The Idea in Brief

An innovation initiative is best organized as a partnership between a dedicated team and the group that handles ongoing operations, the performance engine. Although conflicts between partners are inevitable, they can be managed, by following three steps:

Divide the labor. The performance engine should take on only tasks that flow in parallel with ongoing operations—along the same path, at the same pace, and with the same people in charge. All other tasks should be assigned to the dedicated team.

Assemble the dedicated team. Leaders must approach the dedicated team as if they were building a new company— from scratch. Breaking down existing work relationships and creating new ones is an essential task, which outside hires can help expedite.

Mitigate the conflicts. The innovation leader must take a positive and collaborative approach to working with the performance engine and must be supported by an executive senior enough to prioritize the company’s long-term interests and adjudicate contests for resources.

It was just an innocent comment. While working with a client at a Fortune 500 company, we proposed the formation of a special group to execute a new growth strategy. “For now, let’s just refer to the group as the innovation team,” we suggested.

A version of this article appeared in the July–August 2010 issue of Harvard Business Review.