In most organizations, the staff is so monopolized by day-to-day demands that innovation never seems the thing to do. Organizations should set aside a few leaders from responsibilities for normal operations and allow them to focus strategically and inject innovation through the use of "skunkworks" teams.
The lack of margin in day-to-day operations dominates thinking and limits creativity for innovation. It is important to create head-space within the organization to allow for the kind of perspective that produces innovative ideas.
Dedicated leaders: The key component is the decoupling of leaders from responsibility for directing day-to-day operations with the responsibility to maintain strategic focus and to look for opportunities for spawning innovation within the organization. The assertion is that in many organizations the limit on innovation has more to do with lack of margin for this type of thinking than it does organizational capacity to explore or execute on new ideas.
This role will be most attractive to a leader who measures success in terms of his or her impact on the organization and the compelling nature of the work rather than in terms of size of budget or staff. While being a catalyst for change can be frustrating, the potential upside is enormous. It might also be possible to consider rotating this position as a development opportunity among leaders in the organization, for example offering them a 6-month “innovation sabbatical”. This would give them the opportunity to gain strategic perspective though it would clearly have organizational ramifications that would have to be navigated.
Skunkworks teams: Because the leader is decoupled from the normal operational teams, implementation of their ideas will require help from cross-functional teams. Though it could be possible to create dedicated skunkworks teams tied to the innovation leader, this could have the effect of isolating the innovation from the operational departments such that they feel no ownership or desire to see the innovation succeed.
By gaining support for the exercise from the operational leaders and assembling a team of the right individuals from across the organization with a mandate to explore and possibly implement the innovative project you not only accomplish the goal of innovation but also encourage ownership of innovation throughout the organization. It is anticipated that involvement in the skunkworks teams will typically be a part-time assignment and that the operational leader will have to manage team members’ workloads accordingly.
Separate budget: Budgetary support for these initiatives could be managed several ways with one possible approach being allowing the operational departments to absorb the labor costs while associating hard costs through the innovation leader(s). Another approach would be to give the innovation leader a budget that they would use to “pay” the internal department for its team members’ time while also paying for any associated hard costs of skunkworks projects. This would be further incentive for operational teams to support the skunkworks projects because they would see direct financial compensation/increased budget in return for their support that could be used for additional headcount or toward other initiatives as needed.
Joint Ownership of Innovation: Because this model potentially separates innovation and execution there is a need for joint ownership of innovation goals and governance. This should involve including innovation goals and KPIs for both types of leaders and creating a structure to promote communication around innovative projects. The dedicated leader should not act as a “lone ranger” driving innovation by himself/herself but more as a catalyst exploring options, “teeing up” the best ideas and sharing the credit for successes with the operational leaders. The less the operational leaders feel like a skunkworks project is “costing” them (in terms of man hours or budget) the more likely they will be to support it, so one of the keys to achieving joint ownership will be the innovation leader’s ability to bring financial support (or other forms of support) to help operational leaders ensure their own projects, goals, and KPIs aren’t put at risk.
Measurement: With innovative projects it can be counter-productive to measure based on success or failure, creating a “playing it safe” environment. Instead, the desire is to create an environment of safety where everyone feels free to express ideas, even if they aren’t sure they will work. It will be important to measure the success of the venture in terms of the contribution of the individual team members, the possible solutions explored and especially the learning gained during the project. If the initiative succeeds it should be celebrated but an initiative that is explored and rejected should also be celebrated if the process was healthy and led to a correct conclusion.
Leadership should be measured based on their team’s contribution to these projects, the number of innovation projects explored and the quality of learning and results gained.
In our organization we created a new position (VP of Technology) that was tasked with the creation of the technology strategy and roadmap but not directly responsible for the IT department. In the process of assessing the current state and charting a course for fulfillment of the organizational strategy, opportunities for innovative application of technology became evident, many of which were tenable in the near term.
By assembling ad hoc skunkworks teams with needed resources to operationalize the new initiatives, feasibility can be established and the innovation explored.
In about 15 months since having created this position we have explored several dozen potential innovations, sparked many conversations about how technology changes should impact our thinking and brought at least one new product to market. This all happened during a time when the IT department was implementing 3 new major software platforms simultaneously – a herculean effort that left them with absolutely no margin or headspace.
It is very difficult for someone anchored in operational details to gain strategic perspective in a short time. It takes a minimum of 60-90 days to begin to get the kind of clarity required. So, it is important to free this leader from any responsibilities that would drag them back into the weeds for an extended period of time at the beginning of a skunkworks initiative. This initial period for research and reflection is very helpful and should be expected before real innovation opportunities begin to surface.
This is also the ideal time for the leadership team to set aside a budget for skunkworks initiatives. This puts the skunkworks leader in a strong position to begin talking with operational leaders about who might be good candidates to participate on a skunkworks project and what hard costs might be associated.
Once an innovative idea surfaces, the skunkworks leader should work with organizational leaders to identify members who can serve on the skunkworks team. The team should be given the charter to determine the best way to explore the idea and, if possible, to conduct a pilot or test to determine its viability and value. They should be assured that their performance will not be evaluated based on the success or failure of the idea but on the basis of the participation and contribution to the process. Finally, they should report back to leadership on their findings and results as well as the lessons learned in the process.