Innovation Teams Lack Data, Structure

Of course, large companies make innovation decisions in a structured, data-driven way. But do smaller innovation teams do the same? “I’m going to be blunt with you: The answer is no,” says Paul, a product development staffer at a US medical device company. “Our team hasn’t thought much about how it makes decisions. I don’t know exactly what a team approach should look like; though for starters, we need a better way to communicate, to use the same language and data.” Paul was part of our recent Babson Executive Education study of innovation team leaders at 21 science and engineering-based companies (special thanks Dipali Desai at Kepner-Tregoe for her input during this study). Only six respondents report that their innovation teams make decisions in a structured and data-driven way, while 18 reported that their organization-wide innovation process — a stage gate or a drug pipeline, for example — tends to be much more disciplined and data-driven. Why the gap in data orientation between organizations and their teams? Though our analysis is still preliminary, and our sample size small, interviewees report having at least one of three concerns: The define-as-you-go problem. Teams don’t establish a common process and metrics for making decisions up-front. Instead, they converge on a common approach in medias res. Eight of our interviewees corroborate this point. According to one application developer, “decisions were initially here and there, or something for a program manager to worry about. [But today] we are using a common process to help unify us. Now everyone says, ‘here are the results,’ ‘here is what we’re talking about.’ Now we know what each of us is talking about, who’s supposed to do what, when they’re supposed to do it by, and when we’ll make the go or no-go decision.” This is partly a trust problem. Newly assembled groups of knowledge workers, which may include a mix of lab scientists, material engineers, product designers, and others, need time to interact in unstructured ways to build trust. Some interviewees said they wanted this team-building to happen in concert with establishing a clear decision process. One product development VP told us about how his team has been together for years. However, it wasn’t until a mandated off site training retreat “with exercises on how to do decision-making, with data and documentation” that his team adopted a more explicit approach to developing microprocessor chips. This retreat which both built trust and focused on decisions “improved his team’s efficiency” in ways he hadn’t initially considered. The “Which metrics?” problem. Members lack certainty about what sort of data should predominate. Internal politics is one contributor to uncertainty. For example, in expressing why there is “a lack of rigor” within his team decision-making process, one electrical engineer at an aerospace firm described a turf war. “The technology leaders have a long term view when working with innovative ideas,” while “on the other side, the business leaders have a short term view oriented to obtain a financial objective,” causing his team’s data orientation to flip-flop depending on which group had the upper hand. In another case, firms report that fellow team members use a common set of analytical or quality control tools such as six sigma, risk/reward analysis, and failure mode and effects analysis. But, as five of our respondents confirm, teams are often internally inconsistent about which sorts of data to select to inform a decision, and which data is simply “white noise.” The “Which methods?” problem. Finally, organization-wide innovation processes do not transfer to the team setting. “We use a stage gate process at our firm, but our group’s decision process seems much less standardized,” says a senior chemical engineer, one of nine interviewees cited this problem. “Things are based more on our team leader.” Eleven of our interviewees reported that they frequently hand off data to inform decisions that will be made outside their team, often by senior management, a program leader, or a senior scientist. And yet, many of them openly wondered about whether the data they generate gets used by managers. Without feedback, teams can be left wondering whether their input to the organization-wide process was useful, whether it identified a new path to revenue or productivity, or whether they were just spinning their wheels. Betraying a sense of disconnection, a scientist in bio-pharma quipped that “I am not really involved in the higher level decision making process, so I cannot speak for the larger organization.” Not an encouraging sign. One cancer drug researcher believes her company has overcome this. She describes a highly interactive decision-making process, characterized by weekly meetings of teams from different functions and departments. Though key decisions are made by a project leader outside her immediate work group, these gatherings “provide a platform for open discussion, so everyone can see how they contribute, how their [opinions and data] are affecting the final decisions.” However, the transparency in decision-making at her firm is an exception, at least among our sample. One method of overcoming a lack of data and structure on innovation teams that was mentioned piqued our interest. Several respondents report that they have started to use electronic voting to solve some of the problems described above. For example, one technology engineer told us that voting not only lets every one understand the groups’ feeling about a project, but it also serves a gate keeping function. To reach milestones, the group must vote, but, “it’s not possible for a group to reach a vote unless an appropriate amount of data has been collected.” He acknowledges there’s some flexibility in what ‘appropriate’ means. Voting can also highlight a connection between a team’s decision-making process and the organization-wide innovation process, making a team’s input visible and documented. “People got to grade and vote on various criteria: What were the key issues? Which should weigh more heavily in decision-making to go forward?” said one engineer. “Each vote builds upon the next. We could show [all the teams involved] how the process was moving forward.” Any votes on how your team can improve its innovation decisions? H. James Wilson is a Senior Researcher and Senior Writer at Babson Executive Education in Wellesley, MA. He is co-author of the HBR article, “Who’s Bringing You Hot Ideas (And How Are You Responding)?“

Innovation Teams Lack Data, Structure

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