Organisations in today's world need to seriously consider their commitment to innovation at all levels of the organisation. Too often I witness innovation at the top of the organisation while silo working still plagues the front line. There are good reasons for these patterns. I will here aim to set out a number of organisational tension and key ingredients which I often find missing, yet which are a vital piece of the innovation puzzle.
1. The need for diverse perspectives
At the top of the organisation, it is not uncommon to find teams of Executives which are very diverse in their backgrounds and as such have very diverse perspectives. While diverse perspectives could mean stronger conversation and potential conflict, when led and facilitated well, innovation is likely to thrive!
When you look at an organisational chart however, you will note that with every layer of management, teams become far more functional in nature, often led by a functional specialist and driven by specific qualifications and professional values. The more functional a team, the more solid the edges to the team when working with others. Functional teams often have a more command-and-control communication style when working with others as they seek compliance from others, perceiving themselves as commercial Expert Advisers rather than collaborative Business Partners in the journey to achieving organisational improvements.
This perspective is not helped by the notion that some organisations are outsourcing 'functional departments', encouraging commercial rather than collaborative relationships. This is a real dilemma for many organisations who need to consider outsourcing as part of much needed down-sizing efforts. Instead of tapping into more entrepreneurial thinking, outsourcing could lead to competitiveness and as a result even more siloed practices.
So how do organisations deal with these obvious tensions? Develop a strong commitment to a Stakeholder Culture across and beyond your organisation. Whether you are working with customers, investors, employees or suppliers, the key is to embrace all parties as equal and interdependent stakeholders in delivering better outcomes. A strong Stakeholder Engagement Culture can help clarify the importance of early involvement of diverse perspectives to improve ownership and innovative outcomes, and discourage competitiveness between all parties.
2. The need for Entrepreneurial & Start-Up Thinking
Too often entrepreneurial thinking is mistaken for commercial acumen. There is a very big difference. Entrepreneurship is built on creativity for all stakeholders while commercial acumen is built on creating shareholder value. Also entrepreneurship is about evolving continuously through conversation with important stakeholders, while commercial acumen is about tying down solutions and products to sell to consumers.
The evolving, engaging and collaborative nature of entrepreneurship often creates powerful building blocks to more responsive and often co-created projects or services delivered through a start-up platform.
Large organisations know the value of entrepreneurial thinking though struggle to keep hold of them. Why? Slow decision making processes & static procedures often frustrate the internal entrepreneur (aka Intrapreneur) who prefers to work differently. Equally, they are often perceived as disruptive to the status quo and as such may be marginalised. Boards, CEOs & Senior Managers who do not value disruption as a tool for change, will likely push intrapreneurs out of the organisation.
At this stage I would also like to add another important consideration which has become even more important in today's world. Entrepreneurship in itself is no longer enough. Each entrepreneurial bubble has to make important considerations around their Social Value in relation to the Local Economy, Local Citizens/Communities and the Environment, giving birth to the concept of the Social Entrepreneur who commits to leaner, greener and more collaborative (social) ways of making a difference.
3. Infrastructural & Design Thinking
We also need to rethink our Business Models. For too long businesses have created dependent workforces and consumers. The purpose of a business was to 'do to' and 'sell to', rather than 'do with' and 'empower'. In order to evolve, businesses do well to listen to the people they serve, not to tweak their offer, but to transform their intention and purpose. There are two strands to this.
The first is Infrastructure or Platform Thinking. The traditional purpose of any business is to produce a service or product. Many businesses still do! However some business have recognised the creative and highly responsive power of the crowd. They have noted that the people most passionate and motivated about a service make the best employees. Some businesses, such as Uber and AirBnB, have set the scene for organisations as outcome-driven infrastructures or platforms where many people can do little things to achieve maximum opportunities.
These businesses also tap into the excess assets of the people they serve and work with. For example, AirBnB advertises itself as '... the easiest way for people to monetise their extra space and showcase it to an audience of millions.' They provide the infrastructure or platform for people to help people.
The second is Design Thinking to encourage co-creation of the above business models. The following video explains this beautifully and evidences how businesses need to use design thinking to solve practical, but mostly emotional and behavioural challenges for stakeholders.
Understanding the key ingredients for unlocking innovation are key to all business sectors. Whether you work in the Public, Private or Third Sector, innovation provides an opportunity for long-term sustainability. If Future Catalyst can assist in exploring your ideal business model or help unlock your culture of Innovation, please do not hesitate to get in touch as we are on a mission to restore every business to long-term sustainability.
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