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How to implement effective innovation governance

Innovation has become the cornerstone of success for large organizations, but it’s not always structured properly. Here’s how to spot an inadequate system and redirect it towards success.

How to implement effective innovation governance

Innovation governance is a set of processes, policies, and structures that guide and control innovation activities within an organization. It’s a framework that helps companies effectively manage and direct their innovation efforts. The goal of innovation governance is to ensure that innovation aligns with the overall strategic objectives of the organization, is carried out efficiently, and delivers value.

The Perils of Ineffective Governance

Large organizations often find themselves at a crossroads when it comes to implementing effective governance frameworks for new ventures. Despite their vast resources and experienced leadership, these organizations often stumble in the face of innovation.

A lack of innovation governance can create countless problems for large organizations. While some of these issues are strictly internal, external factors can also play a part. If you look at an organization's existing culture, how is it run? Are they agile and open-minded or resistant to change? When it’s the latter, new ideas get shelved in favor of what they are used to doing. They’re not willing to take risks, which a lot of startups are willing to do. Fear of failure can stifle creative thinking and experimentation at every turn.

Let’s say though, that a large organization is willing to take a risk. In that case, what will the decision-making process look like? Typically, the bigger the company, the more levels of approval the idea must go through. It’s great to secure that executive buy-in, but it’s a challenge to keep everyone in the loop, waiting for approval from the top down. This hinders the rapid implementation of innovative ideas, making the company miss out on vital opportunities.

These slow decision making cycles can be a death sentence for innovation. On top of missed opportunities and increased costs, you also have to worry about frustrated employees and the satisfaction of your customers. When these issues arise, what steps should be taken to solve them?

Striking the balance between freedom and control is essential for harnessing the full potential of innovation within the confines of a large enterprise. One key aspect of governing innovation in large organizations is the establishment of a clear and strategic framework. Leaders must define innovation goals, aligning them with the overall business strategy. This framework will guide teams towards the areas where innovation is most needed and can deliver maximum impact.

Once a framework has been established, the organization can focus on fostering a culture that encourages and rewards innovation. Large organizations often grapple with the inertia that comes with size, making it imperative to create an environment where employees feel empowered to think creatively and take risks. This involves recognizing and celebrating successes as well as normalizing the concept of failure as an inherent part of the innovation process. Learning from setbacks is just as valuable as learning from breakthroughs.

In tandem with the cultural shift, organizations should invest in continuous learning and development programs. This ensures employees are equipped with the necessary skills and knowledge.

Large organizations also need to establish clear communication channels that facilitate the flow of ideas across departments and hierarchical levels. Creating cross-functional teams that can break down silos and encourage collaboration, ensuring that diverse perspectives are considered in the innovation process.

However, to govern innovation effectively, it is essential to strike a balance between freedom and control. Too much control stifles creativity, while too much freedom can lead to chaos. Implementing a robust governance structure helps manage this delicate equilibrium. This includes defining decision-making processes, setting up innovation committees, and establishing metrics to measure the success of innovation initiatives.

Another thing to consider is that establishing a successful innovation governance can lead to a more efficient and customer-focused organization, both of which contribute to a healthier and more successful sales pipeline.

Furthermore, large organizations must be agile in their approach to innovation governance. The ability to adapt quickly to changing market dynamics and emerging technologies is paramount. Regularly reassessing the innovation strategy and making adjustments based on feedback and performance metrics ensures that the organization remains responsive to the evolving business landscape.

The U+ Approach to Venture-Building

The U+ approach to innovation governance emphasizes two factors above all: agility and transparency. The aim is to bring a venture to a state of market-readiness with minimal obstacles while keeping all stakeholders aligned and informed at every stage of the process.

To accomplish this, we work with a single innovation leader (or small innovation team) on the client side. This allows us to ensure that our rapid, flexible approach to venture building is maintained, independent of the client organization’s inner workings.

We organize regular meetings to ensure that the client is up-to-date on how a venture is developing, what the obstacles are (current and projected), and what future resources we might need. These include, in order of frequency, a quarterly board review, a monthly call with high-level stakeholders, a detailed weekly meeting (attended by the full U+ team) highlighting where we sit on the project timeline, and a daily standup in which every member of the core team gives a real-time update about the progress they’re making.

A well-crafted strategy overview helps leaders communicate the direction of the business to stakeholders, employees, and other relevant parties. Throughout the innovation process, consistent discussion allows us to effectively communicate the key aspects of our strategy, which include:

  • Market: Assess high-potential market opportunities based on the needs and demands of real customers.
  • Product: Build a solution to meet those market needs
  • Positioning: Analyze competition and craft a commercialization strategy
  • Go-to-market: Monitor sales channels, pricing, and product launch

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Utilizing an efficient innovative governance framework can help guide any large organization to more success. If these organizations are willing to emphasize agility and transparency, while minimizing obstacles, they can be successful. This approach has proven successful for us at U+, where we’ve seen 100+ products developed over the past 14 years.

To find out how U+ can help your organization create an effective innovation governance framework, contact us here.

Don't miss the opportunity to boost your innovation strategy 100x and unlock the full potential of your next venture. Learn more about this game-changing platform, and book a demo here.