“The Three Fundamental Principles of Exceptional Corporate Innovation by Steve Blank”

How to Create a World-Class Innovation Ecosystem?

Innovation is crucial to companies for growth, sustainability and competitiveness. Despite this importance, only 20% of executives feel that their companies are ready to innovate at scale. This is where a world-class innovation ecosystem comes in. Alexander Osterwalder, the inventor of the Business Model Canvas along with his associate partner Tendayi Viki, shares their insights on building a repeatable innovation process in their playbook “From Innovation Theater to Growth Engine.” In their playbook, they describe the three pillars of corporate innovation that are essential to achieve a world-class innovation ecosystem.

Innovation Portfolios

Innovation portfolios refer to a company’s portfolio of innovation projects. It is important to evaluate whether a company’s portfolio of innovation projects explores or exploits business models. A balanced portfolio of projects is crucial, one that covers efficiency and sustaining, as well as transformative innovation. Another important aspect is assessing the health of your innovation funnel or pipeline.

Explore: Search for new value propositions and business models by designing and testing new business ideas rather than execution. 

Exploit: Manage existing business models by scaling emerging businesses, renovating declining ones and protecting the successful ones.

Innovation Programs

How a company’s innovation programs are structured and managed is an important aspect to evaluate. Leaders often get excited about the wrong innovation programs and it is important to ensure that the innovation programs are interconnected in a strategic way to produce tangible results for the company.

Value Creation: Creating new products, services, value propositions and business models. These programs invest in and manage innovation projects that create value by producing new growth or cost savings.

Culture Change: Transforming the company to establish an innovation culture. This may include new processes, metrics, incentive systems, or changing organizational structures. These transformations help the company innovate in a consistent and repeatable way.

Innovation Culture

What are the blockers and enablers of innovation in a company? How much time does a company’s leadership spend on innovation and where does innovation live in the organization? The kill rate for innovation projects also needs to be evaluated. Overcoming the innovation capability gap requires creating a culture that enables the right behaviors to produce world-class innovative outcomes.

Leadership Support

Corporate leaders have a crucial role in supporting innovation. Investing time, strategic guidance and resource allocation can have a significant impact on innovation. Organizational Design is important to give innovation legitimacy and power, to create the right incentives, and have clear policies for collaboration with the core business. Innovation Practice is all about developing people’s innovation skills and experience, acquiring the right innovation talent, and ensuring the use of the right tools, processes, and metrics to test and adapt ideas in order to reduce risk.


Innovation is an imperative aspect for companies to stay competitive, but building a world-class innovation ecosystem is a significant challenge. Evaluating the three pillars of corporate innovation – Innovation portfolios, Innovation programs and Culture of Innovation – can be a starting point in building a repeatable innovation process. Corporate leaders can have a significant impact on innovation by supporting, creating the right incentives, and investing in innovation. Developing innovation skills and using the right tools, processes, and metrics is also crucial to reduce risk and produce tangible results.

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