Companies constantly develop new products, or variations of existing ones, to sell to the market. However, large and well-established businesses are especially prone to resisting change and becoming entrenched in their ways of doing things. They prefer to expand their current offering rather than reinvent it. This is understandable since innovative activities are characterised by a high risk of failure, and a high degree of unpredictability as well as uncertainty. Thus, innovation necessitates a great level of failure tolerance.
Just because businesses fail to innovate, it does not mean their employees are not creative. Indeed, corporate talent can be a valuable resource for a company’s future goals. The difficult part is that in a working environment, ideas that differ from the company’s established business model may run into roadblocks, either because they don’t fit into the time frame of quarterly targets, they are too risky, or there is no allocated staff or budget to nurture them.
Here is where startups come into play. With their new and different perspectives, they find opportunities to flip over entire industries with innovative business models and technologies. Corporate innovation is an attempt to identify those opportunities first: if your company does not adapt to changing conditions, someone else will gladly take its place in the market.