Innovation Governance

Innovation a mindset, and that's where governance comes in.

Innovation is about managing novel ideas to achieve its business values. Governance is to steer, oversee, and monitor business management. Innovation and governance seem to be the opposite practice. Do individuals believe governance is essential to effective business innovation and that the two are interdependent? Or do individuals believe governance is incompatible with or even stifle innovation and leads ultimately to company failure? Innovation governance, how to get it right?

Innovation Governance needs to advocate, steer, and sustain innovation: Innovation needs a level of guidance, it has to deliver business objectives, but it needs the right kind of governance to thrive. Traditional business governance for an operational excellence enterprise will stifle innovation. When governance is done properly,  it actually is a great tool to facilitate innovation. A good governance standard provides a common corporate "language" as well as work instructions. In other words, proper standards, appropriate business, and user cases, etc., may not let every idea through, but it will certainly bring the ones forward that makes sense. Practically speaking: when there is an innovative idea; the governance mechanisms dictate how that idea is fostered from inception to retirement.

Effective Governance has innovation built-in. Those organizations feeling stifled by Governance may not have matured beyond operational risk and control. Controls feel stifling not because they are undisciplined. The leverage point is to frame innovation and keep focused, but not adding too much complexity. Innovation cannot be separated from a specific business purpose and in a broad context, governance is critical for meaningful innovation. Look at innovation and governance as a continuum. What context "innovation" is used in? When you say innovation, you could really mean maximizing value to the business, when you say governance you could mean minimizing risk. So they are complementary to achieve a premium business result.

Innovation needs a certain level of guidelines and rules: Although breaking the rules is an important part of innovation, ‘business creativity’ such as using creative thinking for business goals, does require certain ‘rules.’ To get the best results, you need to structure the creative process. For instance, depending on where you are in the process, you might want to ‘force’ people to rephrase a challenge, let them view an idea from different perspectives, temporarily forbid criticism, set time limits, apply thinking techniques, each with their own ‘rules’ etc. It seems that the more integrated and culturally based innovation or imagination is, the more sustainable and productive such initiatives are. If an innovation department operates without being an integral part of every other department, it certainly could be counterproductive. Therefore, the right level of guide and process is important, but the overly rigid process or too ‘pushy’ goals will stifle innovation.

Remember governance isn’t just about putting restrictions on what you can do, it is also about monitoring and knowing when things are not going to plan so that you can take appropriate action at the right time. Innovation is doing something better than it currently is. Hence, it requires a sound and competent understanding of what is currently being done. Not what others are good at. It's a mindset, and that's where governance comes in. Governance needs to set the framework for innovation management, and it steers and sustains innovation to manage risks and maximize its business values.

Posted in: GRC,Innovation