This article is a summary of the e-book “The Innovation Game” from Cap Gemini Consulting. Download the full ebook.

Evolution doesn’t wait. 52% of the Fortune 500 have merged, been acquired or have gone bankrupt since 2000. There are myriad examples of established corporates that have fallen on difficult times. Nokia, Blackberry and Kodak are just some of the many companies that have been disrupted, decimated or reduced to a shadow of their former selves, after having once dominated their industries.

How can companies avoid this fate? The answer is innovation. A recent survey of large corporations found that 65% of senior executives face increased pressure to innovate.


52% of the Fortune 500 have merged, been acquired or have gone bankrupt since 2000.


However, the challenges of innovation continue to defeat many. In consumer goods, for example, research shows that more than 85% of new products fail. The reality is that traditional innovation approaches are broken. A recent study revealed that only 5% of R&D staff feel highly motivated to innovate. In certain sectors, more than 85% of new products fail and an overwhelming 90% of companies consider they are too slow in launching new products and services.


Large organisations are simply not structurally or culturally equipped to innovate fast enough.


The weaknesses of traditional innovation approaches have led some organisations to explore different avenues and seek new inspiration. These organisations have launched innovation centres in major technology hubs with the explicit mandate to accelerate digital innovations. These innovation centres, comprising teams of people and often physical sites, are established in a global tech hub. The goal is to leverage the ecosystem of startups, venture capitalists, accelerators, vendors, and academic institutions that these hubs provide. 

[pullquote]“An innovation centre is a team, a space and a mindset.”[/pullquote]

Major global technology hubs are the preferred destinations for setting up innovation centers. 60% of companies that have set up these centres have a presence in the Silicon Valley but many more hubs are emerging across Europe and Asia.

The primary objective of an innovation centre is to accelerate innovation by rethinking the customer experience, improving operational efficiency and testing new business models through the use of digital technologies such as Big Data, the Internet of Things, Social Media, Mobile, Robotics, Augmented Reality and 3D Printing.

Penetration varies significantly between sectors; manufacturing is a clear leader at 58%, but despite facing increasing pressures from digital disruptions, remarkably, Financial Services lags with only 28% of firms adopting the innovation centre approach.

Where innovation centres succeed, companies find they deliver an accelerating the speed of innovation and a fresh source of ideas. However, less obviously they can also start to change the culture of the broader organisation, enhancing risk-taking ability, attract talent, driving employee engagement and building a culture of innovation.

However, it is extremely challenging to make a success of innovation centres.

[pullquote]“80 to 90 percent of innovation centres fail, and end up being a massive waste of resources.”[/pullquote]

Success factors include having a clear vision for the innovation centre, having committed and senior sponsorship in the organisation, hiring and retaining the right people, building internal and external partnerships and ensuring a strong connection with the rest of the business.

“You need to avoid becoming an innovation theatre where all you are doing is interacting with a bunch of start-ups that don’t really care about your company”.


Contexis evaluation

There are compelling reasons for large organisations to urgently look for news ways to innovate. This highly readable Cap Gemini e-book makes clear that large companies are simply unable to innovate to keep pace with the speed of change and that inability to innovate is leading to mass corporate failure. And the pace can only increase.

Are innovation centres the answer? The authors make a strong case but also make clear that up to 90% of innovation fail. Not an enticing statistic given the scale of the investment.

Most centres fail for similar reasons that innovation fails within the organisation: a lack of a clear vision for the innovation centre, hiring and retaining the right entrepreneurial people, building partnerships with start up and entrepreneurial businesses and ensuring a strong connection with the rest of the business.

For this to work whole cultures need to change. Until large organisations learn how to think small innovation is liable to be stifled if it is kept within the organisation and misunderstood where it is externalised.

To succeed organisations need to choose. Either to learn to either think like entrepreneurs and innovate internally, or learn how to understand entrepreneurs to create effective and meaningful external partnerships.