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Innovation: Product Management’s Sweet Spot

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Organizations value innovation. While everyone agrees that innovation is an important activity the effective execution of innovation activities is often more difficult to achieve. In fact, we have found that the actual leadership of innovation activities can be viewed as a continuum with different leaders assuming responsibility along various points of the innovation continuum. Awareness of these transition points can help ensure that innovation execution is more effective.

A Closer Look at Our Survey Findings

This year’s data clearly illustrates the roles actively involved in innovation leadership. It is interesting to note that there tend to be three brackets of leadership, each playing a role at various points of a company’s growth and evolution. Let’s begin by taking a closer look at the actual survey data.

Who is responsible for incubating and leading the definition and development of innovative or disruptive products in your organization?

Actuation Consulting, the World's Leading Product Management Consulting and Training Organization

Product Management’s Role in Innovation

 

Nearly half of respondents (48.1%) said the responsibility for incubating and defining innovative or disruptive product ideas falls to a member of executive management. This ranges from the company founder (8.2%), CEO (11.8%) or CTO (5.9%) to the VP of Engineering (7.6%) or another thoughtleading executive team member (14.6%). Nearly a fourth of respondents (21.3%) indicate that product management holds responsibility for this important activity. Surprisingly, more than 8% said no one in their organization is responsible for the incubation of innovative or disruptive product ideas.

The Leadership Continuum

When size of a company’s revenue stream is overlaid on top of the innovation leadership data a clearer picture begins to emerge. In company’s of less than $50 M in annual revenue C-level executives typically drive innovation activities. As the $50 M threshold is breached, and continuing up to approximately $2 B in annual revenues, product management is expected to take the lead. Once the $2B threshold is attained cross-functional teams take the lead.

Product Management’s Leadership Role in Innovation Activities

Our data shows that product management is being held accountable in the majority of organizations (between $50 M to $2B in annual revenues) for driving innovation. There is a clear hand-off from executive leadership in the startup/scaleup phase to product management as organizations achieve mid-sized scale. This makes a large degree of intuitive sense as organizational revenue rises executives can afford specialization and need to rely upon others to lead these critical activities. Finally, as organizational size and complexity scale over $2B in annual revenue the baton is frequently handed-off to a cross-functional team rather than relying upon product managers.

In order for product management teams to successfully assume these responsibilities organizations need to ensure they have the right talent in place to smoothly transition these responsibilities and structure the team appropriately. Too often this hand-off is done in a manner that does not ensure continuity and, overtime, these issues can mushroom into problems that impede successful scaling.

How well is prepared is your organization to handle the innovation leadership transitions?

 

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