One of the big conundrums for organisations which want to become more innovative is whether to set up a specialist innovation team or enable everybody in the organisation to become more innovative.
For many, their initial inclination is to pursue the former course of action as it removes these people from the constraints and cultural “handbrake” of the core business. This team of people are typically set up in a dedicated space where innovation can flourish, supported by the accoutrements of creativity like beanbags, whiteboards and sticky notes. For many organisations, this approach rapidly backfires as the team quickly distances itself from the core business, creating wide caverns between new silos and the core business which is often adopting the “not invented here” mindset that ensures any nascent, promising ideas are rapidly consigned to the round filing cabinet on the floor.
Other organisations adopt the latter approach and are disappointed when the innovations that emerge from across the organisations are merely tweaks to the current business model rather than explorations of fresh new ideas that have the potential to out-disrupt the disruptors.
So the question becomes which of these two models is the right one – how can they both be wrong and is the answer to flip-flop between the two as many organisations end up doing.
The answer, unsurprisingly, is “it depends”. It depends on why you’re innovating in the first place. Understanding the drivers behind the desire to become more innovative will provide important clues on the best way of building organisational innovation capability.
Understanding the drivers starts with being very clear on the growth gaps. If the core business has the ability to meet the leaders’ growth aspirations (scenario A), the task becomes one of “exploiting” the current business model through continuous improvement and squeezing as much ‘juice’ as possible from the existing ‘orange’. The innovations required will be incremental innovations and the best people to generate and execute these innovations are typically people who are close to the core business. It will be important that these people are trained in best practice innovation practices so that they’re driven by customer insights and being as efficient as possible but ‘removing’ them from the core business can be a mistake.
If however, the core business is highly unlikely to deliver on the broader growth aspirations (scenario B), then a different approach is required. This most usually happens when either the core business is declining or under severe threat of being disrupted by new entrants. Either of these situations tends to drive a need for more radical innovations that will “explore” new ways of driving new and material growth. These radical innovations require people to be removed from the core business. They need fresh thinking that is not anchored in the current business model and ways of working. This situation typically needs people who are prepared to start new ventures that would be too small and seemingly too irrelevant to get attention and resources if they were buried in the core business. These people need to be pioneers, a team of innovation experts who are free to explore new business models and are free to compete with the core business if required.
As is typically the case in most organisations, the answer as to whether the growth is going to come from exploiting or exploring is that it shouldn’t be an either/or proposition; the business should do both, concurrently. This is where the leadership teams need to develop organisational ambidexterity – the ability to both exploit the current business model and explore new business models and opportunities at the same time. Organisational ambidexterity is at the core of many successful organisations that recognise that flip-flopping between innovation modes isn’t the answer but instead they must exploit and explore in parallel. Importantly, ambidexterity is a leadership capability that requires the leadership team to have the skills and understanding to enable both of these innovation models to operate in parallel but with very different goals, processes and leadership approaches.
So the moral to this story is that the solution for how best to create innovation capability within an organisation begins with strategy and leadership – that old (but critical) chestnut again J
If you would like to discuss creating an ambidextrous innovation strategy for your organisation, or anything else related to innovation and growth, please feel free to get in touch with me at email@example.com or contact anyone here at Orange Squid – we’re all very passionate about developing true organisational innovation capability!