INNOVATION GOVERNANCE - BOARD LEVEL OVESIGHT OF INNOVATION PRACTICE
Innovation Governance provides the leadership and scrutiny instruments that encourage the right behaviours, structures and processes to become embedded across an organisation. It is not directly about how innovation is managed by practitioners (which is domain specific and already supported by a large literature in innovation management), but about how a Board of Directors, CEOs, and senior leaders promote and review innovation practice on behalf of their stakeholders.
Innovation is important:
- It is the foundation of growth and competitive advantage, creating and appropriating value in the private sector;
- It is the only way to make significant advances to 'deliver better for less' in the public sector.
It is therefore surprising that few organisations treat the scrutiny of their innovation practice as an explicit part of their corporate governance regime. There are exceptions to this, for example:
- Proctor and Gamble have an Innovation and Technology Committed of their main Board, which is strongly connected to executive innovation responsibilities;
- Lang O'Rourke have an Engineering and Manufacturing sub-committee of the main Board which focuses on innovation to provide maximum benefits to clients and business returns;
- NHS Direct has an Innovation Committed of its Board;
but these are the exceptions. Most major businesses and government bodies in the UK do not have explicit Board-level governance addressing innovation. Indeed, there is some survey evidence (from Australia) that many Board directors do not see innovation practice as coming within their purview.
Does an organisation have ‘best in class’ innovation practice?
How do shareholders know their medium term interests are being protected by appropriate approaches to achieving effective, affordable, innovation that appropriates value to them?
Are investment projects managed effectively to deliver intended returns?
Are there shifts in technology or market behaviour that will create new risks or opportunities?
How do taxpayers know government organisations are able to explore and implement new ideas in the way they deliver better outcomes?
This lacuna in corporate governance may explain why, despite much material being published on innovation, and with the importance of innovation being a ubiquitous refrain in recent business and policy utterances, numerous surveys show adoption of innovation best practice remains weak.
This Website offers some pragmatic and concise guidance on what an Innovation Governance Regime should look like. It makes clear the pervasive nature of process, incentives, leadership and behaviour in gaining maximum returns from innovation. The aim is to highlight the issues that need to be considered in a form that is easily accessed, but which opens up consideration of the detailed and often nuanced features that innovation governance must provide. The aimis also to stimulate awareness and disucssion of the aspect of organisational life.
This is described in the following links:
- Why Innovation Matters summarises why innovation needs to be a central part of any CEO and Board agenda
- Background Comments provides some underlying rationale for innovation and its realisation
- Innovation Dimensions takes each of the eight headings and discusses the issues that need to be considered in designing an innovation governance framework, and sets out a list of key features that innovation governance should address in each case.
- Innovation Governance Checklist addresses the steps in designing and assessing innovation governance
- Implementing Innovation Governance highlights the change management dimension of introducing or updating Innovation Governance
This material is equally relevant to small companies fighting to use innovation to generate high growth as it is to larger organisations that face sustaining growth in a dynamic world. However, the emphasis is on how larger organisation can overcome the impediments to innovation that size or current market dominance can bring. This is very much in sympathy with outlook of the December 2009 paper issued by NETSA "Everyday Innovation" which looks to how innovation can be brought to bear with advantage in every aspect of activity, not just innovation driven by scientific discovery or technology advance.