How innovation departments stay relevant and avoid downsizing
Innovation departments are often first in line in times of downsizing. This raises the question how we as practitioners can show the value of innovation to our organisations
Although innovation as a corporate discipline has been somewhat internalized by companies over the last decades, innovation departments are often first in line in times of downsizing. This raises the question how we as practitioners can show the value of innovation to our organisations and thus avoid becoming the targets of downsizing exercises.
The end of dedicated innovation departments
During the 00s, we saw office spaces dedicated completely to innovation, decorated to clearly stand out from the remaining office décor, and most companies had a designated group of innovators within the company.
The Nosco survey conducted in November/December 2019 (download here) indicates that this trend is fading out; companies still prioritize innovation and dedicate resources to it, but they are to a large extent integrating it into the organization making it less visible and identifiable. There are clear advantages to this, including cost savings and a close relation to the business, but there is also the risk that the main goal of innovation, to challenge the existing business, is lost. Standalone innovation departments are better suited to do just that. In light of the current development, innovation departments thus, need to become clearer in what they deliver and the results they create for the business.
Communication is the key to your success
As practitioners of a fairly new discipline, and one that might have earned a reputation for being buzzwordy and fluffy, we need to constantly prove ourselves and let people know what we are in fact delivering to the business. Instead of talking in general terms about agility, fast failures, sprints etc., we must get concrete and clearly communicate what exactly we do, how it relates to the overall strategy and the results it creates for the business. This communication effort should not be underestimated, and it is a constant effort that must be carried out by both innovation practitioners and their managers. Availability heuristics teaches us that if we can recall something, we will also think it is important, so to get innovation to stick as a standalone corporate discipline, we need to invest in communications.
How to get started
To create meaningful communications, we need to have content and messages to share. That can be hard in the early days of the life of an innovation department, but that is nonetheless when it is the most needed. Collecting data from projects, running surveys, collecting testimonials, tracking results and formulating 3-5 key business-relevant services is a good place to start. The results of innovation efforts are often more long-term and “hidden” within the business. So we need to dedicate an extra effort to make them visible and clearly show how we contribute.
According to a November 2019 HBR article (“What Companies That Are Good at Innovation Get Right”), “innovation and R&D leaders that expect their programs to endure and grow over time must be gathering data — often with help from colleagues — about the economic value they are delivering to the organization”. This data will create the meaning in the communications and make it clear that innovation is in fact necessary for long-term survival.
It can also be useful for an innovation departments to help businesses solve short term issues. Out of a continuous improvement or lean process some really important business issues arise. The innovation team could dedicate 20-25% of their resources to assist the business in solving those issues and help generate revenue in the short term. Such quick-win’s provide results for the innovation team paving the way for new projects, and establishing a relation to the operational business that can prove valuable for other projects.
What you can do today to stay relevant
Based on our experience in working with innovation practitioners, we have gathered some advice on how to create meaningful communication and staying relevant:
1. Run 1-2 profile projects per year that are closely tied to business (solves a real business problem) and make case profiles with key metrics afterwards
2. Create a “catalogue” with the services you offer to the organization, clearly outlining expected outcome and the (minimum) effort required from the business
3. Offer campaigns to the business units: no business problem is too big or small. Key is to have a clear call for ideas, get commitment around implementation, and setting up a fitting process
4. Have a defined incubation process and stay close to the execution. Many innovation projects die due to lack of sales and marketing efforts
5. Run surveys and evaluations on projects to prove your impact
6. Grasp any opportunity you have to talk about what you offer and what you have helped others with (become friends with internal communication)!
1.Make sure there is a clear link between the overall strategy and innovation – it should be clear how innovation contributes to (and is critical in) realizing the strategy
2. Create a dashboard with key metrics on innovation and bring it up as a regular agenda point. Key metrics should cover a) your work (e.g. conversion rate on ideas to projects, speed of closing down ideas, general awareness and engagement in innovation) and b) your contribution to the business (e.g. revenue generated through your projects, cost savings or efficiencies created, satisfaction with your services)
3. Book time at meetings to talk about your offerings and results – at senior management meeting, but also at business line meetings and similar
4. Prioritise this! Dedicate minimum 50% of 1 FTE in the early years of innovation team to communications and stakeholder management
Connecting the dots
Too often, “innovation” happens in secluded parts of the organization that few people have access to and know about. Not until ideas are ready to be implemented, is the organization made aware of it. This approach to innovation is a fundamental opposite to how innovation is best nurtured: via an open and collaborative process where relevant people, across the organization are involved throughout the process. The more distributed the organization is, the bigger a problem it is.
The digital infrastructure of the Nosco platform ties this in by connecting people in the effort to solve critical business problems. Staffing ideas with the right capabilities (tech, production, sales and marketing) ensure that the right ideas get executed and becomes a success in the market. Often the organization is not aware how easy it is to run campaigns, to involve everyone, and make innovation everybody’s business. And they are not aware that it might actually help them save costs and time in doing the things they are already doing. That is why communication is at the core of staying relevant along with creating impact.
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