This document discusses how corporate headquarters can get more value from innovation outposts located in technology clusters around the world. It explains that while setting up these outposts makes sense to gain access to new ideas and talent, the return on investment is often unsatisfactory. To improve this, companies need a "Sense and Capture" model to identify opportunities locally, as well as an "Integration and Propagation" model to share learnings and speed up decision making between the outpost and headquarters. Specifically, the latter model should propagate intelligence, map relationships, and speed up deal making processes to better integrate the outpost with the overall organization.

1. Succesful innovation outposts
How Corporate HQ Can Get More from
Innovation Outposts

2. 2
Background
§ Setting up innovation outposts in global technology clusters, such as Silicon Valley,
Boston, and Tel Aviv, is highly popular among Fortune 500 corporations
§ The geographic proximity to the innovation clusters facilitates the “absorptive
capacity” to assimilate and use know-how
§ The logic is that if you are present where new trends, ideas, talents, and start-ups are
generated you might be able to recognize and assimilate them into your firm’s
innovation pipeline
§ Persuaded by such logic, companies agree to make the investment and set up their
innovation centers. People are relocated or hired locally to staff the outpost
§ Unfortunately, even if there is a strong rationale behind the set-up of outposts, often
the return on investment is perceived as unsatisfactory

3. 3
What is the operating
model of the SV
hub?
What are its
key
components?
How do we integrate
with the organization
to better perform
locally?
How do we propagate
the value back to the
company?
SENSE AND
CAPTURE
MODEL
INTEGRATION AND
PROPAGATION
MODEL
To make innovation outposts work successfully, companies
need to do two things simultaneously
§ The two models, the «Sense and capture» and the «Integration and Propagation» models, are equally
important and intrinsically linked, as two faces of the same coin
The typical pitfall is to overlook the “integration and propagation” model

4. 4
An “Integration and Propagation Model” should address three
objectives
2
Propagate Intelligence and Insights
§ Detect, capture, evaluate, and channel the intelligence and insights from the
innovation cluster through the organization
§ The tacit knowledge should be codified and shared through formal processes
to avoid the risk that valuable information absorbed by the outpost doesn’t
reach the mothership
Map Out Local Relationships
§ Mapping the local team’s network makes social capital relationships explicit
and avoids the risk that it stays with the local team. As an analogy, think of
sales and marketing and the rise of CRM
1
§ The flow and speed of decision making must be reviewed as typically
decisions need to be made much faster in a hyper-competitive environment
§ Shortcuts and priority lanes must be thought of. Accountabilities, transfer
protocols, and decision bodies must be reviewed and properly designed
3
Speed-up Deal Making Processes

5. 5
Thank you!
Contact: adifiore@ecsi-consulting.com