Organizational paradoxes are ultimately illusions. They are artificial constructs, sometimes of a system, many times of the mind. They fail to meet the definition of a paradox because they are not irreconcilable. Yet these illusionary obstacles persist as groups, and individuals protect themselves from the perceived challenges of addressing them. They demand engagement because the process of engagement reveals the illusion, develops a deeper sense of self, and builds an organization's capabilities.
The world's biggest untapped source of energy isn't the wind, water or sun. According to the authors, who hail from innovation consultancy Innosight and DBS Bank, it is the innovative energy lying dormant inside of organizations. And the time has come to harness it. In an excerpt from their book, Eat, Sleep, Innovate: How to Make Creativity an Everyday Activity Inside Your Organization, they describe five behaviors that together define an innovative culture, including customer obsession, comfort with ambiguity and empowering employees.
In the midst of the global pandemic, the Outthinker Strategy Network and Thinkers50 assembled some of the world's foremost management thinkers (virtually, of course) to share their thoughts on leading in times of unprecedented uncertainty. In this compilation of highlights from six of the speakers, topics range from the effects of psychological safety on innovation (Edmondson) to the role of fear in human behavior (Lindstrom) to tips for innovating in times of crisis (Anthony).
Leaders are facing unprecedented uncertainty. But history clearly shows that no matter how stark the crisis, there are always opportunities to innovate and grow. The authors present four 'lenses' and ten questions that leaders can use to enable innovation. The lenses include a future-back strategy; jobs to be done; and encouraging innovation habits. Ultimately, they show that using the four lenses and asking 10 particular questions helps to bring clarity in the midst of a crisis by cutting through the fog of massive uncertainty.
Why are companies still so vulnerable to disruptive threats? The problem isn't that they don't have the right playbook. It's that well-intentioned leaders often downplay disruptive threats or overestimate the difficulty of response. In simple terms, they lie to themselves. This means dealing with disruption is not just an innovation challenge; it is a leadership challenge. Here's how to avoid the delusions about disruption and self-sabotage.
To spur innovation, businesses have spent billions on internal venture capital, incubators, and accelerators. Yet survey after survey indicates these efforts aren't producing results. Why? Because firms fail to address one major obstacle: the day-to-day habits and routines that regularly stifle innovation. These include such things as poorly run meetings, no slack capacity, few opportunities to speak up, and the notion that doing things differently is inefficient and costly. Fortunately, it's possible to hack this problem, using interventions called BEANs, combinations of behavioral enablers, artifacts, and nudges that break down the innovation blockers. Behavior enablers are tools or processes that make it easier for people to do something differently. Artifacts, which you can see or touch, support the new behavior. Nudges promote it through indirect suggestion and reinforcement. In this article the authors describe a variety of BEANs that the bank DBS, the Tata Group, and other companies have devised to unleash innovation. They also explain how any organization can go about creating its own BEANs by identifying the creative behaviors it wants, examining what's getting in the way, and then brainstorming ways to bust those bad habits.
Disruptive change poses existential challenges to leadership teams, raising foundational questions about aspirations, identity, and the very soul of a company. So it is no surprise that leadership teams often struggle to achieve alignment on what degree of growth is needed and what markets and types of innovations to invest in. This article provides a novel and practical road map for achieving leadership alignment. It offers tools to help executive teams establish a foundation of common understanding, expose misalignment, and catalyze decision making through physical exercises. The approach is illustrated through the example of Swisscom, a global telecom facing stagnation and decline in a mature industry. Using the program, it converged on a clear long-term growth strategy, launching a set of innovative ventures, creating a VC-like group to oversee new innovation investments, and locking in a schedule of annually increasing funding.
Most executives will admit that their companies don't innovate in a reliable, orderly way. Too many breakthroughs happen only because of serendipity or individual heroism. Great ideas remain locked inside employees' heads, and the concepts that are developed often aren't the most promising. But there is a way to make innovation more systematic--without massive investments, restructuring, or even a single hire. In this article three consultants explain how a company can build a "minimum viable" innovation function, in just three months, by doing the following: Day 1-30: Define your innovation buckets, looking at how much growth innovations in your core can produce and how much will need to come from new-growth initiatives; Day 20-50: Zero in on a few strategic opportunities, after talking to customers to identify growing needs that match your capabilities; Day 20-70: Dedicate a small team to begin developing innovations; Day 45-90: Set up a committee to shepherd projects, borrowing venture capitalists' best practices. Drawing on the experiences of a financial services firm, a water utility, a hospital, and a 100-year-old nonprofit, the authors describe how to use this approach to build systems that ensure that good ideas are encouraged, identified, shared, prioritized, resourced, and developed.
The innovation revolution spurred by venture capitalists decades ago has created the conditions in which scale enables big companies to shift from shackling innovation to unleashing it. Three trends are behind this shift: (1) The ease of innovation and its decreasing cost mean that start-ups now face the same short-term pressures that have constrained innovation at large companies. (2) Taking a page from start-up strategy, large companies are embracing open innovation and integrating entrepreneurial behaviors with their existing capabilities. (3) Innovation increasingly involves creating business models that tap big companies' unique strengths. In this context, entrepreneurial individuals, whom the author calls "catalysts," are working with corporations' resources, scale, and growing agility to develop solutions to global challenges. Here are the stories of four corporate catalysts: Keyne Monson, at Medtronic, spurred the creation of a program called Healthy Heart for All, which seeks to bring pacemaker technology to hundreds of thousands of Indians who desperately need it. Yuri Jain, at Unilever, sought and found a scalable solution to purifying drinking water--Pureit, a portable system that provides safe water at just half a cent per liter. Nick Musyoka, at Syngenta, devised a program called Uwezo (Swahili for "capability"), which uses the sachet distribution model to provide smallholding farmers with affordable, premeasured packages of crop protection chemicals. Colin Harrison, at IBM, was instrumental in developing the company's Smarter Cities program, which offers bundled technological infrastructure and related services to help cities save money and improve lives.
In the early 2000s, faced with an alarming gap between its growth goals and what its innovation pipeline was delivering, Procter & Gamble created a "new-growth factory"-a network of novel structures and capabilities to rapidly shepherd new products and even business models from inception to market. The resulting innovations range from a 33-cent razor for customers in emerging economies to Tide Dry Cleaners-establishments with drive-through windows and 24-hour drop-off and pickup. Brown, who is P&G's chief technology officer, and Anthony describe the factory's components and practices: new-business-creation groups, entrepreneurial "guides" to help them, an innovation manual, a disruptive-innovation "college," and more. They also offer six lessons for leaders seeking to set up new-growth factories of their own. Although the factory is still ramping up, its early successes suggest that collective creativity can be managed-and can generate sustainable sources of revenue growth no matter how big a company becomes.
If you're an innovation manager struggling to assess your pipeline and assemble a balanced portfolio of growth initiatives, you may find inspiration in Major League Baseball's general managers. They, like you, are constantly shifting their lineups under high degrees of uncertainty while trying to balance stakeholders' demands for immediate results against history's likely judgment of their own choices. Here are some ways to adapt the solutions they've found. Before the sabermetrics revolution in baseball, managers generally dismissed minor league statistics - which turned out to be highly useful predictors of success. Business innovators who likewise learn to analyze information more insightfully can devise better tactics and make investment and personnel decisions more wisely. A ball club's depth chart, illustrating the bench strength for every position, signals strategic priorities. Companies can think the same way about their innovation portfolios to balance offensive and defensive strategies, explore new channels or geographies, and significantly alter platform or marketing approaches. Baseball's farm system allows teams to identify and coach promising players in lower-pressure environments. Innovation executives can similarly organize testmarket research and regional rollouts to expose new offerings to steadily increasing levels of scrutiny from prospective customers. Procter & Gamble has been a leader on this front with its Swash fabric-care products and Tide-branded dry cleaners.
This is an MIT Sloan Management Review article. The way a company views its markets determines what it decides to produce, how it will take those products to market, who it believes its competitors to be, and how large it believes its market opportunities are. Most companies segment along lines defined by the characteristics of their products (category or price) or customers (age, gender, marital status, and income level) since that is the most easily accessible type of data, but product and customer characteristics are poor indicators of customer behavior because that is not how markets are structured from the customer's perspective. Customers simply need to get things done, whether that is fixing their car, staving off boredom, or finding something fun to do with their kids. These situational needs for which customers are looking to "hire" products or services go unnoticed during traditional market research and segmentation. As a result, the true breadth of competition often goes unnoticed too. When companies understand what they are up against in the mind of the customer, they can piece together the real size of the market in which they compete. Using examples from the fast food industry, furniture retailing, the automobile industry, and health care, and citing a wide variety of companies and brands, including FedEx, Starbucks, Google, Blackberry, TurboTax, and OnStar, this article describes the benefits that executives can reap when they segment their markets by job (the risk and cost of innovation is minimized), the methods that those involved in marketing and new product development can use to identify the job-based structure of a market (interviews, surveys, observation, empathic and co-evolution techniques), and how the details of business plans can be made more coherent and focused when innovators understand the job to be done.
In the complex sport of American football, teams rely on playbooks as thick as the Manhattan phone directory. But when it comes to creating innovative growth businesses--which is at least as complicated as professional football--most companies have not developed detailed game plans. Indeed, many managers have concluded that a fog enshrouds the world of innovation, obscuring high-potential opportunities. The authors believe that companies can penetrate that fog by developing growth strategies based on disruptive innovations, as defined by Clayton Christensen. Such innovations conform to a pattern: They offer an entirely new solution; they perform adequately along traditional dimensions and much better along other dimensions that matter more to target customers; and they are not initially appealing to powerful incumbents. Companies can develop customized checklists, or playbooks, by combining this basic pattern with analysis of major innovations in their markets. The key early on is to focus not on detailed financial estimates--which will always guide companies toward the markets most hostile to disruptive innovations--but on how well the innovation fits the pattern of success. It's also crucial to encourage flexibility: Companies must be willing to kill projects that are going nowhere, exempt innovations from standard development processes, and avoid burdening project teams with extra financing, which can keep them heading in the wrong direction. Companies can create competitive advantage by becoming champions at defining the pattern of successful innovations and executing against it. But as that pattern becomes obvious--and others emerge--building a sustainable advantage on innovation competencies will again prove elusive.
SMaL Camera Technologies CEO Maurizio Arienzo was trying to decide what market opportunities SMaL should target. The company had developed a revolutionary imaging technology that powered small digital still and video cameras. Its first-generation product--a kit to power a credit-card-size consumer camera--was a success. Now, Arienzo had to decide whether to focus on beating back emerging competitors in the consumer space, stepping up efforts to crack the security and surveillance market, trying to reach the automotive market, developing a cellular phone camera offering, or making a "left turn." The decision would determine whether SMaL ever hit it big.
CEO Michael Collins must decide if and how a process he developed to further innovation in the kids' industry could port over to other industries. The process was based on Collins' experiences as an inventor and as a venture capitalist, and it allowed his company to be an intermediary between inventors and innovation-seeking companies. The process seemed to be working quite well in the kids' industry and Collins had to decide what would "travel" to a different vertical.