Organize to Innovate

Continuous improvement is no longer the name of the game for growth. Continuous Innovation is ... if you do not have an innovation agenda, the competition, especially new entrants will pass you by. You will see small changes at first, lower growth than previously, losing larger clients, turnover of key staff . . . I believe that innovation needs to be an integral part of the culture of an organization. As a Leader, you want to create an environment where you allow people to push the envelope (including allowing people to make mistakes, and that's okay) of new ideas, business models, products. I have heard leaders say "we want to innovate", but without action they become empty words. You must implement organizational changes and take actions that demonstrate and showcase that you back up your words you want innovation.

The following is a short excerpt from the recently released book, The Innovator's Guide to Growth by Scott D. Anthony, president of Innosight, Mark W. Johnson, chairman and co-founder of Innosight, Joseph V. Sinfield, a partner at Innosight, and Elizabeth J. Altman, a vice president of strategy and business development at Motorola. It is an excellent book if you really want to be a growth business.

http://www.forbes.com/leadership/2008/07/21/innovation-engine-procterandgamble_leadership_clayton_in_sa_0722claytonchristensen_inl.html

Rev Up Your Innovation Engine
The Innovator's Guide to Growth

“Organizing to innovate” is no small task. It goes beyond providing one team with resources and autonomy to pursue a specific idea. It is about creating an environment in which carefully chosen resources can reliably examine, prioritize and develop an array of new growth opportunities.

It is also important to note that “organizing to innovate” is different from “organizing for research and development.” Innovation goes beyond research and development. A properly structured innovation engine considers new business models, creative financing approaches, unique partnership strategies and, of course, more traditional technology levers.

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There are innumerable ways to organize to innovate. At one extreme you have Procter & Gamble's (nyse: PG - news - people ) FutureWorks division, a fully staffed team that is chartered with identifying, developing and seeding new growth platforms for the corporation. At the other extreme, you have the Learning & Development unit within agrochemical giant Syngenta (nyse: SYT - news - people ). The small unit’s goal is to build the innovative and leadership qualities of the company’s executives and managers. Large companies oftentimes--appropriately--have multiple innovation structures working simultaneously.

Our belief is that there is no one-size-fits-all way to organize for innovation. Rather, in order to pick the most appropriate structure (or structures), companies need to assess the strategic goals of their innovation structure and the degree to which active management is required to achieve those goals.

Picking a Strategic Goal

The mission of an innovation unit may encompass all, or only a piece of, the overall innovation activity in a company. Some units simply enhance the “innovative mindset” of an organization. Others seed the broader organization with good ideas. Still others drive the organization’s growth and profitability. In essence, however, senior management can choose to pursue one of four fundamental goals.

1. Stimulate innovation by broadening awareness and building skills. Companies that choose this path typically believe that their organization has the right basic infrastructure to support innovation. However, they believe that managers and teams need help solving practical innovation problems, developing new mindsets or gaining exposure to important external developments.

2. Shepherd innovation by championing innovation efforts and removing obstacles that would otherwise limit the potential for innovative ideas to succeed. This is a more hands-on approach that helps to nurture and safeguard innovative efforts but still relies on the rank and file to drive individual initiatives.

3. Spearhead innovation by providing the resources and environment to take ideas from concept to commercialization. This more resource-intensive approach seeks to build new growth initiatives. Companies that follow this approach generally believe that “business as usual” won’t allow them to meet their innovation objectives.

4. Source innovation by borrowing, acquiring or participating in innovative efforts outside the organization. Companies that choose this path do so because they wish to participate in innovative efforts well outside of their core, see little promise of internal innovation or are looking for ways to augment internal efforts without distracting the core.