Where Should Innovation Live?

All companies have realized that they need innovation in some way to sustain business growth. What is not so clear is who should be responsible for that initiative inside the company…

… Should innovation be placed in the commercial department because they are close to the clients and could know exactly their needs?

…Should innovation be in products department because they are the guys who best know de products and technologies that could enhance their offer?

Or, lets try a third one…

…Should innovation be in the operational area because they are the guys who best know the process that delivers the products and services that would exceed client’s expectations?

How might we move from an “or” to an “and” mode and create an innovation capability inside the company so that every single department could work together to deliver a higher level client experience?

There is no single and right answer to that question, but a good starting point is to think innovation more as a capability than a function inside the organization. There is no lonely and isolated approach that will make innovation happen in a structured and consistent way. A new product or service needs a wide engagement from all areas involved in the process to be developed and implemented.

Of course, the right approach depends on the business strategy, segment, kind of product, brand strategy, marketing positioning etc. But there are some basic rules that can be applied to every single kind of business to help companies to achieve their innovation goals:

1. Sponsorship: ?Senior management needs to be tightly involved in any innovation initiative. The organization must feel confidence that their projects are really valuable to the company strategy
2. Innovation enablers: ?Its also important to have some innovation experts in the group to bring inspiration and the innovation process to create the environment where great ideas can rise and grow
3. Collaborative Work: ?There is no innovation without people! Technology, equipments and money are nothing without brains. It is important to have people from different profiles and backgrounds to look at the problem from different perspectives in order to create a powerful concept. The more the diversity, the best the ideas are going to be.
4. Empowerment to make decisions: Especially on large companies, the decision making process is usually complex and very hierarchical. This is one of the most difficult paradigms to be changed. The group responsible to lead innovation projects need to be empowered to make their own decisions on what is the best approach and solution for their project. For sure some mistakes may be made, but who knows if mistakes wouldnt be made anyway? Failure on innovation projects should be faced as part of a learning process that will lead the company to the future. There is no innovation without risk taking.
5. Focus: While working on a new innovation effort, people should focus on the project. It is very hard to balance day-to-day activities and new ventures. The day-to-day activities usually distract you and take your energy off the project. To build something really new and powerful, people must, literally, live together during the project and be fully engaged.
6. Reward: The company needs to find ways to reward the teams’ effort and results on any new venture. The employees need to be seen as a partner of the company and understand how they can benefit from the project. If they feel that only the company will benefit from their ideas and effort, no innovation initiative will succeed.

All six rules, when applied together, can build a fertile soil where innovation can be sowed and raised in any company.

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Jose Mello is a teacher, speaker and a specialist in innovation management at Itau Unibanco Bank, in Brazil.