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One of the issues that innovation managers and leaders struggle with is how to create corporate structures that will support and nurture innovation. A.G. Lafley and Ram Charan, in their new book, The Game Changer: How You Can Drive Revenue and Profit Growth with Innovation, point out that structuring for innovation is not a one-size-fits-all exercise:
"You need to design and install the right organization structures to suit the business strategy and innovation model… many companies make innovation happen through enabling structures of one form or another. Where they often fall short, surprisingly, is that most people in the company don't understand what, in fact, the structures are and how they actually work."
To selecting appropriate innovation structure for your business, the authors recommend considering six criteria:
- Whether the innovation opportunity is inside a core business, in a business adjacent to a core business, or in an entirely new business
- The level of risk and opportunity and the level of investment.
- The degree to which the innovation opportunity leverages existing strengths or requires the creation and development of new capabilities and strengths.
- The time horizon of innovation development.
- The type of experience and expertise required on the innovation development team.
- The phase of innovation development - ideation and prototyping, development, qualification or commercialization.
The authors also recommend considering these questions, within the context of the six criteria:
- To what degree should the team be separate from or integrated into the current business (both from an organization design standpoint, as well as physical location)?
- Should people be fully dedicated or involved as part of their "day job"? If fully dedicated, do all team members need 100% dedication, or only a few?
- What experience or expertise should you go outside of your business and company to find?
- What is the most effective way to fund the innovation to ensure that it gets the resources, attention and nurturing it needs while also ensuring that it delivers the required business growth?
- What connections and interdependencies between different organization structures can ensure a given innovation has the best chance of being successfully commercialized in the marketplace?
It’s refreshing to read authors who aren’t trying to sell you on an innovation framework; in other words, "If you implement these six strategies, you’ll be unstoppable." Rather, Lafley and Charan recognize that the proper structure to support innovation varies widely, depending upon a host of factors. |
