The challenges that innovation management can present to organisations are well understood as is the possible value and support that a distinct organisational structure, such as an innovation PMO, could offer to the process of innovation [1]. Innovation has a broad scope and typology - from product, to process, to marketing, to business model innovation, etc. Similarly, innovation can be viewed as a continuum incorporating product modifications at one end (continuous improvement) and changes in the nature of society at the other end (transformational).
Disruptive innovation is '...the process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors...' [2].
Incumbent companies generally streamline their operations to serve efficiently and profitably their current market(s) making their senior managers' decision to back new technologies or business models more difficult due to, among other things, their unproven nature, small initial target markets due to the diffusion of innovation curve, and inherent risks of such endeavours leading to the innovator's dilemma [3] issue. Breakthrough innovation, on the other hand, refers to new technological developments that enable existing products or services to leap forward ahead of competitors.
Experience shows that innovation, particularly disruptive and transformational, presents increased challenges to organisations. It seems that high-risk, discontinuous innovation projects do not fit well with the ‘traditional’ stage gate approaches to new product development, rendering their approaches unsuitable. On the other hand, ambidextrous organisations - organisations that for example have developed structurally different teams to exploit existing and explore emerging business opportunities and products - have been proven successful in breakthrough innovation 90% of the time, whereas all other types of organisations were only 25% successful [4].
Taking into account the difficulty for incumbent companies to identify and respond to disruptive and transformational technologies and business models, is it possible for an innovation PMO structure to support companies to be better prepared for disruption and develop ambidextrous qualities?
At a first glance, managing disruptive innovation may seem as contradiction in terms, however an appropriate PMO structure around the innovation activities of an organisation may enable the organisation to pro-actively anticipate and quickly respond to such challenges.
A transformational or disruptive innovation PMO could:
A disruptive innovation PMO could play a key role in serving the innovation pursuits of organisations by supporting them to being more ambidextrous. It can enable organisations to be better prepared to launch their own disruptive innovations in the market place and at the same time respond faster to changes in the competitive environment before the organisation itself is disrupted.
Please contact us to discuss your organisation's innovation endeavours and ways that we can support your innovation projects.
[1] https://www.linkedin.com/pulse/can-pmo-structure-support-innovation-process-costas-chryssou/
[2] http://www.claytonchristensen.com/key-concepts/
[3] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
Costas Chryssou
MBA, PhD
Founder and Managing Director
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