By: Luis F. Solis
Today, meetings consume close to 40-50% of executive time. That’s 100 days per year! By some measures 80% of meeting time could be better invested in closing business, developing talent, recruiting new customers, conceiving new products or improving operations – just about anything other than gathering for another conversation without productive outcomes.
It would seem difficult to argue for more meetings on any basis.
However, Imaginatik research suggests that an Innovation Steering Committee – and its attendant meetings – is a common trait of highly innovative organizations. It may just be that some meetings are much more valuable and worth attending than others. This article explores the purpose and operations of the Innovation Steering Committee: what it is, why constitute one, how to operate it, and some of its primary functions in large organizations seeking to innovate across horizons.
Innovation Steering Committee: The Work to be Done
Usually constituted by the CEO or another senior executive responsible for innovation change, the Innovation Steering Committee represents a guiding coalition to set innovation priorities, change the culture, allocate resources, and make decisions. In short, it is the innovation governance hub. To be effective, it seeks to represent all key interests and stakeholders through purposeful membership. None of this seems unusual based on what we generally know about steering committees.
The innovation Steering Committee represents a guiding coalition to set innovation priorities, change the culture, allocate resources, and make decisions.
Yet client experience and research uncover a few less obvious reasons for Steering Committee development:
- Translate strategy: too often innovation initiatives become decoupled from corporate strategy, or incremental innovation acquires undue emphasis. The steering committee periodically ensures strategy linkage to innovation.
- Ensure enterprise synergy: the larger and more distributed the organization, the greater likelihood of redundant efforts, under-scaling or under-investing, and missed opportunities for organizational leverage. The steering committee asks the tough questions to promote synergy while encouraging proper levels of autonomy.
- Protect H2/H3 priorities: Most organizations experience a natural tendency towards incremental or Horizon 1 innovation. It’s the steering committee’s responsibility to demand a balanced portfolio across H1, H2 (adjacencies) and H3 (breakthroughs or disruption) initiatives if the corporate growth strategy is to be achieved.
- “Peopling” innovation: talent, not capital, is often the number one constraint limiting innovation success. Accordingly, one of the most important Steering Committee functions is to provide a safe, constant forum to source, allocate, or redirect human resources across the horizons. Rewards and recognition schemes are also addressed here.
- Anticipate with indicators: when linked to corporate strategy, innovation indicators provide an early alert system about the portfolio’s capability to yield desired growth. Importantly, the well-informed Steering Committee views innovation through the lens of input, process and output metrics versus mere financial measures.
But if a management team is doing its job, why the need for an Innovation Steering Committee?
Why an Innovation Steering Committee?
Many large organizations wrestle with how to focus on growth opportunities when current results demand virtually all attention. For some, a Chief Innovation Officer is one part of the answer as a means of elevating the priority of growth. Irrespective of the CINO decision, there is one overwhelming rationale for an effective Innovation Steering Committee: to ensure collaborative decision-making about growth, especially growth initiatives which require rethinking about risk, resources and resilience.
Well constituted, the Innovation Steering Committee serves as a guiding coalition to change the culture in favor of prudent risk-taking, experimentation or other novel means of growth. Diversity of interests and stakeholders helps to reshape the culture. As the stories below reveal, a Steering Committee can be difficult to operate. Members understand it’s a fight for strategic alignment, meaning, some decisions will shift resources away from current departments, organizations and projects.
The Innovation Steering Committee serves as a guiding coalition to change the culture in favor of prudent risk-taking, experimentation or other novel means of growth.
The CEO or another senior executive responsible for the innovation process organizes the Steering Committee. Ranging in size from ten to twenty members, the Steering Committee often meets every four, six or eight weeks with a report out by the chief innovation officer or the day-to-day innovation director. Report outs usually focus on project status, highlights about achievements, introduction of new technologies under consideration, and discussion about any industry trends of strategic merit. It is common for the Steering Committee to be chaired by a revolving senior executive, to stimulate ownership of the process.
What do an energy provider, a healthcare insurer and a medical products company have in common in how they think about the Innovation Steering Committee. The three stories below suggest that the answer centers on executive leadership to create an enterprise climate of innovation.
Broadening the Focus of Innovation
The R&D spirit was very much alive at this formidable medical products manufacturer. However, the CEO worried about inclusiveness, about how to rally all employees and managers to feel like they have an innovation purpose or role. Designed to be led by one of the operating presidents, the Innovation Council is comprised of business unit heads, the chief technology officer, the head of the operational excellence group, HR, corporate communications and the strategy leader. Meetings occur monthly, guided by a Council manager.
Herein lies one of the challenges of Steering Committees. Generally, to function properly, they require one mid-to-high level manager or director as a coordinator. In good times this is a welcome expense. In uncertain times this expense is often eliminated or severely questioned.
At this company the Innovation Council manages innovation against the three-to-five year strategic plan to ensure that focus exceeds current operations. Because culture change is a dominant CEO theme for the Council, the decision was made to support two rounds of company-wide challenges for fresh ideas or proposals in six areas:
- Business model
- Business process
- Growth acceleration in new markets
- Innovation index
- Portfolio management
- Culture of innovation
Teams are encouraged; up to 2-3 winning teams per category are recognized, with the CEO reviewing the outcomes to all employees during company meetings. More than 200 submissions (many with several team members) are usually received, with intrinsic and extrinsic prizes (the extrinsic prizes pertain to project funding to develop a winning idea into a formal business or process concept – some of the winning team members are relieved of their full-time jobs to join the development team).
A few lessons stood out from this medical equipment innovator. First, the CEO modeled the requisite time and investment in innovation to be successful. Here he has stressed the innovation imperative, challenging the Council to reach beyond operational efficiencies. Second, in addition to having money to support innovation, the firm has embraced experimentation to fuel growth. Efforts are made to spread focus across all three innovation horizons. Numerous efforts are made to encourage and reward individual and team experiment. Third, the design and deployment of the proper Committee or Council is a strategic consideration. In this instance there are always 6-13 executives present at every meeting to engage in robust discussions. And lastly, it’s interesting that this firm has committed to the Council structure for three years with clear, explicit protocols. Executives rotate, keeping perspectives fresh and commitment high.
Seizing Happy Accidents Across the Enterprise
A 100,000+ person healthcare insurance organization can support many disparate pockets of innovation. For this CEO, enterprise synergy with the help of a pervasive innovation culture was the motivator for an Innovation council. With so many innovation efforts afoot, there was an additional interest in establishing a shared vocabulary plus performance indicators to help the organization work as one.
Visibly sponsored by the CEO, the Chief Innovation Officer’s design for the company-wide Innovation Council was premised on a few assumptions:
- Create a cross enterprise opportunity to include all businesses
- While permitting some autonomy, begin to provide common processes, tools and protocol for multi-horizon innovation
- Get intentional about culture; it’s not about the few smart kids, rather, it’s about fostering serendipity
- Unlock the small bets that had been orphaned in the past, and
- Reveal innovation wins to the public marketplace to enhance Brand
Oftentimes, high-impact solutions stem from so-called happy accidents, unexpected outcomes from well-conceived experiments.
Four business units today share one center of excellence that incubates pilots and experiments. Tools and methods to put energy into commercialization were an early focus. Great offerings are getting into the market.
To support Council success, a community comprised of 30 innovation champions helps to identify opportunities to work across business lines. These champions have been selected for their potential to grow as executives. They invest 10-20 percent of their time in four ways: organizational connectivity, communications, development of the culture, and deployment of the new innovation business model. Future focus may shift to more disruptive projects.
One thing that is clear is that this firm’s Innovation Council has had a profound cultural impact, for the good. By means of the annual CEO Challenge and other local competitions to engage innovation teams, an internal marketplace for talent has begun to flourish. Success has led to a credo: “make space for small bets”. The Council views its mission to provide guidance, support, leadership and tools for innovations teams capable of stumbling across customer experience solutions. Oftentimes, high-impact solutions stem from so-called happy accidents, unexpected outcomes from well-conceived experiments.
Which brings me to some closing observations on this healthcare insurance market leader. First, the Council’s members, twelve executives in total, struggle with how to free people up for innovation. They call it “peopling the teams”. It’s an intelligent yet rare firm that experiments with people resourcing models. In this instance some innovators are freed from their day jobs for a period of time to follow a winning venture, and others can seek permission to join an innovation initiative. Some organizations have unspoken demerits about departing traditional career paths.
Second, a good bit of thought has been applied to innovation governance at this firm. The twelve executive leaders on the Council serve a 3-year term. But it goes further. The Chair is shared by two executives, with all members benefitting from the assistance of an innovation coach whose job it is to challenge parochial thinking. The CEO’s presence at all Innovation Council sessions contributes to active executive engagement.
Lastly, though a common center of excellence has been established as a resource, the four business units retain local power to identify innovation initiatives for development that may most benefit their customers. This flexible model of central innovation services blended with local empowerment seems like the proper balance for a large-scale organization seeking to consistently grow in diverse service areas.
Be Prepared To Overcome Personal Career Risk
Imagine you are the head of marketing at an energy power company with a track record of failed innovation. The Company CEO asks you to step into the brand new role of innovation leader for the Enterprise Council, to bring innovation and knowledge sharing to new levels. Ready to manage personal career risk?
Institutional resistance is usually high, performance is difficult to measure, tangible success is infrequent, and the CEO’s unconditional backing is essential.
This story points to the ever-present career hazards surrounding innovation. Institutional resistance is usually high, performance is difficult to measure, tangible success is infrequent, and the CEO’s unconditional backing is essential. In this instance the innovation director made the wise choice of benchmarking other power companies for their innovation styles and strategies. As part of accepting the challenge, she asked the Council to help her in several areas:
- Jointly develop a definition of innovation (and reconcile large differences)
- Agree upon meeting frequency for the Council
- Design the Council, from membership and agenda to how decisions are made
- Lock down performance indicators for periodic reporting
- Articulate the Council’s top three priorities for the ensuing 12 months
The ultimate Council holds twelve executives. The CEO attends every meeting; some executives do not. One particular executive responsible for operations – and also an early opponent of the Council idea – rarely attends on a regular basis. Although Council membership is permanent, this situation has led to discussions about executive rotation in the future while preserving representation from all key stakeholders at the organization.
And the Council is beginning to embrace governance protocols. Redundant projects are put up for discussion, and sometimes terminated. Monthly meetings gave been rescheduled for every six weeks to better fit the management’s culture.
At this organization the Council’s focus in on reasonably near-term Horizon I projects. You might call them continuous improvement, or advanced operational excellence, however, it’s far from Horizon II or III. However, with the Council’s creation and active role in approving and implementing enterprise initiatives, a culture of innovation has begun to take root. Innovation challenges are commonplace. Reward and recognition take the form of intrinsic measures, including presentations to the CEO by continuous innovation teams.
Closing Thoughts on Steering Committees
A 2013 survey of multinationals (source: Jean-Philippe Deschamps) revealed that fewer than 33% of leaders are highly satisfied with how innovation is governed. For sure there is room for improvement. Steering Committees or Councils will provide some of the innovation performance relief. Each of the three cited cases demonstrate positive experiences.
Fewer than 33% of leaders are highly satisfied with how innovation is governed.
What’s clear is that much more needs to be understood about how to design and operate an optimal Committee or Council for an organization. Irrespective of industry or business scale, our client experience and research points to a few key inter-dependent areas of focus for the CEO in order to get the solution right:
- Purpose: what’s the body’s purpose? Some set strategy, flesh it out, communicate and monitor performance against indicators. Others take a more pro-active role to push out the innovation envelope. Many possibilities exist.
- Composition: who sits on the Committee, why, for how long, and what skills are developed (and how) to facilitate the best results? There is a matter of size as well. At some point the size may impede decision-making without a firm CEO hand or a Chairman to drive accountability.
- Horizon Perspective: in most instances the Innovation Governance body’s highest obligation is to spread resources across all horizons in a deliberate manner, honoring the corporate strategy while down-playing personal interests. Without some degree of coaching or modeling, this can prove hard to do.
Service Mindset: innovation requires persistent support and encouragement of individuals and teams willing to step beyond customary job boundaries. Thus, the Council’s members must find ways to contribute in constructive ways, to challenge without discouraging, to probe while praising the work being done. It’s not for everyone.
- Performance Measurement: by selecting indicators that drive experimentation and learning, or those that recognize the distinct needs of Horizon II versus Horizon I initiatives, for instance, the Council can play an important role in promoting growth. Far too little attention is paid to indicators in our experience; too often output measures get all of the attention, when process indicators should be the top focus.
To learn more about Imaginatik and the solutions we can provide your organization, please visit Imaginatik.
By Luis F Solis
About the author
President, North America, Luis F. Solis is a pioneer in the diffusion of innovation strategy and enterprise software in global organizations. As entrepreneur and business builder, he has taken companies public, guided global roll-ups, started ventures and turned-around software companies. A graduate of Stanford University’s Business and Law Schools, Luis recently authored “Innovation Alchemists: What every CEO needs to know to hire the right Chief Innovation Officer.”