Many organizations centralize responsibility for innovation in a small team, incubator or a research and development (R&D) group. This organization structure has some advantages. Such teams usually work in isolation and this can speed innovations to market, separate innovators from day-to-day operational issues and bring together key experts to collaborate on a problem.
Despite these advantages, innovation is too important to be left to the research organization alone. The location of valuable new ideas is migrating away from the center toward the edge. As we move into a service and knowledge economy, the number of people with useful information that can lead to good ideas multiplies.
One issue with the centralized model is that the closest connections and deepest interactions with customers and partners usually occur at the edges of the organization. These people at the edges hear the “voice of the customer” every day and they actually experience the inefficiencies or inadequacies of processes or systems. Also, the newest and youngest employees often begin their careers in customer service, sales or field service positions. In their early tenure, these people are unimpeded by “the way we’ve always done it” and are unaware of the political obstacles of the organization.
A second issue with the centralized model for innovation is that the innovators are often focused on top line opportunities such as developing new products, services or technologies. Therefore, the enterprises that address innovation only through an R&D organization may miss the opportunity to grow the bottom line as well. Enterprises can innovate in many dimensions that extend beyond products and services as shown in chart that depicts the Dimensions of Innovation.
Technology is also a source of innovation and in recent years, many enterprises invested in technology tools that support improved work practices and collaboration among employees and across value networks. These organizations have created team workspaces and purchased collaboration, content management and social software solutions. They have also experimented with tools for modeling and simulation — all in an effort to increase productivity.
As these technologies and products mature, organizations often reach the inherent productivity limits of the tools. Thus, organizations need to shift their innovation emphasis toward improvements in processes and integrating individual tools into a cohesive work environment. They need to explore ways to get more revenue from existing products by tapping into new techniques for product line extensions plus marketing and communication approaches that include social media. This dimension of innovation is depicted by the yellow shape labeled “new go-to-market approach” on the chart that accompanies this article.
Smart organizations will also not limit their search for good ideas to the marketing department but instead will call upon a wide internal network of employees for suggestions. Oftentimes, the people responsible for business process execution have valuable insight about how those processes could be improved. This dimension of innovation is depicted by the red shape labeled “new process opportunity” on the chart.
Action item: Before going out and soliciting ideas, ensure that you will be able to do something with them when they come in. Ensure that you have the authority to make changes, the resources to act on the new ideas and the clarity of mission to know which ideas to prioritize.
Action item: As you plot out a portfolio of innovation campaigns or events, make sure to include some that target people who work in adjacent areas to the problem domain. For example, if you are looking for creative ways to streamline the customer support process, involve people from sales, marketing and quality management in the campaign. If you feel particularly bold, ask current customers to share their ideas.
Tomorrow: Does the best innovation come from inside the company?
Carol Rozwell is a consultant at Gartner Inc, a research firm.