Why you Should (and Shouldn’t) Create A Dedicated Innovation Unit in 2014? Part 1

In the rush to become innovative, many organisations set up a dedicated innovation department or team (often before they even have an innovation strategy – but that’s another story).   They reason that by having resources dedicated to innovation, they’ll leap over their competitors.  My colleague, Ian Koh, at Deakin University did some research into this when we were writing our respective theses on innovation.  It's often called "internal venturing” - and it has both its advantages and pitfalls.

A classic example of creating a part of the organisation, dedicated to innovation is the Parc Xerox lab established in the 1970s.  It famously invented:

  • the Graphical User Interface (GUI), which is a ubiquitous on every computer today;
  • the mouse;
  • ethernet; and
  • a host of other interventions well before their time.

However, it failed to commercialise them and Xerox is still primarily a photocopy machine and not a computer behemoth.

Steve jobs, from Apple computers, grabbed the ideas (at least for the mouse and GUI) after visits to the Parc labs, and used them to catapult apple to the organisation it is today. 

The downside of a dedicated innovation unit

And therein is the rub - setting up a dedicated innovation department or position, has the danger of removing innovation function from commercial realities.   (NB most organisations would not go as far as Parkes – beanbags, bearded men and heaps of time to play, but the point remains). 

The upside of the dedicated innovation unit

But it has the plus of ensuring that innovation gets a priority seat in the C-suite, elevates the role of innovation, and attracts resources and the capacity to manage and measure innovation efforts.

So what to do?

The question should really be:  “Under what circumstances should an organisation establish a specific ‘department ‘ (or business unit or whatever you want to call it) for innovation?"  When is a good idea to split innovation off into a business unit, and when should innovation be rolled into everybody’s job and every area and team within the organisation?   

What does your strategy say?  Don’t have one?  It’s a good idea to have that first but never fear -in the next blog we’ll answer that question, and also answer how to get the benefits, and guard against the pitfalls of both approaches i.e. “innovation is everyone’s job” and “innovation as a specific functional area”. 

Want more?

  • Need help to develop an innovation strategy or run innovation workshops?  Contact Cris at cris@crispopp.com
  • Like to do it yourself?  Buy “The Innovation Diamond: A 5 Stage Process guaranteed to solve any problem, exploit opportunities, create new ideas and innovate”