Innovation: Working Together to Succeed

by Marisa Brown

April 6, 2008 —

TEAM. Together Everyone Achieves More. Successful innovation is proof positive of this old coach's adage. By pulling in players from multiple functions and locations - both internal and external to the entity - organizations are realizing positive results from their innovation efforts.

APQC's research on innovation has examined and continues to explore how organizations of all types, sizes, and industries deal with the challenge of bringing new products, services, and business models to market, while improving their operations and simultaneously providing employees with the necessary enablers for successful innovation.

The following conclusions are drawn from multiple APQC research projects, including the Open Standards Benchmarking Collaborative^sm (OSBC) innovation research and two consortium best-practices studies: Successfully Embedding Innovation: Strategies and Tactics (2007) and Innovation: Putting Ideas into Action (2006). Best-practice organizations studied in 2007 include: Air Products and Chemicals Inc., Boston Scientific Corporation, Computer Sciences Corporation, Ethicon Endo-Surgery, and Hewlett-Packard Imaging and Printing Group (HP). The best-practice organizations in the 2006 study include: Bausch & Lomb, The Clorox Company, IBM, Kennametal Inc., Mayo Clinic, and Procter & Gamble (P&G).

One finding that has become increasingly clear is that collaboration across traditional boundaries within and outside of an enterprise, including the information technology (IT) function in a visible fashion, can improve an organization's innovation outcomes.

Internal collaboration to support innovation

In examining the structure and processes at best-practice organizations, APQC has found that encouraging employees to collaborate with those outside their specific peer groups can facilitate idea generation and problem solving.

To use a food image, mixing ingredients together in an unlikely way can lead to a great result. A good chef must be willing to "stir the pot" and find taste combinations that are not obvious if he wants to discover a great new recipe. In this study, the best-practice organizations believed in collaborating internally and externally to find the best recipe for innovation success.

When asked about internal collaboration, best-practice organizations collectively indicate that they have various internal disciplines working together on innovation activities more frequently than do other research participants. They are also more likely to assemble cross-functional teams to resolve specific problems or perform specific tasks related to innovation. This type of cross-fertilization among employees who have different competencies and areas of expertise facilitates the idea generation and problem solving processes within these leading organizations.

With this many internal stakeholders involved in innovation, internal alignment is a necessary preexisting condition for innovation to thrive. One way that several of the study best-practice partners have driven this alignment is by cascading measures vertically through the organization. Common performance measures for cross-functional team members, regardless of their functional identity in the company, also help drive horizontal alignment.

External collaboration to support innovation

Leading organizations are finding that it is not sufficient to only bring together the best and brightest from among their own employee pool. There can be much value gained by looking outside the organization's "walls" when it comes to innovation. IT is an important player in this external collaboration. Figure 1 below from the OSBC innovation research shows that among the 100+ research respondents, external collaboration in support of innovation in IT is second only to external collaboration within research and development (R&D). Not surprisingly, almost half of the participants selectively "out task" one or more IT support activities.

As an example of this desire for external involvement, as a part of P&G's paradigm shift to being more externally focused, it asks employees to consider the following sources prior to beginning an innovation project.

1. Does this already exist inside P&G, maybe in another business unit?

2. Have you looked to see if the company's suppliers have it already?

3. Does it exist somewhere else in the world?

4. If no to all of the above, then invent it yourself.

P&G is looking to external partnerships to supply the company with more than half of its new technologies and products. Rather than building up its own infrastructure, P&G seeks external partners who have already made that investment in equipment, processes, and tools. This allows P&G to leverage its "infostructure" instead of adding costly infrastructure. To-date, these partnerships have produced significant successes with new products P&G has introduced to the market.

You are not managing know-how. You are managing know-who. Know-how was last century.

-Larry Huston, former vice president of innovation and knowledge, P&G

So APQC's research has shown that whether the group effort includes both internal and external constituencies, leading organizations are achieving more by embracing an expanded team for their innovation efforts. Increasingly, IT has become a vital stakeholder in that collaborative team, contributing to successful innovation outcomes.

APQC