How To Design And Lead Innovation Teams

Compete in a changing world by designing and leading stronger innovation teams

These days, there is a tremendous focus on working in teams. Which is why it’s surprising that so little science exists to guide us in team design.  What do we know that can help us?

First, let’s talk about great teams in general. Google spent years analyzing data on hundreds of teams trying to unlock the secret of high-performing teams. Nothing appeared to explain it…not personality, not education, not years of experience, not even diversity. Instead, the researchers found that what really mattered was how the team worked together. The number one explanation for high-performing teams? Psychological safety.
 
Psychological safety refers to an individual’s perception of the consequences of taking an interpersonal risk, or a belief that a team is safe for risk-taking in the face of being seen as ignorant, incompetent, negative, or disruptive. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea. Here is a great article on psychological safety, including tools that you can adapt and make your own.

Psychological safety may be even more critical on innovation teams because these teams encounter a higher degree of ambiguity and uncertainty. Our global research found that certain skills are required for innovation teams vs. ordinary teams (who function within more defined contexts). These are the eight traits that are essential for innovation teams to possess:
 

Figure 1: The Eight Innovation Skills

Leaders of innovation teams should start by understanding these eight behaviors, which they can do by reading this simple guide.

This is where psychological safety comes in. When team members feel psychological safety, they feel they can contribute all of the skills and ideas they possess, versus holding back in fear of judgment. The team benefits from the strengths each person possesses, which may be less developed in the other members. An effective innovation leader has the strength to show humanity, humility and some degree of vulnerability. He/she ensures that there is conversational turn-taking on the team, so all perspectives are heard and all of the eight skills are leveraged.
 
An effective innovation leader ensures that there is conversational turn-taking on the team, so all perspectives are heard and all of the eight skills are leveraged.
 
Take a typical team like the one shown in Figure 2, below. On average, they score a 64, in the Continuous Improvement range. But when you look at the Coverage score (Figure 3) showing the highest score for anyone on the team for each of the eight skills, the team scores a 73. If the leader can leverage all of their skills, the team may have what it takes to perform in the Incremental Innovation (Horizon 1) range.
 
If we then add a team member with complementary skills, the team Average score improves to 69, but their Coverage score jumps to 84, in the Horizon 2 range. This score is consequential because the ROI from innovation tends to be much greater as you go from Continuous Improvement to Incremental, Adjacent and Disruptive Innovation ranges.
 


Figure 2. This team has an average innovation score of 64, in the Continuous Improvement range. They are under-developed on Control. Connect, Create and Drive.


 

Maybe you already try to design diverse teams, with representation from a wide range of backgrounds. Isn’t diversity enough to drive innovation? Well, the data is finally in, and the answer is “yes and no.”
 
A study published in Harvard Business Review found a difference between innate and acquired diversity. Inherent diversity involves traits you are born with, such as gender, ethnicity, and sexual orientation. Acquired diversity involves traits you gain from experience. In a separate meta-analysis of 30 years of research, it was found that innate or background diversity (gender, age, ethnicity) is not enough to deliver innovation.¹
 
Back to the HBR article. Its authors refer to 2-D diversity as the presence of both inherent and acquired diversity. Companies with 2-D diversity out-innovate and out-perform others. “Employees at these companies are 45% likelier to report that their firm’s market share grew over the previous year and 70% likelier to report that the firm captured a new market.”
 
Developing the eight innovation skills enhances acquired diversity: e.g. developing employees’ ability to relate to diverse stakeholders, respond to emerging patterns, synthesize diverse sources of data and thrive in ambiguity. Instilling these innovation skills in your workforce may just be a short cut to acquired diversity, and to achieving 2-D diversity.

Assuming you design strong innovation teams with great coverage of the eight innovation skills and with 2-D diversity, does it matter who is in charge? Yes, innovation leaders need special skills and play a unique role.
 
For ordinary teams working in a well-defined area of the business, the priority for leaders is to manage, coach and inspire — in that order. For innovation teams, it’s the opposite. Innovation team leaders need to inspire, coach, then manage — in that order. This is because innovators have a high sense of personal agency; they believe that they can determine the outcomes of events. They need more room to explore and support for voicing divergent opinions. After all, innovators’ tendency to re-frame situations often leads to the breakthrough solutions we seek.

Innovation team leaders also play a unique role at the intersection of their innovation team and the mature, main business. In large companies especially, there can be an antibody-like response to innovation. Anything foreign is flooded with “antibodies” and the organ is rejected. Effective innovation team leaders, therefore, must protect their team from the antibodies.
 
But at the same time, innovation teams that are too removed from the larger organization will lack resources and access to go-to-market channels. So the innovation leader is like a blood-brain barrier that insulates the team from negative forces while ensuring a plentiful blood supply (resources) from the main body.
 
The innovation team leader acts like a blood-brain barrier. He/she insulates the team (the brain) from negative forces while ensuring a plentiful blood supply from the mothership (the body).
 
To summarize, innovation teams (like all teams) blossom with psychological safety. Innovation teams perhaps need such safety even more than regular teams, since they have to function in greater uncertainty. In addition, innovation teams require eight specific skills. Innovation teams with both innate and acquired diversity produce better results than less diverse teams. Innovation team leaders need to inspire first, then coach then manage. And they need to act like the blood-brain barrier, protecting the innovation team from toxins while ensuring a plentiful blood supply from the main body.

Notes

 ¹ While this finding may fly in the face of accepted wisdom, teams with innate or background diversity are not necessarily more successful than those without. In a meta-analysis of the past 30 years of innovation research, it was found that “background diversity” (age, gender, ethnicity) “may lead to communication problems and difficulties in resolving opposing ideas and reaching consensus within the team.” The authors found that “job-relevant diversity (e.g. functional skills and roles) is positively related to innovation, whereas background diversity is negatively related to innovation.”
  
Source: Hülsheger, Ute & Anderson, Neil & Salgado, Jesus. (2009). Team-Level Predictors of Innovation at Work: A Comprehensive Meta-Analysis Spanning Three Decades of Research. The Journal of Applied Psychology. 94. 1128-45. 10.1037/a0015978.