There’s a fundamental problem in many corporations that keeps innovation from constantly delivering valuable results. The challenge probably isn’t what you imagine. While many of us in the innovation space will point at a lack of tools, a lack of innovation experience, low expectations and significant risk barriers as challenges for innovation, along with a lack of resources and inadequate planning and funding, those to some extent can be overcome. In fact these are all frequently overcome when an executive really needs, demands a new product and prioritizes innovation over the business as usual, day to day operations. But herein lies the rub: who is ultimately responsible for innovation? Who wakes up every day and goes to work knowing that their progression, their compensation and their success is measured on how innovation is accomplished on a day to day basis? The answer in many companies is: no one. And further, even in companies where there are people who are measured on these criteria, they often face the challenge of responsibility without authority, or are in the wrong place in the organization to affect constant innovation. Let’s explore.
“Everyone can innovate”
Let’s dispense with the trite but true concepts first. You’ll hear that “everyone can innovate” which is exactly true and mostly meaningless. Everyone can, and should, have the opportunity to innovate. They can generate ideas and participate in an innovation activity. A corporate culture should reward and encourage this behavior, although most don’t. But even if it’s true that everyone can innovate, the majority of people in most corporations don’t, for a variety of reasons. Perhaps they don’t think their ideas are all that great, or don’t understand how to develop their ideas, or don’t have the bandwidth to manage ideas and their day to day jobs. Further, if the don’t innovate, they don’t really risk anything. Since they aren’t measured or accountable for innovation, since it’s not part of their responsibilities and they don’t have the authority to do it on their own, they can’t be held accountable. You can’t sprinkle innovation responsibility across a broad swath of the company without also dictating some fairly specific measures and goals, and constantly evaluating achievement. When everyone’s responsible then no one is responsible.
The CIO is responsible!
In some companies, an individual has been named as the chief innovation officer, and in many cases he or she is nominally responsible for innovation. While we at OVO believe that a “center of excellence” is important to maintain innovation tools and capabilities, too often a corporate function focused on innovation is either a) too corporate and too removed from actual day to day operations to affect innovation in a product group or line of business or b) becomes an innovation center that generates ideas and solutions that aren’t important or relevant to the product groups or lines of business. We believe that innovation is a competency that must be sustained (hence the center of excellence) but at the same time innovation must be accomplished as close to the customer, or need, or opportunity as possible. Who understands the customer, the market and the opportunity better than the product managers, sales people and others in a line of business? Shouldn’t these people be active in the innovation? If so, what role does the CIO play in a day to day basis for innovation? Can they cause innovation to occur in disparate product groups and lines of business? Note that I’m not suggesting that CIOs aren’t important, just that they must be intimately connected with innovation at the grass roots level and not become an ivory tower. They must encourage innovation, and have budgets to help lines of business or product groups fund innovation activities. But who, ultimately, is accountable for innovation in this model? Either the CIO is, if his or her team is responsible for generating ideas, or product group leaders and business line leaders are, if we are to conduct innovation at the coal face. In the latter instance, the CIO is a funder, resource provider and cheerleader for innovation, but shouldn’t be dictating which projects are conducted. This means many CIOs have a lot of responsibility without a lot of authority. However, having a common approach and methodology means there’s a greater chance of consistent innovation approaches and corporate learning.
Push it down into the businesses
If you buy into the idea that innovation should be conducted by line of business leaders or product executives, then you could argue that innovation responsibility, authority and accountability should rest with them, and in many cases I think this is actually the right place. Yet today few are measured on innovation, and few believe their executive teams will provide the space and opportunity for innovation. Most of these executives don’t have innovation experience, but they are at the right place with the right level of authority to decide which projects should be pursued and how much change needs to be introduced.
We believe that the more we can encourage these leaders to innovate, the more corporations can devolve responsibility and accountability for innovation to these individuals, and consistently measure their innovation activities and outcomes, the more likely innovation is to take root and to be conducted on a consistent basis. For this to happen, annual and corporate planning needs to change, to develop budgets for innovation at a product or business team level, and compensation and evaluation programs need to change, so these leaders can see how their promotion and progression are tied to innovation. At the same time, corporations need to ensure a relatively consistent approach to innovation, developing methods and processes that can be shared across these leaders. If every business unit leader or product team executive determines their own methods for innovation, you’ll soon have a cacophony of methods and styles, with little consistency and no comparability. Plus, each team will invest in its own set of processes, tools and external agents, rather than sharing tools and costs.
Responsibility, Accountability, Authority
So we’ll argue that the RESPONSIBILITY for innovation should sit where the AUTHORITY is greatest, where leaders who decide what customers to serve and what products to build are found. They need to be held ACCOUNTABLE for innovation by executive management which sets expectations and budgets linked to STRATEGY and growth targets, and regularly review progress against innovation goals. All the while a CENTER OF EXCELLENCE should support and sustain innovation through the development of common tools, methods, training and other activities to provide a common innovation approach for everyone in the company.
As long as there is uncertainty about who is responsible for innovation, and no one is actively measured on it, and no resources or funds are regularly budgeted for the activity, it will be difficult to perform innovation effectively. Pushing innovation down to line leaders or product executives without also developing budgets and evaluation criteria is meaningless. Naming a CIO who is removed from the day to day operations can create an innovation team that is disconnected from the every day work and creates interesting but ultimately ineffective innovation.
Far too many companies spread innovation responsibility like pixie dust, hoping that if they spread around responsibility, many people will innovate. The reality is that most people are far too busy getting their day to day work accomplished, and lack the accountability and authority to do much in the way of innovation, and can’t find the funds, time, resources or tools to do innovation competently. The sooner large corporations stake out exactly who is accountable, who has the responsibility and authority to do innovation, and the expected impact and frequency of innovation, the sooner we’ll see more interesting and more valuable innovation results.
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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of Relentless Innovation and the blog Innovate on Purpose. Follow him @ovoinnovation