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In my last article I wrote about the influences and themes that I see changing how large, mature and (often) incumbent organisations drive innovative growth and impact. In short, the innovation development professionals are (ironically) being disrupted.

While the demand for innovative impact by executives remains high, the suppliers of innovative outputs (new solutions, employee engagement, etc.) are shifting. Leaders from Digital, Product, Transformation, Strategy, M&A, etc., offer innovation-focused activities that align to executives’ current needs. These quick, incremental improvements drive traceable financial benefits with low risk. Traditional innovation teams may offer approaches and solutions that are seen as missing the mark.

The article generated some great conversations and I very much appreciate the insight and suggestions in both online and personal discussions.

So the natural follow-on discussion is to ask the question, do organisations need centralised innovation functions? If other parties are positioning themselves to deliver innovative solutions / products, what role / value does a program play?

So I’ve prepared some thoughts, again from a personal perspective. Feel free to add in your own thinking in the comments section, or reach out to me to discuss your thoughts in person.

Innovation programs are still relevant and needed, in many companies…

There’s no doubt that innovation programs require significant and sustained investment by executive sponsors, resources and energy to be successful. But for large, complex and often mature incumbents, there is a well-defined need to support the development of new ideas that will drive growth along with secondary benefits such as employee engagement, perception shifts (internal and external) and behaviour change. It would be great if that happened organically, but without consistent sponsorship, coordination, resources and channels to support innovative outcomes, there will be limited impact.

…But aren’t other leaders driving innovative outcomes

Without that central resource and focus, the best you can hope for is that leaders from other competencies or business units take on an innovation agenda. That’s not always a bad thing, as these individuals may be close to customers and be in a position to respond to their needs. Further, they just may be driven around innovative outcomes, and nobody wants to stifle that drive and creativity.

On the flip side, what tends to happen is that outcomes of these efforts will align to the functional needs of those leaders, which can limit impact of efforts over time. Further, without central coordination competing approaches, resources and tools, will seed confusion within the organisation and external partners.

A recent Accenture report points to the importance for certain functions, including innovation development, being centrally managed. A centralised approach directs efforts towards strategic outcomes, encourages cross-functional collaboration and embeds behaviours, resources and capabilities to be consistently applied towards opportunities and challenges. The centralised function is well positioned to build momentum and present more of a “whole of company” response to address opportunities / challenges.

…But we are naturally a decentralised organisation

Many organisations that I work with pride themselves on their decentralised nature, and yes, this can be a great opportunity to allow separate cultures to flourish, create a healthy sense of competition and hopefully drive better financial outcomes. In response to that environment, a corporate innovation function can be relatively light on resources and act as a coordination point between innovation resources embedded across businesses units. The point is that at the very least, having some level of coordination, sharing of best practices and centralised reporting will generate significant benefits for an organisation. The depth of investment and resources for the program, tied to achieving specific outcomes, is more the question that should be addressed.

So where do centralised programs create the most impact

In my experience, once an organisation reaches more than 1,000 employees it needs some level of coordination and support for the development of new ideas to drive growth / impact. Beyond that, the focus is more on level of innovation maturity and existing infrastructure, desired outcomes, competitive position / forces, executive sponsorship, etc. Addressing these questions, in a way that clarifies the needs, expectations and high-level process, will help define the type of program that is developed.

Feel free to reach out to me to discuss any of the points raised above. In my next instalment I will consider what makes for a truly impactful innovation program. Thanks for taking the time to read this far!

Anthony

About the Author

Anthony Ferrier is a well-regarded executive, advisor and thought leader on corporate innovation, with a focus on employee engagement and training. He advises companies on how to thrive in an exponential world, by developing appropriate strategic frameworks to guide organizational change and build cultures that encourage the development of new ideas. Anthony is a widely-read author, speaker and advisor to organizations such as Bristol-Myers Squibb, Fidelity Investments, Pfizer, Johnson & Johnson, ADP and USAA. He previously led The BNY Mellon innovation program and has a Master of Commerce (University of Sydney) and Bachelor of Economics (University of Newcastle).

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