IT Innovation: is outsourcing possible?
1. Innovation as a corporate function
At a growing number of large organizations, innovation is now an identified organizational group, with a specific mandate, roles and responsibilities, metrics, processes, resources, and governance. According to a 2012 Capgemini study, 43% of large global companies now have a formally accountable innovation executive. Innovation has become a corporate function, and the trend is gaining steam.
2. Most leaders see Innovation as distraction
Yet despite the trend, today’s innovation leader has a very difficult mission, for two reasons. First, most corporate warriors in middle management persist in thinking of innovation as a management fad – a distraction from quarterly goals and core objectives. As a result, the innovation leader faces a constant uphill battle for legitimacy – unless he/she demonstrates clear, powerful business results from innovation’s efforts. And there is a limited time window before faith and confidence are lost permanently.
3. Innovation breaks operational excellence
Secondly, innovation has a distinct rhythm from the daily business. Instead of driving to efficiency and operational excellence, successful innovation requires space and time to create, tolerance of failure and a culture of open experimentation. In a corporate setting, individuals with ‘innovative’ personalities have long since learned to hide or downplay them, for the sake of career advancement. So the natural rhythm of innovation inevitably feels strange and foreign within a large organization.
4. Innovation as strategic axis for competition
Yet senior leaders increasingly view innovation as a strategic imperative, allowing the firm to adapt and respond to competitive pressures, customer needs and technology change in a rapidly changing, information-rich 21st century world. Most of the time, a great deal is riding on the success or failure of the Innovation Leader. In some cases, the C-suite has staked the company’s future on it.
5. Innovation Project Outsourcing
In this environment, outsourcing is a critical enabler of success. Experienced innovation firms use proven methods and tools to produce those crucial early-stage results, while also injecting the DNA of innovation process into the organization. Typically this outsourcing takes one of two forms.
When the need for a specific innovation is clear – breakthrough new product designs, for example – the innovation leader may outsource the entirety of an innovation project. This is called Innovation Project Outsourcing – in which an innovation firm acts like a design agency, working independently and producing ready-made innovations as deliverables. These projects can range from R&D and engineering work, product and/or industrial design, to innovation process design.
6. Innovation Process Outsourcing
Ultimately, however, the innovation leader cannot be wholly dependent on an outsourcer to produce innovation. Innovation Process Outsourcing is a critical step in embedding innovation habits into an organisation’s DNA. An experienced innovation firm will be intimately familiar with the difficulties of involving broad sets of enterprise stakeholders in a collaborative process. Working underneath the innovation leader, outsourced programme managers can be embedded into the organization as change agents and campaign managers. Through careful scoping of innovation initiatives, combined with skilful management of the campaigns themselves, dramatic results can be achieved while also socializing the behaviors and rhythms of successful enterprise innovation.
7. Innovation Skill Transfert
The end goal of these outsourcing efforts is innovation skill transfer and discipline-building within the corporation. Over time, the outsourcer trains its client on the core Innovation Management skills and methods, which allows the innovation programme to achieve sustainable scale as an enterprise program. As a result, the organisation begins to treat ideas as valuable intellectual capital – and consistently collect, vet and leverage this capital for business benefit.
8. Permanent home for innovation outsourcing
In the longer term, there is a permanent home for innovation outsourcing in most companies. Innovation strategy is a core competence any organisation needs to build, refine and invest in – it’s the future of the company. But aspects of how innovation is built and executed may be outsourced, as external parties have skills and competencies which the company may not have or even need to be in-house.
- Cloud’s role in the move from outsourcing to smartsourcing (intechnology.co.uk)
- Why Innovation Programs Are A Total Waste Of Time (ceo.com)
- 5 Myths About Innovation And Strategy (ceo.com)
- 2013 Winners: Training Outsourcing Companies Watch List (barebrilliance.wordpress.com)
- Kill Your Innovation Champion (psychologytoday.com)
- Outsourcing Business Processes for Innovation (barebrilliance.wordpress.com)