Central innovation teams are a model well adopted in many industries, from Pharmaceuticals, where research and development budgets tends to be held by large business units dedicated to the purpose, to Banking, where there are likely to be a few smaller New Product Development teams. Even in Government, there's increasing reliance on central innovation teams to drive efficiencies 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.
There is, however, a problem with a central innovation team that does everything. The problem is that in order to get more innovation, you are forced to add more people. In other words, central innovation teams do not scale well.
Frankly, for most innovations, the difference in effort required to get an organisation to do something radical, versus the easier incremental kind of innovation, is not all that great. You still have to do the influencing, the management of politics, and of course, find the money in order to get things progressed.
Incremental innovation, though it tends to be relatively risk free, doesn't really make big returns on a case by case basis. This means that innovation teams have to do a lot of simultaneous innovation before they can make a sizeable difference. With a central team, the fact is that a single incremental innovation will likely not pay for the time of the innovators.
By contrast, radical innovation has much better returns, though the risk level is much, much higher. For innovation teams, this makes it seem sensible to spend their time on radical projects. The rationale is easy to justify: do incremental innovations and never break even ever, or at least have the chance to break even if you do radical.
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. - 31963
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.
There is, however, a problem with a central innovation team that does everything. The problem is that in order to get more innovation, you are forced to add more people. In other words, central innovation teams do not scale well.
Frankly, for most innovations, the difference in effort required to get an organisation to do something radical, versus the easier incremental kind of innovation, is not all that great. You still have to do the influencing, the management of politics, and of course, find the money in order to get things progressed.
Incremental innovation, though it tends to be relatively risk free, doesn't really make big returns on a case by case basis. This means that innovation teams have to do a lot of simultaneous innovation before they can make a sizeable difference. With a central team, the fact is that a single incremental innovation will likely not pay for the time of the innovators.
By contrast, radical innovation has much better returns, though the risk level is much, much higher. For innovation teams, this makes it seem sensible to spend their time on radical projects. The rationale is easy to justify: do incremental innovations and never break even ever, or at least have the chance to break even if you do radical.
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. - 31963
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Are you considering an innovation effort? If so, you'll need the information from James Gardner's free online innovation book when structuring your innovation team.
