Monday, March 20, 2006

Who is responsible for innovation?

In most firms, there's a clear leader for any important business function or process. The CFO is responsible for finances. The VP of Sales is responsible for the sales pipeline and managing the sales team. What remains unclear to me is - who is responsible for innovation in your firm?

Now, most people will quickly point to the head of R&D if the organization has one. That's probably not a bad first choice, except that it argues that all ideas will come from only one group or business function within your organization. Do you really want to stake everything on just one organization? What if your business partners or customers have suggestions or ideas? Will they naturally funnel to the R&D team?

Or, to look at it another way, suppose there's a great idea to improve a business process. That idea, surely, doesn't belong to the R&D team. No, it should belong to the person responsible for the function or business process that needs to be changed. So here's a good idea without a clear owner - or maybe ownership is passed around as the focus of the improvement changes.

Suppose the CEO decides to innovate a service delivery or the business model of the firm. Who owns that change? Who is responsible for ensuring that your organization is considering ideas to improve your products, your services, your business model and other ideas? Certainly all of these ideas are not relevant to the head of R&D.

This is another example of the dysfunction around innovation. Since ideas can come from anywhere, and can reflect anything, it's hard to categorize and assign responsibilities for good ideas. So in any business, there are good ideas for new products being evaluated by R&D and marketing and product management, and good ideas to improve processes being evaluated by the heads of several functional groups. How do you determine which ideas have the most merit and which to fund? Who is responsible for the succcess or failure of these ideas?

Short answer - a lot of different people, who have a lot of other things on their plate. Long answer - really, no one. Perhaps its time to identify the Chief Innovation Officer in your business. This person should be responsible for implementing the tools, processes and culture to help each function record and evaluate ideas and move the best ones forward. He or she could apply funds or resources to nurture great ideas and to provide some assistance to teams within the organization. He or she should report an innovation pipeline, consisting of ideas that relate to products, and processes, and services, to the senior management team.

Innovation should be pervasive across your organization, so yes, we probably are adding another layer of management. However, as the speed of innovation increases, only by surfacing the idea and gaining management buy-in and resources will you be able to consistently innovate.
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