How to Build an Innovation Centre of Excellence

Businesses, regardless of their size, strive to remain competitive. To become successful, they need to achieve a harmonious blend of efficiency and innovation. To achieve it, more businesses are establishing innovation centres of excellence (CoE), business units focused on improving operations across departments. Their main aim is to sustain a competitive advantage by identifying and implementing new technologies, techniques and practices across the organization. The innovation centre of excellence should also function as a resource helping employees overcome problems and improve communication with other business units. One of its goals is to establish ‘a problem-solving culture’, which encourages employees to ask questions and seek answers.  

Despite the evident benefits, setting up an innovation centre of excellence is still a challenging task, which for some companies outweighs the benefits so they decide not to pursue this strategy. By contrast, companies which realize the importance of innovation for their competitiveness consider setting up innovation centres of excellence crucial to their commercial success. The process of setting up innovation centres of excellence could be broken down into these few steps:

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1. Set up an innovation committee. The main role of the innovation committee is to monitor and manage the entire innovation process. It should include managers as well as staff from different departments. The team should have a maximum of 8 members to simplify decision-making. The innovation committee is an initiative with no termination date, which ensures constant promotion of innovation. There is an annual rotation of team members, which allows mixing existing team members with new ones. This practice revitalizes the team, and makes it actively engaged in the innovation process.

2. Create a vision for innovation. The work of the innovation committee should start with brainstorming ideas that focus on the future of the organization. The members of the committee should think of possible scenarios 5 years into the future. They should identify initiatives that highlight the innovative character of the organization / department as well as clearly define how they have achieved this level of innovation. When envisioning these scenarios, it is crucial to forget about constraints related to existing structures, processes and culture. The main focus should be on an ideal future with limitless opportunities.

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3. Develop the innovation process. Successful innovators often follow a rigorous process to ensure the effective management of innovation. It is “a disciplined, stage-by-stage approval process combined with regular measurements of every critical factor”. To create such a process, the innovation committee should take the following steps:

  1. encourage employees to generate ideas by sending them questions, prompts or challenges;
  2. encourage employees to record their ideas on their electronic devices or paper and send them to the innovation committee;
  3. gather all these ideas into groups of similar ideas;
  4. create innovation teams and give them these innovative ideas to work on;
  5. provide continuous training, coaching and support to these innovation teams.

4. Standardize. Innovation centres of excellence aim to create standards and define the best practices. To achieve that, they need to develop and document templates, blueprints, repetitive processes and methodologies used at work. The best practices should be based on industry standards and the experiences and success cases of innovation centres of excellence. The most successful innovation centres of excellence well understand industry trends and establish needed procedures to ensure the competitiveness of the business they represent.

5. Measure performance. Successful endeavours require tracking, measuring and reporting of their performance. The same applies to innovation centres of excellence: metrics are critical for demonstrating success and gaining support from critical stakeholders. Before undertaking any new endeavour, innovation centres of excellence should leverage internal and industry-recognized key performance indicators (KPIs) in order to establish the criteria and benchmarks that denote a successful endeavour. Performance measurement allows improving weaker areas through training, research and subject-matter expertise. This helps secure funding and support from stakeholders.

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References:  Erin Aldridge, | ICMCI and Michael Stanleigh,