Should we have a dedicated innovation team?

This is a question I’ve been receiving a lot in my coaching sessions, so its answer may be of interest to more people. The short answer is “no and yes” which, I know, doesn’t answer much. It is the famous and not-so-useful “it depends” reply used to answer many product management questions. So I’ll expand on the “no and yes” answer bringing some examples from my experience.

No, we should not have a dedicated innovation team

Sometimes we are tempted to create a dedicated innovation team because all our existing teams already have the day-to-day topics to take care of. They don’t have space in their agenda to innovate, so let’s create a separate team to focus on exploring innovations.

Well, that’s not the right mindset to have. All of our existing teams should not only have space to innovate, but their day-to-day work should be to explore innovations.

How? Please follow my reasoning. Product development teams are supposed to be problem-solver teams or, as Marty Cagan says, empowered product teams, i.e., they are given problems to solve and results to achieve and they do so by creating solutions to these problems. Given a problem to solve and a result to achieve, the team is free to experiment with different solution options, and that’s exactly how innovations are born.

If we force our product development teams to operate in a solution-implementer mode or, as Marty Cagan calls them, as feature teams, there’s no space to come up with innovations. They’ll be working on implementing solutions devised by other people, people that do not have enough experience and knowledge of what is possible to do with technology. So it’s very difficult to create innovations with teams operating in a solution-implementer mode.

So, to foster all your product development teams to innovate, they need to have an objective, a problem to solve, so they can test different solutions and maybe come up with new and unseen solutions.

At Lopes, the biggest real estate company in Brazil, where I lead Lopes Labs, the technology and innovation team between 2020 and 2022, we used OKRs to define the objectives and key results we wanted to achieve and tracked these objectives and key results weekly. The teams were free to define what to implement in order to achieve the key results.

We also had quarterly hack days, 3 days at the beginning of the quarter when people from Lopes Labs formed new temporary teams to solve problems the teams proposed. Many interesting innovations were born during the hack days. This is a technique I also used at Locaweb and at Gympass with very good results in terms of creating innovations.

Yes, we should have a dedicated innovation team

On the other hand, there may be some problems or opportunities that may need a dedicated team. Problems or opportunities that are not in the core domain of any of the teams and can be a distraction for them may require a new dedicated innovation team.

At Lopes we started to use a technique we borrowed from our friends at iFood called Jet Ski teams, to solve these types of problems that were not in the core domain of any of the teams. Jet Ski teams are small, dedicated teams temporarily assembled to tackle this kind of problem. We pick people with specific knowledge and experience to build the Jet Ski team and leave them focused on solving the problem. Surely they’ll be missed in their original teams, and we need to account for that, i.e., certain objectives and key results of their original teams may not be hit, which needs to be taken into consideration when building Jet Ski teams. another aspect of consideration is if the team is successful in creating and implementing a solution for the problem, who will take care of this solution when the Jet Ski team is disassembled and its members return to their original teams?

Another way to create a new dedicated innovation team is to create a business unit (B.U.) with a general manager and a few people in order to tackle a specific problem or opportunity. We used this approach at Gympass when we created in the 2nd half of 2019 3 new business units. One focused on selling Gympass to SMBs, another to create a marketplace of products and services for gyms and studios, and a third one, which I lead as the general manager, to explore the opportunity of creating a well-being apps marketplace that ended up becoming Gympass Wellness. This is normally a more permanent approach, so when deciding to create a new business unit it is always important to define how the people relocating to the new business unit will be replaced in their current positions.

Summing up

• Should we have a dedicated innovation team? is a question that I get frequently in my coaching sessions. The short answer is “no and yes”.
• No because the entire team should have space to innovate. The team must be given objectives and problems to solve, and use their knowledge to create possible solutions to these problems in order to achieve the results. These solutions can be very innovative if given the space to experiment.
• Yes because there are circumstances where problems or opportunities that we want to tackle are not in the core domain of any of the teams and can be a distraction for them. That’s when we may need a new dedicated innovation team. I’ve used 2 techniques to create new dedicated innovation teams. One is a technique created by iFood teams called the Jet Ski teams, small, dedicated teams temporarily assembled to tackle this kind of problem. The other is the creation of business units, small permanent teams that will work focused on the problem or opportunity.

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