Some of the most innovative products were developed far from corporate headquarters. The first graphical user interface, for example, emerged from a Xerox research centre in Palo Alto, Calif. — a bit more than a stone’s throw away from the company’s main office in Rochester, N.Y.
A study put out by Nielson this summer suggests there’s good reason to keep suits away from creatives. Of the 30 largest U.S. packaged-goods companies, those with offsite innovation teams reported 5.7% of revenue coming from new products, more than twice the rate of companies with onsite teams. In fact, the 2.7% the latter group recorded was less than was produced by respondents with no innovation teams at all.
The study also found that companies with less senior management involvement generated 80% more new product revenue than ones where management cast a long shadow.
While these numbers suggest it’s best to send your team away, innovation experts say it’s less about the location than providing the right mental and physical space. “The role of management is to create an environment similar to a Darwinian free market, where the best ideas can become integrated and commercialized,” says Stephen Shapiro, a Massachusetts-based innovation consultant and author of four books on the subject. “[Managers] need to be champions of the environment more than particular solutions.”
Dana McCauley believes proximity to other departments is important to those in charge of new ideas. After 15 years as a freelance product innovator with companies such as Coke and McCain Foods, McCauley joined Janes Family Food Ltd., maker of frozen meat and fish products, six months ago to lead an innovation push. Her job, she finds, is very consultative. “If I want to buy chicken legs, I need to go to procurement and find out the price relative to breast,” she says. “Then I go to product development and then to IT. I literally pop around the building asking nosy questions.”
But she had to discourage her bosses from getting involved too early in filtering ideas, something that would have impeded her creative process of putting parts of ideas together to form a whole. “You end up in circular conversations, and you don’t get very far.”
What McCauley does want from management is a stimulating workspace — a place with soft seating and lighting, filled with magazines and videos about food. Since the point of such areas is to maximize creativity, they have to foster openness and collaboration, says George Kembel, executive director of the Stanford University design school. The workspace at that brand new institution features whiteboards hanging from the ceilings so students can see what their peers are thinking about, and some tables are designed intentionally too high for comfortable sitting to promote continual movement.
But the most important thing managers can do to foster innovation, says Kembel, is to encourage employees to pass around the leadership baton. He gives the example of redesigning a hospital experience: the first part of the process would be understanding patients’ needs, and so would require someone with ethnography expertise to lead the team, before the person most skilled at idea generation takes over.
Shapiro agrees. “Leaders should be creating other leaders,” he says, adding that when given more responsibility, employees will feel more invested in the company and come up with better ideas. “People feel accountable, rather than just doing what they’re told.”