??The Producer Model: Building a System for Sustained Innovation??

In the journey of corporate entrepreneurship, the Producer Model stands out as the most structured and strategic approach. Unlike the Opportunist, Enabler, or Advocate models, the Producer Model establishes a dedicated organizational unit responsible for nurturing innovation. This unit functions as the beating heart of entrepreneurial activity, equipped with the resources, mandate, and authority to drive new business initiatives.

Robert C. Wolcott and Michael J. Lippitz, in Grow From Within, describe the Producer Model as the most scalable and sustainable path to innovation. It ensures that entrepreneurship becomes an integral part of the organization’s DNA. This article explores the Producer Model, its key characteristics, advantages, challenges, and real-world application.

"The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic." — Peter Drucker

What is the Producer Model? ???

The Producer Model involves creating a dedicated innovation engine—such as a corporate venture unit, incubator, or innovation lab—that operates semi-independently from the core business. This unit is tasked with fostering entrepreneurial initiatives, from ideation to execution, with clear objectives, budgets, and accountability.

Unlike other models that rely on individual advocacy or dispersed resources, the Producer Model centralizes innovation efforts, creating a robust framework to experiment, iterate, and scale.

Key Characteristics of the Producer Model ??

1. Dedicated Innovation Unit: A distinct team or division focuses exclusively on entrepreneurial activities, free from the operational demands of the core business.
2. Autonomy and Resources: The unit operates semi-independently, with the authority to allocate resources, test ideas, and take calculated risks.
3. Strategic Focus: Innovation initiatives align with the organization’s long-term goals, ensuring relevance and impact.
4. Cross-functional Collaboration: The unit integrates expertise from across the organization, fostering diverse perspectives and creative solutions.

Benefits of the Producer Model ??

1. Sustainable Innovation: The Producer Model ensures a continuous pipeline of ideas and opportunities by institutionalizing entrepreneurship.
2. Risk Mitigation: A dedicated unit can test and validate concepts before scaling, reducing the risk of large-scale failures.
3. Talent Development: The model creates opportunities for employees to work on innovative projects, enhancing their skills and engagement.
4. Scalability: The Producer Model is designed for growth, making it ideal for large organizations looking to diversify their portfolio.

Challenges of the Producer Model ??

1. High Initial Investment: Establishing and running a dedicated innovation unit requires significant resources, including funding, talent, and infrastructure.
2. Cultural Resistance: Integrating the unit’s activities with the core business can create tension and resistance.
3. Complex Governance: Balancing autonomy with accountability requires robust governance structures.
4. Risk of Isolation: If not well-integrated, the innovation unit may become disconnected from the organization’s broader goals.

Real-World Example: Lockheed Martin’s Skunk Works ??

Lockheed Martin’s Skunk Works is a prime example of the Producer Model in action. Founded in 1943, this dedicated innovation unit revolutionized aerospace engineering with groundbreaking projects such as the U-2 reconnaissance aircraft and the SR-71 Blackbird. Operating with a high degree of autonomy, Skunk Works embodies the principles of the Producer Model—focused, agile, and strategically aligned. Its success lies in its ability to rapidly prototype and deliver transformative solutions, creating long-term value for Lockheed Martin and its stakeholders.??

How to Implement the Producer Model ???

1. Establish a Clear Mandate Define the objectives, scope, and success metrics for the innovation unit to ensure alignment with organizational goals.
2. Empower with Autonomy: Grant the unit the authority to make decisions, experiment, and take risks without undue interference.
3. Secure Resources: Allocate sufficient funding, talent, and infrastructure to enable the unit’s success.
4. Foster Integration: Create mechanisms for collaboration between the innovation unit and the core business to maximize synergies.

The Producer Model represents the pinnacle of corporate entrepreneurship, providing a systematic approach to fostering innovation. By establishing dedicated units like Lockheed Martin’s Skunk Works, organizations can create a sustainable engine for growth and transformation. While this model requires significant investment and careful governance, the rewards—long-term competitive advantage, diversified opportunities, and a culture of innovation—are well worth the effort. As we conclude this series, let’s make sure that we use these models of entrepreneurial innovation to drive our organizations forward. ??