The business advantages of scale and scope are widely recognized, but large, global enterprises often fail to fully realize them when it comes to innovation. Innovations that are developed in one geographic region or business unit — new products to delight customers, new HR policies to attract and retain talent, new production processes that drive efficiency gains — too often stay within them instead of being disseminated across the enterprise.
There are three common obstacles to scaling innovations from one to many markets. To illustrate both the obstacles and the solutions for overcoming them we’ll use the case of a global retail bank, which Innosight advised.Though every region is different, local leaders tend to overestimate the singularity of their markets, their customers, and the conditions under which they operate.
The corporate strategy team then facilitated a series of discussions among senior leaders of each region to compare and identify commonalities in their innovation priorities. This surfaced multiple priorities that were shared across all four regions. In addition to those related to the mortgage-application platform, they included the development of new mobile-only products for millennial and Generation Z consumers and reduction of call center use and wait times.
To address these issues, the bank offered P&L relief to regions on a case-by-case basis, allowing them to deviate from profitability targets without risking their bonuses so that they could invest their own resources into scaling innovations for the benefit of other regions. It also established a central fund and team to support global scaling efforts.