Tuesday, October 12, 2004

Strategic innovation

A strategy is an effective one if it creates a certain level of competitive advantage and if it's able to sustain this advantage over time. Many companies develop a strategy but fail to implement and execute well. True success lies in the ability to implement the strategy.

In earlier posts and articles I emphasized the fact that strategies do not implement themselves. People do.

However, a company consists of different people, different functions, different agendas, priorities and ways of working. All of these must be aligned around the shared strategic goals. Therefore it is absolutely necessary that there is sufficient clarity about goals and values so that these are reflected in day-to-day interactions and operating relationships. Even in highly focused organizations decision processes are quite often a matter of "muddling through" since over time the company has developed a lot of inefficiencies.

When operational inefficiencies become too intense, organizations attempt to do something about it, usually by introducing the latest management technique. In most cases they find out that it comes down to software or training. Do these solve the problem? No; at least that is what managers and CEO's say. As one of them put it: "after the smoke has gone, we're still faced with the same questions:

· We keep operating chaotically, we keep on struggling with getting agreement on where we are and where we should go to;

· Marketing, sales and operations keep on acting as if the others weren't there;

· We keep on having trouble with internal communications;

· New software-packages allow us to produce output faster, but it isn't any better;

· Value added by new technologies is wiped out by value lost on the people front.

Why do change and innovation efforts keep on failing like this?

There are a number of facts you cannot discard if you want to develop an organisation that is innovating and that ensures your competitive strength:


· Remember that innovation is mostly a matter of reworking available knowledge to find useful things for the organization. Small improvements are as welcome as important shifts.

· Innovation can only come from individuals and small teams. Processes, systems, software, training or large R&D budgets do not innovate, only people can.

· Individuals and small teams are the core and the cornerstone of innovation. Innovation actually happens at the interface between individuals or groups. The surrounding environment (whether your organization or not) can support their efforts or prevent them.

· Innovation should be embedded in teams. Teams will always do better than individuals to create innovation. Teams are able to incorporate different roles, provide different points of view, different bodies of knowledge etc.

· Individuals and people in teams can learn to become more innovative. If the new 'paradigm' makes sense to them as well intellectually as emotionally, their attitudes and behaviour will change. Innovation is a skill that can be taught.

· Make sure that everyone sees the bigger picture and that everyone is given room enough.

· Make sure to keep people or managers that "always have the best answer to any problem" as far away from your innovation efforts as possible.

· Don't expect that everything will be done right from the first time. If you do, then forget about innovation and copy some competitor.

· Lack of respect and acknowledgement for your people is one of the surest ways to ruin their innovation contribution.

Then how can an organization proceed to create sustainable change that is both profitable and appealing to people? Our experience is that if you take a truly innovative approach, the benefits are both long-term, as well as short-term.

What can you do to enable true innovation:


· Demonstrate 100% commitment at the top. No benevolent agreement but true commitment. If you are not committed, forget it. People will find out sooner than you think.

· Demand innovation and give the organization a clear mandate.

· Start wherever in the organization you find volunteers. Not everyone is ready and able from day one.

· Eliminate barriers to innovation as soon as they are uncovered (rules, patterns, paradigms, etc.).

· Listen carefully to your people and make sure to create direct unbiased feedback channels and channels for new ideas that do not fit the current structures.

· Use the existing planning and budget processes, to make change official.

· Train the mid-level managers on the management of innovation. Make sure they understand their job: not to know all the answers, but to make sure the team finds the best possible answers.

· Balance change and stability over time, so that no area is overwhelmed by a change-overload. Regularly check the organization for readiness. That is the place to start the next wave of initiatives.

posted by es @ 18:14

1 Comments:

At 2:43 PM, Anonymous Anonymous said...

Couldn't agree more. Innovation is the motor of value creation. And people are indeed the motor behind innovation. Hope to read more of you. William D. Havers

 

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