Running a successful enterprise innovation management program can be a challenging mission. Multiple factors have to be considered, each of which affects potential outcomes. One key aspect is the level of support that an innovation program receives from an organization’s management. Connecting the needs of top-down management with the strategy and architecture of an innovation program will always lead to greater levels of success.
In this blog post, we discuss what a top-down management approach is and why it is important to obtain sponsorship for your innovation program from top management. Let’s dive in!
What is a Top-Down Management Approach?
To gain a better understanding of the topic, we should first define what a top-down management approach is. This management style is traditional and is used in many companies from various spheres such as healthcare, manufacturing, and retail. All strategic decisions within companies are made at the highest level first and then distributed to the rest of the team through a hierarchical structure.
The top-down management approach is especially beneficial for large organizations with many small teams, as it typically results in transparent and well-organized processes. However, this approach can lead to slower adaptation to rapidly changing market conditions since the participation of lower levels in the decision-making process may be limited. While this approach is suitable for ensuring consistency, it can hinder innovation in the organization.
Why is Top Management Sponsorship Important?
In today's globalized economy, the need for organizations to innovate is evident. Organizations must continuously adapt to the rapidly changing market environment, customer requirements, and competitive landscape, resulting in ongoing transformation processes. All organizations strive to bridge the development gap, which cannot be achieved solely by offering existing products and services in existing markets. Successful innovation programs are used to achieve this goal and are strategically aligned with the company's objectives, thus with top management decisions.
Top management sponsorship is crucial for fostering innovation in the enterprise, as it provides the necessary support, resources, and direction needed to nurture a culture of creativity and experimentation. When senior executives actively support innovation initiatives, it sends a clear message to the entire organization that innovation is a priority and aligns with the company's strategic objectives. Their involvement can provide funding, resource allocation, and the removal of bureaucratic obstacles, enabling effective research and implementation of innovative ideas.
Furthermore, top management sponsorship lends credibility to innovation efforts by encouraging employees to actively engage in the process, knowing that their ideas have the backing of the highest levels of management.
From Top-Management Sponsorship to Business Value
What is required to transform enterprise innovation programs into long-term, sustainable successes? We have identified four key areas where top-management sponsorship will support innovation managers and organizations in running successful innovation programs. Each is interconnected with the others and impacts an innovation program at different levels and phases.
Strategic sponsorship provides credibility to the innovation program. It emphasizes that the organization as a whole supports the entire initiative. It ensures that innovation managers can align their innovation programs with their organization's goals by involving the strategic sponsor from top management in the alignment process.
Additionally, having a program-level sponsor will help reinforce the belief of audiences that executive management has identified innovation as a core competency and that it plays a fundamental role in solving organizational problems. This instills confidence that time spent on the program is valuable and is part of their business as usual.
When launching an innovation program, considering strategic sponsorship is critical to building and maintaining trust in the program and its successful outcomes.
Tactical sponsorship is a specific level of support and involvement in a project, typically at a mid-level management position. Unlike strategic sponsorship which originates from senior leaders and involves broader strategic decisions, tactical sponsorship comes from managers who are more directly engaged in the day-to-day operations and execution of an innovation program.
Tactical sponsors play a vital role in providing resources and guidance to ensure that the project aligns with the organization's goals, stays on track, and effectively addresses any challenges that may arise during implementation. Tactical sponsorship helps bridge the gap between high-level strategy and program execution, ensuring that initiatives are carried out successfully and contribute to the overall strategic objectives of the enterprise.
Typically, employees may be cautious before joining an innovation program and consider numerous factors. Participation in a program is largely driven by trust in the program or trust in the innovation program sponsor. If employees do not know or trust the sponsor, they will not participate. People need to connect with that person, which in turn will lead to a better commitment to the campaigns. A sponsor will have a positive impact if they are known for "getting things done" and introducing new ideas, while a less progressive image is likely to hurt participation.
Moreover, participation may suffer if sponsors do not act on the ideas and concepts identified or if they do not take them seriously enough. The ability to implement ideas requires that the sponsor not only ask for ideas but that they are within their competence. This will make the audience believe in the sponsor's sincerity and capabilities. Asking for solutions that are not within their sphere of influence will lead to ideas that cannot be implemented, which, in turn, will sharply demotivate the target audience.
The sponsor should be able to indicate what budget is available to realize the idea. This ensures that the identified concepts are within the right range of realization they seek. The target audience should know that the ideas they submit should not, for example, exceed the budget of $100,000. Otherwise, the audience will propose ideas with higher costs that are beyond the sponsor's budget. If the sponsor needs to set a budget, they should consult with the budget manager in advance, which might be possible before launching the campaign. Additionally, besides the budget, sponsors should define high-level criteria that ideas must meet to be considered as possible solutions, such as timelines for implementation or key benefits they can deliver.
Innovation programs and campaigns usually involve different groups of stakeholders, who can influence idea implementation. Sponsors should consider these roles in advance and utilize them appropriately.
Stakeholders who can influence implementation can be actively involved in the campaign and possibly in the evaluation team. Stakeholders with veto power can help develop the campaign description and criteria for good ideas. Stakeholders who support successful concepts can encourage participants and involve their teams. Stakeholders are often underestimated, but they can make or break a campaign or program. The audience will know about them, so they can and should be used to the sponsor's advantage.
Asking senior management for help and encouraging them to sponsor innovation campaigns can build confidence and trust in the program among the employees. Innovation managers can also increase interest and commitment to the innovation program by encouraging leaders to participate. Moreover, business goals can be achieved faster by motivating sponsors to support the most outstanding ideas. In general, attracting sponsors from top executives leads to greater program success.