Decentralized Innovation Model: Benefits and Risks PPT

This PPT slide, part of the 23-slide Product Innovation Management PowerPoint presentation, outlines the characteristics and implications of a decentralized organizational model for innovation. It emphasizes that in this structure, business units (BUs) are fully responsible for their innovation processes, covering everything from ideation to commercialization. The model is designed to eliminate barriers between units, allowing for seamless collaboration and innovation within each BU.

Key points highlighted include that all innovations occur within individual business units, which fosters a sense of ownership and accountability. There are no hand-offs between units, meaning that the BU leaders manage core, adjacent, and transformational innovations directly. This direct management approach minimizes the risk of lost focus or investment in promising ideas, as leaders are fully engaged in the innovation lifecycle.

The slide also notes that sunk costs and projects deemed "dead-on-arrival" are kept to a minimum, which can enhance overall efficiency. However, it raises a critical concern regarding the potential drawbacks of this model. If BU leaders are primarily incentivized to meet short-term metrics, there’s a risk that mid- to long-term innovation efforts could suffer. This could lead to a culture of risk aversion, where leaders shy away from pursuing longer horizon projects that may not yield immediate results.

Overall, the slide presents a nuanced view of the decentralized model, highlighting both its strengths in fostering innovation and its potential pitfalls if not managed properly. This insight is crucial for organizations considering this approach, as it underscores the need for balanced performance metrics that encourage both short-term success and long-term innovation.

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Innovation Management Product Strategy Ideation Innovation