Executives are increasingly waking up to the reality that years of cost cutting and short-term operational focus have left their product and service development pipelines empty. The perceived dormant risk of obsolescence brought about by repeated incremental improvements, and by “sticking to the knitting,” is dormant no more. Based upon this awakening, senior leaders have increasingly indicated that a renewed focus on growth-based initiatives, primarily via innovation approaches, must be pursued in order to extend strategic planning horizons and return some balance to risk-averse portfolios. The ever-swinging pendulum needs to return back toward the middle.
During these times, innovation management practitioners have certainly taken notice of the renewed focus and attention on growth being espoused by the executive ranks. Outright enthusiasm, however, is somewhat tempered by skepticism and the fact that many practitioners have a realistic understanding of the inherent difficulty in reigniting a dormant program or building one completely from scratch. Added to this cynicism is the unfortunate fact that far too many executive-level decision makers continue to simply “talk the talk” rather than “walk the walk” when it comes to adequately funding, resourcing and personally engaging in an innovation management initiative.
For those leaders who do legitimately see innovation management discipline as the preferred vehicle for driving growth-based initiatives, additional internal obstacles exist for even getting such an approach off of the ground. Some of these obstacles include:
- Short-term (quarterly) focus dictated by investors and analysts
- Lack of a strategic plan
- Leadership that punishes risk taking, failure or anything “out of variance”
- Lack of resources or time for innovation
- No processes, models or approaches available for moving ideas into execution
- Lack of education/training on creative problem solving, idea management and innovation management concepts
- Lack of leadership support or attention
One of the most intricate obstacles that many executives are encountering as they start to pursue growth via innovation management, is the difficulty related to embedding a continuous innovation culture, mindset and discipline within and across the organization. Without a dedicated and continuous effort to build, maintain and support innovation approaches, the effort is likely doomed to fail before it even begins. Building upon that belief, some organizations are exploring a myriad of structural options that include traditional Research & Development departments, internal strategic focus teams, innovation-based project portfolio management approaches and executive-level leadership roles responsible for the growth-based initiatives of the organization.
Another organizational management construct, however, that may be applicable for providing structured leadership of innovation concepts is the “Center of Excellence” model. A Center of Excellence is defined as a place where the highest standards of achievement are aimed for in a particular sphere of activity. In essence, the Center of Excellence, or “CoE,” approach provides structure, centralized knowledge and dedicated resources to a narrow area of expertise or specialty, in this case, innovation management.
The CoE concept is not a new one. Historically, it has been leveraged by information technology leaders seeking to facilitate the creation of hubs for knowledge sharing and for building and enhancing capabilities within a specific technical specialty area. Key to this approach are the tactics and assumptions surrounding improved flexibility, increased productivity, cost efficiency and resource utilization.
As a centralized body of knowledge, the CoE structure provides subject matter expertise on a specific field, function or technology and utilizes a structured set of processes, procedures and activities that support high levels of efficient and effective performance. In support of this approach, the CoE is typically staffed with subject matter experts in the chosen field who promote collaboration and the application of knowledge, techniques, tools and processes.
Organizations that are committed to leveraging the benefits of a formal innovation management approach that propels growth and executes upon strategy must take into consideration a number of key “must-haves” that support enhanced success:
- The innovation initiative must have at least one (1) executive leader who is willing to sponsor, engage, champion and actively participate
- Innovation must be treated as true business discipline, with its own organizational structure, financial portfolio, P&L responsibility, and with equal standing and consideration among more traditional business operating units such as Finance, Human Resources or Marketing
- A sufficient amount of resources must be dedicated to the innovation initiative to ensure its success. These resources include financial resources, human resources, time resources and spatial resources
- The innovation initiative must also have a collection of appropriately tailored methodologies, processes, tools, techniques and systems in place to ensure the effective and efficient delivery of growth-focused directives
Many leaders struggle not only with the concept of innovation itself, but more tactically, how innovation management can be deployed and embedded within their organizations. The lack of a consistent, well-defined framework for creating an innovation “discipline” is but one of many obstacles that organizations face.
Innovation management, the business discipline, is a field of specialized knowledge, leveraging complex processes that are spread among limited trained resources. It is also likely to be the organization’s sole business unit dedicated to strategic future growth. Think about that for a moment…what other business functions do organizations typically have that are dedicated to ensuring the future of the organization? Quite frankly, you’d be hard pressed to identify any business operation that is expending much more than a passing thought at what is planned beyond the next fiscal quarter, much less what may be coming on the distant horizon.
Typically, where longer term strategy, business vision and future growth sources are primarily conceived, debated and planned is at the executive leadership level. However, with the frenetic pace and splintered focus maintained by today’s executive ranks, keeping an eye on “what could be” frequently falls victim to making sure that “what is” stays on track.
There are cases where formal research and development functions exist within larger or technically focused organizations. These teams traditionally provide the dedicated future-focused view needed to ensure the organization maintains some kind of attention to the “next big thing.” In reality, however, most organizations do not have an R&D center to fall back on. This is where the Center of Excellence concept can have the greatest positive impact.
In contrast to the absence of available organizational focus on growth or the lack of need and/or resources required for a dedicated R&D function, an Innovation Center of Excellence would center its attention on providing innovation, organizational creativity and idea management subject matter expertise for the organization. It would also supply facilitation services and development oversight for new ideas, products, services and customer experiences in direct pursuit and alignment with the organization’s long term growth strategy.
Additionally, the Innovation Center of Excellence serves as the champion for innovation internally and would also explore a wide variety of external sources of ideas so as to continually incorporate new concepts, practices, processes and opportunities into the organization. While the Center of Excellence may not be directly responsible for designing, building or implementing innovative products and/or services, they would be responsible for encouraging, fostering, supporting, guiding and embedding an innovative culture and environment.
When your organization is ready to make the commitment to innovation management as a key driver for long-term strategic success, consider the Center of Excellence concept as an alternative to the more traditional R&D or silo-based approaches. You may find the best resource already exists within your own organization!
** This article was excerpted from our 2011 Research White Paper, “Innovation Centers of Excellence – Next Practices in Innovation Management” Please follow the link if you would like to read the paper in its entirety.