Innovation Governance: How Top Management Organizes and Mobilizes for Innovation

“Innovation is a key driver of Nestlé’s growth and profitability, and this is why both top management and the board take innovation governance very seriously. In their book, Deschamps and Nelson highlight many practical aspects of innovation governance considered as a system, including descriptions of frequently–used organizational models. Their book should be an eye–opener for top management teams and boards of directors who are looking for ways to improve their company’s innovation performance.” — Peter Brabeck–Letmathe , former CEO and Board Chairman, Nestlé “To sustain itself in the new reality characterized by greater uncertainty, rising complexity, and rapid changes, an organization needs to put innovation as a high priority. It also needs to institutionalize innovation to enhance its ability to tap internal and external creativity and to create a framework for seamless execution. In their book, Deschamps and Nelson highlight the importance of innovation governance and provide flexible models to suit different contexts.” — Ravi Kant , Vice Chairman and former MD and CEO, Tata Motors Group (including JLR UK, Tata Daewoo Commercial Vehicles, Korea and other companies); Chairman, Indian Institute of Management, Rohtak “In this new book, Deschamps and Nelson deal with a critical topic that is too seldom discussed in companies. Combining years of research on the subject and first–class knowledge of best practices in the corporate world, they raise all the right questions on innovation governance and provide thought provoking answers. Illustrated with great examples from leading corporations, their book is a must–read for any executive or board member who considers innovation as vital to the long term success of their enterprise!” — Dominique Turpin , Professor and President, IMD (Lausanne, Switzerland) "In Innovation Governance, Deschamps and Nelson scale new heights in taking the question of innovation leadership to a higher plane by focusing on the core reason for failure: lack of a well–established system for governing innovation." — Bill George , Professor, Harvard Business School; former Chair and CEO, Medtronic

FOREWORD PREFACE: WHY SHOULD WE PAY ATTENTION TO INNOVATION GOVERNANCE? ACKNOWLEDGMENTS PART I: ADDRESSING THE INNOVATION GOVERNANCE CHALLENGE 1 WHAT IS INNOVATION GOVERNANCE? 2 GOVERNING INNOVATION IN PRACTICE: THE ROLE OF THE BOARD OF DIRECTORS 3 GOVERNING INNOVATION IN PRACTICE: THE ROLE OF THE TOP MANAGEMENT TEAM PART II: CHOOSING BETWEEN ALTERNATIVE GOVERNANCE MODELS 4 WHY FOCUS ON INNOVATION GOVERNANCE MODELS? 5 INNOVATION GOVERNANCE MODELS 6 WHICH MODELS SEEM TO WORK AND WHY? PART III: LEARNING FROM THE FIELD 7 LEADING FROM THE TOP Example 1 – IBM’s Innovation Governance Model: A Succession of CEOs Oversees “Continuous Transformation” 8 LEADING FROM THE TOP Example 2 – Corning’s Innovation Governance Model: Two Executive Councils Execute Hands–on Governance 9 APPOINTING INDIVIDUAL INNOVATION CHAMPIONS Example 1 – Nestlé’s Innovation Governance Model: CTO in Partnership with Business Heads 10 APPOINTING INDIVIDUAL INNOVATION CHAMPIONS Example 2 – DSM’s Innovation Governance Model: The Entrepreneurial CIO 11 SETTING UP A COLLECTIVE GOVERNANCE SYSTEM Example – Tetra Pak’s Innovation Governance Model: High–level Cross–functional Steering Groups PART IV: DESIGNING YOUR OWN GOVERNANCE SYSTEM AND MAKING IT WORK 12 GETTING STARTED How Michelin has Rethought its Governance Model 13 RECOGNIZING THE IMPERATIVES FOR AN EFFECTIVE GOVERNANCE SYSTEM 14 ALIGNING INDIVIDUAL AND COLLECTIVE INNOVATION LEADERSHIP APPENDIX: EXAMPLES OF TASKS AND INITIATIVES TO SUPPORT INNOVATION INDEX

Jean–Philippe Deschamps is an innovation management practitioner with 40 years of international consulting experience. At IMD, which he joined in 1996 as professor of technology and innovation management, he focuses his research, teaching and consulting activities on the management and governance of innovation and on the profile and focus of innovation leaders. Before IMD, he was a vice president and practice leader with consulting firm Arthur D. Little. He is the author of numerous cases, articles and book chapters, and Product Juggernauts: How Companies Mobilize to Generate Streams of Market Winners co–authoredwith P. Ranganath Nayak (Harvard Business School Press, 1995) and Innovation Leaders: How Senior Executives Stimulate, Steer and Sustain Innovation (Wiley/Jossey–Bass, 2008). He has given conferences and lectures throughout the world, including the prestigious 2010 Millenium Prize in Helsinki, the equivalent of the “Nobel prize” for technology and twice as a speaker at the World Economic Forum in Davos. He lives near Lausanne and is married to a practicing psychoanalyst and author Beebe Nelson has worked as an innovation and product development consultant and facilitator for the past 25 years.  As co–director and then director of the IAPD (International Association for Product Development) she helped leading innovation companies refine and improve their innovation practices. Her articles on innovation and product development have appeared in publications of the PDMA (Product Development and Management Association) as well as other professional publications, and she has given lectures and seminars on innovation topics.  She holds a doctorate in philosophy from Harvard University and has taught philosophy and management at the University of Massachusetts at Boston and at Lowell.  The publication of New Product Development for Dummies (co–authored with Robin Karol, Wiley, 2007) marked the maturity of the product development field and pointed clearly to the need for excellence in innovation governance.