How to shore up sponsorship

All this week, innovation author and strategy guru Rowan Gibson answers pressing questions about the best ways to approach innovation. He will provide case studies of some of the world's top brands, and he'll share some tips that you can apply to your business immediately to bring measurable value to your innovation efforts. Follow along through the week, and weigh in with your comments at the bottom of each post.

With sponsorship being so crucial, what are the best ways to enhance or shore up proper Innovation sponsorship?

Even in the best economic times, it can be tough to find financial sponsorship for innovation. Within most organizations, there are formidable barriers that prevent would-be innovators from getting access to the resources they need to execute their ideas. And of course many corporations are still struggling to recover from the economic downturn of the past couple of years, so it remains a difficult challenge.

Where I believe a lot of companies go wrong with innovation is that they put almost all the focus on the generation of new ideas — from across and beyond the organization — but they don’t seem to think about how to reallocate talent and capital behind those ideas to turn them into viable business plans and scalable opportunities.

Of course, organizing innovation sponsorship is easier said than done. As every manager knows, reallocating resources is an intensely political and difficult process. But there are some tried and tested ways to successfully overcome the barriers to funding radical innovation.

One way is to set up a mechanism for connecting an idea — wherever it originates and whoever thinks it up — with the money and the talent required to start pushing that idea forward. Prospective innovators should be able to get fast, easy access to experimental capital that has been set aside in the company for funding breakout ideas. And they should also get access to human skills — to a few smart people who can help advance, develop, and test the idea, perhaps by building a prototype.

An excellent example is Shell GameChanger — a companywide process at the oil giant that solicits and funds breakthrough ideas from across the global enterprise as well as beyond. GameChanger is open to anybody, anywhere in the company, and also to people and organizations outside the corporate boundaries.

Shell GameChanger

Shell has offered up to $600,000 for new ideas through its GameChanger platform.

Once an idea is submitted, it goes straight to a six-person peer review panel. If they give an idea the green light, the innovator can receive initial funding of $25,000 in less than a week. Along with that money, the innovator (if he or she is a Shell employee) is given 30 days off to design an experiment that will either validate or invalidate the idea’s most critical hypotheses. After 30 days, the innovator comes back and presents the learning.

At that point the panel may say, “This looks really promising, so we’d like to give you $50,000 for a further 90 days.” A subsequent proof-of-concept review determines whether a project deserves further funding. In the end, the average GameChanger grant is $100,000, but some projects have received as much as $600,000 in funding.

So far, the system has been a magnet for thousands of new ideas from employees in all parts of the organization — as well as from external sources — hundreds of which have been funded. Many of these ideas are later moved into an operating unit or one of Shell’s growth initiatives.

At another large company, 10 percent of its $1 billion-a-year capital budget has been earmarked for funding radical innovation projects. Divisional executives have been told that if they don’t bring in such projects, they will slowly be starved of capital. This approach demonstrates a deep recognition that if the company is not funding breakout ideas, it is never going to achieve breakout results.

Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation. He is also one of the world’s most in-demand public speakers. Rowan’s books have been translated into over 20 languages. His latest book, Innovation to the Core, is published by Harvard Business School Press. He may be contacted at rg@rowangibson.com.

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