3 Frequently Asked Questions on structuring innovation
- Business Model Innovation
One of the things that we talk about all the time at BMI, is the many different ways that innovation can happen. Whether you’re bringing in external support to help you ideate with you or execute your innovation problems, or whether you have a team dedicated to driving innovation for your entire organization, innovation has many avenues to success.
In recent posts, we’ve talked about the value of structuring innovation and we broke down four ways in which you can structure innovation as it moves from the “search” phase to the “execution” phase. In this post, we’re following up on these articles with three of the questions we tend to get from our clients as we work with them to rethink how they manage innovation.
Take a look.
1. How do I figure out which innovation structure best suits my organization?
Using our innovation matrix (see below), there are two key questions you need to answer to help you find the right path for your organization. Do you need a strategy that’s internal or external? And will this be centralized or decentralized across your different business units? Answering these questions, however, requires reflection.
To determine whether you should invest in an internal or external strategy, start by considering what type of new business model and value propositions you’re aiming for. What impact are you looking to make? Does the new business model go beyond your core business capabilities? Do you have the capacity, budget, or people to build a team internally if it doesn’t exist already? This context will be important to understand if it even makes sense to attempt to do the work internally.
These are all questions that can be addressed with support of business executives that have a finger on the pulse of the company’s budgetary allowances and future-looking plans. In fact, these questions are a great way of starting the necessary conversations.
When you’re choosing between a centralized or decentralized approach, context is also key. Is each of your business units equipped with the right capabilities to take on an innovation project, or is there already a centralized team thinking about innovation for the business as a whole? Is your innovation project going to impact all groups, or just one? Ideas that are designed to address needs across the organization should have a multidisciplinary team that understands the needs and challenges from various teams. If you’re focusing on one business unit, however, having a dedicated innovation expert will help you move quickly.
2. How do I transition projects or initiatives from “search” to “execution”?
When it comes to innovation projects, there’s typically a handover when it moves from the “search” to the “execution” phase of the project. The key to success here is to involve the right people from various business units (or just the one if it’s a decentralized project) that will be benefiting from the innovation. This will ensure that all the requirements and specifications are gathered early on, so that they can be met efficiently in the “execute” stage.
One thing worth noting is that it’s important to be purposeful about when to involve these teams. Typically early stage innovations are rather fuzzy and too premature to instigate meaningful collaboration with other business units. However, this usually starts when growth becomes visible and there’s an opportunity to optimize a newly created business model or value proposition – rather than early stage customer discovery or prototyping.
Another important consideration is who the project is being handed off to. If you’ve created an internal innovation team – be it centralized or decentralized – they need to be empowered to build the project once it’s transitioned. Alternatively, if the innovation is big enough and turns into its own line of business, it could be spun off into its own organization with the resources to develop the idea further.
3. How can I ensure focus by design in innovation projects?
While it’s nice to believe that anything is possible when it comes to innovation, it can often lead an organization to follow every rabbit that shows up on their path – and that’s not fruitful. This is especially true for open innovation hubs, which are often at risk of dealing with an endless stream of opportunities.
Alongside having a clear innovation strategy, it can help to design focus into your innovation teams. Consider innovation labs. These are often designed with a specific focus area, like blockchain for the energy sector or new ecommerce solutions for retail. The same can be done within an organization. Derive your focus area from your business strategy, and your innovation labs will ensure your innovation projects ladder up to your business goals.
Regardless of where our clients are on their innovation journeys, we’re constantly working with them to add structure to their approach so that they can get the most out of their initiatives.
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