Organizational Resilience through Decentralized Innovation

What is organizational resilience? 

Organizational resilience is defined as “the ability to anticipate crises and respond effectively to disruptions, even when they are unexpected and severe”. An organization will then be able to anticipate, prepare for, respond to, and adapt to major market changes. 

Two categories exist: Defensive resilience prevents bad outcomes, while progressive strategies focus on creating positive results. While 46% of marketers cite risk resistance as a major stumbling block, organizational resilience goes a long way to overcoming it. 

What is decentralized innovation?

Decentralized innovation is when planning and decision-making functions are moved away from a central location in an organization. In simple terms, this approach involves more people in making decisions. It includes stakeholders, employees, and customers in the innovation process.

This is different from the traditional method where only a few senior leaders make decisions. Everyone has the opportunity to contribute their ideas and insights.

This approach to innovation cultivates a culture where more ideas are generated. More importantly, they come from multiple perspectives, thus giving you the best chance to unlock the full potential of bottom-up innovation as well as traditional top-down methods.

4 ways that decentralized innovation contributes to organizational resilience

1. More ideas equals a better chance of adapting

Organizational resilience is largely about finding quick and effective answers and strategies to respond when potential problems or challenges surface. Naturally, then, encouraging ideas from a greater number of participants will increase your hopes of identifying a suitable solution.

Decentralized innovation supports employees at all levels of the organization with their innovation while also facilitating collaborations with customers. Having access to a variety of well-developed ideas can help a business be ready for anything. 

2. Tapping into a wider knowledge base

As well as gaining ideas from all perspectives, decentralized innovation allows employees to support other innovations. Contributions will be recorded, so there is no competition over who came up with an idea. Arguments about taking credit are unnecessary. This creates a culture where innovation is all about solving problems, using the collective knowledge of  stakeholders in an organization, to succeed in any situation.

59% of executives worry that they don’t have the right personnel to innovate. However, this is reduced when employees can be supported by colleagues to fill their knowledge gaps.

3. Faster decision-making

Decentralized innovation supports streamlined decision-making processes in several key ways. Firstly, it allows employees to work on their ideas and removes the need for seeking approvals from C-level figures. By avoiding delays in this way, ideas can move down the innovation funnel much faster.

Moreover, decentralized innovation will often be underpinned by cloud computing and the Internet of Things (IoT). The plethora of real-time data insights will allow for quick decisions that are driven by data rather than emotion. Taking this approach means that all ideas are submitted on a level playing field, ensuring that the best are not ignored. 

4. Risks are significantly reduced

Finally, a centralized innovation strategy leaves the organization at significant risk as a single mistake from major decision makers has the potential to hinder the entire business and innovation strategy.

Conversely, removing the authority away from a single location means that the impact of a mistake will be localized. This results in reduced disruption while simultaneously allowing employees to step in and find a quicker resolution. The knowledge of this also helps remove the fear of failure for all employees. So, organizational resilience will improve while mindsets will be aligned with the creative processes. 

Building a resilient organization

When decentralizing innovation efforts, it is key to do so with a dedicated innovation management solution in place. This allows employees creative freedom, while still receiving the necessary guidance and structure when innovating.