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How to innovate? Google exec explains

December 17, 2013: 8:51 AM ET

The best type of innovation is disruptive innovation. Who better to teach it than a star Google exec who ran the Pentagon's R&D arm?

Dugan

FORTUNE -- Disruptive innovation is the kind that unhinges old ways of operating, juices competition and creates new growth.

One of the world's leading experts on the subject is Regina Dugan, Motorola Mobility's SVP in charge of Advanced Technology and Projects, a skunkworks-inspired unit devoted to delivering breakthrough innovations. Dugan joined Motorola Mobility, part of Google (GOOG), last year after heading the Defense Advanced Research Projects Agency (DARPA), the Pentagon's R&D unit where scientific inflection points and critical applications--the essence of disruptive innovation, she says--have often intersected. DARPA's legacy of radical innovation includes RISC computing, the Internet, miniaturized GPS, and those unmanned aerial vehicles popularly known as drones.

I saw Dugan speak on a panel about Interactive Technology at Ernst & Young's recent Strategic Growth Forum. Her advice about organizing for innovation success in an environment swirling with change was smart and practical. So I asked her to share it here. Dugan's Rx for disruptive innovation:

1. Get uncomfortable.
Make a list of the biggest and boldest projects in your company.  Ask yourself how many make you deeply uncomfortable because they could change your fundamental business model.  If a project has disruptive potential, it should make you uncomfortable.

2. Create a small, agile team.
While you can organize a large company to support evolutionary R&D, that doesn't work with disruptive innovation. You need a small and agile organization. If you have fewer than 200 people, you don't need a lot of process and you can talk to almost anyone by stepping out of your office and talking a little loud. (I'm Italian.)

3. Refresh the team constantly.
Ask yourself how many people on your innovation team have been there more than five years. If the answer is "a lot," you're in trouble. Then ask yourself how many people on your team are from outside the organization. If the answer is "almost none," more trouble. You need fresh thinking from people on the outside as well as the inside. Short tenures create necessary urgency.

4. Restrict decision-making to no more than two people.
If you have more than two people making decisions about strategy and execution, it's too many. Disruptive innovation is not about consensus. The CEO or the team leader should have strong and ultimate authority.

5. Create tension.
A disruptive innovation group exists, in part, to create tension. So don't be surprised when that happens. Disruptive innovation will challenge processes, challenge HR, and challenge your perspective on IP—while it upsets your ideas about who gets to be involved in the development process. The result: the speed and flexibility you need for effective disruptive innovation.

For more on how to organize for disruptive innovation, read "Special Forces" Innovation: How DARPA Attacks Problems by Regina Dugan & Kaigham Gabriel in the October issue of the Harvard Business Review.

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Pattie Sellers
Pattie Sellers
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Pattie Sellers has written more than 20 Fortune cover stories including "Marissa Mayer: Ready to Rumble at Yahoo," "Muhtar Kent's New Coke," "Oprah's Next Act", "The $100 Billion Woman" (Melinda Gates), and "Gone with the Wind" (Ted Turner). She co-founded Fortune Most Powerful Women and oversees the Fortune MPW Summit, the preeminent gathering of women leaders in business and beyond—and programs such as Fortune MPW Entrepreneurs and the Fortune-U.S. State Department Global Women Leaders Mentoring Partnership. Pattie also develops Live Content across Time Inc. Her blog, Postcards, is about how power players lead and navigate their careers. Pattie won Time Inc.'s prestigious MVP award for her performance in 2012.

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