Innovation capability falling at the strategic level

by
Tony Golsby-Smith

In my travels in the last few months I have had a very similar conversation with half a dozen different people from large organisations, all heads of in-house customer experience or innovation teams. The conversation begins with them proudly telling me about how they have been able to put in place an internal team with various innovation-related capabilities, most commonly a combination of design thinking and lean start up/agile methodologies. In some cases the organisation is building or already using a well-appointed innovation lab – an important physical symbol of the organisation’s commitment to new ways of thinking and doing. The new teams are productively employed undertaking various projects which are starting to score some wins and bring new ways of working into the organisation. It all sounds like things are moving ahead well, and there’s not a lot of need for any outside help.

And then the conversation pivots and some common themes seem to emerge. The one that often tops the bill is about the difficulty of engaging senior leaders and operating at a more strategic level. While some good work is being done on individual projects, it is largely bottom up and opportunistic, not top-down and strategic. Generally there will be a few Executive level champions who get it; if this was not in place, the team would not exist. But for the rest of the organisation, the innovation team operates in a parallel universe, a rather mysterious world whose most tangible feature seems to be project rooms covered in post-it notes. In most cases, the team is benignly tolerated as a curious new capability, a little divorced from the hard-edge operational world. In some cases, there are early ripples of discontent, perhaps because of the amount of funding that is being put into it, or the increasingly frequent requests for key resources and subject matter experts to participate in collaboration workshops, or a feeling that the design process takes too long to produce a result (because let’s face it, a strong customer focus, upfront thinking and early, low-risk testing of hypotheses is no substitute for getting stuff done!)

If one of the key frustrations of those who head up internal innovation teams is how to engage senior leaders and help build their awareness and support for what the team is doing, then another theme is the need to reshape existing organisational systems and processes to make room for the new approaches. The most immediate need that innovation teams face is to build a shared language and common understanding of how to blend agile/lean processes, design thinking and traditional project management approaches into a coherent approach, and this is where most of the early effort is expended. But there are other systems that also need to be addressed. Most organisations don’t have a coherent approach in place for how to develop and maintain an innovation portfolio. At the most basic level, this often means there is no visibility of the full range of projects that are underway, no agreed way of categorising what type of innovation is involved (eg continuous improvement vs breakthrough innovation), and no clarity about what innovation tools and processes are most effective in different types of problem spaces.

Even if there is some existing capacity to look across a whole portfolio of projects, there may not be any effective processes in place for making good decisions about which projects to prioritise and how to allocate limited resources (both money and people) to them; for measuring the benefits to the organisation and comparing these benefits across projects; for making agile decisions about which projects to continue and which ones to kill off; or for leveraging insights from specific projects to other projects or to the organisation more generally. In short, there are some big gaps in the capability of an organisation to undertake effective portfolio governance (as opposed to project governance) or to create a broadly-based culture of knowledge sharing and learning.

A further set of issues that an internal innovation team will soon encounter relates to their operating model, by which I mean the way that interact with the wider organisation. This can include questions such as what channels the team uses to connect with the wider organisation, how requests for help are triaged and processed, how the work of this team interacts with or is distinguished from other teams and functions (eg customer insights teams, process improvement teams, technology functions), how the ideas that are developed within the innovation team are taken back into the organisation. It’s one thing to have a creative internal team of designers ready and equipped to work on projects, but if the rest of the organisation doesn’t really understand when and how to engage them, how their work fits with other organisational systems and processes, or how to take the insights that are being generated across into their daily work, then much of the potential purpose and value of the team will be eroded.

Last but not least, once a team trained in customer research, the design process or lean/agile methodologies starts working within an organisation, a new set of cultural awareness and capability issues start to emerge. How much knowledge of the tools of innovation does the rest of the organisation need to participate effectively in design-led processes? What new capabilities do senior executives need to lead design effectively and to leverage its potential into more strategic, whole-of-enterprise level design challenges? And what others skillsets do those who lead design projects need other than design thinking and agile-lean methodologies? The more complex the problem, the wider range of skills that will be required, including the ability to facilitate multi-stakeholder engagement processes, the ability to visualise and model abstract ecosystems, and to negotiate the political and cultural challenges of managing change.

I certainly appreciate all the energy and passion that the leaders of these new and emerging innovation teams are bringing to the challenging task of embedding new ways of thinking and working into organisations, and the new focus that this is bringing to important themes like enhancing the experience of the customer and addressing some of the longstanding pain points and inefficiencies in organisational processes. As someone who was around when large public and private sector organisations had hardly heard of concepts like design thinking, it is fabulous to see how far we have come in a few short years. But the journey is only just beginning. It is relatively easy for larger organisations who feel the need to ‘do something’ about innovation to create a team, provide some training, maybe even build a more creatively inspiring physical space if the budget allows. It’s the deeper work of changing the thinking, work practices, systems and culture of the organisation that is going to require new insights and creative ideas over the longer term – a wicked design problem in its own right!

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