This is a guest post by Vistage Speaker Jatin DeSai.
In my last post, I mentioned that every CEO and business executive who intends to lead innovation as a strategic agenda will need to address four critical barriers to innovation.
The second barrier is not recognizing and then not aligning the abundance of resources available to large organizations for investment in innovation. Even when overwhelming evidence shows that the companies who invest in innovation consistently outperform their peer groups, why haven’t most organizations taken innovation seriously?
The challenge is not that an organization does not have resources to invest in innovation; rather it’s where to most effectively funnel those resources, and how to do it.
Innovation in most organizations should be a mandate that cuts across functional areas. Problem with that in most organizations is the current organizational structures makes effective resource allocation decisions very difficult – which no one has time to deal with. It requires tremendous top-down courage and political savvy.
The few common themes that arise are: prioritizing effectively for the same competing resources across business units, designing solutions that may be ideal for a single business unit but not for the corporation as a whole, and balancing between the need to build markets while servicing existing customers.
The bottom line: resources are available, but the allocation and ownership for innovation is fragmented responsibility across most companies. There are three options to quickly overcome this barrier:
1) Develop a central innovation structure – including funding to help internal businesses quickly welcome innovation in their areas. Once initial ideas
2) Develop a hybrid innovation structure – which centralize core capabilities, but shares accountability and risks between corporate and lines of business.
3) Develop a Center of Excellence structure – centralizes core innovation capabilities and resources for business areas based on their respective needs.
Stay tuned to Part-3,4.
CEO, The DeSai Group