“Most innovations fail. And companies that don’t innovate die. In a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e., patents) from other companies,” outlined Henry Chesbrough, who is an adjunct professor and the faculty director of the Garwood Center for Corporate Innovation at the Haas School of Business at the University of California, Berkeley. There are several reasons why corporations may fail, including poor management, misaligned business strategy, lack of innovation, poor market positioning, inadequate financial planning and controls, failure to adapt to changing market conditions, excessive debt, and competition from other companies. Among these, lack of innovation is the prime reason. This is reflected in the inconsistent revenue trend of Fortune 500 companies. Over the past 10 years, the revenue of Fortune 500 companies has fluctuated greatly. In 2010, the average revenue for these companies was $50 billion. However, by 2015, this had risen to $60 billion before dropping back down to $55 billion in 2016. In 2017, there was a significant increase in revenue, with the average company making $65 billion. This trend continued into 2018, with average revenue reaching $70 billion. However, in 2019, the revenue of Fortune 500 companies began to decline, dropping to $65 billion. This trend continued into 2020, with the average revenue falling to $60 billion. Despite this, these companies’ revenue began to rise again in 2021, reaching $65 billion. Overall, the revenue of Fortune 500 companies has seen both significant increases and declines over the last 10 years, with the average revenue fluctuating between $50 and $70 billion.

Corporate innovation refers to the process by which companies develop and implement new ideas, technologies, and ways of working to drive growth, improve efficiency, and stay competitive in the marketplace. This can include everything from the development of new products or services, to the adoption of new technologies, to the implementation of new business models or organizational structures. Corporate innovation can be driven by various factors, including the need to respond to changes in the market or industry, the desire to improve upon existing products or processes, or the pursuit of new growth opportunities. Overall, corporate innovation aims to help companies stay relevant, adaptable, and successful in an increasingly competitive and dynamic business environment.

The models of innovation in corporations are frameworks that organizations use to identify, prioritize, and implement new ideas and technologies. These models help companies to stay competitive in a rapidly-changing business environment and keep up with the latest trends and developments. Here are the top models of corporate innovation:

1. Open Innovation – involving the external ecosystem in the innovation process.
2. Internal Corporate Venturing – setting up internal venture units to invest in startups and external innovation.
3. Venture Capital as a Service (VCaaS): partnering with an external Venture Capital firm to drive startup investments in areas of strategic interest to the corporation.
4. Partnerships and Collaborations – partnering with other organizations to co-create and co-innovate.
5. Intrapreneurship – fostering a culture of innovation and encouraging employees to act like entrepreneurs within the organization.
6. Corporate Accelerators and Incubators – providing resources and support to startups and internal innovation projects.
7. Innovation Labs – dedicated internal units focused on exploring and experimenting with new ideas and technologies.
8. Crowdsourcing – soliciting ideas and solutions from a large group of external stakeholders.
9. Customer-Driven Innovation – incorporating customer feedback and needs into the innovation process.

Let’s look at the emerging models out of these.

An increasingly popular model is the internal innovation funnel, which focuses on generating and evaluating many ideas before selecting the most promising ones for further development. This model allows organizations to foster a culture of innovation and encourages employees to contribute their ideas and perspectives.

The open innovation model, on the other hand, emphasizes collaboration and partnerships with external stakeholders such as customers, suppliers, and even competitors. This model recognizes that innovation can come from anywhere and encourages organizations to tap into external sources of knowledge and expertise. The open innovation model was coined by Henry Chesbrough. He defined open innovation as a paradigm that assumes that firms can and should use external ideas, internal ideas, and internal and external paths to market as the firms look to advance their technology.

Venture Capital as a Service (VCaaS) model leverages an external firm’s network and domain expertise strengths while advancing the corporation’s strategic envelope.

One key aspect of these models is the role of leadership in fostering a culture of innovation. Leaders need to create an environment where employees feel safe to share their ideas and take risks and where innovation is encouraged and rewarded. This includes providing support and resources for employees to develop and implement their ideas and recognizing and celebrating innovation efforts and successes.

In conclusion, models of innovation in corporations are essential for organizations to stay competitive and adapt to changing market conditions. These models provide a framework for identifying, prioritizing, and implementing new ideas and technologies and help to foster a culture of innovation within the organization.