In business, the enthusiasm for innovation has dwindled. We have seen many enterprise innovation hubs, labs and incubators come and go. They promised to disrupt, or to face disruptors head on, yet all they seem to have disrupted is their limited funds and resources.

But innovation wasn’t the problem: it was how businesses were structuring their attempts at innovation. 

The prevailing belief was that, by creating an enterprise innovation lab, a business could incubate ideas without disrupting business as usual. Once there was an idea with a high enough chance of success, a new line of business would be formed, and this idea would be integrated into the rest of the business. Until then, the innovation leader was left to farm on their own. 

This approach was doomed from the start. 

If you’re relegating the exploration of new products, services, experiences or methods to a part of your business, as with a hub or lab — that is, if innovation isn’t central to your business strategy and operations — then you are setting yourself up for failure.

Trying to generate innovative ideas without harnessing the collective wisdom of your organization is like planting a seedling far away from water, sunshine and oxygen, and still expecting it to give fruit. Plants don’t grow on wishes and wants, and neither does innovation.

In my experience, innovation groups with sustained success and growth have only one thing in common: their proximity to the core business strategy. The closer and more inextricably linked the core business strategy is with the source of innovation, the higher the likelihood that these efforts will generate real business growth. Separate your innovation from your strategy functions, and your hub will flame out.

Doing Integrated Innovation Well

Moe, an innovation leader at a large financial advisory services business, started out with a team of two employees and, within two years, had created three new in-market offerings, built a team of 13 effective innovation strategists, and generated $50M in new and incremental revenue (representing 38% growth). Instead of taking the prevailing advice to build an innovation hub, he opted to integrate his approach with the strategy and operations that were indispensable to the business’s growth. 

To adopt his approach, follow the four steps below.

1. Engage leaders on key priorities and challenges
   As soon as Moe was appointed to his innovation leadership role, he engaged key leaders to better understand which parts of the business needed to be addressed. Their priorities were diverse: level up the technical capabilities of the entire practice, increase everyone’s familiarity with innovation processes, energize team members, generate leadership buy-in for big ideas, and most importantly, steer the strategic value of services based on the clients’ and markets’ evolving needs.

2. Activate team members throughout the innovation process
   Moe was on a tight budget: he had no room to hire FTE. So, instead, he had the business lend him team members on a four-week secondment and rotated his team continuously. While this was more challenging to manage, he turned it into an opportunity to educate the team and get them excited about innovation processes, turning this secondment from a nuisance into a highly desirable opportunity for ambitious team members.

3. Establish the baseline criteria for selecting an innovation challenge
   The criteria for selecting an innovation challenge included assessing (a) the strategic value of a solution for the overall business, (b) the challenge’s ability to produce buy-in and quick wins, (c) the degree of uncertainty the business faced with this challenge, and (d) its potential to energize teams. Cleverly, these criteria for challenge selection were the same elements that the leaders identified as critical to the business. The criteria were also the same scorecard metrics Moe would use to measure the success of his team over time.

4. Communicate early and often to demonstrate progress
   Moe used his scorecard metrics to share successes and learnings, both big and small, with the team. In doing so, he demonstrated progress that the rest of the business could benefit from. For example, since energizing the team and familiarizing them with the innovation process were key to success, he communicated the speed at which his innovation newsletter was gaining subscribers and the increase in team members that had raised their hands for secondment opportunities.

With these four steps, Moe went from leading an innovation function that sat adjacent to the business — a reactionary role with a limited budget, a small team and a need to prove to leaders that innovation supports business growth — to leading the core strategic engine of the business. His new innovation function earned:

• leader buy-in and their advocacy of innovation as central to business growth;
• budget protection for the innovation mandate and a team of 13 FTE employees; and
• a central role in setting the business’s strategic agenda.

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If you are an innovation leader who wants to increase the strategic purview of your mandate and the effectiveness of your team, get in touch and let’s chat.