Tuesday, September 15, 2009

Who "owns" Innovation? Where does it "live" in an organization?

Braden Kelly has asked a number of us to respond to the question "Who owns innovation and where does it live in an organization?" This is actually a question we are asked quite frequently by our clients. The answers are based on the strategic goals of the firm.

First, let's consider who "owns" innovation. Many firms will argue that the CEO "owns" innovation, and they are correct, to a point. Anyone with any amount of experience working on innovation will tell you that an engaged, involved executive team is vital to success when innovating. However, a CEO simply doesn't have the time or bandwidth to get involved in every decision and manage all the disparate teams and activities that are involved. A CEO needs to make clear strategies and declarations about innovation's purpose, and ensure the work is conducted effectively and measured. OK, if the CEO doesn't "own" innovation, who does? I've written before that larger firms may need a Chief Innovation Officer, but only if that role is accurately defined. Since innovation can happen anywhere in the organization at any time, we certainly don't want to place all the emphasis on one person or team.

Our preferred model is an innovation team that sponsors innovation, defines the processes, methods, tools and language for the organization and works on disruptive or "white space" ideas. Just as there is one common chart of accounts or one standard purchasing process, we need to create common innovation tools and methods, and be able to roll up the results. This central innovation team can report to a CIO, but the team and the CIO bear only a portion of the innovation effort.

Clearly, a lot of innovation happens in product groups, geographies and lines of business. Establishing a central innovation team doesn't relieve these groups of the requirement for innovation - quite the opposite. Defining a team that can offer methods, tools and services should accelerate innovation in each line of business or product group. These teams are closer to the customer and have a better understanding of customer needs. Unfortunately the business lines are also bound by a 90 day clock, which keeps their focus on quarterly results and not longer term growth. There's a real need for innovation at this level, coupled with innovation at a level that is not so bound by quarterly results.

So, who owns innovation? The CEO should SPONSOR and ENCOURAGE innovation and MEASURE it regularly. A Chief Innovation Officer should build capabilities, methodologies and tool sets to enable innovation in the organization, and the individuals who head up business lines, product groups or geographies should build the expectation for innovation into their annual plans, and product incremental and occasional disruptive innovation. No one person can own the responsibility and capability for innovation, but a management team working together to a common goal can clearly establish the expectations, build the tools and set the plans to unleash the creativity their employees, partners and customers have.

Additionally, innovation needs to reside at every level of the organization. We've seen it proven that innovation driven from the top doesn't work effectively, and innovation residing in just one product group or team creates an unbalanced organization. Every group, every team should be expected to innovate. It's not the responsibility of one team or one manager, but every individual in every group.
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posted by Jeffrey Phillips at 5:02 AM


Anonymous Priyanka said...

I agree CEO should sponsor and encourage innovation, but not just by words.
Rather by creating necessary work environment and policies

12:53 AM  
Anonymous Dale B. Halling said...

An inadvertent killer of innovation in most large organizations is the patent review process. Patent counsel can significantly enhance (or discourage) the quantity and quality of innovation in a large organization. To see more on why Patent Review Committees kill innovation see http://hallingblog.com/2009/09/01/want-to-get-more-for-your-patent-dollar/

8:38 AM  
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