Why ‘Innovation Management’ Isn’t an Oxymoron

When it comes to innovation, IT and business leaders expend a lot of effort prying their organizations out of the box.

At The Hershey Co., Deborah Arcoleo, an innovation director, encourages innovation teams to act like anthropologists before brainstorming workshops, observing the outside world and exploring all kinds of retailers.

At Capital One, CTO Monique Shivanandan hosts trips to rub shoulders with the people behind startups and famous innovation houses like Google.

But just as too many constraints will squelch creativity, too much blue-sky thinking can take you out of orbit. To foster innovation, IT leaders must balance creativity with control. A PriceAwaterhouseCoopers survey of 1,757 executives found that 78 percent of the most innovative companies structured their creative efforts, compared with just 66 percent of less-innovative ones.

Balancing structure and creativity, however, often means designing new processes. When creating its Digital Innovation Labs two years ago, Capital One replaced its waterfall development methodology with agile processes. Because agile places designers side-by-side with developers, it meshes the creative with the doable, Shivanandan says.

“The designers aren’t thinking up ideas that are impossible to build,” Shivanandan says. “And it’s much more fun for developers because they’re not just Acoders; they’re building along with the designers.”

One of the structured creativity guidelines at the $21.4 billion bank is that innovation labs must include between 20 and 45 people. Too small, and the group could lack the necessary diversity; too big, and it could become unfocused, bureaucratic and “more like a day job,” Shivanandan says.

It’s crucial to find structures that work for what innovation consultant Chris Trimble calls “the ignored side of innovation”–namely, execution. Unlike with traditional project management, innovating companies are attempting to implement the new while still meeting day-to-day demands, says Trimble, co-author of Beyond the Idea: How to Execute Innovation in Any Organization.

Rather than shoehorning innovation into employees’ slack time, he says, companies need to combine dedicated teams with other staff that divides its time between daily work and innovation. “That’s a structure designed to do both jobs at the same time.”

While employees at Hershey are encouraged to seek insights from unlikely sources during the exploration phase of innovation, they focus on a business goal, such as product development or process improvements, Arcoleo says. “They’re not floating around untethered.”

Ideas are captured and executive sponsors screen, sort and rank them. From Hershey’s Simple Pleasures to Rolo Minis, most products that the $6.6 billion company has launched in recent years have gone through a similar process.

“There are times to be convergent, or structured and analytic, and times to be divergent, or open-minded and creative,” she says. “It’s important that the project champion signals to the team which mind-set to be in, so people know how to behave.”

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