December 14, 2016

Market Analysis

UC Irvine creates model for digital innovation in the enterprise

This article was originally published on

New public-private partnership approaches in higher ed show how enterprise organizations can increase the speed of innovation and create a rapid cultural shift.

In his 1997 book, The Innovator’s Dilemma, Clayton Christensen examined why large organizations often fail to innovate and leave themselves open to disruption from faster, more nimble competitors. And this was before the current generation of technology companies unleashed their onslaught of disruptive technologies.

It’s fair to say that in the nearly 20 years since the book’s release, the stakes have grown exponentially greater. Yet for many enterprise organizations, the struggle to create a truly innovative culture continues. The vast majority of corporate executives fully expect new tech startups to disrupt their organizations, yet still have trouble overcoming the ‘innovator’s dilemma.’

Some universities, however, are testing new approaches that may offer strategies to finally break down these walls of innovation.

A new model for innovation

A few years ago, the University of California, Irvine (UCI) launched what they call UCI Applied Innovation, and a unique space called The Cove. Their stated objective is to serve as the ‘front door’ enabling collaboration between UCI and industry. And what they’ve created may act as a model for enterprise organizations looking to accelerate innovation.

I recently sat down with Carolyn Stephens, the center’s Associate Director and Chief of Staff, and Matt Bailey, the Director of Applied Innovation’s Collaborative Venturing Group, to understand how they work and how it might apply to enterprises seeking to harness greater levels of innovation.

Bailey explained, “While most universities have an innovation center of some sort, the mix of private start-ups, the focus on external investment and The Cove make us unique.”

Every university seeks to commercialize their research. There is nothing unusual in that. But how UCI’s Applied Innovation center approaches it is what sets them apart — and why they may prove to be a model for large enterprise organizations.

Rather than only seeking to license their research and IP, Applied Innovation established The Cove — which they designed to act as a hub of activity and community between the university and the business community surrounding it. Under its roof, start-ups, angel investors and related support organizations happily co-habitate.

Within The Cove, start-ups collaborate, make investor pitches (including to the center’s privately funded, $5M+ seed fund) and participate in a wide range of mostly-free, educational and community events.

Part incubator, part mentor, part community outreach organization, UCI’s Applied Innovation and The Cove has created a safe environment in which the university can partner with the business community to develop, fund and bring exciting new ideas to market.

A new model for collaboration

UCI is solving a problem that is very similar to what faces enterprises as they make the transition to the digital era: organizations must free the wealth of ideas and innovation within them to stay relevant.

Applied Innovation is a recognition that traditional approaches are not sufficient. The university realized that they needed a way to collaborate with the startup and investor communities to harness the value of their IP and increase the velocity of innovation. Enterprise organizations must do the same.

A virtual army of would-be entrepreneurs and innovators populates most organizations. Their rich pool of talent, depth of market expertise and extensive customer knowledge provides it with invaluable insights on potential innovations and industry disruptions — yet they are mostly left untapped.

As Christensen described, enterprise organizations are not disrupted because they lack the insights. They are disrupted because they lack the ability to break through the corporate inertia to give those insights and the would-be entrepreneurs within their ranks room to explore and commercialize them.

But what would happen if enterprise organizations adopted UCI’s approach and created their own “Cove’s of Innovation”?

Breaking free of corporate inertia

Completing the transition from an industrial-era organization into a digital enterprise demands that leaders break down the barriers to innovation. That’s much easier said than done. And in most cases, it cannot be done within the confines of the traditional enterprise.

UCI’s Applied Innovation is both unique and successful in two important respects. First, they report directly to the Chancellor of the University, giving them a unique degree of control and autonomy. Second, they operate as a sort of private-public joint venture, with one-third of their funding coming from the community.

Both of these factors give them the ability to innovate rapidly, experiment and fund ideas that would almost certainly be impossible within the confines of the larger university. The same is true within large enterprise organizations.

What would happen if they established similar innovation centers that were operated semi-independently and in partnership with their respective community or industry ecosystems? If they also gave their most innovative and entrepreneurial-minded employees the opportunity to pursue their ideas within such an environment, what might happen?

Overcoming the ‘Innovator’s Dilemma’

History is still writing the story of the digital era. Technology startups are continuing to disrupt virtually every industry. That part of the story will continue. But we have not relegated industrial age enterprise organizations to the sidelines to await their inevitable demise.

Every organization can overcome the ‘innovator’s dilemma’ and transform themselves into a digital enterprise. But doing so will require that they break free of their limiting, traditional approaches and embrace the innovation communities already taking shape within and around their organizations.


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