Organizational Departments Aren’t Aligned with Innovation

Dedicated, poly-skilled project teams are more effective at delivering innovation projects than well-honed, departmentally-distributed, operationally-focused teams.

The choice of using an internal vs. external team is often considered when planning how to take on a significant innovation project.

Internal expertise and capacity are two common factors used to assess the viability of the internal team.

Even if internal expertise and capacity predictions appear sufficient to internally pursue an innovation project, a departmentally-oriented organizational structure introduces subtle forces that can significantly increase the risk of late delivery and reduced differentiation. Innovation will be unintentionally suffocated.

Risks of Running Projects Through Established Departments

Departmental structures can slow down innovation projects:

• Departments are prone to having their own initiatives that get pushed into innovation projects. Innovation budget and time is used for departmental goals related to operational infrastructure.
• Departments have responsibilities to the organization. Their operational work queues are likely not subordinated to the innovation project. Reducing scope in the innovation project to speed delivery may not have lasting impact because a team member can still be constrained by favoring less valuable operational tasks.
• Multi-tasking between departmental responsibilities and innovation project tasks destroys productivity on all projects.

Departmental structures can reduce differentiation:

• Product agility can be reduced due to departmental efficiency incentives. Departmental structures often foster project plans that isolate Voice of Customer influence and design decisions to the beginning of a project.
• Departmental decision makers are prone to overly apply operational heuristics to an innovation platform. Technology choices are subordinated to an operationally-focused consolidation plan rather than pursuing options that maximize agility or user experience opportunities.
• A separation of business, design, and technical responsibilities can result in the abandonment of localized creativity. Creative tensions occurring at the intersections of disciplines won’t result in innovation or opportunity when collaboration isn’t convenient.

Innovation services firms offer a significant advantage if time to market is important and your company doesn’t have a mature project-centric organizational structure.

Project-focused, poly-skilled teams allow for faster, predictable delivery and greater differentiation.

Benefits of Running Projects Through Dedicated, Poly-skilled Teams

Project-focused, poly-skilled teams increase speed:

• Creating a quality product within time and budget is not jeopardized by competing goals.
• Since teams only work from one project’s task queue, changes in scope have direct and lasting impact.
• Core productivity time is maximized by having teams focused on a single project. Bottlenecks that roam across disciplines throughout a project can swiftly be addressed by cross-trained team members.

Project-focused, poly-skilled teams preserve agility and promote differentiation:

• Product agility is preserved by having business, design, and technical team members collaboratively converging on a solution that is iteratively validated by customers.
• Technology decisions favor tools that offer speed, agility and user experience benefits. Operational integration with existing data and services is subordinated to maximizing opportunities for the innovation project. Experienced innovation project teams work from the perspective of the customer to the organization, not from the organization to the customer.
• Co-located, poly-skilled teams can quickly integrate and test insights. Decisions can be made quickly. Opportunities, costs, and alternatives can be quickly explored by a cross-disciplined team with a unifying focus on differentiation, cost, and speed.

Background Information

Some of the influencing rationale behind this post can be found in Michael L. George’s book, Fast Innovation.

Big Idea: Time to market can be reduced by properly buffering utilization, reducing active projects, and increasing cross-training of team members.

Fast Innovation – Law of Innovation Variation: p. 61

Big Idea: There is a non-linear relationship between a team member’s overhead and productivity time when the number of projects increase. Available productivity time drastically decreases per project as the number of projects increase.

Fast Innovation – Time distributions for single-project vs. multi-project allocations: p. 268