At our CIO 100 event in San Diego this week, I\u2019ve been hearing a lot about how to build and manage innovative teams. This morning, Gentry Lee, chief engineer for planetary flight systems with the Jet Propulsion laboratory, gave a compelling talk about how to balance risk and innovation when developing new technology. \u00a0I\u2019ll get to how this relates to project teams in a minute. First, you need to know about Lee. He oversees the engineering for such projects as the Mars rover mission, as well as the Deep Impact and Stardust missions that collected data from a passing comet. In the space business, missing a launch date costs researchers years, and technology that doesn\u2019t work can torpedo an entire mission (not to mention send hundreds of millions of dollars down the drain). The teams that build the hardware and write the software for interplanetary missions need room to run, because they\u2019re inventing new technologies. But they also need to mitigate the risks than inevitably arise.It shouldn\u2019t surprise you to learn that the structure of the project teams that build these systems is essential to achieving the balance between risk and innovation.Among Lee\u2019s tenets of team building for innovation is something you probably already do. You have to find the smartest people you can to assign to an innovation project and choose an experienced technical leader who can guide and inspire the group. But what you might not do is pair that technical leader with a manager whose job it is to worry about the risks, the costs and the budget.The reason? \u201cPeople involved in the project cannot simultaneously throw everything they have into the development of the project and think about the risks. You have to have someone in a position to raise issues.\u201dIn other words, the creative talent needs to be protected from bureaucratic pressures, so they can concentrate on the technical challenges in front of them. Nothing kills the imagination like having to count beans at the end of the day. But a project can\u2019t succeed if no one keeps an eye out for how much money is being spent, what it\u2019s getting you, and whether what you\u2019re doing actually works.According to Lee, a close relationship between the technical leader and the project manager allows risks to be addressed and managed. The technical leader, because she is trusted by the team, can deliver the demands from management (including bad news) and mobilize the team to solve problems in a way a \u201cbureaucrat\u201d\u2014who doesn\u2019t have credibility as an expert\u2014can\u2019t.Some companies reject this approach, Lee says, because they don\u2019t like the \u201cfriction\u201d between the technical leader and the project manager. But friction is essential, because it helps create a better product. A product that is created absent constraints (whether a limited budget, or performance requirements) simply won\u2019t be very good, because the team hasn\u2019t been forced to work through the potential bugs.. Lee\u2019s talk echoed a theme that came up more than once in different conversations about innovation during the past couple of days. On Monday, Stephanie Wernet, CIO and VP of IT at Goodyear, observed that rule-bound IT departments can put the kibosh on experimentation by insisting developers adhere to corporate standards. So she\u2019s willing to let her R&D team use the tools they think they need. But as the manager, she wants to know about the \u201cshadow IT\u201d that\u2019s lurking within her department and the opportunities and risks it presents.Goodyear\u2019s CIO 100 award winning project, which uses virtual supercomputers to design tires, was 10 years in development. During this time, the project did not operate in the shadows\u2014the company had a way to measure progress and determine it was worth continuing. Goodyear had a technical leader who stuck with the project from start to finish\u2014and who believed passionately in the idea\u2014as well as a management champion who protected it.Mike Jones, the CIO with Circuit City, addressed the question of building innovation teams during his talk on Monday. His company culled innovators from the corporate ranks in a process akin to a football draft \u2013 all the \u201cplayers\u201d went into a common pool, and the top talent was \u201cdrafted\u201d to innovation teams. The members of these teams still had to do their day jobs, and give an additional 50 percent of their time and energy to new projects. But their work on innovation was separate from their \u201cregular\u201d work.The CIOs at the conference that I talked to about these ideas agree there\u2019s wisdom in them. How they\u2019re implemented will probably look different in different organizations. For instance, one CIO tells me he plans to establish short-term innovation teams. He\u2019ll dedicate a group to a project for, say six months. Then a new group will go on innovation detail.How do you organize and manage your innovation teams?