Creating value with innovation management.

Ten Tips for Successful

Innovation Teams
By Carl Fudge & Joaquín Roca
 Idea in brief
Innovation projects are said to fail 90% of the time. Why is this?
Part of the answer lies in the special “innovation teams” who are
mandated with finding breakthrough growth in large corporations.
Setting these teams up for success is vital, yet corporations often
fail when doing this. This article provides a collection of ten tips that
serve as a talent management roadmap for growth companies in
search of high-performance teams that deliver. 2
After interviewing a series of successful growth leaders,
entrepreneurs and management gurus, we found that successful
innovation teams start by selecting a diverse group who are
analytical and creative in equal measures and have networks that
are as broad and as deep as their skill sets. They function best within
a structured environment that utilizes specialized working practices
such as “safe space” and clear performance goals. Finally, the best
teams are fully committed and invested in their success – mimicking
the intense focus displayed by start-up entrepreneurs.

Introduction
Imagine that you’ve been asked to lead a new “innovation team” at
your company. Your task is to build a team that can come up with a
new revenue-generating business idea and take it all the way from
concept to launch. You’ve got a serious challenge on your hands
though – finding new growth beyond the core will be tough in a
company that has been making the same products for decades and
has a notoriously risk averse culture. On the plus side, you’ve been
given a budget and the freedom to assemble your own dream team
to help you on your mission. On the other hand, you don’t have a

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 lot of time and your division president is breathing down your neck
looking for results. Where do you start?

1. Start by building a bigger box

rather than trying to think outside it!
The first step in building the innovation team is selecting the right
people. The best way to start is by understanding the actual work
the team will do and then optimizing the personnel around these key
activities. Commonly included in the work of an innovation team is a
creative phase to generate new business ideas, an analytical phase
to understand their business potential and a development phase to
refine the most promising ideas and then test them in the market.

With these activities in mind, assembling a group of people only

capable of thinking “outside the box” clearly won’t be sufficient
for success, as the generation of the idea is only one part of the
process. We believe that a better staffing goal is to bring together a
team that has the “biggest box” possible.
3
The box represents the sum of the experiences, skills, professional
networks and academic knowledge that the team possesses
collectively. The more diverse the backgrounds of the team are, the
bigger the box they will have to draw from. Professor Jeanne Liedtka
from the University of Virginia’s Darden School was among the first
to make the important distinction between these two concepts in her
book, the “Catalyst” and it applies as well to the innovation team as it
does to the growth leader, which was her focus.

A big box is helpful for many reasons, especially because it increases

the likelihood of forming new cognitive connections between all
of the team members, commonly known as the “a-ha” moments
that spur great new ideas and identify undiscovered possibilities. A
team with a larger box will also be more capable of addressing the
various challenges and questions that come up along the course of a
journey from idea generation to launch.

While we believe that selecting people capable of generating fresh

thinking is a given, we are surprised at how often companies err on the
side of caution in this respect, bringing in a group of veterans whose

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 deep experience of the core business can prevent them from seeing
new possibilities. While we don’t advocate stocking the team full of
“creatives” who are wired to generate a bucket of crazy ideas that
can’t be implemented, it is unlikely that your team will come up with
anything too breakthrough without sufficient diversity and a big box.

2. Select your team for WHO they

know as well as WHaT they know
The old adage of “its not what you know but who know” is true for
innovation teams. Every innovation team needs well-connected team
members, who, with one glance at their Rolodexes (or iPhones)
can find answers and call in favors, fast. As management guru
Jon Katzenbach explains, “In an innovation team, there is no way 4
to divorce the individual innovator from his network.” Access to a
strong network provides insight into a broader range of knowledge,
but it also provides support. An innovation team that doesn’t take
advantage of its networks will be less successful.

While innovation teams usually network fairly instinctively, we believe

that the quality of professional networks should be an explicit
selection criteria when staffing decisions are made. In fact, modern
tools have allowed mapping networks to become a much easier task
(see Figure 1) and it is a wise investment of time to investigate this
underrated aspect of teams before personnel selections are made.

The importance of a strong network was highlighted recently during a

consulting project at a large consumer goods company. When rumors
spread that the team needed to supply detailed internal rate of return
projections for an upcoming check-in meeting with top executives, the
team panicked. Not only was there little time left before the meeting
but they felt that they didn’t yet have the facts to put together such a
granular analysis. On the other hand, disappointing a senior group of
executives could be fatal for their project.

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 Luckily, a member of the innovation team had a strong relationship
with the VP of Finance for the division. Before the meeting, he
proactively reached out to the VP and aligned on the level of
analysis needed while generating enthusiasm for the team’s work
to-date. Thanks to the team member’s strong network, particularly
his relationship with the VP of Finance, the new business concept
gained vital buy-in from the Executive team. They were granted more
resources to continue developing the concept – a big win for the team.

3. Pick a one leader and provide him or her

the autonomy they need to be successful
Because so much has been written about the concept of creative
leadership, we instead chose to focus on how to set up the given
leader for success in their role. Our research taught us several
principles of leadership that are unique to innovation teams.

First, having just one appointed leader on the team is optimum. While
some innovation teams have experimented with leadership duos
or trios, they have rarely succeeded. One entrepreneur, Tim Ogilvie
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who was part of a three-way leadership team at a software startup
remarked, “Any innovation team that has more than one leader
isn’t set up for success.” He reasoned that the key downsides are
inefficient decision-making and lower morale: “Equal voting rights
creates gridlock over decisions and grumpy partners!” A solo leader
is free to own the vision and make final decisions, which helps him
keep the process moving along fast – a vital trait in this kind of work.
For the leader of the innovation team, continuing to press forward
even with imperfect information is better than stalling progress while
waiting for elusive data points.

Interestingly, we found that while having one appointed leader is vital,

multiple members of the team can and should be able to step up
and take on leadership roles at times when they hold the relevant
expertise at that time. Katzenbach reports that a team who is able to
execute this practice has reached the status of a “real team,” – the
highest level of functionality by a group of individuals.

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 The second major principle of team leadership is that the most
successful leaders are granted total autonomy over team selection.
They are free to recruit the people they feel are needed on the team
(hopefully with the assistance of a seasoned HR professional) and
can make substitutions when changes are necessary. Being able
to fire a key team member is an important aspect of team success
as teams need to stay nimble and flexible, with personnel who can
respond to the needs of the project at any given time.

4. Build a team that can both identify gaps

in the market and markets in the gap!
We all know that a good business idea usually fills a gap in the
market – the idea addresses some sort of unmet need for which
there is no other solution currently available. That is an important
start but it isn’t enough to be considered true innovation. Innovation
happens when there is not only a good idea, but also real customers
willing to pay for it – that is to say, there is also a market in the gap.
Surprisingly, innovation teams often neglect to bring in the skills
required to ensure both of these two things happen.
6

Being able to assess the size of a market is often the part that
innovation teams find easier. Most large corporations and
management consulting firms have plenty of analytical “whizzkids”
capable of performing heavy lifting in Excel and sizing the likely
revenue opportunities attainable for a new business concept.
Often, they build bottom-up estimations of financial performance
(sometimes referred to as a reverse income statement) that can
either fuel further investment or be used as rationale for de-
prioritization. While there is no doubt of the value that financial
analysts bring, this unfortunately doesn’t ensure that the idea is good
to start with. It’s impossible to staff a team full of analysts and expect
them to come up with anything truly innovative.

To generate creative ideas and identify gaps in the market, nothing

can replace the original insights gleaned through a team member
trained in ethnography. An ethnographer’s role is to observe
consumer behaviors and generate insights around their unmet
needs - needs that typically lead to ripe innovation opportunities.

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 Ethnographers spend time observing and interviewing consumers
as they go about their daily activities, looking for pain points and
understanding their motivations. Having an ethnographer on the
innovation team ensures that companies don’t innovate in a vacuum
- consumers and their needs become a constant grounding force
behind the direction of the work.

On a recent innovation project with a large financial services firm,

ethnographers noticed simultaneous yet conflicting unmet needs
between banks and their consumers: while consumers desired
more interpersonal contact with banking tellers, banks sought to
reduce costs by shutting down branches. Spotting this unmet need
eventually led to the concept of a “virtual teller” system – delivered 7
via ATMs equipped with cameras and video screens connected to
outsourced tellers in remote locations. This innovative idea was a
win-win for banks and their consumers and the concept has been
launched in the market.

5. Find team members who tell great stories!

In our experience, the ability to communicate the new business
idea is almost as important as the quality of the idea itself. Whether
you are presenting to your boss, your colleagues or to a panel of
Venture Capitalists, it is absolutely vital that they come away with a
clear understanding of the concept’s value proposition, and a shared
enthusiasm to make it successful. A good storyteller can help make
this a reality.

Storytellers can describe problems and their solutions in a way

that captivates attention and encourages action. They can help
teams collaborate better and gain more support from others in
the organization. In addition, it is cognitively simpler and more
emotionally compelling for audiences to hear a well-explained story,
versus sitting through a dull presentation of industry analysis and

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 financial projections. Stories can be told verbally but they often have
more impact if combined with visual methods such as storyboards,
cartoons and movies. Modern platforms such as Facebook, YouTube,
Pinterest have all emerged as modern-day story telling vehicles that
highlight the potency of combining verbal and visual methods.

At Microsoft’s Entertainment and Devices business unit, the design

organization has spearheaded the use of visual methods and
stories to present new consumer experiences. It has proven to be
especially effective as a tool to communicate with the Engineers
who are responsible for creating the technology that makes the new
consumer experiences a reality. “They see one of our presentations
and they get jazzed. Not only are they more enthusiastic, they
also make less mistakes, allowing us to innovate faster,” said one
Microsoft Product Manager.

6. Understand the difference

between good and bad conflict
While we strongly believe that a diverse innovation team will achieve
8
the best results, there is no doubt that bringing together such a wide
variety of people who have different roles, thinking preferences and
perspectives will lead to some interpersonal friction. These differences
can lead to discomfort and even conflict, so careful attention to the
team’s working processes is a vital responsibility for the team.

The inevitability of such conflict was aptly described by Jeanne

Liedtka who summarized that, “The value of the team and its ability
lives in the diversity of their perspectives, but we also know that
accomplishing things in the face of very diverse perspectives is
difficult to do.”

In fact, not only is some conflict inevitable, but perhaps it is even

desirable. Katzenbach said, “People think you put teams together
because they are compatible, well you sure don’t want that on an
innovation team! You certainly want team members to learn to work
together, but you don’t want compatibility because you want their
ideas to challenge each other.”

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 Getting people who think very differently to work together
productively ensures that the diversity can be harnessed instead
of threatening to take down the entire team. Group process skills –
understanding how work gets done in a group – can help and the
team must develop sophisticated procedures, rules, group dynamics
and interaction styles in order to do this.

Cheryl Perkins, former Chief Innovation Officer at Kimberly-Clark

described the difference between good and bad conflict. Good
conflict or “constructive conflict,” means maximizing debate
and problem solving that relates to the work itself. One form of
constructive conflict is when group members challenge each other’s
assumptions and hypotheses in the hope of arriving at a better
answer. It is important to note, however, that constructive conflict
can be over done: repetitively challenging another person is unlikely
to lead to innovation. In fact, it can even be a source of bad conflict
- interpersonal conflict - if disagreements about the content of the
work leak over into the interpersonal realm. Bad conflict should be
nipped in the bud, but constructive conflict should be encouraged. 9

7. Supplement the innovation core

team with an external provocateur
Sometimes, no matter how great the innovation team, it can help to
send in an outsider. In our work, we’ve had great success bringing in
external experts from outside our client’s organization to function as
a knowledge resource that can inspire an organiazation to consider
bold and audacious srategies. In some cases teams lacking a spark
should consider hiring a wild card member, who in the words of
Katzenbach, will come up with “eight crazy ideas and two really
good ones.” Any interpersonal idiosyncrasies that they might bring
are more than mitigated by their potential to come up with a game-
changing idea or insight. We like to refer to this role as that of the
“Irritant.” This is not to say that they must in fact be an irritating
person, rather that their personality and experiences are in such
contrast to that of the rest of the group that their mere presence can
act as a boost of energy.

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 At a recent ideation session with a large CPG company, a senior
member of the R&D organization showed up to play the role of
the irritant. Unlike the rest of his colleagues who came in standard
business casual dress, he wore a bright bow tie and jeans. He
spent much of the day bouncing ideas of other colleagues while
also reacting to and building on the ideas of the group. While
his comments were imaginative and relevant, they were far from
succinct and he didn’t seem bounded by the agenda. At the end
of the session however, the room was buzzing with a handful of
insights that this man had contributed to the group. His ability to think
expansively, his long history working with and studying corporate
innovations and his confidence to think out loud while stumbling into
the next great thought allowed him to add significant value. 10
8. Remember to set goals
and measure progress
Some innovation teams neglect to set goals at the start of a project
because the range of possible outcomes from the project are so
extreme that they find it impossible to know what to shoot for. On the
one hand, they don’t want to aim too high as they don’t want to fail
but at the same time they don’t want to constrain themselves to only
considering incremental opportunities. Even though it might seem
to be a difficult exercise, teams that don’t have the discipline to set
goals upfront are likely making a mistake.

Starting off by establishing a vision of what the team is hoping to

achieve is the first step. Dr. Kobus Neethling, President of the South
African Creativity Foundation, notes that painting an image of the
future that the whole team buys into feeds the team’s hunger for
success while also mitigating conflict. “When team members are
confident they are all striving for the same goal, interpersonal conflict
is lessened,” because the only things they can disagree on will be
how to achieve those goals.

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 The high performing teams tend to revisit their goals periodically as
“a way of reinforcing amongst themselves their commitment to the
cause” according to Katzenbach. The metrics that work the best are
ones that the team has co-created themselves as teams are more
likely to be committed and accountable to goals that they have set
for themselves.

While some teams might set themselves lofty goals, such as “find
$200MM of new revenues,” we believe that focusing on business
outcomes too early in the process is a mistake. We agree with
Liedtka’s recommendation in “The Catalyst” that getting an answer
to a question might be a better goal to set. Innovation requires a
number of applied experiments aimed at figuring out which new idea
will work, and simply getting an answer—either yes this will work, or
no, this will not work—is one measure of success. Disconfirming data
is not to be considered a failure because cutting bait on bad ideas
before you waste money and time, are vital for long term success of
any organization that aims to grow.
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9. Think like a startup entrepreneur
After spending time with successful entrepreneurs, we were struck
by the stories they told about the high levels of motivation and
focus they displayed at their peak. This level of commitment and
engagement is hard to mimic in a large corporation, where members
of innovation teams often work under less pressure. In fact, we’ve
often been surprised to see members of corporate innovation teams
going about their work in a “business as usual manner” in stark
contrast to the approach of startup entrepreneurs whose passion
often drives them to work long hours and make other personal
sacrifices for the good of the business. Much of the innovation taking
place in today’s world is happening because of entrepreneurs and
if big corporations are going to keep up, mindsets and behaviors
among innovation teams will need to change.

Attempting to spur entrepreneurial motivation within a corporation

might be possible by adjusting the compensation and rewards
to provide more risk and more potential for financial rewards. If

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 this is not feasible, perhaps team members could at least sign
an “entrepreneurship contract” pledging their commitment to the
business.

10. Ensure team members have “both feet in.”

Regardless of the potential monetary or other rewards, there is no
doubt that for any innovation team to be successful, team members
must be fully committed and not “one foot in, one foot out.” When
looking at this aspect of motivation it is helpful to put on the hat of
a venture capitalist to understand what characteristics are most
important to them when they evaluate an innovation team.

According to Carter Griffin from Technology VC firm, Updata

Partners, successful innovators have a unique mindset. The
mentality is one that they “have to put their entire being behind this
initiative, as the ones who try to hedge fail. The ones who don’t pour
their soul into it typically don’t make it.”

One recipient of venture funding from Updata partners was a digital

12
marketing company called iContact. The CEO of the company, Ryan
Allis started the company while a student at the University of North
Carolina at Chapel Hill. After a short while, his young tech company
started growing and performing smartly. Soon, Ryan was faced with
a difficult decision: continue at UNC and finish his degree or leave to
focus on his startup? For him, it was a no-brainer. Just like his role
models, Michael Dell and Bill Gates, he knew that the right choice was
to leave school so he could give his business the attention it deserved.

Apparently he made the right choice. From its formation in 2003 to

now, iContact has grown into a company with 210 employees and
annual sales of $38 million. He was able to be successful in large
part because he focused all of his time and energy on his business,
instead of having his attention split several ways. For innovation
teams in corporations, the same issue is present and often team
members have their attention split across multiple responsibilities.
For the team to be successful, team members must be allowed to
fully focus on their innovation project, rather than being distracted by
their other roles in the corporation.

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 In summary, we believe that as long as big corporations continue
to seek new ways to deliver organic growth, innovation teams will
have a role to play. Companies that spend time upfront, thoughtfully
assembling, managing and motivating their teams will likely have more
success than those who pursue a “business as usual” approach.

Recap:
Innovation Team Checklist
q  “Big box” of skills

q  Well developed network

q  One autonomous leader

q  Able to find gaps in the market and

markets in the gap

q  Great story tellers 13

q  Constructive conflict

q  External provocateur on call

q  Goals and metrics

q  Entrepreneurial mindsets

q  Both feet in

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 14

Figure 1.

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 Authors
Carl Fudge (carl@motivstrategies.com) is a
Director at the innovation consultancy,
Motiv Strategies, based in Washington, D.C.
He holds a MA degree in Social-Organizational
Psychology from Teachers College,
Columbia University and is a former
McKinsey consultant.

Joaquín Roca (joaquin@joaquinroca.com) is

an organizational change consultant focusing
on group process at technology startups in
the New York area and a PhD candidate in
Social-Organizational Psychology at Teachers
College, Columbia University.

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