Innovation

Ten rules for managing global innovation

Harvard Business Review /

Companies are well aware that hidden in their dispersed, global operations is a treasure trove of ideas and capabilities for innovation.

But it’s proving harder than expected to unearth those ideas or exploit those capabilities in global innovation projects.

What works for an innovation project conducted in a single location doesn’t necessarily work for one dispersed across many sites around the world. When a project spans multiple locations, many of the natural benefits of co-location are lost. Part of the challenge of dispersed innovation thus becomes how to replicate the positive aspects of colocation while harnessing the unique benefits of a global initiative.

To explore this challenge, we spent more than a decade doing field research at 47 companies around the world, including Citibank, Intel, Novartis, Samsung and Xerox. In 2004 we teamed up with Booz & Company to conduct a global survey that was completed by 186 companies from 19 countries and 17 sectors. We draw on that work to present a set of guidelines for successfully managing global innovation projects.

1. Start small

No matter how strong technical capabilities or customer knowledge may be at a particular site, employees will struggle to make a contribution to a global project commensurate with their skills if they have had experience only in co-located development. That’s because on single-location projects, team members benefit from collective tacit knowledge and a shared context, both of which support rich communication and help build trust and confidence among coworkers.

Projects that span multiple sites and time zones are often hobbled by differences in workplace practices, communication patterns and cultural norms. In the absence of everyday interactions and encounters, people struggle to signal trustworthiness and demonstrate competencies. Many teams are used to competing for resources with teams at other sites, and this creates yet another barrier to trust and collaboration between sites.

To be effective, dispersed teams have to develop a new set of collaboration competencies and establish a collaborative mindset. This can be done by running small, dispersed projects involving just two or three sites before a project launch.

2. Provide a stable organisational context

During periods of major organisational change, the complexity of dispersed innovation escalates. Top managers are likely to be focused elsewhere within the organisation, leaving their global projects orphaned. In a climate of organisational uncertainty, turf battles can flare up, and team members may become concerned about job security and lose focus.

Managers need to anticipate the possible toxic side effects of reorganisation on global innovation and shelter teams as much as possible from disruptions. They should focus on creating an atmosphere of stability and bolster employees’ sense of self-worth and loyalty to the firm.

3. Assign oversight and support responsibility to a senior manager

When a project is fragmented and scattered over multiple locations, miscommunication, conflict and stalemates over crucial decision-making are much more likely. Teams often struggle to handle these problems constructively over a distance, so senior managers have to take on a formal role as arbiter, risk-manager, support-provider and ultimate decision-maker. Companies that are smart about global innovation create an explicit role for senior executives in their projects.

4. Use rigorous project management and seasoned project leaders

A global innovation project also requires a strong management team to drive the project on a day-to-day basis and strong team leaders supported by robust tools and processes. These are necessary to impose discipline, structure and a shared sense of purpose across the locations.

Firms can adopt rigorous quality programs to provide formal management for global projects, or they can build a corporate project-management capability. However, it’s important to note that global innovation projects are so complex that standard tools and processes don’t always work well.

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