Innovation in corporations: Three elements of an innovation factory

MaRS Verge: Making innovation Work is a curated gathering of corporate innovation directors and managers who are ready to challenge the way they think. Join us February 29 and March 1, 2016 for MaRS Verge and gain an updated set of skills, new innovation contacts and a different way of thinking.

Elmar Mock, the co-founder of Swatch, stopped by MaRS to deliver an interactive lecture for our first MaRS Verge Insider event.

Elmar is a serial innovator. He started in 1980 with his most famous co-invention, the Swatch. At the time, the Swiss watch industry was facing serious competition from cheap watches from Japan. Elmar, who was an engineer in microtechnology, asked his boss to invest in an expensive plastic injection molding machine in order to create a new type of watch that could be created out of one piece of plastic and just fifty-one parts. This plastic watch, which was significantly cheaper than other Swiss watches and was marketed as a fashion product rather than a traditional watch, was the first product to encourage consumers to own more than one Swiss watch. This innovative product helped revive the Swiss watch market share that had dropped from 50% to 15%.

Elmar went on to design Tissot’s Rockwatch before leaving the company and founding his own engineering and technical consultation company, Creaholic, in Biel, Switzerland, in 1986. Creaholic is an innovation factory that specializes in disruptive innovation and the development and industrialization of new products and technologies. The company has completed over 600 projects for a dozen companies, including Nestle and Sony Ericsson. It has created several spin-off companies, won numerous awards and generated over 150 patents in various fields.

Elmar discussed a number of topics, including elements of his innovation factory model and how to be innovative in a corporate environment. Here are the three key elements from that discussion:

1. Concept space v. knowledge space

What is the creative process in a traditional organization? When a company is facing a challenge that people say cannot work or has never been done before, then this is when your team should work in the concept space. This creative non-linear space is where brainstorming and problem solving occurs. When the team has come up with initial proposals in the concept space, it’s time to shift to the knowledge space. The knowledge space supports these creative ideas with strategies for implementation. After doing research in the knowledge space, the team needs to shift back to the concept space and develop the idea more. The process overall is a “dance between the two spaces” and will need to go back and forth a number of times until a solution is reached. There may be one interdisciplinary team that shifts between the two spaces, or two teams for the two spaces who collaborate. Either way, it’s important that team members don’t work in one space in isolation and that they move or collaborate between the two spaces.

2. Innovation v. renovation

What is true innovation? There is a difference between renovation, which is an iteration of an existing idea (evolution) that the market is asking for, and truly innovating a new product or service that the market didn’t know it needed. These two processes are often confused as one and the same, with companies tending to lean toward renovation as it’s easier to justify the effort to senior management. True innovation can take a long time and, in the early inspirational stages, it can be a little messy. By using the concept and knowledge space model, you can start to refine your innovative idea.

3. Attitude v. aptitude

Is innovation within a corporate space a whim or a will? Even for those organizations that have created innovation offices and/or chief innovation officers, supporting innovation is a high-risk undertaking. True innovation involves jumping into the unknown. Part of the success of innovation in traditional companies is a top-down attitude. An example of this is Nestle: it took over 10 years to develop the Nespresso, but the CEO believed in this revolutionary idea and supported the team’s initiatives through its development. Senior management must be willing to take risks or fall behind as did Kodak or Nokia. These one-time industry leaders relied on aptitude, but with a lack of attitude, they failed to truly innovate and remain relevant.

Elmar Mock’s new book, Innovation Factory, comes out in July 2016. Get the inside scoop on corporate innovation and intrapreneurship by subscribing to Verge Insider.