The drive for a more innovative organization, or for innovation to become central to a company's strategy, is not new. In fact it is now almost assumed that all businesses need to have an innovation capability at its core but many struggle to make the transition and their innovation initiatives die. There are many challenges that an organization faces when it makes the transformation to becoming more innovative and while I have spent most of my research on the people side of innovation along with the Penn State Innovation Leadership Lab, I also understand it is a multi-faceted issue.
I my recent work with the Tepper Business School at Carnegie Mellon, I have looked into how companies structure their innovation, and there is very little research out there to guide them. It is interesting that a McKinsey survey from a few years ago focuses on innovation structures and found that many organizations use multiple innovation models, however their survey suggests regardless of structure innovation faces the same challenges. These included:
To understand how companies fail to overcome these challenges we need to look at how companies start this transformation. In general there has been some change in their environment that pushes them to focus on growth and then identify innovation as the key to that growth. In my experience here is how many organization's journey looks like.
This journey is thought to be linear and is driven by what leaders feel are tangible outcomes first (structure and processes) and then "soft" areas like people and culture are pushed to the back. Eventually the organizations innovation efforts fail, either because the people do not have the skills or because the culture is not supportive, and the enthusiasm drops which means that change becomes less likely. Finally the senior leaders come out with a new initiative on innovation and they start again.
Innovation is such a cross-functional challenge that you need to consider your culture up front in the process. Innovation is hard not only because coming up with the right idea is tough, but because large organizations are not designed to accept something that is new and different. Almost all of their processes are around efficiency, control and linear processes. Innovation is really none of those so you find that leaders within the organization that are not intimate with the innovation projects are resistant to the new ideas.
"To get an innovation idea into the market place it takes 50 people to say yes. To stop it takes one person to say no"
To get more people to say yes you need to start not only with your strategy, but also with your culture. Assessing where you are and how open your organization is to innovative ideas, how easily different areas will accept things out of the norm as well as the risk tolerance is critical. This then becomes an important input on how the innovation organization is structured. Best practices and bench marking are important as part of the process but you cannot just copy what another organization does without truly understanding where your culture is, who will be advocates, who are enablers and who will be challenges.
Beyond which functions should be involved there is the classic challenge of how integrated into your current business should your innovation initiatives be. There is a continuum that is based on understanding the link between your strategy and culture.