The PDMA Handbook of Innovation and New Product Development, 4th Edition

CHAPTER SIX INNOVATION GOVERNANCE

Rod B. McNaughton

6.1 Introduction

The importance of governance in generating the conditions where innovation can flourish, and new product development thrive is often overlooked. Most attention is paid to specific new product development (NPD) processes rather than the broader corporate governance context in which they are set. However, supportive and robust governance is critical to fostering innovation. Innovation governance is “…a system of mechanisms to align goals, allocate resources and assign decision-making authority for innovation, across the company and with external parties” (Deschamps 2013). Innovation governance emphasizes the importance of the board and senior executives in setting expectations and policies, organizing the firm, delegating decision-making, and hiring the right people to support innovation. Thus, this chapter addresses company directors, C-suite executives, and the innovation and product managers who report to them.

The concept of innovation governance was popularized a decade ago by Deschamps and Nelson’s (2012) book Innovation Governance: How Top Management Organizes and Mobilizes for Innovation. However, the influence of organization-level governance on innovation remains underappreciated. Successful innovation begins before opportunities are identified, or new products and services are developed. Many firms ...