Technology

Who should be leading innovation?

This article explores the dilemma between creating dedicated innovation teams and distributing the responsibility for innovation across an organisation, proposing a hybrid approach as the optimal solution to stimulate creativity and operational efficiency in contemporary companies.
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Introduction

In today’s competitive market, companies are constantly searching for the golden ticket to outshine their competitors and secure their place in the future. This quest often leads them to prioritise innovation, which, in business terms, translates to introducing novel products, refining processes, or reimagining business models to boost value through revenue growth or enhanced efficiency. However, innovation isn’t just about keeping up; it’s about laying the groundwork for enduring success in a world that never stops changing.

The drive to innovate introduces a classic corporate conundrum: the pursuit of operational efficiency, which focuses on optimising current operations to deliver quick wins and stability, often clashes with the messy, unpredictable nature of innovation. As companies strive to balance these seemingly opposing needs, the debate heats up over the best way to structure innovation efforts – should innovation be a company-wide endeavour, or is it better to have a dedicated team leading the charge?

The Debate on Innovation Approaches

The dialogue surrounding how to best foster innovation within organisations has unveiled two primary viewpoints. One side advocates for the creation of specialised innovation teams, arguing that having a group solely focused on exploring new possibilities allows for a depth of exploration that’s hard to achieve when innovation is just one item on a long list of responsibilities.

On the flip side, innovation should be everyone’s job. According to this view, limiting the responsibility for innovation to a specific team might stifle the potential for groundbreaking ideas that could emerge from various corners of the organisation. 

When Everyone Innovates

Pros

Making innovation a collective responsibility invites a wealth of perspectives and ideas, potentially leading to a more dynamic and innovative organisation. This approach promotes a culture where creativity is valued at all levels, encouraging everyone to contribute ideas and insights. Such inclusivity not only diversifies the innovation pipeline but also boosts morale and engagement as people feel their contributions can directly influence the company’s direction and success.

Cons

However, expecting all teams to innovate alongside their regular duties can lead to significant challenges. While it might seem that allocating time for teams to brainstorm and develop new ideas would unleash a wave of creativity, the reality is often less idyllic. Teams find it difficult to disengage from their day-to-day responsibilities, which are always demanding and require immediate attention. The initial enthusiasm for innovation can quickly dissipate as the pressing needs of ongoing projects take precedence. This shift back to routine tasks can happen so subtly, and swiftly that teams scarcely realise it, leaving little room for the kind of sustained focus required to nurture and develop truly innovative ideas. Instead of developing creative projects, companies can get stuck in the same execution cycle, and innovative ideas remain just out of reach.

It often requires well-established and mature product-driven organisations and teams to establish successful innovation processes from within the teams. Being the ultimate goal of any organisation that wants to innovate, it comes as a reward when you reach that level of maturity.

Dedicated Innovation Teams

Pros

The approach of having a dedicated team for innovation, inspired by Clayton Christensen’s “The Innovator’s Dilemma,” offers a focused and agile methodology for exploring new ideas. This team is free to pursue unexplored technologies, markets, and business models, free from the operational constraints that typically slow innovation. Their ability to rapidly test and iterate accelerates the development process and enhances the probability of uncovering impactful innovations.

One critical advantage of this setup is its protective effect on the core business functions. Innovations often necessitate significant changes, which can disrupt ongoing operations. A dedicated team can manage these transitions smoothly, ensuring innovations are integrated with minimal disruption. They act as agents of change, coordinating with various departments to implement new ideas effectively.

Furthermore, a dedicated innovation team can significantly influence the company’s culture, instilling a spirit of creativity and entrepreneurial thinking across the organisation. Their work encourages all employees to contribute ideas, fostering a more dynamic and innovative workplace. For this to work, the team must comprise individuals with the right skills and a mindset oriented toward experimentation and exploration.

This approach positions dedicated innovation teams as critical drivers of organisational transformation, pushing the boundaries of what’s possible and steering the company toward growth and adaptability with a mix of strategic insight and creative execution.

It’s also the most straightforward model to implement in any organisation, often requiring less investment to start and maintain. As mentioned above, it is also less disruptive and suitable for organisations that are beginning to explore how innovation works and how it can be integrated into product development processes.

Cons

Dedicated innovation teams can encounter obstacles, notably in timing and integration within the broader organisation. Success in innovation is not just about creating cutting-edge solutions but also aligning these innovations with market readiness and the company’s strategic direction. For example, advancements in technology like artificial intelligence must meet a market ready and willing to adopt such changes, which isn’t always the case.

One concern is that the innovation team may become isolated from the rest of the organisation and need help getting buy-in from other departments. Without strong connections to other departments, securing the necessary buy-in for projects can become a formidable barrier, undermining the potential for these innovations to be effectively implemented and scaled within the organisation. This disconnect can lead to misaligned efforts, where innovation initiatives overlap with or diverge from the company’s main goals, resulting in inefficiency and a scattered approach to innovation.

In essence, while dedicated innovation teams have the potential to drive significant advancements, their effectiveness is contingent upon their ability to synchronise with market demands, maintain alignment with the organisational strategy, and foster collaboration across the company to avoid inefficiencies and ensure that innovations are both relevant and scalable.

The Optimal Solution: Collaboration and Integration

At AUTODOC we have a mixed approach. On the one hand, we have a dedicated product innovation unit, which can work more independently on some ideas,  and on the other, the innovation unit is placed in a shared structure – ProductOrg, which ensures close interaction between all departments. On top of that, we understand that product company best practices, such as the Discovery Phase and Hypothesis Testing, should be practised within each product domain, not just in the innovation department. 

Blending the focused expertise of dedicated innovation teams with the wide-ranging insights of the entire organisation emerges as the best strategy for fostering innovation. 

This hybrid approach allows for the exploration of bold, risky ideas while ensuring that these initiatives benefit from the practical knowledge and experience scattered throughout the company. By fostering a culture of collaboration, companies can strike the right balance between groundbreaking innovation and the operational excellence needed to bring these ideas to life.

For us at AUTODOC, innovation is not just a buzzword. From the beginning of our e-commerce journey, innovation has been an integral part of AUTODOC’s DNA.

Authors: Marco Costa, VP of Engineering; Alexander Tryvailo, Product Innovation Director.

, Technology

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