Hacking the Enterprise: Here’s Why Corporations Open (Useful) Innovation Centers

Innovation center

Over 25 global corporations including Coca-Cola, thyssenkrupp, Home Depot and Stanley Black & Decker tap into Atlanta’s dynamic concentration of startups, talent and entrepreneurial initiatives by standing up an off-site innovation center.

Innovation centers can make a significant impact on business growth when done well. Off-site centers allow for autonomy to build, connections to external resources and a pipeline for ideas to be implemented into the core business. But when done poorly, centers struggle to define their purpose and value beyond vanity. Looking “innovative” equates to a sea of empty seats and Post-it note tumbleweeds.

Innovation centers need action. Leadership, vision, metrics, healthy churn, a line back into the business units and connections into the entrepreneurial community are required for success. You get the sense it is being done right when walking into Home Depot’s innovation center in Midtown’s Tech Square. Their space is bursting at the seams with tech talent.

To uncover the secret sauce of making corporate innovation centers successful, I talked to Anthony Gregorio, ‎Senior Manager of Home Depot’s Innovation Center, Larry Harper, Vice President of Stanley Innovations and John Avery, Group Manager of Panasonic Automatic Innovation Center, who have all made great strides in figuring this out.

Define your Vision and Mission

Don’t build an innovation center without knowing exactly why you’re doing it. To figure out your why, define your internal customer, discover what they are trying to solve and interview them many times. Ask what would worry them if you didn’t create the innovation center. Focus your efforts on one objective and make that very clear.

Stanley Black & Decker has been on a four-year innovation mission. The company has always been innovative (credited with many ‘world’s first’), but they’ve focused in on creating a global innovation ecosystem for all business units. Stanley Black & Decker has set up small, external off-site groups, called Breakthrough Teams, to disrupt themselves in each of their units. The program started with one team in Baltimore and now has expanded to 12 cities.

The next layer of Stanley Black & Decker’s innovation ecosystem is an Atlanta-based Digital Accelerator — a center of excellence for all things digital from IoT, IoT platforms, data analytics and digital marketing to software development.

“Stanley Black & Decker had a desire to become a very good digital company, which is unusual for most industrial enterprises. The company has a vision to not only be a very good digital industrial company, but a very good digital company — period,” shares Harper. The industrial giant considered a lot of options on where to place the digital program (including Austin, Boston, and Indianapolis), but Atlanta was selected for proximity to Georgia Tech talent and the burgeoning innovation community.

Consider your ‘Why’

Scouting — Are you scouting for commercial partnerships? If so, have you defined a routine and process to identify and invite startups into your company? Are you looking for investment opportunities? If so, do you have a fund and what is your investment thesis? Or are you just hoping to see what’s out there? Each requires a different approach, so consider focusing your efforts to start.

Generating Disruptive Business Models — Moving a team offsite to develop ideas outside of the core business model is the riskiest of all programming. Innovation centers generally fail to clearly define the process for how ideas will be developed at the outpost and absorbed by headquarters, who may not have the capabilities, resources or interest required to develop adjacent or disruptive business models. Will you continue to develop the ideas externally? Does leadership really care if they are implemented?

Since 2015, Home Depot’s strategy has focused on emerging technology and incremental innovation. Gregorio explains their thesis as, “inventing ways to be successful with new technologies, instead of focusing on inventing. Everything for us is focused on how we can improve the customer experience.”

All projects that come out of the center are proofs-of-concept engineered to be implemented back into business units. A project doesn’t start without involvement from strategic business teams and that relationship guides the teams. Ideas in the pipeline aren’t lobbed over the fence from the center to headquarters; they are created as a constant partnership to ensure a focused approach.

An example of this approach is the Center’s work with VR technology, which allows supply chain analysts to simulate how a pallet is built and how it fits in the packing container to improve accuracy and speed of the queue.

Talent — Gregorio, who started at Home Depot as an intern himself, cites one of the most unexpected benefits to Home Depot’s Innovation Center is the incredible student engagement (in both number and quality of interns). The center acts as a conduit for greenfield opportunities — fostering relationships with professors, providing students exposure to impact the business and achieving a 95 percent intern conversion rate to permanently joining the company. The initiative has helped Home Depot grow from six technology interns to 215.

Panasonic was the first corporation to launch a space in Atlanta (back in 2012), and they chose Georgia Tech’s campus for student attraction as well. “We wanted to attract talent, and we didn’t have the reputation at Georgia Tech to attract people to our office in Peachtree City from the northern arc and Atlanta,” shares Avery. After pioneering the innovation space, Panasonic went from 3 interns to 100 a year.

PR — Though this should not be the primary objective, it can be an internal and external benefit. Be sure to capture stories and share what you’re doing with the mothership, otherwise they will forget what you’re up to.

Avery suggests to “communicate in high fidelity. Don’t underestimate the storytelling aspect. Good sales material and painting the picture for your vision is critical to keep leadership and the headquarters engaged and excited about what you’re doing.”

Your Planning Checklist

  • Figure out who is going to be working there and what you’re going to ask them to do. What skills will they have and how will you define their objectives?
  • Don’t decide where to put your innovation center before you’ve decided what your goal is. You shouldn’t define a geography until you figure out your objective. Be sure the location is strategic based on your goal and not a PR knee-jerk reaction (everyone else is there, so we should be, too).
  • Define and align on what you will measure and how you will define ROI.
  • Know where your budget is coming from and how much time you have. Financial transparency helps you to define your runway and lets you know when you need to start showing results.
  • Gut check, start small and experiment.

Carie Davis is a former Coca-Cola Global Director of Innovation & Entrepreneurship. She started Your Ideas Are Terrible and The Enterprise Growth Institute and serves as Program Director of the BridgeCommunity. She works with global companies to implement tools & systems for a steady flow of validated ideas.