During my career, I have moved back and forth between innovation and business units. When I joined back to the innovation team, my colleagues in the business unit, said: “Hey, that’s so cool! You are going to innovate!”. Leaving aside the very romantic idea my colleague had of what working in an innovation team is, what worries me more about this statement is that it illustrates the barrier between the “official innovators” and the rest of the company. This barrier has been created by the organisational model itself, tagging a concrete area of the company as #innovation.
Bring innovation and business units as close as possible
However, becoming an innovative company has very little to do with just setting up an innovation team. A capable and well funded innovation team does not guarantee innovative initiatives to have an impact for your company. It is key to engage the business units to scale up and operate the initiatives that get the approval. If your organisational model keeps the innovation and the business units in silos, you get inefficiency and frustration on both sides.The business unit complaints about not having the time to innovate and the misalignment between the business needs and the innovation team deliverables. On the other hand, the innovation unit feels innovation is not a priority for the business team and given the innovation team is not close to the business they don’t have enough information about the challenges the business team is facing. It could be argued that the company strategy should close the gap and common objectives can be set. In practise, business and innovation units have different goals and different ways to measure success.
The solution for this dilemma is to bring innovation and business units as close as possible. How much? It depends on the organisation capabilities and the type of innovation.
Incremental innovation shall be led by the business units
For incremental innovation, no doubt the team best suited to deliver efficiently is the business unit itself. They are on the front line of the market and understand the problems to solve better than anyone else.
What do the teams need to deliver? They need the common understanding at all levels that innovation is part of the product cycle they manage, not a lateral activity. This decision means to the business unit to:
- Develop the skills to run effective innovation cycles.
- Create a trust environment where try&learn with the minimum resources is encouraged and recognised.
- Allocate resources to prototype, so it becomes a business-as-usual activity not a nice to have.
If innovation methodology is new to the business units or they don´t have the right profiles, the innovation team may support them to make a start covering the gaps until the business team is on track.
Disruptive Innovation can be delivered jointly between innovation and business units
Disruptive innovation is a different story. These initiatives are trying to change the rules and support the company’s long-term revenues. Given these are unexplored territories there is no operating unit looking after these topics. Hence, it makes sense to have a dedicated innovation team to tackle the challenge. Or not. For large companies, with multidisciplinary teams skilled in different areas there is an option for collaborative disruptive innovation. Disruptive innovation can be led by an innovation team, however, enrolling business units to some extent in these initiatives is possible and beneficial.
- It’s very rewarding for the business units, so they feel part of the future of the company and reduce the anxiety that changes may make them feel.
- It is a source of subject experts and incorporates diversity to the analysis of the problem and the design of the solution.
- It’s a way to reduce the friction and speed up the hand over of these initiatives to the business areas in the future.
What do the teams need to deliver?
- Business unit members are allowed to join for a period of time, e.g. from 3 to 6 months, to a disruptive programme where they can contribute with their expertise.
- Innovation units act as the resident disruption team members. They lead the programme to maintain consistency, methodology and focus.
In summary, removing the organisational model silos is key to innovate effectively. It is a paradox that the era of open innovation had arrived for some companies earlier than the collaboration between their own innovation team and the business areas.
