What a board must decide about innovation

A board should not decide on innovation projects. It should decide four things: what innovation must deliver, what it may cost, who decides what, and how success is judged. Written down on two pages, that is an innovation mandate. Without it, every innovation case has to win the argument from zero.

Most boards say innovation matters. In BCG's 2024 study, 83% of companies put it in their top three priorities. Yet only 3% were ready to turn that priority into results. The gap is not ambition. It is the missing decisions behind the ambition.

Why "support" is not a mandate

Support is applause. A mandate is structure: a budget that doesn't have to be renegotiated per project, decision rights that are clear before the meeting, and criteria that don't change when the quarter gets tight. IMD calls the innovation mandate "an explicit delegation of authority from the board" and sees it as the foundation of innovation governance. Without that delegation, innovation managers carry the responsibility without the authority.

The four decisions only a board can make

1. What must innovation deliver? Link it to strategy: which customers, markets or capabilities matter in five years, and what share of growth should come from new things. Not "be more innovative".
2. What may it cost? A protected budget for a set period, and an explicit risk appetite. Expecting breakthrough results from a small budget and zero tolerance for failure is wishful thinking.
3. Who decides what? Which decisions sit with the innovation team, which with the sponsor, and which come back to the board. Name the people, not the committees.
4. How do we judge success? Not only short-term return. Add leading indicators: decisions taken, assumptions tested, cases stopped on time.

What a board should not decide

Individual projects, methods and tools. A board that approves every case one by one has not delegated anything. It has only moved the bottleneck to the boardroom.

Signs your board has not decided yet

• The innovation budget is renegotiated for every case.
• Every case is escalated, because nobody below the board feels allowed to say yes.
• Innovation is judged on the same yearly return as the core business.
• The innovation manager reports to three people and none of them can decide.

How to get a mandate in three weeks

The Mandate Sprint does exactly this. Week 1: about twelve stakeholder interviews and an EPIC maturity assessment. Week 2: a draft mandate. Week 3: a half-day workshop with the leadership team. The result is a two-page innovation mandate with ambition, boundaries, decision rights and the first cases to work on. Each of those cases can go straight into a Case Sprint.

Questions people ask

Is an innovation mandate the same as an innovation strategy?

No. The strategy says where you want to go. The mandate says who may do what to get there, with which money and which risk.

How big should the innovation budget be?

There is no right number. What matters is that it is fixed for a period and matches the ambition. Big ambition with a small, unstable budget is the most common mismatch.

How often should the mandate be reviewed?

Once a year, or when strategy changes. Not every quarter: a mandate that moves with every bad quarter is not a mandate.

Related: Why innovation cases stall, and how to get a decision.

Jan Van Caneghem helps leadership teams and innovation managers in Belgium and the Netherlands get innovation decided, through WAAI Design.

Sources: IMD, The mandate for innovation (Joep de Caluwé and Stephen Parkins, 25 November 2024) · BCG, Innovation Systems Need a Reboot (2024)