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INNOVATION


ISSUE 03 2014


nSet up external innovation labs – Orange, Vodafone, AT&T, Singtel and many other CSPs have all decided to set up ‘innovation incubators’ that are physically and culturally removed from the parent company, similar in some ways to the ‘skunk works’ strategy in the aviation sector. For these to succeed they have to use a very light-touch management approach for fear of crushing the life out of their nascent innovation hubs. As with the out-sourced innovation, the big company has to resist the temptation of putting too strict boundaries around the scope of its innovation lab. But there are risks here too.


I’ve seen one big CSP lab ‘go native’ and lose sight of their parent company’s strategic imperatives. Success in this area needs an almost infinitely flexible strong-weak bond with the parent, where the leaders of the innovation lab are sufficiently senior in the parent organisation to have direct access to the CEO or executive team and understand the parent’s strategic plans intimately, but also don’t feel bound to have to constantly deliver business-focused benefits on a day-to-day basis.


nIn-source innovation – This involves bringing innovative companies inside the parent CSP and trying to develop a symbiotic relationship between the fast-moving innovative companies and the wealthy and experienced parent CSP. Telefonica’s Wayra programme – motto ‘The rules are not


yet written’ – is a great example of this approach, where the company provides financing, mentoring and access to technology expertise within Telefónica and uses purpose- built Wayra Academies currently situated in 12 countries to nurture technology start-ups.


nContinue to do it in-house – Of course this is the default option and, in any cold analysis of how CSPs approach innovation, this is undoubtedly the commonest approach and the one that absorbs the most resources from the CSP, although arguably it also continues to yield the best returns. This however is probably based more on sustaining innovation, rather than on delivering truly disruptive progress.


nRely on your major vendors for innovation – This is a much more common approach than many would imagine. Most of the newer CSPs don’t have the history or infrastructure of innovation in terms of R&D labs that many of the old monopoly CSPs had, while the Tier 2 and 3 CSPs are generally content to pick up bits of appropriate innovation from their major vendors rather than invest internally. This is certainly cost-effective and makes sense if you have the ambition to be a fast follower rather than a leader. It also lowers the implementation risk, as the innovations will be designed from the start to work with the existing installed IT and network infrastructure. This strategy does however severely limit a CSP’s freedom of movement and choice and is obviously contingent on the vendor’s continuing investment and indeed survival.


Innovation networks


Recent academic research has found that differences in individual creativity and intelligence matter far less where innovation is concerned than the connections and networks that can support it


Every organisation usually has a mix of people, some who are passionate about innovation and others who feel uncomfortable about change of any kind. Recent academic research has found that differences in individual creativity and intelligence matter far less where innovation is concerned than the connections and networks that can support it. For example, employees able to network together and share ideas and insights, no matter how crazy they might first appear, will get that first critical feedback more easily and carry out triage on whether something is feasible or desirable.


Since new ideas usually spin out more new ideas, networks can generate a self-sustaining and widespread virtuous cycle of innovation and feedback. Furthermore, both intra-company and inter-company networks allow people with different kinds of knowledge and ways of thinking to cross-fertilise each other. By focusing on getting the most from innovation networks, leaders can capture more value from their existing resources, without having to launch large-scale change management programmes.


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