Organizing for Breakthrough Innovation

Being successful with innovation is more than just having a great idea and running with it. Moving ideas to reality is hard. Really hard. To say it is merely an “execution” problem is to dismiss the real work of changing the world and relegate yourself to idealand, a place where anything is possible because nothing is real.

Innovation and Operations are fundamentally in conflict. Operations are about reliability and repeatability; Innovation is unique and uncertain. Those in charge of each area often find themselves at odds, and usually innovation loses because operations creates the resources needed to innovate.
According to one of the speakers at the recent Back End of Innovation conference, Chris Trimble, author of Reverse Innovation, and The Other Side of Innovation, the key to resolving this conflict is to organize innovation correctly. Driving breakthrough innovation requires what he calls “Method 3” or “Custom Innovation”: treating innovations as special projects, in a partnership with operations in an environment of mutual respect, as illustrated below:

The shared staff lives in the operational organization, and their roles and responsibilities remain unchanged by the innovation project. They are given more work to support the innovation, of a familiar sort, but are not asked to bend the rules or change their behavior.

The dedicated team is a custom organization. It is a zero-based structure, flexible and adapted to the needs of the innovation. This team does the work that is unusual, unfamiliar, or requires changing the rules.

These two teams must live in partnership, based on mutual respect. The innovation needs the support of the operational organization to keep the resources going; the operational organization needs the innovation to remain relevant.

Conflict will arise. When it does, the general manager who oversees the shared staff will always win, resolving in favor of operations. So the partnership requires oversight at a higher level in the organization, that is the leader of the innovation must report to the general manager’s boss, at least for the duration of the innovation. Further the boss must have enough understanding of the issues in both areas and enough concern for both areas to fairly adjudicate and manage conflict.

This approach seems straightforward, but it strikes me that it puts a very high hurdle on the innovation: it must be worth the boss’s time. I’ve come across many innovators who think too small and who make their great ideas mediocre so they can get it approved in the traditional organizational structure.

The formulation phase helps set up this vision with concrete steps to prove it out.