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Organising for innovation

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Kant Weerakant Drive Thailand
Kant Weerakant Drive Thailand

- Three aspects of an organization's structure that affect innovation are corporate culture, architecture/structure, and roles. - An innovation culture starts from leadership and should encourage risk-taking, collaboration, and rewarding innovation. However, many Asian cultures are more hierarchical and risk-averse. - To build an innovation culture, leaders must lead by example to foster an open culture tolerant of mistakes. Creativity should be guided by strategy and stretch targets used to encourage thinking outside the box. Innovations and innovators should be celebrated.

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Innovation Management การจัดการเพื่อสร้างนวัตกรรม Organising for Innovation Source : David Smith, Introduction to Innovation , 2006
Innovation Management 3 Aspects of Organisation that affect Innovation  Corporate Culture  Architecture/Structure  Roles
Innovation Management What is Corporate Culture? “…the way we do things around here” i.e. shared values, beliefs and attitudes
Innovation Management Innovation culture  Innovation is as much about attitude as it is about processes and systems.  If firms are to succeed in harnessing the power of innovation, they will have to work hard to create innovation cultures.  An innovation culture starts at the top – in the boardroom and the office of the CEO.  It’s ”top-down,” not ”bottom-up” – but should certainly reach throughout the firm.  “It’s not my job to innovate; my job is to do what my boss asks me to do and Innovation is risky; I don’t want to fail!” Source : H. Patel and S. Wyatt
Innovation Management Innovation culture
Innovation Management Innovation culture  becomes standard practice throughout the organization.  But education system based more on memorizing answers than creating solutions; and an Asian culture that defers to seniority and authority.  Widespread good intentions: Many business leaders want and plan to move from a command-and- control corporate culture to one that is less hierarchical and more innovation-friendly. Source : H. Patel and S. Wyatt
Innovation Management Innovation culture  That is too rigid, hierarchical, bureaucratic and risk-averse.  They need to create free and collaborative environment for experimentation, prototyping and implementation.  They need to make innovation an expectation from every employee.  They need to measure and reward innovation activities that have significant positive impact on their business.
Innovation Management Begin to build “innovation cultures” Ensure the leadership ‘walk to talk’.  CEOs must also lead by example in fostering an open, creative, experimental, collaborative, mistake-tolerant culture.  Creativity can come from anyone and anywhere Focus Individuals’ Creativity through Strategic Platforms.  If not guided by clear strategy and direction, even the best employees will waste their time and resources on low–impact, low-value activities.
Innovation Management Begin to build “innovation cultures” Use Stretch Targets to Think Outside the Box.  the human spirit, when faced with difficult goals, consistently rises to the challenge. It is stretch targets that drove NASA to put a man on the moon.  Korean CEOs at Hyundai, Samsung and LG have set stretch targets for many of their business units to become Top Three performers by 2008  Pulling our staffs out of their comfort zones.  Managers should reward individuals who meet them but not punish those who don’t.
Innovation Management Begin to build “innovation cultures”  Set Individual and Team Actions To Strategy.  “I always tell my chaps that hard work, team work and integrity are given. I do not give you any bonus for that. I only give bonuses for three things: ideas, judgment and leadership.  Ideas, because if you do not come up with anything new, then you are just keeping things going.  Judgment, because if you come up with all hairy-scary ideas and waste your time chasing wild geese, then you are not much good.  Leadership, because without it, your ideas are not going to get off the ground”.
Innovation Management Begin to build “innovation cultures”  Celebrate Your Innovations and Innovators.  Rewards : At Motorola, innovators with more than 10 patents are issued a gold colored name badge so that all will recognize their contribution.
Innovation Management Factors that influence Corporate Culture  History  Traditions, customs etc  Size  Small companies more flexible & dynamic  Technology  Rapidly changing technology gives rise to flexibility and willingness to change  Leadership  Powerful leader stamps his/her „way of doing things‟ on the organisation
Innovation Management Features of a Culture that supports Innovation  Outward looking and receptive to new ideas, particularly from outside (Open innovation)  Facilitates communication, especially across the organisation (walk to talk/informal meeting)  Is open and receptive to new ideas and approaches (not only boss ideas)  Challenges established ideas and practices – „the conventional wisdom‟ (Think outside the box)  Accepts and learns from failure (Nonblame culture)  Promotes evaluation and reflection (Reward)
Innovation Management Three-Dimensional Model of The Environment Stable Dynamic Simple Complex Abundant Scarce
Innovation Management Start to break culture barriers Begin to build innovation culture Turf Issues Resistance to Change Hierarchy Blaming and Excuses Lack of : Bias for Action Trust Openness Teamwork “Can-do” attitude Customer Focus Low results Few out Many in Culture barriers
Innovation Management Mechanistic Versus Organic Models High specialization Rigid departmentalization Clear chain of command Narrow spans of control Centralization High formalization Cross-functional team Cross hierarchical teams Free flow of information Wide span of control Decentralization Low formalization
Innovation Management 1 Span of control 256 64 16 4 1024 1 512 64 8 4096 4096 Organizationlevel (Highest) Assuming span of 4 Assuming span of 8 Operatives = 4096 Managers (1-6) = 1365 Operatives = 4096 Managers (1-4) = 585
Innovation Management Size : Is Bigger better?  Schumperter (1940) -> Bigger is better  Finance R&D project  Spread the fixed costs of R&D  Take on large or risky innovation projects (Boeing 747)  On the other hand  R&D efficiency might decrease (less control and motivate)  Individual incentive diminish
Innovation Management Structures that support Innovation  Network  e.g. Benetton, Nike  Strategic Alliances  Provide a structure by which organisations can link to external sources of innovation  e.g. small biotech companies and major drug firms  Corporate Venturing  „business within a business‟  Gives benefits of small firm within a large firm
Innovation Management Organisational Roles  Project Leader  Product Champion  Gatekeeper  Godfather
Innovation Management  Formal position or designation within the organisation  Takes responsibility for managing the project/innovation  Provides leadership  May not be strong on technical side  Mix of talents: communication, motivating, analytical & organising skills Project Leader
Innovation Management Product Champion  A person with real commitment to a project  Good at attention to detail  Fights for resources  Prevents staff being poached  Looks after & protects the interests of the project  May well possess business skills as well as technical knowledge
Innovation Management Gatekeeper  Acts as guardian of knowledge/expertise  Well informed about what is happening, especially outside the organisation  Good at passing information to others  Serves as an information resource for others  Able to unlock (knowledge) resources  Can provide access to other individuals  Can be very effective in denying resources
Innovation Management Godfather  High position in the organisation  No direct connection to project  Provides “protection”  Guides the project through the system  Ensures clearance of appraisal/evaluation hurdles  Divine intervention when appropriate
Innovation Management

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Organising for innovation

  • 2. Innovation Management 3 Aspects of Organisation that affect Innovation  Corporate Culture  Architecture/Structure  Roles
  • 3. Innovation Management What is Corporate Culture? “…the way we do things around here” i.e. shared values, beliefs and attitudes
  • 4. Innovation Management Innovation culture  Innovation is as much about attitude as it is about processes and systems.  If firms are to succeed in harnessing the power of innovation, they will have to work hard to create innovation cultures.  An innovation culture starts at the top – in the boardroom and the office of the CEO.  It’s ”top-down,” not ”bottom-up” – but should certainly reach throughout the firm.  “It’s not my job to innovate; my job is to do what my boss asks me to do and Innovation is risky; I don’t want to fail!” Source : H. Patel and S. Wyatt
  • 6. Innovation Management Innovation culture  becomes standard practice throughout the organization.  But education system based more on memorizing answers than creating solutions; and an Asian culture that defers to seniority and authority.  Widespread good intentions: Many business leaders want and plan to move from a command-and- control corporate culture to one that is less hierarchical and more innovation-friendly. Source : H. Patel and S. Wyatt
  • 7. Innovation Management Innovation culture  That is too rigid, hierarchical, bureaucratic and risk-averse.  They need to create free and collaborative environment for experimentation, prototyping and implementation.  They need to make innovation an expectation from every employee.  They need to measure and reward innovation activities that have significant positive impact on their business.
  • 8. Innovation Management Begin to build “innovation cultures” Ensure the leadership ‘walk to talk’.  CEOs must also lead by example in fostering an open, creative, experimental, collaborative, mistake-tolerant culture.  Creativity can come from anyone and anywhere Focus Individuals’ Creativity through Strategic Platforms.  If not guided by clear strategy and direction, even the best employees will waste their time and resources on low–impact, low-value activities.
  • 9. Innovation Management Begin to build “innovation cultures” Use Stretch Targets to Think Outside the Box.  the human spirit, when faced with difficult goals, consistently rises to the challenge. It is stretch targets that drove NASA to put a man on the moon.  Korean CEOs at Hyundai, Samsung and LG have set stretch targets for many of their business units to become Top Three performers by 2008  Pulling our staffs out of their comfort zones.  Managers should reward individuals who meet them but not punish those who don’t.
  • 10. Innovation Management Begin to build “innovation cultures”  Set Individual and Team Actions To Strategy.  “I always tell my chaps that hard work, team work and integrity are given. I do not give you any bonus for that. I only give bonuses for three things: ideas, judgment and leadership.  Ideas, because if you do not come up with anything new, then you are just keeping things going.  Judgment, because if you come up with all hairy-scary ideas and waste your time chasing wild geese, then you are not much good.  Leadership, because without it, your ideas are not going to get off the ground”.
  • 11. Innovation Management Begin to build “innovation cultures”  Celebrate Your Innovations and Innovators.  Rewards : At Motorola, innovators with more than 10 patents are issued a gold colored name badge so that all will recognize their contribution.
  • 12. Innovation Management Factors that influence Corporate Culture  History  Traditions, customs etc  Size  Small companies more flexible & dynamic  Technology  Rapidly changing technology gives rise to flexibility and willingness to change  Leadership  Powerful leader stamps his/her „way of doing things‟ on the organisation
  • 13. Innovation Management Features of a Culture that supports Innovation  Outward looking and receptive to new ideas, particularly from outside (Open innovation)  Facilitates communication, especially across the organisation (walk to talk/informal meeting)  Is open and receptive to new ideas and approaches (not only boss ideas)  Challenges established ideas and practices – „the conventional wisdom‟ (Think outside the box)  Accepts and learns from failure (Nonblame culture)  Promotes evaluation and reflection (Reward)
  • 14. Innovation Management Three-Dimensional Model of The Environment Stable Dynamic Simple Complex Abundant Scarce
  • 15. Innovation Management Start to break culture barriers Begin to build innovation culture Turf Issues Resistance to Change Hierarchy Blaming and Excuses Lack of : Bias for Action Trust Openness Teamwork “Can-do” attitude Customer Focus Low results Few out Many in Culture barriers
  • 16. Innovation Management Mechanistic Versus Organic Models High specialization Rigid departmentalization Clear chain of command Narrow spans of control Centralization High formalization Cross-functional team Cross hierarchical teams Free flow of information Wide span of control Decentralization Low formalization
  • 17. Innovation Management 1 Span of control 256 64 16 4 1024 1 512 64 8 4096 4096 Organizationlevel (Highest) Assuming span of 4 Assuming span of 8 Operatives = 4096 Managers (1-6) = 1365 Operatives = 4096 Managers (1-4) = 585
  • 18. Innovation Management Size : Is Bigger better?  Schumperter (1940) -> Bigger is better  Finance R&D project  Spread the fixed costs of R&D  Take on large or risky innovation projects (Boeing 747)  On the other hand  R&D efficiency might decrease (less control and motivate)  Individual incentive diminish
  • 19. Innovation Management Structures that support Innovation  Network  e.g. Benetton, Nike  Strategic Alliances  Provide a structure by which organisations can link to external sources of innovation  e.g. small biotech companies and major drug firms  Corporate Venturing  „business within a business‟  Gives benefits of small firm within a large firm
  • 20. Innovation Management Organisational Roles  Project Leader  Product Champion  Gatekeeper  Godfather
  • 21. Innovation Management  Formal position or designation within the organisation  Takes responsibility for managing the project/innovation  Provides leadership  May not be strong on technical side  Mix of talents: communication, motivating, analytical & organising skills Project Leader
  • 22. Innovation Management Product Champion  A person with real commitment to a project  Good at attention to detail  Fights for resources  Prevents staff being poached  Looks after & protects the interests of the project  May well possess business skills as well as technical knowledge
  • 23. Innovation Management Gatekeeper  Acts as guardian of knowledge/expertise  Well informed about what is happening, especially outside the organisation  Good at passing information to others  Serves as an information resource for others  Able to unlock (knowledge) resources  Can provide access to other individuals  Can be very effective in denying resources
  • 24. Innovation Management Godfather  High position in the organisation  No direct connection to project  Provides “protection”  Guides the project through the system  Ensures clearance of appraisal/evaluation hurdles  Divine intervention when appropriate