How to build a sustainable innovation function?

Innovation functions play an integral part in most organisations. When they are setup and run appropriately, innovation improves every aspect of what we do. Three key pillars to achieve a sustainable innovation function are:

• Developing the right leadership and culture
• Integrating the innovation function and its operating model effectively
• Building capability and capacity

Below is our experience of how to implement and apply these three pillars in the real world:

​Developing the right leadership and culture
The most critical aspect to creating a successful innovation function is to adopt empowering practices right across the organisation. Starting at the top, these practices need to be embedded into the culture of the organisation. Empowerment includes:

• encouraging and embracing early failure
• being brave by having the courage to try something new and accepting the risk of failure
• providing consistent incentives to innovate with a clear reward system
• concise communication of common business goals with emphasis on taking a collective journey to reach these goals.

 
Whilst most organisations have innovation as one of their strategic priorities, the lack of knowing “how” to deliver it tends to slow down results. The second and third pillars provide insights on ways to address that.
 
Integrating the innovation function and its operating model effectively
It is critical that the “ship’s” integral parts move together towards the desired destination. Integration between the innovation function with other business functions such as finance, human resources, communications, etc needs to be designed, developed, tested, operationalised and adjusted as these functions evolve. There are several models that can be adopted so performing an initial assessment of the organisation is critical to ensure the right model is selected. The assessment should include reviewing the:

• current innovation culture within the organisation and the collective skillset in addressing and solving challenges
• current innovation processes maturity for operationalising ideas and delivering sustainable outcomes
• current strategy to prioritise innovation ideas and guide them through their lifecycle
• working practices across different sites/geographies (similarities, methods, cultures, etc)
• capacity for existing functions business as usual tasks
• other strategic considerations (e.g. rebranding on the horizon, appetite to risks for the areas you wish to innovate in, recruitment strategy, etc)

The outcome of such assessment can guide the selection of the model. The three common models are:

1. Dedicated innovation function that works alongside the other functions within an organisation
2. Embedded innovation within each existing functions of an organisation
3. Outsourcing the innovation function to a third party

Organisations can also adopt a hybrid of these models. However, whichever model they choose will have its own benefits and disbenefits. Therefore, organisations should regularly monitor and assess the outputs of the innovation function and adjust align it with any changes in the overall business strategy.

​Building capability and capacity
Starting from a clear strategy definition, it is critical to allocate the right people with the right skillset, establish a light operating model and equip the innovation function with the required technology. These seem to be straightforward suggestions however in practice it is easy for organisations to underestimate the level of commitment that needs to be applied. Organisations that do innovation well are those where the leadership commits to dedicating the time and resources required to allow teams to focus on innovation without being distracted or overburdened with routine or other tasks.
 
Summary
Leadership and culture is the most important pillar of building an innovation function. In successful organisations the leadership is brave, it empowers its people, commits dedicated time and resources and embraces failing fast. Leadership also recognise that there is not a one size fits all model for delivering a sustainable innovation function. Therefore, organisations should choose the model that best fits and then adjust over time to align to their business strategy.
 
At Daintta we help organisations deliver successful innovation functions. If you are interested to find out more about how we can help your organisation please get in touch via info@daintta.com.