Innovation Case: Creating A World Class Innovation Unit
A global and well-respected company in a fast-growing industry wants to set up a new innovation unit. Their current innovation efforts are technology-driven but there is a growing understanding that innovation efforts need to focus beyond technology and R&D.
Creating a cross-functional perspective is a key objective for the new innovation unit that faces several obstacles including:
• a lack of true innovation understanding from the executives
• strong focus on internal capabilities which hinders external contributions
• a lack of internal knowledge on how to set-up such a unit
In this case, I would like to focus on the latter obstacle thus giving us some key questions to ponder:
How can the project team in charge of establishing this new unit acquire the insights, knowledge and skills needed to make this happen?
How can the project team spread this insight and knowledge across the company once a knowledge base and a learning process for the project team itself has been established?
How do you convince executives in a R&D focused company that innovation should be about more than just products and technology?
The ambitions are high as the project team aims to create a world-class innovation unit in just three years time. How can we help them?
Hi Stefan!
This is actually becoming a frequently asked question at many organizations…which I take as positive news in light of the continued problems with getting the global economy moving again.
I typically approach client inquiries of this nature from a couple of fronts:
1. My preferred method of establishing a solid core innovation capability is to use what I call the "Innovaiton Center of Excellence" approach. This is centralizes the "function" of innovation for the organization by providing coaches, champions, training, process management, thought leadership and research, while maintaining the "operation" or actual idea gen and decision making embedded where it belongs, in each and every department and division. I actually walk through this concept in greater detail in a blog post I created last year. (http://tinyurl.com/ygmf7cr)
2. Before any traction can be felt in approach #1 however, someone (hopefully a member of the executive management team willing to be the innovation champion and sponsor) needs to starting building the business case for a broader view of innovation and R&D directly with the CEO and other members of the executive team. Valid business reasons are required in order to provide the resources and, most importantly, engagement needed to properly support the effort. Otherwise, you'll be hampered by a grassroots effort that will be constantly in competition with other key organizational resources. This is an education and business case sales effort.
This approach at least provides a stepping stone for additional thought and action…and any forward progress should be considered a "win" when getting these types of efforts off the ground.
Paul
Stefan,
The company, which I assume has been successfull so far, somehow reached the following conclusions:
1. we to innovate to meet our growth objectives and/or for the survival of the company
2. with our current approach to innovation we will not be able to meet our objectives
3. we need a different approach to innovation (at least there is a growing understanding)
4. we need to create a new organizational unit, operating from a cross functional perspective
5. this unit needs to be the best of the industry within three years ('worldclass')
It would be very interesting to understand what analysis founds the conclusion: changes in external environment (customers, competition, legislation, political, technology etc) , changes in shareholder expectations etc.). The analysis should give a good indication about the type of innovation needed (radical, incremental, blue ocean, etc).
The second conclusion that the way the company currently innovates, and therefore needs to be reorganized, will not lead to the desired results is premature. Does this company need an innovation unit? Could it be that simply increasing the current efforts leads is sufficient to meet their objectives? So far the company has been successfull with this approach, it may be that this approach is not perceived to be efficient (only 4 out of 10 technological innovations are a commercial success), may be the decision making process needs to be optimized (are we working on the right projects?), may be there is a salesforce problem (new stuff is complicated and I have difficulty explaining it to my customers).
The strategy (creating a separate organizational unit) is based on 'a growing understanding that we need to change something' , and the flavor of the month is innovation. It is not clear what the mission and objectives of the new unit are and it there is no direct link with a concrete burning business issue. Not a very good start for an innovation team, and no wonder that there executives need to be convinced that it is more than projects and technology, and no wonder that they have little true understanding about innovation: it simply is not a key priority for them.
Under the assumption that the unit will be responsible for optimization of incremental innovation (not radical or blue ocean, that requires a different set up) my advise to the team would be to have a thorough discussion with board and a broad group of internal stakeholders to get the mission and objectives of the new unit as concrete as possible. Relate to at least 1 concrete hot business issue and to the objectives of the company. Write it down in a manifesto which can be used for internal and external communication. Explaining what you do and why you are doing it is one of the biggest challenges for innovation team. With the right execution you will have a powerfull instrument to convince executives.
Building worldclass innovation capabilities is a growth process with successes and failures along the way. Whilst for most innovators that is quite clear, for most executives it is not, failure is not an option. It is crucial therefore to create a credits (results) as quickly as possible to create room for failure. Roadmap the growth stages of the team.
I all cases start with a small team of people with very good networking skills and stature within the company, they are the ones to build the bridges and relationships between the divisions/unitis, and let the new insights and knowledge travel through informal channels through the organization. This will give visibility and starts building credit. This can be done parallel to establishing the knowledge base within the team.
Take a few external people from other industries on board to bring in fresh thinking and capabilities that are not yet there. Small teams do not have to spend time in formalizing workstructures, communication, etc. so they can spend their time on doing their jobs.
I would also advise to seek people outside the company who have been in similar situations tap into their experience.
Regards,
Frank
The mission and objectives for the unit are most important:
The sense of urgency, and primary reason to change,