This blog explains how to make innovation a core competence and the leadership challenge to do so as the organization matures.
All leaders must drive innovation no matter the stage of evolution for the business. Innovation is a proactive approach to change. Some companies are good at reacting to change in their markets especially if there is a threat. But an innovative business actively looks for opportunity and threat and builds inner competitive tensions to constantly improve and grow.
“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Jack Welch ~ CEO of General Electric
C suites should want innovation to be a part of their company’s DNA and yet very few companies embed it as a continuous improvement process. This is hard to fathom given an absence or a sporadic approach to innovation in an organization will result in dis-improvement in its performance over time.
Regular readers of this blog will be aware of our love of a good military analogy. This article is no exception. An analysis of Allied leaders’ performance in Operation Overlord (from the D Day landing to the arrival in Berlin) revealed some interesting insights: leaders were categorized as ‘beach head takers’, ‘route marchers’ or ‘Berliners’. Over the years, it has always helped us to think about our client’s business in this context. And if the reader just wants to understand Operation Overlord leaders performance analysis, please scroll to the bottom of this page.
A start-up seeks to capture an initial beachhead or a small set of customers. Route marching, or a series of battles towards an overall victory, equates to a growth phase where a business is trying to own a market one niche at a time. Arrival in Berlin and implementing new systems of government equates to the scale of management challenges in a large multi product international company.
Taking a beachhead
Start-up leaders will generally articulate a clear vision. The raison d’etre for a start-up is a form of innovation or disruption and it is innovate or die. Building a business from scratch is a frightening prospect and requires a team with great belief in a shared vision.
Leaders in this environment perform multiple roles and lead by example. Teams are under-resourced. The pace at which events occur and the need to pivot to survive creates a high pressure and noisy environment.
When viewed retrospectively, the innovation path will seem haphazard. There is no structured process for innovation that captures learnings along the way. It’s hard to know if leaders made good calls in the heat of battle. Rarely is there a coherent collective memory of what has taken place but there is a general acceptance that dodging bullets is a must have skill.
If a start-up does take a beachhead of any description, the next task is to grow quickly before the competition has time to respond. In this stage of corporate evolution, leaders will be strategically aware, tactically astute and very agile. There is no longer any need to charge headlong into the competition. Equally, if it’s not working, they can change it, always acting with urgency to avoid being pushed back into the sea.
The challenges at this stage are to identify niches where there is less competition and deploy resources carefully so as not to get stretched chasing too many diverse opportunities. Discipline and focus are paramount.
A hierarchical structure is required as decision making needs both leaders with an overview of the battle for market share and discrete teams to execute their piece of the battle plan efficiently. Separation of duties starts at this point as customer acquisition and customer service become discrete tasks for different teams. However, disconnect from customers can occur as there are fewer people with knowledge of the complete customer journey.
At this stage of corporate evolution, leaders will assume that innovation is ‘how we do things around here’ especially if they have been with the business through the start-up phase. But, growth leaders want to retain focus and consequently ideas for new products can sometimes be considered a ‘distraction’. Company growth strategy may involve mergers or acquisitions where leadership’s task is to consolidate innovations into a single product strategy.
A good continuous innovation process ensures innovative ideas are heard. As organizations grow, it’s probable that founding team innovators leave the business as they fit better in organizations at an earlier stage of growth. This is a waste as Intellectual Property(IP) walks out the door. Acknowledgement of ideas to their originators is critical in retaining good staff.
A good innovation process is democratized and always on. Growth stage companies will sometimes try to recover their innovation mojo through the creation of a lab or running a hackathon. These can succeed, but a lab assumes that ideas are generated in a silo. One-off events such as hackathons assume that innovation must occur at a moment in time.
The net effect can be the loss of innovation as a core competence in a growth stage business. A former colleague once articulated this to me as ‘if only we knew what we know’. In other words, do we know how we got here and have we forgotten the lessons we learned along the way?
Arriving in Berlin
Established multinational businesses tend to struggle with innovation. Intellectually, they accept innovation is essential but they can incur cultural debt meaning they get in their own way. The hierarchy that was required to structure growth can extend and create a frozen middle where the signal from customers to the C suite is lost. Processes to manage and account for expenditures cause delays that stifle individuals’ motivation to suggest good ideas.
Disconnected leadership and under-motivated staff will lead to a dis-improvement mindset. No one ever sets out to remove value from a business but an absence of innovation in effect means standing still. Such is the rate of change in most markets, standing still equates to dis-improvement.
The more mature the organization the more innovation is required. How do we recreate that beachhead tension? Jeff Bezos encourages his teams to think of every day as day one. In effect this is an invitation to everyone to challenge the status quo.
How then do we harness people’s natural desire to continuously improve? How do we stimulate innovation in any organization irrespective of its size?
Empirical research shows innovations occur close to customers and can originate anywhere or anytime in a business. This implies that a good innovation process is inclusive of all staff (or partners) and is not time bound.
Clearly, we need a repeatable process that can scale – something we at Daysha have implemented for our clients. The core concept is that anyone can have a good idea (or a frustration they need to overcome) and leaders can harness this through a measurable process such as Value Stream Management.
Implementing a Scaleable Innovation Process
1. Identify a C suite sponsor – preferably the CEO
2. Introduce a bounty to reward people with innovative ideas that deliver value
3. Create a Kanban board where people can transparently see their idea progress through the process. This can be as simple as to do – doing – done.
4. Form a team (or appoint an individual) to review the ideas regularly and to secure the funding to validate ideas as minimally viable.
5. Review successes and failures to capture learnings.
6. Disseminate the learnings to all staff/partners/ etc.
7. Ensure the C suite regularly mentions the Innovation Process in town halls and highlights success.
Note: steps 6 and 7 will keep the competitive juices flowing.
These concepts are more fully explained in a book we published last year and if you would like a copy of the relevant chapter please email firstname.lastname@example.org. There is nothing proprietary about this process and you can implement it as befits your organization.
As a consulting company, we offer value through an impartial and objective analysis of an organization’s potential to innovate, as well as supporting the implementation of the changes required to help realize innovation potential. Typically, these are changes in how people and teams interact with one another and we undertake this type of work primarily through training, workshops and coaching.
Allied Leaders Outcomes
So how did those leaders fare out? In fact, the Allies had not identified in advance what qualities leaders required for the different phases of Operation Overlord.
Consequently, leaders who were best suited to administer Berlin died in large numbers on the beaches of Normandy. Equally, leaders who succeeded in the beach landings did not do well if they got to Berlin as they were still spoiling for a fight when the fight was over.
Overall, the leaders who route-marched had the best survival rates. They adjusted to their changing battlefield: they had the nous to stay alive on the beaches; they were tactically astute in only fighting where they had a good chance of success as they route marched; and they were wise enough to demobilize before they got to Berlin!
Feedback is the breakfast of champions so whatever your thoughts on this blog – good, bad, or indifferent, we would be delighted to hear from you. Email email@example.com
Brendan O Reilly and Gail Park of Change Leap have collaborated in the design of new training and workshop offers since 2017. This article is based on their experiences of working with organisations with various approaches to innovation as they grew from start ups into multinational businesses.
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