Directed Innovation, the most effective way to create a corporate culture of innovation
Many companies are attempting to create a corporate culture of innovation by establishing a centralized Innovation Center of Excellence. Decisions on how to structure and staff such a center can make or break it—and can affect the company’s ultimate success or failure.
There are two common approaches to creating a culture of innovation:
- Everyone is responsible for innovation. Organizations that take this approach train hundreds, even thousands, of employees as part of a change management effort. They want all their employees to think differently about innovation.
- A specialized team is responsible for innovation. Organizations that take this approach place responsibility for innovation upon a small team and call upon that team as needed.
In our experience, both approaches are flawed. Companies that take the first approach, which is the more common, see innovation as being inextricably linked to broad cultural change in the organization. But it doesn’t need to be. What we have learned is that innovation as most commonly understood—that is, product and service innovation, geared toward growth—should not be everyone’s responsibility. Only those who decide what products to place in the development pipeline should concern themselves with innovation. These are the people who need to think and act differently so that only products that will create significant new customer value and contribute to revenue growth enter the development process to begin with. The rest of the organization simply has to do what it has always done—that is, validate, prototype, design, build, create, ship, and launch those products. Training the entire organization to be innovators is a time-consuming, costly, and unnecessary activity.
But the second approach is also flawed, and at a fundamental level. The problem with creating an internal team of innovation consultants is that there is a mismatch between the time it takes to develop the needed skills on the one hand and the demands that the organization is likely to place on the team, once trained, on the other. It takes a long time to obtain the skills and expertise needed: if this group is not involved in constant innovation, those skills will get rusty (and may never develop properly in the first place). But most organizations are not generating that level of innovation throughput. All too often, organizations that take this approach end up dissolving the innovation team. It simply lacks the skills needed to sustain itself.
So what is the solution?
We have introduced an innovation culture-building model called “directed innovation.” The directed innovation model enables an organization to grow through innovation quickly, with the least investment.
Instead of requiring the entire organization to be responsible for innovation, the directed innovation model requires a small group of people to form the nucleus of the Center of Excellence. But this model differs from approach number two because this team is not responsible for actually creating growth plans. Rather, it is responsible for assisting Strategyn’s professionals in the creation of such a plan and for managing its execution. The team does not have to develop the skills required for selecting and sizing markets, and it does not have to conduct job-based research. The innovation team, or Center of Innovation of Excellence, has three responsibilities:
- It must identify the markets that will generate growth.
- It must work with Strategyn to create a growth plan for those markets.
- It must oversee the execution of that growth plan.
With our assistance, the Center of Excellence presents a visionary growth plan to the sponsoring division, along with supporting information and financial justification. The sponsoring division takes it from there and works with the center to execute the growth plan. We will often work with the division as well, to ensure the plan is being executed as envisioned and to teach them how to use the plan’s insights to manage growth for years to come.
The diagram below illustrates the three recommended areas of focus for a Center of Innovation Excellence.
To find out more about how using directed innovation can help companies achieve their growth objectives without a major cultural overhaul, read our article “Building a Corporate Culture of Innovation.” Please feel free to contact us at info@strategyn.com with any questions or comments.
