Dr. Omar A. Alsamani/Open Library/Innovation Management العربيةPDF
Chapter 6

The organizational architecture of innovation

In this chapter we explore how an organization arranges itself to house innovation: where innovation sits in the structure, the enablers it requires, how units can work together rather than each in isolation, and who leads this effort. We take the university as an applied case whose thread runs through later chapters.

Introduction

Opening case: a Saudi university (composite case)

One university has what many organizations aspire to: a business accelerator, a Fab Lab for digital fabrication, an innovation oasis, research centers, a program for gifted students, and a Deanship of Student Affairs that organizes competitions. Each of these units has its own plan, indicators and annual reports. Yet a student survey showed that many students did not know these units existed, and those who did saw no connection between them and their courses. Assignments in most courses measure the ability to answer exam questions; a student with an idea does not know where to take it; and each unit waits for students to come to it.

This university has all the inputs. What it lacks is the architecture that would bring these units together into a single ecosystem reaching students where they learn. That architecture is our concern in this chapter: how an organization arranges itself so that its side-by-side entities become an organizational capability for innovation.

Learning Objectives

After studying this chapter, the reader should be able to:

  1. Distinguish between the success of a standalone initiative and building an organizational capability for innovation.
  2. Compare centralized, distributed and hybrid models for organizing innovation.
  3. Identify the enablers that innovation needs, with time foremost among them.
  4. Analyze the opportunities hidden in the gaps between units and design integration among them.
  5. Design an orchestrating unit that links the components of the ecosystem without becoming a new isolated entity.
  6. Define the role and competencies of the chief innovation officer and the ways they influence units and leadership.

6.1From standalone initiatives to organizational capability

An innovation initiative may succeed thanks to an enthusiastic leader or an exceptional team, but that does not mean the organization has become capable of innovation. Organizational capability shows itself when the flow of opportunities, experiments and implementation is supported by a structure of roles, resources and relationships that endures when the organization’s standout members move on, and through which innovation is spread across the whole organization. This is why the international standard defines the innovation management system as the organization’s means of developing and demonstrating its innovation capability (ISO, 2024).

When innovation stalls, organizations tend to blame a shortage of ideas or a lack of employee enthusiasm. It is more useful to ask about the architecture: Does innovation have a clear place in the structure? Are its enablers in place? Do units work together? Does the system reach people where they work?

6.2Where does innovation sit in the structure?

Organizations follow one of three models in organizing innovation, each with its strengths and limits. From their study of large firms pursuing radical innovation, O’Connor and DeMartino concluded that building the capability for it requires turning scattered efforts into a clear organizational function (O'Connor & DeMartino, 2006).

Centralized
Form
An independent unit that leads innovation for the whole organization
Suited to
Building standards, and long-term bets
Risk
Isolation from the units’ problems and difficulty transferring solutions to them
Distributed
Form
Each unit innovates within its own scope
Suited to
Proximity to problems and speed of adoption
Risk
Duplication and fragmentation, and missed cross-unit opportunities
Hybrid
Form
A small central team that runs the system and the portfolio, with focal points and teams in the units
Suited to
Most organizations of medium maturity and size
Risk
Ambiguous roles between the center and the units if they are not defined
Figure 6.1 Three models for the place of innovation in the organizational structure.

A particular form of the centralized model, the innovation lab, has spread widely in the public sector. A study of 35 government labs found that the motives for setting them up included tackling complex problems and technical challenges, but also imitating other agencies and seeking legitimacy (Tõnurist et al., 2017). A lab created because others have created one, or to make the organization look innovative, risks remaining an input with no output.

6.3Enablers

Wherever it sits in the structure, innovation needs enablers that are a precondition for its work. An organization’s declared support for innovation remains incomplete as long as people are innovating with the same resources they use for their routine work.

Table 6.1 The core enablers of innovation
EnablerWhat it meansSign of its absence
TimeProtected time for exploration within official working hours“Innovate once you’ve finished your tasks”
SkillsUnderstanding beneficiaries, formulating hypotheses and designing experiments, alongside generating ideasRepeated brainstorming workshops with no progress
Data and toolsAccess to data and to prototyping and testing toolsTeams waiting months to obtain data
SpacesPlaces for collaborative work and experimentation, close to peopleAn elegant space in a remote building that no one visits
NetworksConnections to experts and partners inside and outside the organizationEvery team starts from scratch
FundingFunding that increases in step with the evidenceEither no funding at all, or large early funding with no stages

Time deserves particular attention, because it is the scarcest and most overlooked of the enablers. Amabile and her colleagues analyzed the diaries of 177 employees and found that time pressure undermines creative thinking when people feel they are on a treadmill or working on autopilot, whereas creativity remains possible under pressure when people feel they are on a meaningful mission, know its purpose, and are protected from distraction (Amabile et al., 2002). The issue, then, goes beyond the amount of time to its meaning: do individuals feel that their time is directed toward a clear purpose, or spread across scattered tasks that never end?

6.4Innovation between units

Many innovation opportunities lie in the gaps between organizational units. One unit may carry a burden created by a decision in another; an employee may re-enter data because systems are not integrated; a beneficiary may wait between two service points because ownership of their journey is fragmented. Each unit may look efficient on its local indicator, while the overall journey remains slow.

Unit AIts indicator: excellent
Unit BIts indicator: excellent
Unit CIts indicator: excellent
Unit DIts indicator: excellent
The beneficiary’s journey across the four units: waiting between each unit and the next, being asked for the same information again and again, and no one owning the journey as a whole
Figure 6.2 When every unit excels on its own indicator yet the overall journey stays slow: the territory of architectural innovation.

This does not mean that the answer is more meetings and joint committees. Hansen showed that collaboration between units has a cost, that it pays off only when its expected value exceeds that cost, and called for disciplined collaboration: collaboration measured by the specific result toward which it is directed (Hansen, 2009). Productive integration between units requires:

6.5The orchestrating unit

The opening case returns with a practical question: how can the university’s side-by-side units become a single ecosystem? The common response is to set up a new unit in charge of “innovation.” The risk is that this unit becomes a seventh isolated entity alongside the other six. A better alternative is an orchestrating unit that reports to senior leadership and works in the background. Its function is limited to connecting the existing units with one another and connecting all of them to the student, without owning initiatives or competing with those units.

A unit that becomes a new, isolated entity
  • Launches its own programs and competes with existing units
  • Measures its success by the number of its activities
  • Waits for students to come to it
  • Reports to a mid-level official
An orchestrating unit
  • Connects existing units and supports their work
  • Measures its success by the flow of students and ideas between units and the results achieved
  • Goes to students in their classrooms and courses
  • Reports to senior leadership so that it has the authority to coordinate
Figure 6.3 The difference between a unit that adds a new isolated entity and one that builds bridges between existing entities.

At a university, integration can take several possible forms, depending on what the diagnosis reveals. Three pathways stand out:

We return to these pathways in the chapters on the innovator and their environment, adoption and scaling, and innovation ecosystems, and then bring them together in Chapter 20 on the university innovation ecosystem.

Principle

An ecosystem is built by designing the flow between its entities more than by adding new ones. The question that reveals the quality of the architecture is: how many steps does an idea’s owner need to take to reach someone who can help?

6.6The chief innovation officer: role and competencies

The orchestrating unit needs someone to lead it. Many organizations assign this to an innovation officer who goes by various titles: director of the innovation unit, head of innovation, or chief innovation officer. The role carries a paradox: its holder is responsible for results that are mostly achieved within units they do not head, by people who do not report to them. Their success is therefore measured more by their ability to make others succeed than by what they carry out themselves.

What the role takes on and what it avoids

The chief innovation officer’s role is consistent with the logic of the orchestrating unit: they build capability and leave ownership of ideas with those who originated them. Table 6.2 sets out the main domains of the role, what the officer takes on in each, and what they would do well to avoid.

Table 6.2 Domains of the chief innovation officer’s role. Prepared by the author.
DomainWhat they take onWhat they avoid
StrategyWorks with leadership to formulate search fields and the level of ambition, and translates them into understandable prioritiesWriting the strategy alone, or copying it from another organization
PortfolioManages gates and staged funding, and ensures a reasoned response to every ideaOwning initiatives in place of their originators, or deciding on them unilaterally
EnablersProvides tools, skills and protected time, and removes procedural obstaclesBecoming the organization’s only source of ideas
ConnectionConnects units with one another, and connects the organization with partners and beneficiariesCompeting with existing units through parallel programs
MeasurementMeasures flow and impact, and learns from failureMeasuring their success by the number of events and competitions
CommunicationTells the story of what is achieved and credits it to those responsibleAttributing success to their own unit

Competencies

The OECD identified six core skills for public sector innovation that public servants need to varying degrees, and that those who lead innovation need to a greater degree: iteration, that is, developing solutions through rapid rounds of prototyping and testing; data literacy; user centricity; curiosity, that is, seeking out new ideas and different perspectives; storytelling, that is, explaining change through a narrative that builds support for it and links the past to the present and a possible future; and insurgency, that is, challenging the status quo, working with unusual partners, and treating setbacks as opportunities to learn (OECD, 2017).

The chief innovation officer’s position between units adds a critically important competency: influence without authority. Cohen and Bradford argue that such influence rests on exchange: the person making a request understands what the other party cares about and what they can offer in return, whether resources, information, support or recognition, so that the relationship shifts from a request to a partnership (Cohen & Bradford, 2005). Those who lead innovation by instruction alone usually obtain formal compliance; exchange is more likely to generate commitment.

Winning leadership attention

The chief innovation officer also needs to place on leadership’s agenda issues that were not there before. Dutton and Ashford described this phenomenon and named it issue selling: the efforts employees make to direct senior management’s attention to issues they consider important and to shape how management understands them (Dutton & Ashford, 1993). A later study identified three sets of moves that distinguish successful attempts: packaging moves, such as linking the issue to the organization’s goals and presenting it in the language of results and cost; involvement moves, such as building a coalition of supporters before the pitch; and process moves, such as careful preparation, choosing the right timing, and combining formal and informal channels (Dutton et al., 2001). A good idea presented at the wrong time, or in language that does not speak to leadership, may be rejected even though it deserves acceptance.

Where to begin?

When someone is put in charge of innovation, it is tempting to start with a visible program that proves their presence: a competition, a platform or an award. It is wiser to understand before building. They can map the internal ecosystem using the tool presented in this chapter, listen to leadership, units and beneficiaries, look for successful efforts already under way, and agree with leadership on a clear mandate and defined decision rights. Then they can choose one or two initiatives that address a problem everyone acknowledges, use them to produce early evidence of value, and earn the trust on which to build what comes next.

Chapter tool: internal ecosystem map

Draw a map of the units that support innovation in your organization. For each unit, note what it offers, who actually benefits from it, its connection to people’s everyday work, and its connection to the other units. Then look for three signs on the map: a unit unknown to those it is supposed to serve, two units offering the same service, and an idea that finds no clear path from one unit to another.

Chapter tool Internal ecosystem map (example from the university case)
UnitWhat it offersWho actually benefitsConnection to everyday workConnection to other units
Business acceleratorIncubating entrepreneurial venturesA limited number of proactive studentsWeak: no link to coursesLimited
Fab LabPrototyping and fabrication toolsStudents from some engineering collegesModerateNo link to the accelerator
Gifted programEnrichment programsThose enrolled in the programSeparate from students’ majorsLimited
Colleges and coursesFormal learningAll studentsThey are the everyday work itselfDo not refer students to any unit
…

Chapter Summary

Key Terms

Innovation capabilityInnovation capability
An organization’s ability to innovate repeatedly and independently of particular individuals.
Innovation labInnovation lab
A unit dedicated to experimentation and to tackling complex problems with new methods.
Disciplined collaborationDisciplined collaboration
Collaboration between units directed toward a result whose value exceeds its cost.
Orchestrating unitOrchestrating unit
A unit that reports to senior leadership and links the components of the existing ecosystem without owning its initiatives.
Chief innovation officerChief innovation officer
The person who leads the orchestrating unit and achieves results through units they do not head.
Issue sellingIssue selling
Employees’ efforts to direct senior management’s attention to issues they consider important and to shape how management understands them.
Influence without authorityInfluence without authority
A person’s ability to mobilize people who do not report to them, through exchange and partnership building.

Review and Discussion Questions

  1. What is the difference between an organization in which an innovation initiative has succeeded and an organization that has the capability to innovate? Understanding
  2. Which of the three models for organizing innovation suits your organization? What needs to be clarified to avoid its risk? Application
  3. In light of the time pressure study, how can a leader protect their team’s creativity without abolishing deadlines? Analysis
  4. Draw your organization’s internal ecosystem map, and identify the shortest path an idea can take from its originator to someone who can help. Application
  5. You have been put in charge of leading innovation in your organization. What will you do in your first three months? What will you avoid? Application
  6. “The solution to fragmented innovation units is to create a new unit to oversee them.” Evaluate this statement. Evaluation

Chapter references

  1. Amabile, T. M., Hadley, C. N., & Kramer, S. J. (2002). Creativity under the gun. Harvard Business Review, 80(8), 52–61.
  2. Cohen, A. R., & Bradford, D. L. (2005). Influence without authority (2nd ed.). Wiley.
  3. Dutton, J. E., & Ashford, S. J. (1993). Selling issues to top management. Academy of Management Review, 18(3), 397–428. https://doi.org/10.5465/amr.1993.9309035145
  4. Dutton, J. E., Ashford, S. J., O’Neill, R. M., & Lawrence, K. A. (2001). Moves that matter: Issue selling and organizational change. Academy of Management Journal, 44(4), 716–736. https://doi.org/10.5465/3069412
  5. Hansen, M. T. (2009). Collaboration: How leaders avoid the traps, create unity, and reap big results. Harvard Business Press.
  6. International Organization for Standardization. (2024). Innovation management system — Requirements (ISO Standard No. 56001:2024). https://www.iso.org/standard/79278.html
  7. O'Connor, G. C., & DeMartino, R. (2006). Organizing for radical innovation: An exploratory study of the structural aspects of RI management systems in large established firms. Journal of Product Innovation Management, 23(6), 475–497. https://doi.org/10.1111/j.1540-5885.2006.00219.x
  8. OECD. (2017). Skills for a high performing civil service. https://doi.org/10.1787/9789264280724-en
  9. Tõnurist, P., Kattel, R., & Lember, V. (2017). Innovation labs in the public sector: What they are and what they do? Public Management Review, 19(10), 1455–1479. https://doi.org/10.1080/14719037.2017.1287939