Sustaining Innovation in Teams

Planning for Change:  Innovative Organizations and the Cycle of Renewal[1]

Gary Herman

Gradient Coaching


Innovation, defined as "the act of introducing something new, useful, and significantly different." has been a principal theme throughout my professional career as a practitioner, team leader, executive, and, now, consultant and coach. Over the years, I've encountered the challenge that innovation poses for organizations, and I've tried to observe (and experiment) to understand why it is so elusive.  Why do some teams succeed at innovation and some do not?  Why do some teams sustain their innovative capacity year after year, while others succeed once and then fade?  Why do some managers of teams achieve success through innovation with team after team, year after year, while others succeed just once, and still others, not at all?  Is this primarily due to luck?  An element of innovation is almost certainly luck, but my experience suggests something more that luck is at work: "Luck is the residue of design."*

As part of my work at the Hudson Institute of Santa Barbara, I decided to investigate more formally the nature of innovative teams by drawing from the published literature on management of technology and innovation and by using my own experience and observations from over two decades working in the telecommunications and computer industries. 

The work I'll describe here addresses the challenges facing such teams in the context of the Hudson Institute's "Cycle of Renewal," a model of individual and organizational evolution and renewal that is a core component of HI's approach to individual coaching and organizational development.  I'll map innovation project phases and team competencies typically necessary for innovation to occur onto the phases of the HI model and explore how missing competencies at a critical stage in project evolution can lead a project to fail.  I'll further describe why, even when a team executes an innovative project successfully, the natural tendencies of individuals and groups over time typically result in future team performance (e.g., the ability to repeat success at innovation) that declines as team tenure grows. 

This decline is not inevitable, but long-lived, high-performing, innovative teams do not result from chance alone.  A critical factor separating declining teams from sustaining teams is the ability of the team leadership to understand the critical competencies associated with successful innovation and to institute practices and instill values that counteract the natural tendency toward organizational decay.   In essence, teams for whom innovation (change) is the mission must themselves enforce self-change in order to sustain their innovative vitality over time.

Despite the substantial body of published evidence and analyses that describes the requisites for successful innovation, my experience in industry is that, at least within R&D functions, this knowledge and insight is usually absent in the engineers and scientists who populate management and executive positions.  My hope is that the analyses and approaches described here will help team leaders, consultants, and coaches better understand the contextual dimensions of would-be innovative teams in transition and will assist coaches working with managers and executives toward more effective leadership of innovative teams.


Innovation and the Cycle of Renewal

Roberts and Fusfeld (2004) describe a model for innovation that provides a basis for understanding the critical components of the phenomenon over the life of an innovation project.  The activities in their model map well onto the Hudson Institute Cycle of Renewal for teams (The Hudson Institute of Santa Barbara, 2004), as shown in Figure 1.   This provides a framework for considering the challenges of both achieving innovation initially as well as sustaining innovative capacity in an organization over time.Hudson model

Figure 1.  The Hudson Institute Cycle of Renewal for Teams

The HI model describes the evolution of teams as a predictable, repeating cycle comprising four distinct phases.  In Phase 1:  Fully Aligned, a team is largely united by a common set of objectives and metrics; this is a phase of accelerating performance.  Over time, team performance typically reaches a plateau and then begins to decline as the original goals (hopefully) have been achieved and as the original sense of urgency wanes.  Eventually, the team evolves into Phase 2:  Out of Sync, where the team may feel lethargy or a sense of decline.  Perhaps, after a major success, what follows is anticlimactic.  Motivation decreases, and negativity and cynicism increase.  In the HI model, departure from the dissatisfying, low performing state of Out of Sync eventually occurs either as a minitransition, whereby a team makes a modest adjustment to current circumstances and relaunches itself into Phase 1, or as a major transition into Phase 3:  Re-Purposing.  Re-Purposing requires fundamental re-examination of circumstances and the team's sense of identity and purpose.  Following this phase, the team moves into Phase 4: Exploring New Directions, where, equipped with a new sense of identity and purpose, the team explores alternatives and eventually settles on a new set of goals.  At this point, in the HI model, the team re-enters Phase 1:  Fully Aligned.


Figure Two shows each of six project stages from the Roberts et al model (red italic text) mapped roughly onto the Cycle of Renewal for teams, based on the focus of energy and activity for a project in each stage.  The six stages of a typical innovation project in the Roberts model are:  1) pre-project; 2) project possibilities; 3) project initiation; 4) project execution; 5) project outcome evaluation; 6) project transfer.  (In this model, a project is a coordinated activity by a number of people over a period of time to define and achieve a goal.  It is a work effort.  A team, in contrast, is an assembly of people who may contribute to execution of one or more projects.  A team may participate in several projects, in different stages of execution, simultaneously.  Or, many teams may work on a single large project.  In many organizational models, the team lives on after the project completes).

The activities in each stage correspond well with phases in the HI cycle model.  Pre-project activities involve information gathering, reflection, and discussion.  Project possibilities involve the exploration of several more specific concepts to determine feasibility and desirability, including technology, business, and customer/market investigations.  Project initiation requires choice and focus to create a specific, executable plan.  Project execution reflects momentum and intensity toward a chosen goal, shifting heavily into execution, along with ongoing activities that monitor external events and trends to ensure the validity of the project's purpose in the face of a changing external environment.  Project outcome evaluation is an assessment and validation of the adequacy of project results relative to current goals/needs and may lead to additional implementation.  Eventually, success results in project transfer, where responsibility for the project's results shifts to another organizational entity.

This project evolution model is quite general and could apply to almost any type of project.  Innovation projects, however, are those that pursue something "new and significantly different".  The challenge of "new and different" creates additional requirements on the competencies of the team members who are executing the project.

According to the model of Roberts and Fusfeld, roughly 70% to 80% of the human activity in an innovation project over its lifecycle is "routine problem-solving".  The other 20%-30% of activities, however, involve five additional work roles that appear essential for an innovation project to begin, become established, and proceed to a successful conclusion.  These five roles are 1) idea generating; 2) entrepreneuring or championing; 3) project leading; 4) gatekeeping; and 5) sponsoring/mentoring.  These roles are typically occupied informally by the individuals with the interest and required talents to perform them and are rarely visible (aside from formal project leadership titles) in formal organization structures.Innovation model

Figure 2.  The Cycle of Innovation for Teams

Figure Two also shows each of these five roles (green italic text) placed on the Cycle of Renewal at roughly the point of greatest relevance for each role.  Idea generation, which involves creation of new ideas from analysis and/or synthesis from a range of sources internal and external, technical and market, is particularly essential in Exploring.  Championing, the recognition and promotion of a useful new idea more broadly within a team or the organization generally, is necessary to allow a project to move from Exploring toward Fully Aligned.  Project leading, essential in Fully Aligned, involves the decision making, planning, and coordination effort required to allow a team take a chosen idea, shape it into an executable project definition, and move it effectively forward toward successful realization.

Two other roles appear to be essential across the entirety of the Cycle.  Sponsoring involves the informal activities of facilitation of work inside and outside the responsible team, as well as informal mentoring and development of less experienced project participants.  Gatekeeping is similarly valuable over the entire Cycle.  In the Exploring phase, gatekeeping provides the exposure to events, trends, technologies, and ideas from outside of the embryonic project that stimulate thinking and form the fuel for idea generation.  However, even when a project is in the full execution phase of Fully Aligned, gatekeeping provides a continuing window onto the outside world to allow adjustment of goals in response to changing marketplace realities, technology changes, or business priorities.  Projects that lose touch with the "whitewater" (Vaill, 1996) of the world outside themselves risk being rendered irrelevant by external events.


Challenges for Teams in Innovation Projects

Challenges that a team must master to innovate successfully become clear in this model.  A primary challenge is the availability of the correct mix of competencies at the appropriate time in a project lifecycle.  A team must have sufficient capacity in idea generation and gatekeeping to create ideas with sufficient innovative potential to enable success.  Even with an abundance of ideas, a worthy idea may not progress to become the focus of a new project without the capacity for championing - to publicize, sell, and establish committed support for execution of the idea.  Once an idea is adopted as the basis for a project's goals, the team's capability for project leading determines whether, or how well, the idea can be transformed into the set of necessary tasks for its realization.  And, project leading determines, in large part, how well the tasks in that set will be executed.

Well-conceived, well-structured, and satisfactorily executed projects may also struggle.  If they lack the gatekeeping capability to adjust to changes in the external world (requirements, competitive factors, economic climate, new technologies), they fail to adjust appropriately to continue to offer a compelling value proposition.  And, without sponsoring capability to socialize the value of a project and its progress with other parts of the organization, adverse political forces may stymie even a project with great virtues.

In my experience, teams with deficiencies in any of the critical competencies often exhibit one or more symptoms: 

  • they are unable to produce project proposals that are seen to be sufficiently compelling to justify investment in execution;
  • they abound with good ideas but none never seems to progress further;  
  • they struggle to make timely technical progress on committed projects;
  • they are blindsided by seemingly irrational (to the team) organizational decisions outside the team;
  • they happily execute a project only to find that the result has little or no value because it is no longer (or actually never was) relevant and/or valuable. 

Depending on management values and practices in the larger organization, such teams may be disbanded, be increasingly starved for resources, or live on in a chronic state of underachievement.  Members of such teams, either as individuals (if the team is disbanded) or as a group, find themselves in Phase 2 of the Cycle, Out of Sync.

Challenges for Successful Teams

If a team succeeds in moving a project successfully through the stage of project transfer, a common next step would be to attempt a kind of "mini-transition" back into the "project possibilities" stage, so that the project cycle can begin anew.  What are the challenges to sustaining a high level of performance in innovation past a single success, over multiple projects, over the long term?

My personal observations are that a successful team often struggles to sustain its initial level of success.  In fact, empirical studies of technical team performance (Katz and Allen, 2005, and Katz, 2005) show that successful teams do encounter a challenge in sustaining performance over time.  These studies found that team performance typically peaks and then declines, and that a critical variable is the average team tenure (time as a team member, not total work experience) of the employees on the team.  That is, a newly formed team typically demonstrates performance that rises rapidly to a peak between 18 months and two years following team creation.  Performance then tends to decline as average team tenure grows past four years.  In a sense, even if a team is attempting to start new projects and may not exhibit visible signs of employee dissatisfaction, chronic performance decline in a team that needs to be innovative is a classic, if subtle, sign of being Out of Sync.


What happens as a team "ages" that adversely affects its ability to perform?  Several interrelated factors appear to contribute: 

  • processes of normal development in individual employees;
  • group dynamics that move the group to become more insular and self-justifying,
  • a related reduction in dissent and access to new information and ideas,
  • loss of essential (for innovation) capabilities from the team as the specific capability(ies) essential in the earlier stages of innovation have reduced value relative to the dominating short-term goals of the team.

The normal longitudinal development process of individuals following the formation of a team (or an individual joining a team) is a critical contributor to this phenomenon.  As their time-in-job increases, individual employees progress through the phases of socialization (creating identity within the team, a kind of "breaking-in" process), to innovation (shift of energy from safety and acceptance toward achievement and influence), finally arriving at the phase of stabilization (achieve predictability and routine, protect autonomy, minimize vulnerability) (Katz, 2004).  Employee contribution, according to this model, is lower in the socialization phase, rises during the innovation phase, peaking after roughly 18 months, and then typically plateaus and declines in the stabilization phase. 

In teams for whom innovation is a critical success factor, the stabilization phase of individuals is particularly problematic.  "The willingness to go beyond that which is requested, to try something new, or to seek out new responsibilities, is not there" (Katz, p. 164).  Moreover, when a team's project is solidly in the project execution stage, trying something new or seeking out new responsibilities may not be seen as generally desirable in terms of progress toward the project's immediate goals.

According to Katz, group dynamics can amplify the effects of this typical performance trajectory for individuals.  If the major segment of team members progresses through these stages more or less in concert, then aggregate team performance will reflect a similar progression.  The productive innovation phase for members of the group will occur simultaneously, at roughly 18 months to four years of experience within the team.  And, beyond four years of average team tenure, stabilization behaviors, with their orientation toward risk aversion and predictability, tend to dominate.

Moreover, group dynamics for teams whose population has moved into the stabilization phase can create an environment that appears particularly hostile to innovative contribution.  Such groups tend to become more homogeneous, isolated, complacent, and resistant to ideas and perspectives in conflict with those adopted by the group itself.  Such a team culture, once established, tends to perpetuate itself, as the team selects new team members who will "fit in".  The group similarly will resist ideas that do not "fit" the group's predispositions.  This latter behavior is the source of the often observed "Not Invented Here" (NIH) syndrome in well-established teams.  In some sense, a strong, cohesive team identity, often viewed as a virtue, may have its own "shadow side".  Reported job satisfaction may, in fact, still be high.  This state would appear to be an unconscious entry into Out of Sync, at least with respect to innovative potential.

Associated with this characteristic insularity is an observable reduction in communication of all forms.  Communication, the ability to gather and/or share ideas internally, with other teams in the corporation, and with the world outside the corporation (the marketplace, customers, competitors, or the peer community for the disciplines involved) is a strong characteristic of high performing teams (Katz and Tushman, 2004) as well as high performing individuals (Allen, 2004).  Reduced levels of all forms of communications are common in long-tenure teams.  Such teams tend to become increasingly isolated from external changes (e.g., changes in customer behavior and requirements) and technological development.

I believe that loss of key roles required for innovation also contributes to declining team performance over time.  Once a project shifts solidly into the project execution stage, routine problem solving becomes the dominant project activity within the team.  At this point, employees oriented toward idea generation, championing, gatekeeping, and sponsoring may find few such roles to fill and may choose to leave the team.  This tendency may be reinforced if the team's reward system shifts to favor project leading and execution and the skills associated excellence in routine problem solving.  As discussed earlier, while the project may continue to execute, its relevancy may decline.  And, when the project completes and the team attempts a mini-transition to begin a new project, the team may find it has lost much of the intellectual competency required to fully explore project possibilities in search of a new innovation project.


Management and the Cycle of Renewal

The challenges faced by managers of teams that aspire to be innovative differ depending on the phase of the team on the Cycle of Renewal.  Managers of teams that are Exploring or in the early part of Fully Aligned must ensure that their teams have the human competencies to fill the critical early roles of idea generation and gatekeeping, without losing sight of the longer term needs that will arise for championing, project initiation, and project execution.  This is a delicate balancing act that includes not only insightful staffing and career development choices, but creating appropriately structured rewards and incentives.  "How the critical functions are encouraged and made a conscious part of technology management is probably an organization's single most important area of leverage for maintaining and improving effective innovation" (Roberts et al., p. 250).  My own experience is that managers with an engineering or science background often struggle to acquire and utilize this breadth of perspective, as they tend to retain a value system developed as individual technical specialists (see Badawy, 2004) and may personally over-identify with one of the key roles, to the detriment of the other roles required for the team to succeed over time.

What about mature teams?  Is performance decline inevitable?  No, but management appears to be the critical factor.  In a study of more than 300 R&D project teams, Katz (2004) found that the qualities of team management were the single most important factor separating long term high performing teams from lesser performers.

Managers of more mature teams do face an additional set of challenges in preventing or recovering from the performance decline characteristic of long-tenure teams.  Not only do these managers need to retain (or understand how to obtain) the full set of competencies to initiate a new innovation project (with the issues of team values and rewards that follow), they must also take steps to counteract the negative effects of socialization that lead to insularity and resistance to new ideas.  Katz's findings support this view.  Managers of high performing teams were characteristically not "participative" managers, but were "extremely demanding" and "challenging... to perform in new ways and directions" (p. 169).

The particular challenge here, if the team has a long history and the manager is newly arrived, is that the manager must first overcome the very phenomenon he or she needs to change (resistance) in order to subsequently change it.  In this regard, the models and techniques of Maurer (1996) apply.  And, interventions like the Hudson Institute's "Planning for Change: Renewing Team Focus & Energy" workshop should be of value.

With a long-term, cyclical view of innovative teams in mind, a range of options is available for managers to cultivate and sustain the competencies and culture required to enable sustained performance in innovative teams.  These include:

  • Communications practices that promote intra-team and extra-team communications, including identifying, encouraging, and rewarding "gatekeeper" roles within the team.
  • Reward systems that avoid over optimization in the short term and encourage diversity of contribution as well as long term thinking.
  • Joint activities with critical groups outside of the team, including functions like Marketing or perhaps customers themselves.
  • Recruiting that consciously seeks to maintain diversity (role, discipline, ethnicity, professional background, work style), so as to maintain a robust "gene pool" within the team itself.
  • Systematically introduced "mini-transitions" at the individual employee or sub-team level that facilitate staff development, that require new supervisor/subordinate and peer relationships, that place employees into new roles, and that encourage informal inter-team communications using personal relationships.  By consciously introducing diversity and change, managers can develop the team's ability not only to cope with change, but also to embrace change as a requisite for team and career vitality. 

This last point, that voluntarily-introduced change is invigorating and constructive, as opposed to disruptive and harmful, has generally been counter-intuitive to managers and staff in most of the engineering work cultures that I've experienced.  The prevailing belief was usually that stability is to be highly prized because it leads to maximum organizational efficiency (and, it avoids the need to confront resistance!).  In these cultures, supervisor-subordinate relationships were long-lasting, and team tenures also tended to be very long.  Change occurred only in reaction to uncontrollable events or some otherwise intractable management dilemma.  Since change was uncommon, and usually resisted, it was, in fact, disruptive when it finally occurred.


A fundamental challenge in the management of innovative teams is for managers to simultaneously balance two kinds of demands.  Certainly, they must attend to the near term challenge of efficiency and predictability of performance for their project and team in the short term.  However, they must simultaneously recognize and anticipate long term project needs and team dynamics, and make and sustain the organizational investments and adjustments they know are necessary for the long term health and success of the team.  Only organizations with a management culture that values balanced attention to the opposing forces of efficiency and robustness, of predictability and risk, of stability and change, will be those who can sustain innovation over time.

 "The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function."#




Allen, Thomas J. (2004). "Communications Networks in R&D Laboratories," in The Human Side of Managing Technological Evolution, 2nd Edition, Ralph Katz, Ed., New York:  Oxford University Press.

Badawy, Michael K. (2004).  "Why Managers Fail," in The Human Side of Managing Technological Evolution, 2nd Edition, Ralph Katz, Ed., New York:  Oxford University Press.

Katz, Ralph (2004).  "Managing Creative Performance in R&D Teams,"  in The Human Side of Managing Technological Evolution, 2nd Edition, Ralph Katz, Ed., New York:  Oxford University Press.

Katz, Ralph, and Allen, Thomas J (2004).  "Organizational Issues in the Introduction of New Technologies," in The Human Side of Managing Technological Evolution, 2nd Edition, Ralph Katz, Ed., New York:  Oxford University Press.

Katz, Ralph, and Tushman, Michael L. (2004), "A Study of the Influence of Technical Gatekeeping on Project Performance and Career Outcomes in an R&D Facility," in The Human Side of Managing Technological Evolution, 2nd Edition, Ralph Katz, Ed., New York:  Oxford University Press.

Maurer, Rick (1996).  Beyond the Wall of Resistance - Unconventional Strategies that Build Support for Change.  Austin, TX:  Bard Books.

Roberts, Edward B., and Fusfeld, Alan R. (2004).  "Critical Functions:  Needed Roles in the Innovation Process," in The Human Side of Managing Technological Evolution, 2nd Edition, Ralph Katz, Ed., New York:  Oxford University Press.

The Hudson Institute of Santa Barbara (2004).  Planning for Change:  Renewing Team Focus & Energy - Leader Materials, Santa Barbara CA:  The Hudson Institute of Santa Barbara.

Vaill, Peter B. (1996), Learning as a Way of Being, San Francisco:  Jossey Bass.


[1] An earlier version of this paper was submitted in partial fulfillment of the requirements of the coaching certification program at the Hudson Institute of Santa Barbara.  Copyright ©2006, 2007 by Gary Herman.


* Attributed, variously, to poet John Milton and former Commissioner of Baseball Branch Rickey.

# F. Scott Fitzgerald