Practical ideas for running innovation teams in mature organizations

Making innovation happen in mature organizations is an ongoing challenge. As an organization grows, more checks and processes are implemented to prevent failures and mistakes, while keeping the organization managed and controlled. At the same time, these checks and processes reduce the chances for new ideas and innovations to emerge, which is the core of the “innovation challenge” for many companies. Organizations can try to overcome these challenges by setting “ecosystems” within the organization that are able to partly break free from the existing processes and structures.

One area of my research activities at the University of St. Gallen, was to understand how you can run small-scale innovation teams within mature organizations, and what happens in the organization within the team during this process. This was not based on reviewing literature alone; it actually included real projects in several companies. When running these projects, the main goal was to “run the team like a startup”. The successful outcomes of these projects are proof that this approach has worked, but not without always without initial tension and conflict.

The ideas presented here reflect the experiences I made during these projects, along with general observations I made in the last years while researching and working in that area.

Define rules that redefine existing rules

The first step in our projects was to define a clear set of rules that overrule existing rules and procedures within the organization. Reporting and status updates were the first things we redefined. Instead of summarizing what happened, we listened to daily team meetings to understand if the flow was right or wrong. The team did not do a review meeting for us; we observed and listened which often gives you a much better idea of what is going on than a written status report.

Decision making was another area that we usually change. Instead of having quantitative proof that an alternative is the right way, we challenged the team until they were intrinsically convinced that this is the one alternative that should be pursued further. If you can look your team in the eyes, and they are convinced that this decision is correct, you have achieved more certainty than you can ever get from a market forecast or business case.

To be fair, when we were running these projects, we had full permission from top-management to pull off our approach and experiment within the organization. Nevertheless, I believe that some of these changes can also be implemented on a smaller scale and don’t need top management support to be successfully implemented.

Don’t optimize processes, remove them

The optimization of processes and procedures is a favorite activity in organizations. But instead of improving existing processes like procurement or budget approvals, it is more effective if you just get rid of them completely and give the responsibility to the team.

There is nothing that slows down a team more than waiting for a budget approval for ridiculously small amounts of money which often result in either team members paying for expenses themselves, and hoping for a later reimbursement, or covering expenses through the budget of the University cooperation. Small things like this can slow down a project more than the money that is saved by following these principles.

Form teams that are more than just a group of people working together

A team should be more than just a group of people working together. It should be a small, coherent group where each team member has a role they understand and know how to contribute toward the project goals.

I think off-site team building events are a waste of time – especially if the event is organized by an event company. In my experience, the best team cohesion results from a team working together to achieve a goal that is directly related to the project at hand. Going whitewater rafting will not help. The only exception for off-site team building activities is if the team itself organizes the event alone. The process of finding out what to do, and indentifying the interests of each one involved, is already an excellent exercise for decision making within the team.

Decision making within the team, no more steering committees

Steering committees might be one of the most dangerous, yet necessary, forms of management within an organization. They are necessary to keep different groups within the organization aligned and to ensure that everybody is informed and on-board in the decision making process. At the same time, they slow things down by taking a lot of energy from the project at hand. Since many of our projects were dubbed as “experiments”, we were able to circumvent any steering committees and either have a clear liaison who could influence decisions , or allow the team to make decisions by themselves.

“Getting traction” is the new performance goal

The difference between an invention and an innovation is that an innovation also has success on the market. With this in mind, the new benchmark for an organizations ability to innovate should not be R&D and product development output. The new benchmark for new products and services currently under development is the degree to which they have proven to generate traction.

How can you figure out if your products have “real-world” traction or not? Maybe they have to be launched on a smaller scale in stealth mode, or maybe it has to be launched under a different brand. If there are no quantitative indicators that an idea is gaining traction, a new product or service is not ready for the next step.

Hire global experts but don’t integrate them

Globalization and social networks like LinkedIn have made it easier than ever before to tap into a global talent pool and find the best designer, programmer, and marketing people to work together on a project. Yet too often these experts don’t survive long in a corporation because they are forced to integrate into the organization and follow the “rules”. Most likely, they have not become experts by following rules The moment you aim to “integrate” and make them follow rules, you shape them into a culture that you wanted to change by hiring them in the first place. So forget about integrating them and making them “fit in” because this will either result in conflicts or will make them leave.

Provide the right tools & environment

Latest technology and software applications that make work more productive are the key for an organization, but very often the IT equipment is focusing solely on cost-reduction and doesn’t have the means to deliver innovative solutions. Nevertheless, these kind of applications are essential to support collaboration between design teams and Wikis, Blogs and Instant Messaging should be standard options available from your corporate IT.

The work environment – physical and psychological – has a major influence on the ability of the innovation team to work together and create something new. A meeting room is for meetings, a desk is for one person to work, but where can two or three people work together for several hours and share screens? Where can they work on different computers and use flipcharts, whiteboards, and other material? Yet even the existence of a supportive environment is useless if the mindset in the organization is that work gets done only when everyone is sitting in front of their computer from 9 to 5.

A note about incentives

You can’t force people to think faster and you can’t force people to “come up with better ideas”. So I believe a lack of innovation cannot be overcome by “creating the right incentives”. If a company has a problem of lack of innovative ideas, it’s not about incentives, but about the risk to be embarrassed for an idea that is not brilliant at the first time it is mentioned. If we haven’t figured out a sustainable bonus systems for the financial industry or for CEO compensation, I wonder if anyone is to create the right incentive systems that foster innovation.

Instead of thinking about incentives or idea competitions for the best idea in your company, think about changing behavior and incentives for ideas that are not yet brilliant. You don’t want to hear the brilliant ideas, you want to hear the not-yet brilliant ideas so that through conversations, these ideas can become breakthrough ideas. If people are afraid to share their not-brilliant ideas, they will never share a brilliant idea either.

The conclusion

Organizational change is a difficult area and changing corporate culture is a multi-year endeavor. At the same time, I do think it is possible to create an organizational culture that allows certain “hotspots of innovation” on the lowest level by removing many existing corporate rules and implementing the right set of “new corporate rules” for innovation. In the beginning, this will only be a single project, later it could become a new approach for a certain kind of project in the company to ensure that an organization keeps innovating, while at the same time achieving operational excellence.