Oftentimes in large organizations and F500 companies, innovation and R&D are treated like a shared service, with the majority of initiatives originating from outside the function. Other business units and product lines, inspired after an ideation session or hackathon, come to the innovation team with an idea to explore. This engagement and collaboration allows the innovation function to stay close to strategic initiatives and high-level, vital projects. Plus, pooling resources, funding, and internal knowledge can improve internal coordination, speeding up the time to market for a new product or service.
But taken too far, following this model hurts innovation more than it helps. Stuck as an order-taker, the innovation function has little oversight or knowledge of the reasoning behind each request. Flooded with custom projects and a grab bag of ideas, the team gets saddled with incremental activities designed to sustain the business. Inevitably, long-term initiatives are cannibalized by short-term wants and needs. Innovation loses any influence it had over the strategic direction of the business. Leadership begins to doubt the function while the rest of the organization starts to question who’s driving innovation. From there it only gets worse, with budget cuts and canceled programs.
To beat the odds, innovation leaders must fight to retain (or regain) their functions’ autonomy and authority by protecting the time, workload, and resources of their team. While innovation cannot and should not be entirely insulated from the rest of the organization, the right barriers can help teams find a balance to be responsive to immediate needs from around the business while pursuing exploratory, H2 and H3 projects. With better oversight and insight, innovation will have more strategic pull to influence the direction, priorities, and goals of the organization.
Setting Boundaries: Let the Mission Determine the Process
Every organization has finite resources (whether that is personnel, time, or money) and thus must make tough decisions on where best to focus their efforts and attention. To remain competitive, it is critical to identify the opportunities with the greatest possible outcome and likelihood for success.
Like all other business units/functions, innovation’s decisions must be informed by facts and evidence. The supporting data may be gathered formally (as part of submitted project briefs or proposals) or informally (through meetings and conversations), but it is up to the requestor to ensure all of the necessary information is presented to innovation. The innovation team may also decide to do its own homework (when feasible) as part of making its own case for or against a given project. The critical point is that the innovation portfolio strategy is the primary determinant, not the politics of internal fiefdoms and vested interests.
Too often, we see innovation teams arbitrate decisions only at the level of individual yes/no decisions. This is a nearly insurmountable mistake. The critical precondition for success is a logical framework in which the decisions will reside. In other words, without a strategic mission or mandate guiding their work, an innovation team will always be left twisting in the wind.
Several key questions deserve clear answers. Which aspects of the business strategy should the innovation team support, and to what degree? Within what range of risk tolerance and time horizon should the team operate? Which aspects of the innovation mission are must-have and which are nice-to-have? How will the team’s success be measured and rewarded?
Answers to such questions will provide the backdrop for a well-articulated charter - the innovation mission. Ideally, innovation groups should consider making their charter as transparent as possible. This helps their colleagues understand what is in-bounds and what is not. There should also be some tolerance for X-factor ideas that no one considered when drafting the innovation mission. Although they are rare, the occasional “out of the blue” idea or project can wind up as the biggest hit of the year (or decade).
By setting up standards and a common rubric to evaluate ideas and opportunities, innovation becomes much more than an order taker; innovation can be the final arbiter of its own portfolio or at least gain some level of authority over its own workstreams. This does not mean that innovation can veto any project for any reason, rather it becomes a process to gather the necessary information to support sound decisions.
Using Evaluations: Scalable and Repeatable Criteria
Implementing a repeatable process for evaluations will give the innovation team enough information to validate ideas, or rather the hypothesis behind the idea. Some organizations use the “Three Lenses of Innovation”/”Desirability, Feasibility, Viability” method while others rely on the 9 Diamond Framework to vet opportunities. Organizations like Google and Amazon have created their own processes, designed to extract the essential and relevant data points to make a decision. The exact criteria will vary from company to company but the end goal is the same - collect enough information to make an educated assessment. Here are some other questions to ask/considerations to make:
- Who will benefit from this effort? - Is it of value to other internal teams? Will it be included in the offering to the customer?
- What problem is this solving? - Can it be categorized as incremental or breakthrough innovation?
- Where will this idea go from here? - Can it be used to provide immediate value to the customer? Can this technology be used again or be more useful to another business group?
- When is this project due? - Are there any deadlines or time constraints before the opportunity is missed?
- Why is this opportunity worth pursuing? - Will it help create new value? Is it worth the financial investment/cost?
- How will the success of the project be assessed or defined? - Are there metrics and KPIs to determine success?
Once this new practice of validating ideas has been adopted and internalized by external contributors, innovation can spend less time processing requests and more time delivering on work that will have a lasting impact on the business. With more bandwidth, the team can elevate the opportunities with the most potential and request additional resources to aggressively pursue them.
Without the proper safeguards in place, shared innovation and R&D services can bring an organization to its knees. By using uniform criteria for evaluation, assessing and ranking competing projects becomes less personal; in an ideal world, this may inspire teams to adopt new, more stringent standards within their own discipline.
|We’re aware that this advice may sound intuitive, but that doesn’t make it easy. Many innovation teams struggle with internal politics, or the need to “prove” themselves before being choosy, or uncertainty about what their strategic mission should look like (and perhaps unwillingness from top execs to help them define it). If that sounds like you, we encourage you to reach out. Wellspring helps many companies reach their innovation potential; we may be able to help you tilt the scales in your favor as well.|