Innovation Structures and Governance

August 29, 2018

When it comes to innovation, most people are happy to generate ideas and try to realize the value of ideas as new products and services.  Less interesting is any discussion of innovation team structure or governance. While innovation structures and governance may seem to be boring topics, I hope to convince you that these two concepts are vital to successful innovation efforts.  Taking just a bit of time to construct the best innovation structure and provide good governance can cut costs, shorten cycle times and actually accelerate innovation.  What many companies don’t understand is that innovation teams and structures pop up quite frequently, and often operate concurrently, with little oversight or direction.  This can lead to duplication of effort, poor allocation of resources and general confusion.conference table with chairs

But before we get ahead of ourselves, let’s do a bit of definitional work.  I’m defining innovation structures as the teams or organizations that conduct or promote innovation work.  There are a lot of innovation structure options, from temporary project teams working to develop a new product or service to more permanent innovation structures and hierarchies (like open innovation or a corporate venturing team).  Many innovation structures are built to oversee specific work: generate internal ideas, find external technologies, accelerate internal ideas or external companies to market.  As a result, it isn’t unusual to find several innovation structures at work simultaneously in a large organization.  Often these structures are independent of each other, with different goals and expected outcomes.

This last bit – different expectations and goals – means that each innovation structure may have different governance.  We define governance as the expected goals, staffing, resources, risk tolerance, budget and measures that the sponsor or executive who founded the team or activity has established.  Most corporate activities have some form of governance to ensure the effort is within scope, stays on track and spends resources appropriately.  

Looking at the larger picture

If we pull back from this analysis it’s relatively easy to extrapolate that larger corporations probably have multiple innovation structures existing simultaneously, and each may have different governance models, assuming, of course, they have any explicit governance at all.  That is, we hope the structures were well-defined, and that they were provided meaningful governance models.  However, in our experience, many innovation structures weren’t carefully constructed and don’t have adequate governance.  If these assertions are true, this means that in many large corporations there are multiple innovation activities underway that are wasting time and resources and won’t produce meaningful results.

It’s this lack of structure and governance that often gives innovation a bad name, or creates the conditions where innovation fails to achieve its promised outcomes.  Any activity that is poorly defined, managed and governed is likely to miss its targets.  When you couple the lack of structure and governance with the risk and uncertainty that accompany any innovation activity, it’s no wonder that many innovation activities don’t achieve their goals.  

How Innovation Advisors can help

We understand the importance of innovation activities, teams and structures.  We have worked with our clients to build permanent and project-based innovation structures, to provide training and skills as well as innovation process knowledge.  Further, we work with our clients to develop good governance for every type of innovation structure, from open innovation teams to corporate venture teams to accelerators and incubators and many more.  Developing and communicating good governance – goals, staffing models, resources, risk tolerance, budget, scope, and measures – makes the team and sponsor more accountable and provides direction and confidence.  Without good governance, teams will either flounder, constantly redefining their own governance, or adopt the governance they are familiar with – that of day-to-day operations - which will typically be too constrictive to generate excellent ideas.

 

About the Author
Jeffrey Phillips from our Strategic Innovation team will be speaking on innovation structures and governance at the IRI meeting in September 2018 and will publish a paper and a presentation on this topic shortly.  Contact Innovation Advisors for more information about setting up the best innovation structures and creating the governance that helps your teams succeed.

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