Structure !

Sparks to fire up your innovation combustion

This coaching session discusses how to organize innovation teams in a large corporation.

Starring: Inna (Innovation Leader in a large Pharma corporation) and Wim (coach for Innovation Leaders). [Transcription far below]

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• Do you want a soundboard, a sparring partner?
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• I believe in KISS: Keeping Innovation Super Simple. High focus on passion, low focus on processes.
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Transcript

Inna:

⁃ Hi Wim. How to manage sustainable vs. radical innovation in a corporation?

Wim:

⁃ We do need both, Inna, but it can indeed be a challenge to manage both in the same organization: Sustainable (or incremental or Horizon 1/2) innovation typically provides relatively small, but fast impact on the current, core business, while. Radical (or disruptive or Horizon 3) innovation has the potential to create a very significant impact on the corporation, but with a higher uncertainty and long term. Business leaders who have to address both may be tempted to prioritize the short term over the longer term opportunities.

Inna:

⁃ How can this be addressed, structurally?

Wim:

⁃ There are several options. The most critical success factor is that all of the alternatives require active, strong senior leadership support. I believe that it’s best to organize sustainable innovation as close as possible to the core business. This will help to deeply understand both the customer needs and the business priorities. This will also secure engagement and early buy-in from the core business teams, ultimately facilitating scaling of successful innovations. Scaling is typically implemented by the business units. I would however create a separate unit, reporting to the overall business leadership, not to the business unit leaders. This will ensure that day to day business issues don’t override and starve Innovation. This will also facilitate scaling of successful innovations across business units, by overcoming the “not-invented-here” syndrome.

Inna:

⁃ That makes sense. And how then to manage radical innovation?

Wim:

⁃ I have seen it work successfully when that innovation team reports directly to a non-operational executive, like the CEO or the CFO. You can even have multiple innovation teams, like: One team that invests in external start-ups, with the possibility of acquiring those start-ups and One team that runs radically innovative businesses as part of the corporation, but totally independent from the core business. The reasons to keep these teams independent from the core business include: Their long term focus, which would risk them to be de-prioritized vs. short term, day-to-day business priorities; There is also the possibility that these teams may be competing with or in the long term even destroy the current core business.

Inna:

⁃ So keep the sustainable and radical innovation teams separate?

Wim:

⁃ Indeed, but I would create a forum where all innovation teams can connect, even informally, as this may help to align internal and external communication; coordinate engagement with the same customers; build on each other’s networks and share learnings on how to innovate within the corporation. This can include innovation frameworks, tools and capabilities (like IT systems and regulatory processes)

Inna:

⁃ Thanks! Sustainable innovation – part of core business. Radical innovation – separate from core business.

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