Adapting for success: Efficiency, innovation or both?
Question: How do established organisations ‘Innovate’? The answer is, for the most part, – ‘With Difficulty’
To successfully innovate within established organisations is no trivial task, made more challenging where innovation has never been part of the organisation’s culture or strategy.
Innovation means different things to different people, and is mostly context specific. For example, an innovation in the air traffic control industry will differ from an innovation that relates to wearable technology (such as a smart watch). In the former, people may die if the innovation fails, and in the latter only the product fails.
To innovate or not to innovate? That is the question, I suppose
A product or process ‘refinement’ in one industry could be described as an ‘innovation’ in another.
Additionally, innovation does not necessarily require a new, revolutionary product or process to be created, and often results from the application of existing products, processes and services in a different form.
The fact that many products and services may be marketed as being ‘innovative’, or labelled ‘innovative’ by industry analysts or the media, further blurs the distinction between a marginal improvement and a transformational innovation.
So, in the new Innovation Economy, how does the C-suite of established organisations transition their organisations to becoming ‘innovative’ without damaging the future potential growth and/or intrinsic value of the enterprise?
The efficiency – innovation continuum.
Consider the innovation – efficiency continuum in this simple graphic based on the adaptation model of The Gill Framework® V.3.0 (Gill 2015)1.
On the one end of the scale we have a highly efficient organisation that is not regarded as innovative. At the other end of the continuum, we have the opposite.
Characteristics of Efficiency-centric organisations might include adherence to standards, policy, process and procedures. It also embodies auditability, process repeatability, tight cost control and close process variance management. Organisational structures are mostly functionally aligned, hierarchical and the culture failure averse. This is the world of standards, compliance, governance, repeatability, and risk management. Think aviation industry.
At the other of the continuum, characteristics of ‘Blue-sky’, innovative organisations that have a unique and relevant strategy based around innovation may include localised or individual autonomy, exhibit a culture of trust as well as a tolerance for failure. Organisational structures encourage cross functional collaboration, internal networking and commitment to a shared vision. This is the hallmark of the typical start-up organisation, unencumbered from legacy business and leadership practices, technologies as well as organisational structures. Think Uber, Google, Facebook.
So, the challenge for business leaders of organisations at either end of this continuum exist:
- As an innovative organisation, how best to grow and scale this innovation capability with sustained efficiency?
- As an established organisation, how best to transition towards becoming an innovative organisation without compromising existing profitability, effective governance or risk?
The C-suite’s impetus for innovation.
As identified in a recent Stanford article entitled “Innovation Is Not the Holy Grail– It is time to move from innovation as an ideology to innovation as a process“, a number of key and very valid considerations are explored that are applicable to both federal government initiatives and corporations alike.
Business leaders serious about ensuring their organisations remain relevant in a changing world, recognise that perpetuating or fine-tuning past strategies, structures, leadership practices and governance models is no basis for long term survival. Whether externally imposed change forces the hand of the ‘C-suite’ to react, or attempts at pro-actively initiating change within the organisation to support its strategic vision and mission – change is a given.
Given that change is the only constant, the key to success hinges on striking the right balance between efficiency and innovation.
How to adapt for success: Build an adaptive enterprise.
Other than reading The Innovator’s Dilemma by Clayton Christensen or the any of the multitude of other useful perspectives on how to innovate . In particular, how – specifically – does an individual enterprise adapt to, and adopt innovation without undermining itself?
The fundamental challenge facing the ‘C-suite’ lies in assessing the useful insights, opinions and examples of apparent innovation successes of other organisations – then relating these to their own organisation.
The assumption that by replicating the innovation successes of other organisations will translate to your innovation success needs to be tested. No two organisations are identical.
Additionally, the swarm of innovation consultants, advisors and ‘thought leaders’ entering the market only adds to the challenge facing CEOs and their executives in making the optimal decision on how best to make the innovation shift for their specific organisation given its unique context. It is not a simple as ‘ innovate or die’.
The key to harnessing the upside potential of innovation lies in the organisation’s own ability to continuously critically assess, re-design, improve and transform itself.
Where to start?
The starting point for this journey is to equip the entire ‘C-suite’ and key business stakeholders within the organisation with the skills, competencies and capabilities needed to take on the task of adapting, defining, operating, managing and supporting the enterprise as it undertakes the transformation to becoming a truly adaptive and resilient organisation.
Successful innovation is not the remit of an individual executive or manager, business unit or the responsibility of a consultant, but lies in the ensuring that the the entire C-suite and key business stakeholders have a consistent framework of reference within which to work.
While the history books are filled with breakthrough innovations that have originated from an individual’s efforts, the reality is that innovation within and across established, successful organisations requires a holistic, systematic and deliberate shift away from the conventional approached to business strategies, operating models, project management and enterprise architectures.
A good starting point to consider is reviewing the freely available The Gill Framework®. The Gill Framework® defines the foundational meta-elements on which adaptive enterprise strategy, architecture, project and service management capabilities can be tailored for a specific enterprise by adopting agile and non-agile practices, tools and techniques.
The bottom line is that effective, sustainable innovation requires an adaptive approach to your organisation. The choice is yours to make.
1 Also, you may want to read Dr Gill’s book Adaptive Cloud Enterprise Architecture (Published 2015 by World Scientific Publishing Co.)