Innovation is the lifeblood of healthy organizations. Markets change and our ability to meet new requirements often determine whether we will be winners or losers in the economy. We live in a shrinking world, intensely personal in how the changes affect each of us. 
I believe organizations struggle with innovation for two key reasons:

  • 1. They underestimate their tolerance for risk and the type of innovation their risk profile can support.
  • 2. The internal management structures cannot support continuous innovation.

 Innovation and Risk Profile

 Ask most business leaders about what kind of innovation they want for their companies and you’re likely to hear a response such as “Breakthrough innovation that will transform my industry and make my company a market leader.” Breakthrough innovation requires the acceptance of a 95%+ failure rate. Very few CEOs can tolerate that failure rate – either personally or professionally.

 It is much more reasonable for organizations to choose a less radical innovation path. The Boeing 737 is one of the most profitable aircraft ever produced, because Boeing followed a path of Maintenance Innovation. I like calling Maintenance Innovation the “Accountant’s Innovation”. It’s incremental, predictable, and has a very high success rate. Accountants love it because they understand the plan, know the up-front bet, and can calculate a clear return. There are several innovation paths and we can discuss them in the weeks ahead.

 Internal Management Structure

 Most management structures are designed to protect the status quo. Functionally oriented organizations maintain the efficiency and effectiveness of delivering goods and services to a targeted market. Innovation requires a disruption to that efficiency and the normal management structures do not have the flexibility or perspective to create innovation on a regular basis.

 Organizations seeking innovation understand the need to create new structures and operations to foster creativity. Cross-functional teams often form the core of these efforts, but ineffectively addressing the team’s make-up and leadership needs can sabotage the best efforts of those teams. We will also explore leadership, team membership, and how they impact the ability of organizations to be innovative.

 Join in the discussion and help us all be more creative and innovative. It will be a great ride!

 

 

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3 Responses to “Innovation”


  1. August 29, 2008 at 10:35 am

    Attended an excellent talk last night at the Chicago Graduate School of Business. Bill Burnett is an expert on innovation – specifically how to identify and organize the people you need to innovate in your organization. He led a far-reaching discussion on the skills necessary to develop innovative solutions and the conditions leaders need to create in order to foster those conditions.

    Bill believes that synthesis skills are critical in order to create innovative solutions. Synthesis is the ability to match patterns from the past to solve present problems. It’s the process of combining existing knowledge to create new knowledge. Often these skills come from a novice or an outsider. Synthesizers are people who are able to sort through and reorganize the available information into ways that solve difficult problems.

    Synthesis can be taught and developed, but more often than not these skills become a natural outgrowth of a certain personality. Synthesizers are people with broad interests and expertise; search for truth, rather than credit; have little regard for hierarchy or position; and acts based on what’s right, rather than what’s easy. Often, these people are outcasts because they march to the beat of a different drummer. Finding people with these skills is difficult because of those personalities and the fact that most position searches look for expertise, not the ability to assemble expertise.

    Bill also talked about the need to build an environment built on the search for truth, creation of a peerage system, and fostering Adult-to-Adult communication. The idea is to create an environment where equals work together to find the best answers, facilitated by rational discussions of facts. It sounds easy and straight forward, but actually requires clarity, persistence, and a unique skill set to pull it all together.

    If you are in Chicago and have the opportunity to hear Bill speak, GO!!! If not, visit his website: http://www.wburnettllc.com.

  2. September 1, 2008 at 12:38 pm

    Now What Do Innovative Leaders Need to Do?

    Can we please add a few more requirements for successful business leaders? Geez…we have regulatory requirements and process requirements and environmental requirements and people requirements and technical requirements…the list goes on and on.

    Now, MIT’s Sloan School and Professors Day and Schoemaker publish “Are You a Vigilant Leader?” We have been told to focus, focus, FOCUS!!! These authors tell us to widen our vision…and they make a good case for innovators.

    Conventional wisdom tells us to concentrate on our markets and deliver value to our customer base. Value is created where we develop deep relationships with our customers, understanding their business and knowing how our products and services make them money. That takes time, effort, and focus.

    Long-term success requires innovation. That occurs on the periphery of the market. Innovation requires vision outside core offerings, and diffuse investments of time and energy. It requires the willingness to explore and try ideas away from core competencies.

    The authors suggest a systematic approach to the effort. They suggest constantly and consistently sending scout teams to push the boundaries. Their job is to test assumptions and present ways to create new markets and generate new profits. Great scout teams present options and challenge controversial thinking.

    Great leadership requires focus and flexibility. Innovation is essential and focus is comfortable. Striking a balance is key for future success.

  3. September 5, 2008 at 6:42 pm

    There are some terrific discussions on innovation happening on the LinkedIn Answers section. The responses are practical and come from people in the real world. OK. There are a few kooks in the crowd, but just chuckle and move along.

    Here’s an answer I posted this evening about what three things companies could do to encourage innovation:

    I think every company can increase their idea flow and hear more ideas from unusual places if they do three things:

    1. Pick your Innovation. We all have different risk profiles, and so do companies. Breakthrough innovation has a 95% failure rate. Maintenance innovation runs about a 3% failure rate. Define the risk you are willing to accept, the innovation you want, and reconcile the differences.

    2. Organize for Innovation. Organization involves two dimensions: Safe Zones and Teams. Innovation requires making mistakes. Leadership must establish “Safe Zones” in the organization where speaking the truth is demanded and intelligent mistakes can be made.

    The team aspect involves creating cross-functional teams. I think everyone understands that you won’t innovate very far with a room full of accountants…or salespeople…or operations folks…or any other function. It requires multiple perspectives to innovative. The part most people miss is that it also requires adding another role to this team: a Synthesizer. A Synthesizer is someone (usually an outsider) who has the ability to take diverse information and combine it into great thinking. Synthesizers make the team more efficient and effective.

    3. Fuel Passion. The team must have a real passion for creating something new and great! Often, this can be fueled by adding a second role to the team: the Free Radical. Free radicals in science are molecules with an added electron – extra energy, if you will. They can cause destruction unless they find a way to productively dispose of their electron. A Free Radical in a team is that person that’s ready to break all the rules, hurdle every barrier, and risk anything to be successful. Left alone, these people usually destroy themselves or chunks of the company. On an innovation team, they can release their energy in a positive way and fire-up the team members.

    Passion can also be fueled outside the team arena. One of my friends suggests finding every way possible to say “Yes!” to people with a passion for an idea. For most companies, you can find a way to fund and support these people in their passions. Provide seed money or other discretionary resources to the person. If they can get another person excited, increase the bet. If they find more people, do it again! People with passion make great things happen…sometimes in very surprising ways!


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