The central innovation team is a model which is well adopted in many industries. In Parma, for example, research and development budgets tend to be held in large business units which are dedicated to the innovation function. And in Banking as an another example, there are likely to be many small New Product Development teams, each of which is accountable for the innovation in a particular business line. Even in Government, there's increasing reliance on central innovation teams, in the never-ending pursuit of efficiency and cost savings.
Understanding the reason is not difficult. Central teams are simple to establish, and very easy to measure compared to alternatives which rely on an "innovation culture". It is easy to point to such teams and say "here is how we do innovation". These are teams which make executives feel good about their innovation efforts, because when you can nominate specific individuals and assign accountability, you know things are being done.
Now, in this model, the innovation team is the group that decides how and when to innovate. They ordinarily control an investment budget of some kind, and are accountable for making investments that drive forward the innovation agenda. If they are any good at all, they will sign up to some big return numbers that can justify the investments they're making.
But there's a problem with a central innovation team that does everything: in order to get more innovation happening, you have to add more people. This doesn't scale, and here is why.
For most new things, the difference in effort required to get an organisation to do something radical, versus something a little more incremental isn't all that great. You still have to do all the influencing, the management of politics, and of course, the finding of the money.
Incremental innovations, though they tend to be relatively risk free compared to their radical cousins, don't generally make big returns individually. You need to be doing a lot of them before you can make a sizeable difference. With a central team, you often find the individual incremental innovations don't pay for the time of the innovators.
On the other hand, doing things which are more radical can provide much better returns, though the risk level is much higher. For innovators, this makes it seem sensible to select more radical innovation for progression. The rationale is clear: do incremental and never break even, or do radical and at least have the chance to do so.
What is really needed, though, is a balanced portfolio approach to innovation coupled with significant inputs from customers and employees. Participatory innovation, as this approach is known when supported by a central team, is usually the best approach to making innovation work in large organisations. - 32171
Understanding the reason is not difficult. Central teams are simple to establish, and very easy to measure compared to alternatives which rely on an "innovation culture". It is easy to point to such teams and say "here is how we do innovation". These are teams which make executives feel good about their innovation efforts, because when you can nominate specific individuals and assign accountability, you know things are being done.
Now, in this model, the innovation team is the group that decides how and when to innovate. They ordinarily control an investment budget of some kind, and are accountable for making investments that drive forward the innovation agenda. If they are any good at all, they will sign up to some big return numbers that can justify the investments they're making.
But there's a problem with a central innovation team that does everything: in order to get more innovation happening, you have to add more people. This doesn't scale, and here is why.
For most new things, the difference in effort required to get an organisation to do something radical, versus something a little more incremental isn't all that great. You still have to do all the influencing, the management of politics, and of course, the finding of the money.
Incremental innovations, though they tend to be relatively risk free compared to their radical cousins, don't generally make big returns individually. You need to be doing a lot of them before you can make a sizeable difference. With a central team, you often find the individual incremental innovations don't pay for the time of the innovators.
On the other hand, doing things which are more radical can provide much better returns, though the risk level is much higher. For innovators, this makes it seem sensible to select more radical innovation for progression. The rationale is clear: do incremental and never break even, or do radical and at least have the chance to do so.
What is really needed, though, is a balanced portfolio approach to innovation coupled with significant inputs from customers and employees. Participatory innovation, as this approach is known when supported by a central team, is usually the best approach to making innovation work in large organisations. - 32171
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Are you deciding on an innovation programme? If so, you'll want to access the data from James Gardner's free online innovation book when structuring your innovation team.
