For the past ten years, my colleague, Chris Trimble, and I have studied one critical question: What are the best practices for executing an innovation initiative?
Execution is the poor stepchild of the innovation challenge. People love to engage in the hunt for the big ideas, but, let’s face it, without execution capability, an idea on paper is….just an idea on paper.
Having conducted research in more than 25 of the Fortune 500 companies, including Deere, Hasbro, Thomson Reuters, GE, IBM, and Corning, we have found that when they want to bring an innovation alive, companies typically commit one of two cardinal sins. Either they ask the core business to do the innovation, or they create skunkworks. Both approaches are fatally flawed. Asking the core business to do innovation won’t work because the core is built for efficiency – to make every task repeatable and predictable. Innovation requires actions that are incompatible with what core business can do, actions that are non-routine and unpredictable. On the other hand, isolating innovation in skunkworks far away from the core business is not a good solution either, since innovation must leverage some assets from the core. Otherwise the skunkworks has no advantage over a Silicon Valley start up.
Businesses need a distinct-but-linked organizational model: a dedicated team for the innovation initiative that partners rather than fights with the core business. Once it has that partnership in place, a company must keep it on track.
We have observed five danger signs that signals that the partnership has gone awry:
1.The members of the dedicated team frequently use words like “rebellion” and “conspiracy.”
2.The dedicated team members act as though they are the company’s saviors.
3.Those assigned to the dedicated team feel like winners and those that aren’t feel like losers, or vice versa.
4.Core-business employees are obsessed with the dedicated team’s special treatment, such as performance standards or compensation formulas that depart from the company’s norms.
5.Core business leaders go out of their way to argue that the innovation initiative is failing by highlighting its shortfalls against the company’s typical performance expectations.