Central innovation teams are a model well adopted in many industries, from Pharmaceuticals, where research and development budgets tends to be held by large business units dedicated to the purpose, to Banking, where there are likely to be a few smaller New Product Development teams. Even in Government, there's increasing reliance on central innovation teams to drive efficiencies and cost savings.
Understanding the reason is not difficult. Central teams are simple to establish, and very easy to measure compared to alternatives which rely on an "innovation culture". It is easy to point to such teams and say "here is how we do innovation". These are teams which make executives feel good about their innovation efforts, because when you can nominate specific individuals and assign accountability, you know things are being done.
In the central team model, it is usually the innovation team that decides what and when innovations will be progressed. They will have an investment budget of some kind, and will be accountable for driving forward the innovation agenda. If they are any good at all, they will agree to a big financial return number which will justify the investments they have decided to make.
There is, however, a problem with a central innovation team that does everything. The problem is that in order to get more innovation, you are forced to add more people. In other words, central innovation teams do not scale well.
Frankly, for most innovations, the difference in effort required to get an organisation to do something radical, versus the easier incremental kind of innovation, is not all that great. You still have to do the influencing, the management of politics, and of course, find the money in order to get things progressed.
Incremental innovations, though they tend to be relatively risk free compared to their radical cousins, don't generally make big returns individually. You need to be doing a lot of them before you can make a sizeable difference. With a central team, you often find the individual incremental innovations don't pay for the time of the innovators.
By contrast, radical innovation has much better returns, though the risk level is much, much higher. For innovation teams, this makes it seem sensible to spend their time on radical projects. The rationale is easy to justify: do incremental innovations and never break even ever, or at least have the chance to break even if you do radical.
What is really needed to make innovation work in large organisations is a balanced approach which combines a portfolio with inputs from customers and employees. Participatory innovation, as this is known, helps the central innovation team reduce its costs per innovation, and is usually the best way to make an innovation programme work in large organisations. - 31960
Understanding the reason is not difficult. Central teams are simple to establish, and very easy to measure compared to alternatives which rely on an "innovation culture". It is easy to point to such teams and say "here is how we do innovation". These are teams which make executives feel good about their innovation efforts, because when you can nominate specific individuals and assign accountability, you know things are being done.
In the central team model, it is usually the innovation team that decides what and when innovations will be progressed. They will have an investment budget of some kind, and will be accountable for driving forward the innovation agenda. If they are any good at all, they will agree to a big financial return number which will justify the investments they have decided to make.
There is, however, a problem with a central innovation team that does everything. The problem is that in order to get more innovation, you are forced to add more people. In other words, central innovation teams do not scale well.
Frankly, for most innovations, the difference in effort required to get an organisation to do something radical, versus the easier incremental kind of innovation, is not all that great. You still have to do the influencing, the management of politics, and of course, find the money in order to get things progressed.
Incremental innovations, though they tend to be relatively risk free compared to their radical cousins, don't generally make big returns individually. You need to be doing a lot of them before you can make a sizeable difference. With a central team, you often find the individual incremental innovations don't pay for the time of the innovators.
By contrast, radical innovation has much better returns, though the risk level is much, much higher. For innovation teams, this makes it seem sensible to spend their time on radical projects. The rationale is easy to justify: do incremental innovations and never break even ever, or at least have the chance to break even if you do radical.
What is really needed to make innovation work in large organisations is a balanced approach which combines a portfolio with inputs from customers and employees. Participatory innovation, as this is known, helps the central innovation team reduce its costs per innovation, and is usually the best way to make an innovation programme work in large organisations. - 31960
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Are you considering an innovation programme? If so, you'll want to review the notes from James Gardner's free online innovation ebook when implementing your innovation team.
