Can innovation be isolated to a business unit and expect to succeed? I suppose that depends on your definition of successful innovation. If your goal is to re-engineer a process or a department, than you can justify setting up an innovation department.
I would argue that innovation is a bigger commitment and cannot be setup in isolation. Innovation is a part of corporate culture that needs to be initiated and sustained from the top and cultivated throughout the organization.
Like any cultural initiative within an organization, the key is to get everyone to buy into the goals. Oftentimes management will set corporate goals and get department heads and line managers to nod their heads in agreement. However, when it comes to the employees who are dealing with customers, oftentimes the desired cultural change is not applied.
Most innovation within the company has to do with putting technology to use to streamline processes, increase collaboration, work smarter with strategic vendors, and connect with customers in a more effective manner. In these cases, the front line workers are the most important stakeholders in cementing an innovation into the foundation of the organization. If the front line workers do not view the new technology or process as a benefit making their jobs easier or more rewarding, they will fight the change and the innovation won’t take hold.
When I work on a project inside an organization or developing a product for a customer, the most valuable time I spend is with the front line workers who will be using the technology on a daily basis. Understanding their frustrations and the nuances of the current work flow is critical to designing and implementing a new process that will be appreciated.
In organizations that try to isolate the Innovation Department from the rest of the organization, the front line workers are not fully engaged in the conceptualization or creation of the innovation. Instead they are only called up on at the end of the process when it is time to implement. In some cases the innovation makes an obvious improvement and doesn’t require a major behavior change. In many cases there are key behavior changes that must take place on a consistent and timely basis or the entire innovation falls apart.
Giving the innovation team the ability to work throughout the organization and getting consistent support and reinforcement from top management will always yield better results. This kind of support from top management and the freedom it engenders will help any organization innovate more rapidly and with less effort. Starting the innovation engine is the hard part. Keeping it going after it is humming along is much easier.