Change the Innovation Infrastructure

Blog Post Innovation that Creates New Value

Employees are stretched. Their focus is on the short-term, day-to-day operational responsibilities of meeting deadlines, delivering products and staying within budget.

Given the choice of priorities, long-term innovations usually lose. People push them off for another month or two, finding it difficult to manage these long-term projects with their daily obligations. Who can blame them, when compensation is often tied to their operational performance?

The solution is to change the infrastructure by setting up a parallel universe of innovation. Insigniam consultant Robert Johnston and I introduced this concept to our consumer packaged goods (CPG)/manufacturing client in South Africa more than a year ago, and it’s worked beautifully.

We helped them set up volunteer teams separate from ongoing business responsibilities. The team members’ bonuses weren’t tied to performance. This creative, entrepreneurial group was excited to be part of the future of the business and work closely with senior leaders. They were still held responsible for milestones from the standpoint that senior leaders were interested in their findings, which they hoped would result in new products and opportunities.

We called it “a year of innovation” and expected that four or five innovation teams would emerge. Imagine our surprise when we learned that 26 teams had been formed. The senior leaders really embraced the idea.

Some groups, like the one that focused on how to take the company paperless, completed their task in three to four months. They reported that their innovation team operated differently than their standard project team because they had more freedom, input, and influence on the decision-making vs. an obligation to carry out what the leader assigned.

Change management guru John Kotter’s article “Accelerate!” in the November issue of Harvard Business Review reinforces this concept of a parallel universe of innovation. He lays out the process exactly as we’ve done with our South African client, resulting in breakthrough performance.

The reality is that, in most cases, organizations can’t afford to solely dedicate employees to innovation tasks. Creating a parallel universe of innovation with different rules allows employees to operate in both realms, but conflicts are not unusual. Organizations have to think carefully about how they compensate, reward and recognize employees who do both.

Creating a new infrastructure takes time. First, the innovation teams have to prove their value. Proctor & Gamble experimented with parallel innovation in the 1990s, creating ad-hoc teams before instituting a corporate new ventures division. With a dedicated infrastructure in place, new products like Swiffer and Crest Whitestrips helped create several other billion-dollar businesses within the company. Today, everyone in the organization from the mailroom up is expected to innovate. For total immersion, corporations must integrate the parallel universe into the fold.

Getting serious about innovation may require re-designing business units and processes as well as re-evaluating the approach to people. It’s a journey, but the payoff can be huge.

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