Your Growth Mandate Has Been Set. But Have You Organized for Innovation?

What does that mean? Sounds like another management concept that looks good on paper but doesn’t exist in reality. What exactly are we talking about? Why is it important? What does it mean to achieve it?

Good questions, all.

Let’s start at the beginning. Nearly all organizations say they value and prioritize innovation as part of the growth strategy. But how many actually do so? How many have a set of meaningful and sustained actions and activities that drive an ongoing and impactful agenda? In our experience, the answer is very few. Only a small number of organizations take the actual time and effort to walk the talk by truly defining what that means to them, and then establishing work, methods and organizational support to drive that agenda.

To begin with, your organization needs to thoughtfully define your definition of desired innovation outcomes. If you’ve been through this exercise, you know it’s easier said than done.

Then you need to establish the proper organizational supports to drive and sustain that innovation agenda. This means developing the right innovation work processes for you, your agenda, and your cultural realities. There are many to choose from! Next, building and maintaining the right roles and skills to perform the work and processes are critical, and can take some time and iteration. We all know what doesn’t get measured doesn’t get done, and innovation measures will need to differ from those of the core (and already scaled) business(es). Do you know what yours are? Incentives for both leadership and beyond need to be developed and hooked to those additional or revised measures. Funding and resourcing methods should support innovation and aptly “compete” with the resource needs of the core business(es). And surrounding management processes and systems like annual strategic planning or talent acquisition have to support the innovation work and resourcing approach rather than conflict with them.

Using the framework offered below, ask yourself – how many of the elements does your organization “check off” as having addressed to enable and support an innovation agenda or “flywheel”?

Figure 1

If you said “most”, then you’re in the minority. If you said “all,” you’re in rarified air.

You need to intentionally organize to support outcomes you want to achieve. It doesn’t occur by happenstance. Serendipity is a bad strategy to achieve sustained innovation outcomes. Organizations achieve exactly what they are built to achieve. It stands to reason that doing something new and different (that is, innovating) is not going to happen automatically. You must make some deliberate, intentional adjustments.

And you need to organize to support your innovation agenda that is fit-for-purpose for you – for your industry, your objectives, your organizational context, your constraints.

How that design is developed is a longer conversation.  However, we can share here some principles to live by when “organizing.”

•  Be comprehensive: Take the opportunity to think through all the elements of organizing for innovation. Will it matter that you have process and tools in place if incentives push for “business as usual”? Of course not.  How about if all management reviews and conversations are about the state of the core business? Will anyone really pay attention to generating and testing “new”? You get the idea. One element without the addition of many – if not all – of the other elements has the potential to neuter your innovation system.
• Think systemically: Organizing levers should reinforce one another, not fight one another. Defining innovation as differentiated and of material value to consumers conflicts with innovation processes which only drive toward quality enhancements which lower costs. Don’t treat organizing levers options as an “à la carte” menu that you choose from. It’s a much more intricate design task that creates a self-reinforcing system.
• Start where the organization is: Whirlpool is not Google, Google is not Amazon, and Amazon is not Exelon. All are great organizations with great heritages and accomplishments to boast. But none are like the other, so the idea that the same innovation “template” works for each of them is, well, pretty nonsensical. Start where the organization is and work with the grain.
• Avoid islands: No matter what innovation system you design, integration and leverage of the organization’s talents, resources, and competencies is a must. Otherwise, why is it leverageable for you? Why can’t anyone, including some garage start up, just go do it? Any innovation process or work effort worth its salt will address this and develop answers which acknowledge same.  The system will need to implement innovations utilizing organizational capabilities, resources, and/or scale. This is why skunkworks, when not well thought through, tend to fail.  Don’t err on the side of not utilizing what the broader organization can bring to bear on the innovation agenda.

Follow these four principles as you design a system to drive your agenda, using the levers like those illustrated in Figure 1, and you’re a long way down the path, and well ahead of many organizations. The specifics and options available regarding some of those levers are the topics of discussions to come.

By Lotis Blue Consulting, February 21, 2018