Congratulations! Awesome! You are about to hire an innovation manager! If you want your new hire to be successful, you need to be clear about the job, hire a person with the right qualifications, make sure there is commitment from senior management, and sufficient budget to get things off the ground.
For this blog, I spoke with several innovation managers and reached out to a few organizations that were hiring innovation managers. The organizations that were looking to hire, were looking for a person who could bring structure to their portfolio of innovation projects. Others were looking for someone who could build a culture for innovation. While both seem totally reasonable, from those who currently hold the job, it is clear that too many organizations expect their innovation managers to be miracle workers.
The purpose of this blog therefore is to set reasonable expectations for the role of an innovation manager, so that your new hire is set up for success.
What is the job?
Let's start with defining the job of an innovation manager, as that is not the same in all organizations.
What is the job of the innovation manager?
What the job of an innovation manager is, depends on the type of organization. In many organizations, the innovation manager is expected to execute innovation projects. That is, define the strategy, select and prioritize initiatives, and bring the selected projects to fruition.
In most (service) organizations, the innovation manager is responsible for facilitating the process and the business units are expected to bring these new services to practice.
For the rest of the blog, I differentiate between these two roles as an innovation manager who facilitates versus one who executes. There is a big difference between these two roles. So define what you expect from your innovation manager, before you hire someone.
The executing innovation manager is going to execute innovation projects on behalf of the organization. That means, he or she will have their own innovation budget and responsibilities. This innovation manager is expected to decide which projects the organization will invest in. The role requires that the innovation manager has in-depth domain expertise of all the areas that the firm is involved in, as the person will need to evaluate the merits of each innovation project. Clearly, the person also needs to have an affinity with and some experience with innovation management but the primary requirement will be domain experience. Just realize, that it is pretty difficult to find someone with in-depth domain expertise for all the practice groups or business units in a professional service firm. Organizations that often have as many specialties as there are partners.
The facilitating innovation manager will facilitate and coordinate the innovation activities of the organization. The project themselves will be funded and approved by the business units of the organization. This innovation manager will make sure that each innovation team knows what to do, manages the innovation process, and orchestrates the portfolio of innovation projects. In this role, you will be looking for someone who has experience with managing innovation projects. Someone who can coordinate and facilitate these activities for the organization and across business units. An affinity with the business clearly helps, but this person does not need to have in-depth domain expertise, because they won't make investment decisions. They will work with the teams to prepare the proposals, so senior management can decide.
We have developed a quiz to help organizations figure out which profile suits them best:
I took the lists of expectations below from online advertisements on LinkedIn. Look through the list and see if you can identify what type of innovation managers these organizations are looking for.
The financial institute:
- Provide support to the CEO in the evolution of our innovation program.
- Develop relevant external relationships and thought leadership within the evolving Fintech spaces.
- Partner with Research and Customer Experience counterparts to develop and apply actionable customer and partner understanding.
- Track key competitor and industry developments and recommend strategic action.
- Lead idea screening, concept testing/optimization, and pipeline development efforts.
- Support senior business leaders in evaluating gaps and opportunities.
- Actively participate in the development and implementation of innovation initiatives that support the organization’s strategic direction and individual business unit needs.
- Lead/shepherd ideas through the initiation, elaboration and valuation processes, including coordination of financial value analysis and business case development.
- Own and drive efficiency within the business tools inherent to the innovation process.
- Participate in Business Unit Strategic Planning/Team Business Planning processes as needed.
- Conduct industry analysis to bring forth industry trends and insights.
The management consultancy:
- Assist with the creation and implementation of a repeatable innovation process, including the deployment of a new innovation management software platform across the enterprise
- Manage various innovation workstreams across our key technology pillars; Data Analytics, Automation and Blockchain
- Execute on new innovation culture initiatives across various service lines and help lead our practitioners through digital transformation programs
- Collaborates with key stakeholders and teams across the organization providing support for innovation-related strategies
- Supports the development of detailed project execution plans and tracking against milestones
- Conducts market and technology insights research to support innovation strategies
- Facilitating ideation/brainstorming sessions and collaboration
- Present at meetings, workshops, and internal training programs
Both lists are for the job of “innovation manager”. But as you can see the expectations and duties are very different. The financial institute is looking for an 'executor', whereas the consultancy is looking for a 'facilitator'.
The executor vs the facilitator
Traditionally, innovation managers were all 'executors', responsible for the development of the next generation of products. They would run (part of) the research and development unit, scout for new opportunities, vet projects, decide which projects to invest in, execute, and oversee the implementation.
However, the above only works in what is referred to as volume operations (source). That is, typically business-to-consumer product organizations, that have a lot of products in the pipeline line, and where the innovation manager is held accountable for generating new revenues. It typically is a very senior role in the firm, as the future of the firm depends on it.
In complex systems organizations, innovation takes place in the business units. The managers of these business units are the ones that decide on which projects to fund and who will be on the team. The role of the innovation manager is to facilitate these projects and orchestrate the portfolio of all innovation activities across the organization, to share best practices, avoid duplications, and ensure scale benefits are realized. Without budget responsibilities, this facilitating innovation manager is often a more junior person.
Commitment from senior management
Hiring an innovation manager is seen as a strong signal that the organization is committed to innovation.
However, assigning someone the role of innovation manager and the task to manage the innovation process is a necessary but not sufficient condition to show commitment to the innovation process.
The example below, of a Government Agency may help to illustrate the problem.
This Government Agency put out an advertisement for a new innovation manager position. The add was to hire an innovation manager for around $200k/year depending on experience and credentials. A pretty serious commitment, you would think.
Thanks to previous conversations with someone at that agency, I knew the agency didn’t have a lot of ongoing innovation activities. I followed up with my friend as I was curious what this innovation manager was going to manage.
"Our new director has made a serious start with creating a culture for innovation and created this new managerial position", was the answer I got. Did the agency also budget for $2M - $4M for innovation projects for this innovation manager to manage? The answer was "no".
What the agency seemed to fail to understand, is that this innovation manager who was expected to execute innovation projects would have to earn four million dollars in cost savings, new revenue, or other contributions, in order to justify the salary expenditure (for details, see the cost of innovation). To do that, you need about two to three million dollar in project budget.
So if this position would have come with $2M in project budget, it would have been a very bold innovation initiative, especially for a government agency. However, as I learned, the agency had budgeted for the innovation manager, but not budgeted for any innovation projects that he or she would oversee.
How is this innovation manager supposed to do his or her job and create a culture for innovation?
A skilled innovation management can certainly make a difference and can perhaps pull a project or two off on a shoestring budget. But that is not the same as senior management showing commitment to innovation efforts.
To compare, no organization would consider hiring a marketing manager without making sure there was also marketing budget. This budget could be with the different business units in the organization and for the marketing manager to oversee, but you would not expect this marketing manager to create buzz, improve the brand reputation, and that all just because you hired someone for the function of managing these activities.
Now, the budget for an innovation manager who executes vs facilitat are very different. So, senior management does necessarily need to free up millions of dollars to back up your commitment to innovation. But even an innovation manager who facilitates needs a budget, in this case to track, support, train, and coach teams.
In other words, just creating the role of the innovation manager is not sufficient. You need also to invest in the innovation process. The level of budget that requires needs to be consistent with the role that is expected from this new hire.
A different starting point
Given that hiring an innovation manager requires a significant financial investment, it may be interesting to know that there is an alternative starting point.
The Government Agency mentioned earlier, for example, could start with freeing up budget to support one to five innovation initiatives. Initiatives that would target pressing issues. Low hanging fruit, so to speak.
Then, if they were more of a high-volume type of agency, it could hire a consultancy to execute these initial projects for them. If they were more of a complex-system agency, these teams could be driven by innovative employees. These employees would need support in the form of training and/or coaching, as else beginner mistakes would sink these projects. We offer several PRODUCTS that provide such support.
Taking on these few initial projects would enable management to learn more about the innovation challenges specific to their organization. It would also give the agency insights into the time, resources, support, and budget needed to bring innovative ideas into practice. With this information, management could then go ahead with drafting the job description for their incoming innovation manager with much more clarity on the role and the expectations.
In other words, it makes the most sense to hire an innovation manager after you have a few innovation projects underway and are fully aware of the challenges and potential value of the process. Make sure you know what you want your innovation manager should do before you hire someone to execute or facilitate your innovation process.
Start large or small?
Showing commitment by starting with hiring the innovation manager
If you’re in a hurry to put your organization on the map, starting off by hiring the innovation manager certainly will make a statement, as long as you realize that this person will be most effective with at least a dozen projects to facilitate. And executing these projects costs money. It typically takes at least 2-3 years if not longer to make innovation efforts self-sustaining.
So, if you are committed, can afford the budget, and are aiming to make a statement, by all means, starting with hiring an innovation manager makes sense.
Just make sure the overall budget for this position allows you to support your new hire with the tools and resources to do their job right, whether it is executing or facilitating innovation manager. Budget for this person to manage about 10-20 innovation projects in their first year.
Showing commitment by starting with innovation projects first
If you have time to get things up and running, you could start by defining one or two strategic innovation or technology priorities and invest in making a few projects happen, before you invest in hiring an innovation manager. Just realize that in this case, these first projects require budget and some sort of support.
Just as it won't work to start with an innovation manager only, you cannot start with just budgeting for a few innovation projects either.
The biggest expense in innovation projects is often in the manpower. The hours it takes for a team to define their project, create the business case, test solutions, find a first customer etc. If you are willing to commit time in those activities. It will be smart to also invest in providing support to these innovation teams. For example by contracting an innovation consultant or project manager to support these first few projects, or by providing innovation training to your innovators and/or innovation teams. Any support is better than none.
Before hiring an innovation manager, make sure that:
- You know whether your organization requires a facilitating or an executing innovation manager (QUIZ).
- There is experience with at least a few innovation projects, so you know what this innovation manager is supposed to manage
- The organization is budgeting for the salary of the innovation manager and the support of innovation projects
- 5 Reasons why innovation needs structure
- Innovation in the Workplace
- The Cost of Innovation
- The Innovation Management Process
- Managing innovation on a shoestring budget