What does "building an innovation function" actually mean? (And why most people start in the wrong place)

Building an innovation function means creating the internal capability to explore, validate, and scale new value beyond the core business. Most innovation leads start by trying to define the strategy before answering a simpler question: what is this function actually meant to deliver?

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In practice, this creates complexity because there is no alignment around what the function is actually meant to deliver (Bundl, 8 Essential Actions to Define Your Innovation Strategy, 2026). A better starting point is much narrower:

• What problem is this function solving internally?
• Who needs to benefit from it first?
• What type of innovation does the organisation actually need right now?

For some companies, the answer is startup partnerships. For others, it is venture building, customer co-creation, ecosystem orchestration, or operational transformation. The trap (and it's one Bundl sees often) is getting "too broad, too fast" and trying to cover a variety of spaces (sustainability, AI, ecosystem expansion) all at once.

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Without clear prioritisation, the function becomes a catch-all rather than a strategic capability. It's a widespread problem: more than half of senior executives cite an unclear innovation strategy as a top-three challenge inside their own organisation (BCG, Most Innovative Companies, 2024).

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How do you decide who your innovation function is actually for?

Treat your innovation function like a product and run a value proposition exercise for your own team. Identify your real audiences, understand what each one actually needs, and then choose one to serve first. 

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Most innovation leads discover they have multiple distinct audiences, which often include: 

• Internal teams 
• External partners
• Media 
• Customers 

These audiences all want different things and measure success differently, usually with no clear hierarchy between them. This is a challenge because trying to optimise for all of them usually leads to fragmented activity.

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87% of organisations report struggling to turn ideas into outcomes, and diffused effort across too many audiences is one of the most consistent reasons why (HYPE Innovation, State of Corporate Innovation, 2025).

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A good way to avoid this is to begin with a primary audience and expand gradually from there. At Bundl, we often recommend running a value proposition exercise for each audience:

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Once you've mapped all your audiences against those questions, choose one to start with. The right choice is the audience where:

• You have the clearest read on their actual need
• A visible early win is achievable within 90 days
• Success helps build trust with the other audiences

What should you actually do in the first 90 days?

Your first 90 days should focus on identifying an internal sponsor, defining the vehicle you need, and executing your first pilot. This approach shows progress and builds credibility without overcommitting resources. 

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Across Bundl cases, successful innovation functions share a common structure: they didn't try to build the full portfolio from day one. Instead, they pick one initiative, prove its value, and use that win to unlock the next mandate.

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Here's what that looks like in practice:

Step 1. Find your sponsor: One senior stakeholder with enough authority to clear a path and

enough belief in the work to protect your early efforts. That person becomes your internal champion when budget cycles come around and priorities shift (BVC Roundtable, How to Get Key Internal Stakeholder Support and Sponsorship, 2024).

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Step 2. Choose your vehicle: It should be an innovation model that fits your organisation's current capability and risk appetite. That might be a venture client programme, a co-creation sprint with a startup, or a focused scouting exercise. 

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Step 3. Run your first pilot: Something small enough to complete in 90 days and concrete

enough to evaluate. The question you're answering: can this team engage the right

people, run a credible process, and produce something the business can use?

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For more details, be sure to check out our article: How to Build a Corporate Innovation Program from Scratch: A Practical 90-Day Playbook.

How do you get leadership buy-in before you have results to show?

Use external benchmarks, industry case studies, and cross-sector examples to legitimise the direction you want to go in. They can help give your internal conviction the credibility it needs to gain leadership support. 

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Decisions at the senior level are made based on proof and risk reduction, not innovation enthusiasm. Your job in the early months is to reduce the perceived risk of backing you.

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Bundl has worked closely with many teams to achieve this goal, and across cases, the key to unlocking leadership support is cross-industry case evidence. Not academic research, but real examples of how comparable companies built comparable functions and what they achieved. The purpose is not to educate your leadership team, but to use external proof to lower resistance (BVC Roundtable, How to prove ROI of corporate venturing to my Exco, 2024).

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Here are three things that make external benchmarks land with leadership:

• Adjacent, not identical: Competitor cases look like imitation; adjacent industry cases look like foresight. Leadership wants to lead, not follow.
• Outcome-specific: Be specific about what changed and by how much (e.g. cutting time-to-market by 40%). Vague milestones won’t make an impact.  
• Risk-focused: Frame innovation as defending market position rather than chasing ambitious growth. Lead with the downside of not acting, not the upside of acting.

Case study: How Bundl helped a global consumer brand build its innovation community from zero

A global consumer brand partnered with Bundl to launch a completely new innovation function with a new lead, no precedent, no model, no inherited programme to build on and multiple possible audiences.

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Instead of asking “what should we build?” Bundl helped them answer: “Who are we building for, and what is our first credible step?” 

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Our strategy was straightforward:

• Narrow the focus: Target one primary audience
• Launch a tangible asset: Build a community initiative instead of a strategy document
• Deliver immediate utility: Ensure the first milestone is genuinely useful to its users

That first milestone became the foundation for everything that came after. It created a reference point for the broader organisation, gave leadership tangible proof of concept and secured the function's room to grow.

Corporate Innovation Function FAQs

Q: What is the difference between an innovation function and an innovation ecosystem?

An innovation function is the internal capability responsible for coordinating innovation activity. An innovation ecosystem is the broader network of startups, partners, customers, universities, investors, and internal stakeholders connected around that activity.

Strong ecosystems usually emerge from strong operating models, not the other way around.

Q: I’ve been asked to build an innovation function, but I don’t know what that means. Where do I start?

Start by identifying the business problem the function is meant to solve internally. Avoid trying to define a complete innovation strategy immediately. Focus first on who the function serves, what pressure points exist inside the organisation, and where you can create visible traction early.

Q: How do I scope an innovation function when multiple stakeholders want different things?

Prioritise one primary audience first. Most new innovation functions fail because they try to support leadership, business units, startups, ecosystem partners, and customers simultaneously before the operating model is mature enough to support that complexity.

Q: What should an innovation lead deliver in the first 90 days?

The strongest first 90 days usually include:

• one executive sponsor
• one clear opportunity area
• one operating model or innovation vehicle
• and one initiative capable of demonstrating traction internally

The goal is momentum and legitimacy, not a complete innovation portfolio (Bundl, How to Build a Corporate Innovation Program from Scratch: A Practical 90-Day Playbook, 2026).

Q: How do I get leadership buy-in before I have measurable results?

Use external benchmarks, focused pilots, and strategic alignment to create legitimacy early. Leadership teams are more likely to support innovation functions when they can clearly connect them to existing business priorities and see credible external examples validating the direction (BVC Roundtable, 2024).

Q: What makes Bundl different from other corporate innovation consultancies?

Bundl works directly with consumer-driven companies building venture studios, innovation ecosystems, venture client units, startup partnerships, and new growth initiatives. Rather than approaching innovation as isolated workshops or strategy exercises, Bundl focuses on helping organisations build operational mechanisms capable of generating measurable long-term business value.

Want to see how top corporates build innovation ecosystems?

Be sure to check out Bundl's 9 Corporate Innovation Ecosystem Examples report.

It breaks down how companies like Alphabet, Volvo, and Bosch leverage CVCs, labs, venture studios and more to create powerful ecosystems that fuel innovation and drive measurable growth.

Ready to be inspired?

👉 Download the report: 9 Corporate Innovation Ecosystem Examples

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Want to build an innovation function? We can help you design and launch a setup tailored to your organisation’s strategic priorities, complete with the right operating model, ecosystem approach, and first-wave initiatives.