Should You Have an Innovation Department?

Posted by Adi Gaskell on Sep 19, 2017 8:33:49 AM

In my previous post I highlighted a report from The European Academic Network for Open Innovation into the skills shortage many organizations face when trying to innovate successfully. One potential solution to this challenge is to build a dedicated department whose primary remit is to innovate. You can then do everything necessary to ensure that the personnel within that department have the skills required.

While this has a certain logic to it, I would argue that an innovation department is the last thing you should have. Indeed, as Creative England’s CEO Caroline Norbury famously said earlier this year, "as soon as you have an innovation department, you're buggered". The theory is that innovation is something that only really works when everyone is involved in it. You need the kind of thought diversity that only comes when many different perspectives input into the process.

Organizing for innovation

The topic of how to organize for innovation is one that has vexed some of the biggest thinkers in the field. John Kotter is perhaps the most well known exponent of the need to create an ambidextrous organization that allows you to simultaneously continue doing 'business as usual' things efficiently and profitably, whilst also doing the new things that form the crux of your innovation work.

In such an environment, it is easy to conjure a scenario whereby those people within your organization who want to do things differently regard their more stoic colleagues as the enemy, as rigid stick-in-the-muds who want nothing but to stifle their creativity.

In such a world it's perhaps understandable that the 'creatives' would want to section themselves off from the rest and surround themselves with others just like them. It's a temptation that should be resisted, as while your more conservative colleagues may not be creative geniuses, they nonetheless have many crucial skills that will be required to take your innovation from idea to market.

While it's inadvisable to create a permanent 'innovation department', it is nonetheless likely that you will form temporary and flexible innovation teams to work on new projects. How you go about structuring such teams will play a crucial role in how successful they are. Let's have a look at some of the issues they may face.

Insider or outsider?

Most organizations have a 'power center' that has a strong influence on the running of the company. It might be a department that dominates strategy, or from which the CEO usually derives. It could be the sales department, or maybe finance. It might be a particular product or geographic team who deliver substantial profits and attract the superstar talents in your organization. The actual department it is doesn't really matter so much as accepting that it exists.

If you take the basic assumption that innovation is a break from the status quo, then you can probably also assume that this 'power center' represents the status quo, as those past glories are what has given it the power it wields. It's important, therefore, that you figure out a way of successfully working with this power center. You don't want to replicate what has gone before, but neither do you want to ostracize a group that will be crucial to any successful integration of any innovations produced.

A paper published last year highlights how such things can unfold, and tells the story of a power struggle between engineering and marketing departments in a tech startup. It documents how disruptive such squabbles can be.

Forming your innovation team

Overcoming such challenges is something that Tuck Business School's Vijay Govindarajan has focused extensively on. He advocates a number of steps you can take to ensure your innovation team thrives alongside what he calls the 'performance engine' of your organization.

  1. Divide the labor - The performance engine will be great at some things, but less so at others. Make sure you capitalize on what they're good at to give your innovation the best chance of success.
  2. Assemble the team - It's crucial that you don't replicate your performance engine. You should think of it as more akin to building a startup from scratch. This could involve unique job titles and descriptions, maybe even a new location or physical space.
  3. Manage the partnership - When striving for a degree of independence whilst also utilizing core company assets, it's crucial to adroitly manage this partnership. It's a challenge that healthcare company Aetna undertook and the partnership required a significant dose of energy and enthusiasm to build and maintain. This partnership can be especially challenging as you often share resources, attention and motivations, which can disrupt the smooth operation of the team.

It's well documented that innovation is something that many organizations struggle with, and the issues above provide some insight into just why that is. Hopefully however, awareness of the issues can be the first step in helping you overcome them.

Topics: Innovation Insights

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