Coca-Cola Argentina initiative, it developed and launched the Wabi app for small businesses to receive proximity orders, sell their products (not just soft drinks), and take them home.¹⁸

The Wabi app allowed operators to stay open during the pandemic and safely serve customers without having to be physically open. When a shopper placed an order via a free mobile app, the platform pinged nearby retailers. The first store to accept the order delivered the items to the shopper’s doorstep in 30 minutes or less.

The Wabi app is considered a transformational innovation. Coca-Cola anticipated the needs of consumers during the lockdown and disrupted the traditional wholesaler system that it previously relied on for distribution. Wabi went live in 23 major cities across five continents, connecting Coca-Cola’s system and other consumer products companies to store owners and end-users.

Finding the Right Balance

Once you understand the types of innovation, you can put your existing portfolios into different categories to evaluate them. The next question you have to ask is, “Do I have the right balance of different types of innovation that will allow me to achieve my corporate vision?”

Depending on the maturity of the corporation’s business and the corporate strategy, you need to allocate investment to different categories of innovation. But this can be difficult in large, established corporations. When there are many established assets, including products, markets, and processes, it’s hard for people to think outside the box. Coupled with a tendency toward risk avoidance, many ideas that are generated and approved eventually fall under core or slightly adjacent innovation. Transformational innovation, therefore, becomes rare.

To find the right balance in an innovation portfolio, Bansi Nagji and Geoff Tuff studied the industrial, technology, and consumer goods sectors. They looked at whether any particular allocation of resources across different types of innovation initiatives correlated with significantly better performance, as reflected in the share price. They discovered that companies that allocated about 70 percent of their innovation activity to core initiatives, 20 percent to adjacent ones, and 10 percent to transformational ones outperformed their peers. They typically realized a price to earnings (P/E) premium of 10 to 20 percent. To what extent did different types of innovation generate income? They consistently found that the return ratio was roughly the inverse of the resource allocation. Core innovation typically contributed 10 percent of the long-term, cumulative return on innovation investment. Adjacent initiatives contributed 20 percent, and transformational efforts contributed 70 percent.

Of course, these are average figures and do not mean that this allocation is a magic number for all. Each company is unique, with its own competitive advantage and assets. You should consider your investment in different innovation activities based on your corporate vision and innovation strategy. While that varies from corporation to corporation, it is recommended that you constantly manage your innovation portfolio and review your investment allocation.

IT Infrastructure

A craftsman who wishes to practice his craft well must first sharpen his tools.

—Confucius

Intrapreneurship is built on an experimental approach. To enable your employees to conduct experiments, leaders have to put in place an intrapreneur-friendly IT infrastructure. IT infrastructure refers to the hardware, software, networks, facilities, and equipment used to develop, test, monitor, control, or support IT services.¹⁹ Examples of IT infrastructure include data centers, communication networks, IT security, and end-user technology services. In this section, we will focus on infrastructure related to innovation under Industry 5.0. Even though not all innovation is related to IT services, during the development of a new product there is a high chance that intrapreneurs would use components of IT infrastructure to perform some of the tasks.

If a corporation relies on its legacy infrastructure and applies the same infrastructure across its production and experimental environment, it will find it hard to catch up with the pace of innovation. It also runs the risk of operational failure. That’s why many see existing IT infrastructure as a roadblock to innovation.

An IT infrastructure that truly supports innovation should aim at empowering all employees to become innovators. To enable an experimental environment, corporations need an agile, scalable IT infrastructure. It should allow experiments in a safe environment with rapid setup, flexible scalability, and compatibility with modern and emerging technologies, for example AI, blockchain, and IoT.

IT infrastructure that you need to support intrapreneurship in your organization should be:

• Agile. Designed to support the rapid development and launch of MVPs, incremental upgrades, and improvements

• Scalable. Launch, grow, recede, or terminate based on the demands of traffic and volume of users

• Isolatable. Allows experiments in isolation without risking harm to the production environment

• Accessible. Provide easy access for employees to explore the resources and initiate experiments on their own

• Integratable. Connects the delivery of new solutions to the legacy system and is highly compatible with emerging technologies

• Secure. Protected from hacks and unauthorized access

• Cost-effective. An IT infrastructure that does not require huge, multiyear upfront investment to set up and maintain

In the Industry 5.0 environment, you need to plan and deploy relevant IT infrastructure that aligns with your innovation strategy. It’s an investment to enable innovation and intrapreneurship. Given the required characteristics earlier, these are the components of IT infrastructure that enable rapid experiments.

Cloud Computing

Conventionally with on-premise technology, the size of the infrastructure footprint is limited by rigid budgeting cycles. Decisions about infrastructure have to be made upfront, and short-term change does not come easily between cycles.²⁰ I have experienced the process in various corporations. The cycle timings vary in different corporations but the overall process looks quite similar. It is an annual process that is triggered in a particular month every year. If the business year starts in January, the budgeting cycle would start around June the year before. All the leaders provide inputs for the budget, raising their requests for the upcoming year.

It takes around two months for departments to discuss their requirements, put in the numbers, debate the requests, and finally come to a submission. After the requests are gathered, it takes another two to three months for the corporate senior leaders and finance to come together to review the request, balancing the needs of different lines and functions. It is nearly year-end when the final decision is made. Once the budget is confirmed, the teams can engage procurement to source the required infrastructure. Procurement usually takes four to six months to onboard a vendor. The vendor will take another couple of months or even longer, depending on the scope of work, to complete the deployment. It is easily an 18-month lag from the initiation of the request until you actually get to use it. Imagine how devastated you’d be if you were working on an innovation that required infrastructure to support the development.

To move fast, your corporation needs an agile and scalable infrastructure. In contrast to on-premise infrastructure, cloud infrastructure is located off-premise and cloud servers are accessed via the Internet. With cloud infrastructure, users do not have to manage physical servers or run software applications on their own machines.²¹ Cloud is much more than storing and sharing files on the Internet. One of the cloud components, cloud computing, offers delivery of computing services including servers, storage, databases, networking, software, analytics, and intelligence.²²

Cloud computing eliminates the upfront capital expense of acquiring physical infrastructure and offers scalability in real time. Post setup, most cloud computing is self-service and on-demand, making it easy for users to manage the capacity on their own. Many cloud computing providers also offer emerging technology services, such as machine learning and artificial intelligence, data lakes and analytics, and the Internet of Things (IoT).

Cloud service providers usually charge on a “Pay-as-you-go” model. It is a cost-effective model that allows the corporation to easily adapt to changing business needs without overcommitting budgets. The corporation can pay based on needs, instead of the forecast. This model also provides transparency of charges. By paying for services on an as-required basis, cost savings can be redirected to innovation.²³

Sandbox Environment

In the science world, experiments are conducted in a laboratory. It is a confined area with safety measures in place. In case anything goes wrong during the experiment, it can be shut down quickly. Any hazard is contained in the laboratory and does not affect the world outside. In a corporation, people face the fear of risking well-established operations whenever there is change. To provide a safe space for employees to experiment, you need a similar setup to a laboratory for experimentation.

The environment is called a sandbox. The word sandbox comes from the shallow and wide container filled with soft sand in which children can play. It is an environment in which kids can have fun and you would not worry about their safety. In the IT context, a sandbox is a testing environment that enables intrapreneurs to run and execute experiments without risking the application, system or platform on which the experiments run. Any work that is done in the sandbox can be iterated, improved, and refined, without affecting the experience of real customers. A sandbox speeds up innovation as it allows development and testing to happen in parallel. Only after the experiment is completed and the product is ready, it is transferred to and deployed into the production environment.

The sandbox environment takes away the psychological barrier and pressure of risking the existing business. It also provides a compartmental environment in which intrapreneurs need not worry about the integration with all the other systems at the experimental stage or else they can test one integration at a time. The beauty of a sandbox is the creative freedom that it offers to users.²⁴ It creates the environment to walk the talk of embracing failures. Depending on the innovation use case, sandbox setup and usage varies. Here are some examples to consider when setting up a sandbox:

• Mimic the production environment. Specify the list of essential functions in the sandbox that are replicated from the system in the production environment, including interaction with other systems. Some application programming interface (API)-enabled corporations provide an API sandbox as the production environment largely uses APIs. API, a powerful innovation infrastructure, will be further discussed later.

• Datasets. A sandbox can offer a limited dataset for testing purposes. Data can be a subset of real customer data, dummy, or synthesized data. The corporation needs to define what data go into or are prohibited from the sandbox.

• Network connectivity. The sandbox is an isolated environment and therefore, it should be specified whether it is allowed to connect with any other network. If the connectivity is allowed, a vulnerability assessment should be done to ensure that the connectivity is secure.

• Access control. Define who can have access to the sandbox, how the user applies for access, and how the access right is reviewed.

• Life cycle of an experiment. Specify how long the experiment will last, how long the assets of the experiment will be kept in the sandbox, the determining factors for shutting down an experiment, and how the data will be kept as a record.

Application Programming Interfaces

An API is a software intermediary that allows applications to talk to each other. It is a messenger that delivers your request to the provider and returns the provider’s response to you. Figure 6.4 provides a simple explanation of APIs.

The API is not a new invention but its commercialization has gathered pace since the 2000s. It started when Salesforce chose the Internet as the host for its service and developed its approach using an API.²⁵ Subsequently, eBay launched its API in late 2000, together with a program for a select group of developers. In 2002, Amazon joined in when it launched Amazon Web Services. Fast forward to 2021 and the API has become a powerful component gaining increasing traction in fields from e-commerce (Amazon and Shopify), consumer services (Uber, Spotify), social media (Instagram, Facebook, Twitter), and financial services (Visa, Mastercard, BBVA).

Figure 6.4 A simple explanation of APIs

In its report “What It Really Takes to Capture the Value of APIs,” McKinsey explains, “As the connective tissue linking ecosystems of technologies and organizations, APIs allow businesses to monetize data, forge profitable partnerships, and open new pathways for innovation and growth.” In a later report published in 2020, it found that nearly a third (30.6 percent) of the 13,500 developers, testers, and executives it surveyed said that APIs played a role in their organizations’ ability to respond to COVID-19.²⁶ Many utilized APIs for customer communications, powering remote work options, and quickly responding to regulatory changes and government initiatives. Of those working on digital transformation initiatives, 84.5 percent stated that APIs played a significant role in those initiatives.

APIs can be defined as open or private, depending on whether they target external or in-house developers. Open APIs, which are designed to give access to external third parties including customers, vendors, or partners, take innovation to the next level. Corporations can build new services by exposing their APIs to other businesses. In this book, however, the focus is on private APIs that are accessible by the employees of a corporation. The major objective of private APIs is to enable intrapreneurs to create new products for the corporation that leverage existing systems.

APIs have become the growth engine for innovation. By giving API access to your employees, you can facilitate intrapreneurship activities to:

• Leverage existing assets. Rather than creating siloed applications from scratch, private APIs enable intrapreneurs to draw from a common pool of internal software assets.²⁷

• Agile development. APIs hasten the development and deployment cycle by enabling agility and automation. They also extend scalability, functionality, and ease of use.²⁸ They also save the time and effort needed to integrate internal IT systems.

• Foster collaboration. APIs make collaboration much easier.²⁹ Often people from one department will ask for information from another to facilitate their work. Opening the dataset, defining the access rights, and monitoring data usage is not easy. Sometimes people are put off asking because of the tremendous amount of work involved. With private APIs, many of these things can be done without hassle and the collaboration can flow more seamlessly.

A Practical Case Study of API Sandbox

As an intrapreneur, I often work on new ideas that require collaboration with external partners including startups and Financal Technology companies (FinTechs). In my previous role at a global bank, collaborating with external parties has never been an easy task. Banking is a highly regulated industry. Any experiment with external parties faces the concerns of compromising information security, mishandling customer data, and putting internal systems at risk. If those incidences happen, the consequence is huge including regulatory actions, fines, and loss of reputation. To avoid the potential risks, the bank has built a complicated due diligence and onboarding process for gatekeeping. The process usually takes more than six months to assess the external parties to ensure all their operating process and policies are compliant as required by the bank. It is a well-designed process to safeguard the bank’s and its customers’ interests.

However, imagine if I am at an early stage of discussion with a few FinTechs. All I want to do is to test whether they can perform the functions as they have claimed. To achieve that, I need to conduct a proof of concept with FinTech. I do not have the resources to onboard all of them and then start to test and select only one. Considering the process would take more than six months, by the time I can start testing them, the market opportunity might have gone.

To solve that, I have brought in the idea of using an external API sandbox. In this case, the API sandbox acts as the middle layer between the bank and the external parties. When I want to collaborate with a FinTech, the FinTech would register on the API sandbox. The complete registration takes around two days. Once the registration is done, FinTech can upload its API documentation and also expose its API endpoints on the API sandbox. Since this sandbox is separate from the bank’s production environment, no onboarding to the bank is required. My team only need to connect with the FinTech APIs using our corporate developer environment. Once that is done, we can proceed to call their APIs and test their functions. The setup of the testing environment is within days. Using this API sandbox, the team that I led can complete a proof of concept within one to two weeks.

Under this arrangement, there are still restrictions that the team need to observe. Since this is an external environment, only anonymized or synthetic data can be used. Once the proof of concept is over, the connection needs to be unplugged. If my team proceed with a pilot with FinTech, which would involve the production environment, we still need to complete the due diligence to safeguard the bank and its customers.

This setup expedites the testing and selection of FinTechs. There are no resources wasted to perform unnecessary due diligence on unqualified FinTechs. The team can also enter into the contracting stage with clear visibility of FinTech’s capability.

Democratized Data

Data are an important asset that drives innovation. With access to data, intrapreneurs can discover trends, understand customers’ needs, and explore potential solutions. Corporations are applying data and data analytics to drive decision making on innovation projects.³⁰ Netflix is a great example. By collecting data from its 151 million subscribers and implementing data analytics models, Netflix discovers customer behavior and buying patterns. It can even predict whether a show will be a hit when it is produced. By carefully analyzing datasets, Netflix noticed a correlation between fans of the original British House of Cards TV show and fans of both actor Kevin Spacey and director David Fincher.³¹ So Netflix brought these three elements together in one drama, House of Cards. It instantly became its key show. In 2013, 86 percent of Netflix subscribers said they were less likely to cancel their subscription because of this one show alone.

Data are the new gold for corporate innovation. Thanks to technological advances, data are more readily available in today’s business environment. But while many corporations have realized the power of data and relevant insights, many still fall short of providing data empowerment to employees. A MicroStrategy survey found that 46 percent of business intelligence (BI) and analytics respondents had been able to identify and create new products and revenue streams, and 45 percent of organizations were using data and analytics to develop new business models.³² But only 32 percent of respondents said their organizations made data available to up to half of their employees. Worse, about a fifth (19 percent) gave no more than a quarter of their employees access to corporate data, and only 14 percent gave it to 75 percent of staff.

What’s to be gained by giving all employees access to data? In a 2019 article for Raconteur, “Empowering Employees to Think Like Data Scientists,” Ben Rossi quoted Elif Tutuk, senior director of research at Qlik.³³ Tutuk said, “By empowering all employees and nurturing data literacy, businesses may gain more than they could ever realize by looking beyond one sole data employee to make a good decision.” The same applies to intrapreneurship. Data should no longer only be accessible and used by data scientists and data analytics teams. Employees from any part of the organization should be provided with access to data and intuitive self-service analytics tools. It allows them to apply data science to their respective business challenges and explore innovation based on their understanding of the challenges.

To democratize data in your corporation, you need the following infrastructure components:

• Data marketplace. A hub where data are hosted for employees to access. Ideally, it should be self-service and users can define the rules of data that they require (e.g., data element within which period, parameters, and filters).

• Self-service analytics. Easy-to-use data analytics tools for nontechnical users. Functions can include drag-and-drop discovery, natural language processing inquiry, visualization, and so on.

• No-code AI/ML. AI models that require no coding skill to build. These models are often visual. This reduces the entry barrier and time to build AI models and enables non-AI-trained employees to easily experiment with the technology.

• Data literacy training. Even though the technical barrier has been lowered with the aforementioned infrastructure, you still need to provide training for employees to understand the data, the basic skills required, and also troubleshooting.

While you are making the effort to build the necessary structures for idea management and portfolio management, as well as IT infrastructure, you also need to consider how to safeguard the value of these ideas. They could be of great potential value to your business so taking early steps to protect intellectual property (IP) can enhance the competitiveness of your business. In the next section, we will discuss managing the IP from intrapreneurship activities.

Intellectual Property Management

Managing IP for new product development is a critical factor in the successful commercialization of a product. There are four major categories of IP: patents, copyright laws, trademarks, and trade secrets. Based on different stages of innovation, the IP consideration will vary. Intrapreneurs are seldom IP experts. Based on the stage of work that the intrapreneurs have embarked on, corporations should provide support and resources for them to access advice and guidance on navigating the IP process. While I cannot provide legal advice on IP, I will try my best to offer an overall picture of what IP management looks like in the context of corporate innovation. Your corporation should make relevant decisions based on the advice of your own IP legal counsel.

What follows are the IP factors to consider along the innovation journey.

Early-Stage Discovery and Ideation Phase

During this stage, the main activities involved are research and discovery. Two considerations come into play.

First, third-party registered IPs. Does the idea involve using any asset with IP that has been registered by others? Does any part of the proposed product rely on patented technology or a design that is owned by another company? If so, the corporation needs to consider this when the product is developed. The corporation should assist in assessing whether the IP is available for licensing and the cost associated with it. It will affect the decision on proceeding with and commercializing the idea.

Second, the corporation can consider protecting the information as trade secrets.³⁴ At this early stage, there is limited claim toward registering any IP, since the idea has not been fully developed. In fact, not all commercially viable ideas can be registered due to the fulfillment criteria associated with different IPs. At this stage, the corporation can try to manage the idea as trade secrets to avoid alerting competitors. For information to qualify as trade secrets, it has to be³⁵ (the definition might vary across jurisdictions):

• Commercially valuable because it is secret;

• Known only to a limited group of persons; and

• Be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.

Any unauthorized acquisition, use, or disclosure of information by others, in a manner contrary to honest commercial practices, would be considered an unfair practice and a violation of trade secret protection. However, the level of protection is limited under trade secrets. You cannot stop another company from developing a similar idea or disclosing a similar idea that it has developed independently.

Development Phase

When intrapreneurs enter this phase of development, it’s likely that the product concept has already been formed and the team will start building the product. In this phase, intrapreneurs need to consider the potential IPs of the product. Examples under different IP categories during this stage, on top of trade secrets, can be:

• Patent: concept, invention, design, technology know-how, functionality, process

• Copyright: Source code written, elements in the user interface

Do bear in mind that patent and copyright are two distinct concepts and each is designed to protect different aspects of the product. Copyright protects the expression of the idea but not the idea itself, while a patent protects the idea. So if you have developed a software, a copyright is designed to protect the code written while a patent protects its unique functionalities. Hence, you need to consider thoroughly what makes the most sense for the protection your product requires. You will also need to consider a commercialization plan. If you plan to sell the licensing of the product to a third party, the patent would clarify your ownership of the product. Putting the right protection in place would help set up your success in commercializing a product.

Commercialization Phase

Assuming that your product is now ready to be launched onto the market and you already have the necessary patent and copyright protection, there is one more IP you should consider before launch: trademark. A product needs strong branding, and trademarks are information signals that innovative companies can use to distinguish the quality of new products and services.³⁶ On the other hand, a trademark is also an alternative option for differentiating your new product if it is not eligible for patent registration.

When it comes to employee IP ownership, many corporations are reluctant to consider this as an option. The reason is that managing an employee-owned IP could be complicated, especially when the corporation relies on the IP to run a business. Handled inappropriately, there could be potential tension and even litigation. But let’s set aside the implications for the corporation for a moment. Does the intrapreneur who creates a new product have grounds to claim the IP from a legal perspective? This might vary based on jurisdiction.

Let’s look at some examples:

• U.S. Chamber of Commerce: In the United States, when a worker employed by a company is directly involved in the process and creation of a new, patentable idea for the business, the employer owns any IP created by that employee.³⁷ This is viewed as the employee simply doing their job. But what if an employee’s direct role is one where they don’t work directly on a product or system that will eventually be patented by the business? In this scenario, the employee technically owns the innovation, and the business is afforded a nonexclusive license to use that innovation without paying any royalties to the employee. The employee, however, can license their idea to other businesses independent of the employer. This is the case even if the employee used an employer’s resources to create the product or service improvement.

• Australian government: In Australia, the employer owns the IP created by an employee if it is related to the employer’s business unless the employment contract stipulates otherwise.³⁸ Under common law, the issue is whether the invention was made in the course of the employee’s employment and whether it was the employee’s role to invent, that is, whether they had a “duty to invent.” This is frequently dealt with in the terms of the contract of employment, although the contract may not always be determinative in deciding whether or not the employee owns the patent.

• Singapore: If the IP is created in the course of employment or under the terms of employment, the employer is the owner unless otherwise agreed.³⁹ An invention or design made by an employee belongs to the employer if it is made in the course of the normal duties of, or specifically assigned to, the employee. There is no statutory requirement to compensate employees for trademarks. For patents and designs, there is no requirement for the employee to be equitably rewarded for the creation of the IP.

Ultimately, it depends on the jurisdiction and circumstances when it comes to employee ownership of IP. Many corporations think they have the total right to claim all IP during the course of employment. And some employment contracts also contain special clauses that give employers rights over employees’ ideas or inventions, even if they have nothing to do with their jobs.

Intrapreneurship Metrics

You can’t manage what you don’t measure.

—Peter Drucker

Having the right metrics helps ensure you are heading in the right direction. Just as corporate leaders use metrics to measure key aspects of a business, they need to apply the same to intrapreneurship. Having a set of metrics gives you a better picture of intrapreneurship activities and guides your employees on which important intrapreneurship activities to measure.

A few basic metrics to start with:

1. The number of ideas generated by employees

2. The number of intrapreneurship projects

3. The number of MVPs launched by intrapreneurs

4. Customer satisfactory level of the MVP launched

These are common ones to start with for corporations to start keeping track of intrapreneurship activities. These metrics encourage the robustness of intrapreneurship.

Depending on the maturity of intrapreneurship in your organization, you can plan to introduce different metrics at different stages. Corporations that are more mature in intrapreneurship would like to measure their investment efficiency.

More advanced metrics could include:

1. Revenue/profit generated by the new intrapreneur-led products, for example, 3M’s 30 percent rule: 30 percent of each division’s revenues must come from products introduced in the last four years.⁴⁰

2. ROI of the new intrapreneur-led products.

These metrics provide more quantified results of the corporation’s investment in intrapreneurship. However, introducing advanced metrics too early can be intimidating to employees. These metrics might put people off coming up with new ideas as they are worried about the revenue or ROI requirements. Revenue can also be a tricky indicator as a new product usually takes time to ramp up sales. Measuring the revenue on a single-year basis with a newly launched product could be misleading. Refer to “Asking for immediate ROI” in Chapter 11 to see how asking for ROI too early can put innovation at risk.

A well-planned system measuring the right metrics can help you analyze what went wrong in the process if the outcomes are not as expected. What if, over time, the revenue from the new intrapreneur-led product is low? Using the metrics, leaders can now identify the problem: do they not have a sufficient number of new MVPs by intrapreneurs? Or do they have many MVPs but not all generate good revenue? Do they have a sufficient number of ideas to start with? And did a good portion get funded? With the metrics above, you can troubleshoot specific areas.

It’s best to keep metrics simple and easy to understand. Having too many and too complicated metrics can confuse employees. It usually makes the metrics hard to follow and they soon become obsolete.

In this chapter, we’ve looked at the various components of corporate infrastructure that your employees can leverage. These processes, procedures, protocols, policies, and systems enable employees to progress their ideas. In addition, your corporate strategy plays a significant role in your innovation strategy. It greatly influences how you prioritize ideas to invest in and the capabilities you need to acquire to progress those ideas.

To visualize all the ideas in the corporation, you need to build a platform for idea management and manage the pipeline. You need to monitor all the ideas in the portfolio to understand their potential impact on your business. Finally, you need to invest in the relevant IT infrastructure and provide IP advice and support to protect the IPs created from new ideas. You also need to start measuring intrapreneurship to identify any gap between your input and output, and how you can improve it.

In the next chapter, we will dive deep into how to prepare the most important asset of intrapreneurship—your people. Most of your employees probably never imagined creating a business themselves. They were told they had a specific job for which they were hired, and yet now you are encouraging them to innovate. How can you help them get outside of their comfort zones? In the next chapter, we will discuss the skills and training that your people need to develop their ideas.