In Part 1, I described two potential approaches to building a corporate innovation team. One emphasizes specific individual skills of team members, the other focuses on the optimal mix of functional roles within the team.

There is the third approach to the formation of innovation teams. This approach doesn’t pay attention to the team composition or individual skills of its members; it emphasizes the way the team operates.

The logic behind this approach was eloquently articulated in a 2015 article by Google’s Julia Rozovsky. The article argues that the composition of a team matters much less for its success than how the team members interact, structure their work, and view their contribution. The article listed five key factors that set apart successful Google teams:

• Psychological safety: team members taking risks without feeling insecure or embarrassed.
• Dependability: team members counting on each other to do high-quality work.
• Structure & clarity: teams having clear goals, roles, and execution plans for each member.
• Meaning of work: team members working on something that is personally important for them.
• Impact of work: team members believing that their work matters.

Interestingly, it’s the first factor, psychological safety, that was by far the most important of the five. The safer team members felt with one another, the more likely they were to admit mistakes, work together, and take on new roles. The results followed.

The notion that innovation requires taking risks without fear of negative career repercussions is hardly new. We often hear calls to “fail fast and often” — or even to celebrate failures — as a surrogate invitation to innovate.

Unfortunately, while voiceful in promoting risk-taking, experimentation, and learning from mistakes, firms fail to introduce specific corporate policies encouraging and rewarding such behavior of their employees.

What can be done (or at least tried)?

Based on my research of factors favoring innovation, I’d like to propose a few recommendations on building corporate innovation teams

1. Create a brand-new team for each strategic innovation project and adopt a modular approach to the formation of innovation teams.

To avoid groupthink within innovation teams, I recommend creating a brand-new team for each strategic innovation project. This may result in a slow start of the project, due to the frictions between members of the team; however, the benefits of the cognitive diversity brought by new members should eventually overweight the cost of the initial delay.

I further recommend that each innovation team include a few members of the core innovation team (thoroughly trained in innovation management tools) and several outsiders from different units, functions, and locations. Naturally, this modular approach requires the creation of a firm-wide repository of employees with a track record of their prior involvement in innovation activities. Ideally, at some point, this repository will start collecting data allowing to judge the innovation skillsets of prospective members of the team and their optimal functional roles within the team.

2. When creating innovation teams, use a mix of subject-matter experts in the project’s domain and non-experts in this specific innovation field.

This recommendation takes a cue from a 2016 study that showed that the high ratio of domain experts on corporate boards resulted in poor performance of respective firms. The major problem with having too many domain experts on the board was “cognitive entrenchment,” the inability of expert-dominated boards to effectively respond to new information, especially when faced with an increased level of uncertainty. (And an increased level of uncertainty is what innovation is all about!) Sure, the optimal ratio of SMEs vs. non-experts needs to be determined empirically, but for longer-term projects, it can be adjusted midway.

3. When creating an innovation team for consumer-oriented projects, include team members with demographic characteristics mirroring the ones of the prospective end users.

This recommendation is inspired by a 2013 report by the Center of Talent Innovation that found that when innovation teams had one or more members of the same gender, ethnicity, culture, age, or sexual orientation as the project’s target end user, the entire team was far more likely to understand this user’s needs, increasing the likelihood of innovating more effectively.

4. Place members of the innovation team — especially those involved in strategic innovation projects — on fixed-term (tenure-like) employment contracts, as opposed to employment-at-will. 

This proposal is based on multiple studies (reviewed here) showing that the labor laws that make it more difficult to fire employees increase their participation in corporate innovation activities. The idea here is to provide members of the innovation team with immunity for failure for the whole duration of the innovation project, a bureaucratic equivalent of giving them psychological safety.

5. Make stock option grants, as opposed to cash bonuses and other monetary or non-monetary rewards, the principal incentive for engaging employees in innovation projects. 

This proposal is based on a 2015 finding that firms that offer stock options to non-executive employees are more innovative. This proposal, as the previous one, is based on a theoretical framework created by Gustavo Manso, who postulated that the optimal incentives motivating employees to innovate must include a combination of tolerance for failures in the short term and reward for success in the long term.

Of course, there is no guarantee that any of the proposed recommendations, especially taken alone, would result in immediate positive outcomes. But if you believe, as I do, in the importance of experimenting, then experimenting with the way you build your innovation team is a good place to start. 

Image credit:Ashkan Forouzani on Unsplash

Do you agree that to pursue a corporate innovation project, you need a dedicated innovation team?

Maybe not. We often hear that “innovation is everyone’s job” along with arguments that any structure kills creativity and stifles innovation.

Why is the idea that “innovation is everyone’s job” still alive and well in many companies? (I happened to work for one.)

Because this allows corporate leadership to adopt a hands-off approach to innovation.

No need to formulate the company’s innovation strategy and identify key business problems to solve. No need to design and implement specific innovation programs. No need to create a reward and recognition system that would incentivize employees’ engagement in innovation activities.

Instead, you just announce an open season for “ideas,” launch an innovation hackathon or two, and then claim that the collective wisdom of the whole company has been harnessed. (Ironically, helping this hands-off approach to innovation thrive is the proliferation of innovation management software.)

Fortunately, more and more corporate leaders begin to understand the need and the value of creating a dedicated innovation team. Of course, every employee should ideally take part in innovation projects, but it’s the ultimate responsibility of the innovation team to take ownership of the whole process. Anyone with even a passing knowledge of how corporations work knows that when everyone is responsible for something, no one is.

Let’s leapfrog?

And here we reach a crucial question: how should this innovation team be formed?

Several approaches exist.

The first emphasizes the personal skills of the team members. That’s why you can hear that the best way to staff your innovation team is to hire…innovative people. Great advice, of course, but unfortunately, with a limited practical value.

This is not to say, however, that more specific recommendations are completely lacking. Soren Kaplan, for example, suggests looking for these five qualities when recruiting new hires:

• Leapfrogging mindset: a desire to view the world with the goal of changing it.
• Complementary knowledge: possessing the knowledge and expertise that is complementary to yours.
• Strategic relationships: bringing along a strong network of business partners.
• Ambiguity tolerance: the ability to make decisions based on limited data.
• Optimistic persistence: the ability to persist through the tough times.

I like these suggestions. But I suspect that most corporate HR departments, even equipped with advanced evaluation tests, will have trouble with finding enough candidates meeting such a high standard.

When a revolutionary meets a magic maker

Instead of paying attention to the skill sets of individual team members, the second approach emphasizes the need for their optimal mix. This approach specifically focuses on the functional roles each member of the team plays in the project. For example, Braden Kelley suggested that each innovation team should include nine innovation roles including these five:

• Revolutionary: a team member generating and sharing ideas.
• Connector: a team member bringing people together.
• Customer Champion: a team member responsible for interactions with customers.
• Magic Maker: a team member responsible for implementing novel ideas and solutions.
• Evangelist: a team member creating a buzz about the project and its results within the organization.

(The other four roles are Conscript, Artist, Troubleshooter and Judge.)

This approach is obviously more practical than the first. In fact, some firms have already adopted the spirit, if not the exact letter, of it by creating innovation joint task forces composed of representatives from different corporate units and functions: R&D, sales and marketing, customer service, finance, legal, etc.

Implicit in the formation of an innovation team composed of people from different corporate walks of life is a belief that this team can only be successful if it includes people with diverse professional expertise and experience.

In recent years, this concept of functional diversity was augmented by a growing body of evidence suggesting that socially diverse groups (i.e., those with a diversity of gender, race, ethnicity, and sexual orientation) are more innovative than socially homogeneous groups.

Research shows that socially diverse groups are better at solving complex problems not only because people with different backgrounds bring new information, but also because the mere presence of individuals with alternative viewpoints forces group members to work harder to sharpen their own arguments.

This is good news for HR managers in charge of creating innovation teams: in our rapidly globalizing workforce environment, bringing together people with diverse professional and social attributes is much easier than identifying individuals with a leapfrogging mindset or optimistic persistence.

It’s all about the process

There is the third approach to the formation of innovation teams. This approach doesn’t pay attention to the team composition or individual skills of its members; it emphasizes the way the team operates.

I’ll describe this approach in Part 2.

Image credit: Vlad Hilitanu on Unsplash