3 Benefits of Decentralized Innovation Management

In a typical organization that maintains a hierarchy, only C-level executives or a board of directors make critical organizational decisions. The same applies to its innovation process — the management is centralized to the dedicated innovation team if not the innovation manager alone. While centralized innovation management standardizes the activities well and enables tight control over the entire process, it gives rise to some downsides. That is why you should be open to adopt decentralized innovation management.

Centralized Innovation Management Limits Your Business Growth

For a multi-national company with several branches worldwide, every country has its own set of laws and market demands which require tailor-made innovation strategies to thrive. However, an innovation analyst native to Brazil might have a better real-life understanding of the country’s market than a high-level executive posted in the headquarter in the US, who is in charge of all the important decisions. Here, you are not fully utilizing the capabilities of the former — this lack of autonomy in centralized innovation management often leads to missed opportunities. This is just one of the major reasons why you should adopt decentralized innovation management. Explore why it works in your favor!

You Need Decentralized Innovation Management

1. Promotes Bottom-up Innovation

When you decentralize your company’s innovation management, employees from all levels and departments directly contribute to the innovation initiative. This allows talented employees to have a say and try new ideas, even if they are at the bottom of the organizational ladder. This is also called bottom-up innovation, which also improves employee engagement. For instance, in Google’s 20% time rule — apart from their regular projects, the company encourages the employees to dedicate 20% of their time working on anything that they feel would be beneficial for Google. Did you know this is how Gmail and Google Maps were born?

2. Builds a Pro-Innovation Culture

Companies have dedicated innovation teams to efficiently manage their innovation activities. However, it is also important to establish an innovative culture throughout the organization. You can achieve this with decentralized innovation management. Why is it important? In a fully centralized setup, people tend to nourish stereotypes such as — “innovation is not a part of my job” or “there are other people to take care of innovation”. But, opening the company’s innovation to directly involve all the departments makes them aware of the importance of innovation. This also encourages them to support innovation within the scope of their tasks. This contributes to the steady process of building a company-wide pro-innovation culture.

3. Accelerates Decision Making

Executives are also usually very busy with decision-making tasks in their day-to-day work. Quite naturally, a lot of them remain open for a long time, creating bottlenecks. In extreme cases, the once innovative ideas depreciate quickly as they missed hitting the market when it was still hot. However, decentralized innovation management gives autonomy and flexibility to non-c-level employees. Over time, this also provides valuable data regarding the methods that work and those that do not – critical to any decision-making process.

Now, it’s time to hear from you — does your company follow a centralized innovation approach? Do you think it is working? Or planning to shift to decentralized innovation management in the near future? Get in touch & let us know!