Characteristics of Innovative Organizations, part 2 of 3.

First – sorry for the long hiatus between posts here. I’ve had a great last few weeks including a wonderful trip to Paris and a week in Chicago doing some certification training. In the meantime, I’ve also been doing some more thinking about innovation, creativity and how organizations can align talent to improve the chances that innovation can occur. So now it’s time to talk about the next two characteristics I see in most innovative organizations.

Collaboration and a “flat” structure that facilitates information exchanges seem to be present in innovative organizations. I am not talking about a free form, wide open floor where everyone is chattering with everyone else. While such a structure might be fun and entertaining, it’s not a structure that really encourages true collaboration, and it’s not what I mean by “flat.” Most of this extremely important work will occur in team situations, and that will lead us to our last (3 of 3) post on this topic which will be ready next week.

Collaboration

We all have ideas. Right? How many good ideas do we develop in isolation? I’d wager that number is low; at least it is for me. But collaboration with no guiding principles or direction will be a disaster.

This is a bit like releasing thousand monkeys into a room of word processors and hoping they’ll produce Shakespeare. If you are lucky enough to have it happen once, you surely wouldn’t expect it to be repeatable.
The Innovator’s Guide to Growth, p. 121 Scott D. Anthony, Mark W. Johnson, Joseph V. Sinfield & Elizabeth J. Altman

Collaboration can occur in many forms. Organizations can build teams. Formalized “collaborative” opportunities can be made to work, but it’s much more difficult to direct innovation in these circumstances. On the other hand, teams can be vitally important as innovative ideas are brought forward towards production or execution.
The sort of collaboration that really helps drive innovation has its roots in the organization’s culture. Its’ collaboration by, among and between people empowered to think expansively and communicate with people across traditional organizational boundaries, that drives innovation.

My most recent experience with a corporate job illustrates just how true collaboration can help drive innovation. When the project was in its start-up phase, there was a lot of excitement around it. Multiple people all over the organization and outside the organization made themselves available for discussions, brainstorming and ideation. This open ended collaboration lasted about 18 months, and it resulted in the introduction into the market of a completely new way to reach the location level management at client organizations about ways to improve margins aligned with the vendor’s third-party administrative services.

Over the next 18 months, relationships became more formal and the open ended culture of free communications and information sharing ended over turf disputes and certain internal players demanding control over the project. The free exchange of ideas ground to a halt. Outside resources were dismissed as irrelevant or inconsequential, and a sort of internal arrogance began to seep into the project. The end result was a stagnant sales effort and an end to the project. The culture surrounding the initial effort changed into a culture dominated by a total lack of collaboration and failure.

Flat Structure

On some levels, a “flat structure” and collaboration are so closely intertwined; it’s hard to separate the two elements. But I believe the two concepts are separate and should be addressed as such. Collaboration has to do with the way in which the people within an organization see themselves and their relative ability to reach out for ideas and assistance as needed. The “flat structure” concept refers to organizational choices related to command/control and the flow of information.
At the terrific blog, The Heart of Innovation, http://www.ideachampions.com/heartofinnovation/ there was a post on June 5, 2009 about how CEO’s sabotage innovation efforts. It’s a provocative read and highlights the dangers of a rigid, hierarchal structure with a short-term view of “shareholder value.”In other words, when organizations are set up with a strong “top-down” management (NOT leadership!) structure, innovation will usually be little more than an afterthought. These sorts of organizations also tend to work in silos with little knowledge and information flowing across structural “boundaries.” All of these factors combine into a management, structure and cultural mix that are toxic and hostile to innovative initiatives.

In Winning Through Innovation, Tushman and O’Reilly advocate for a management problem solving method they call a “congruence approach.” One of the elements the authors argue that needs to be identified and fostered to accomplish the innovative problem solving is for organizations to identify and leverage the informal networks that move information around the organization. These networks, in innovative organizations, are generally informal, defy operational identities (not in silos) and evolve naturally around the abilities of key individuals who serve as connectors between colleagues and for ideas.

Starting Point

It’s people. Innovation always has been and always will be about your people. How do teams within your organization function? Do teams evolve on their own? Are they formally created? Do leaders emerge or are leaders designated? How are your leaders handling the needs and requirements of an innovative culture?
If you have answers to these questions, I’d love to read about them. In the meantime, we will post the third and final installment of the characteristics of innovative organizations next week. Stay tuned!

Characterisitics of Innovative Organizations, Part 1.

We know innovation when we see it – iPhone, X-Box, Wii, Prius, Twitter, etc. And we are seeing a great deal of chatter and a fair amount of good writing about the critical importance of innovation to sustain organizational success and vitality. But what are the characteristics of truly innovative organizations?

There are several things that truly innovative organizations have in common. For today’s post, I am going to focus on two characteristics or traits I believe are at the core of both creativity and innovation – optimism and a willingness to take reasonable risks. Optimism is vital. If an organization goes into an initiative without a belief that it will work and yield positive results, the organization runs the risk that this core lack of belief will dominate the thinking and approach, and you end up with a self-fulfilling outcome of failure. Now optimism alone will not mean every innovative initiative will work, but optimism about the project and its objectives must be present throughout all participants, or the initiative will fall flat. Risk taking is likewise, vital. But its not about recklessness. The risks organizations must embrace to be innovative must be rooted in their long term objectives and linked to their core value system, otherwise there is no framework for determining whether risks are reasonable or not.

The i-Pod serves as a perfect illustration of these two crucial traits in action. The development team at Apple did not build the I-pod in a vacuum. In fact, when the i-Pod hit the market in the late fall of 2001 (yes – just weeks after 9-11) someone (Steve Jobs among others) had an optimistic perspective that THIS MP3 player would make an impact into the portable, digital music playback device market. (Now doesn’t “i-Pod” sound better?) There were other players on the market, so the i-Pod was not an entirely new concept. But the i-Pod introduced a completely different user interface and a truly unique software application that enabled users to buy and organize their music in a truly innovative way. It was this link between an application and a specific device that represented the disruptive innovation Apple sprung on the market in 2001. Who wanted to buy a device that could ONLY link to ONE application? Well – as it turns out, quite a few of us!

But think about the risks Apple took. Apple dropped millions into the development of a product that would not work with any music applications Apple did not sell and deliver. Would we even consider another device that would could not link to generally available music download and organization applications? Probably not. Anyone remember the Microsoft Zune? But Apple had already carved out a niche in the desktop and laptop computer space delivering products that were not compatible with other applications. So i-Tunes and the i-Pod weren’t so far outside their organizational experience as to be unreasonable risks. In fact, the very foundation of the concept was entirely CONSISTENT with Apple’s already successful business model. The results of Apple’s marketing and product development are pretty clear. They now occupy a dominant market share in the MP3 player space, and i-Tune is as common as – well – it’s just everywhere.

The great lesson we can learn from Apple is how critically linked risk taking and a sense of optimism are to innovation. Organizations simply cannot afford to be defensive or afraid to take reasonable risks – especially in this economy. But we are seeing a huge majority of organizations hunker down, button down the hatches and try to “survive” this downturn. This rather pessimistic outlook cannot foster an environment where creativity and innovation can take root. We need more. We need a view to the future that sees possibilities, not threats. We need organizations willing to move their culture to a place where people are free to pursue the ideas and concepts that can position organizations for true success going forward, not mere survival.

I will be posting on another pair of key characteristics in a week or so, so stay tuned!