Ten Different Types of Innovation (cont.) 3

A. Configuration (focus on the innermost workings of an enterprise and its business systems -  3rd of 4 types)

3. Structure (focus on how you organise and align your organisational talent and assets)

The following tactics may be useful:

- superior talent management systems, like HR, R&D, IT, etc

- standardising assets (reducing operating costs and complexity plus increasing connectivity and modularity by standardising the assets; using ingenious configurations of heavy capital equipment)

- setting up training facilities, like corporate university, etc (provide job-specific or company-specific staff training)

- competencies centre (cluster resources, practices and expertise in these centres that support functions across the organisation to increase efficiency and effectiveness)

- decentralised management (devolve decision-making governance closer to the people or business interfaces)

- incentive systems (offer financial and/or non-financial rewards to provide motivation for a particular course of action & encourage staff to focus on certain goals)

- IT integration (integrate technology resources and application)

- knowledge management (share relevant information internally to reduce duplication and improve job performance)

- organisational design (make form follow function and online infrastructure with core qualities & business processes)

- outsourcing (assign to a vendor responsibility for developing and/or maintaining a system), etc

NB The above tactics can be used individually or in combination.

Indicators of success are when the organisation

- has a unique or unusual organisational structure

- attracts top talent in a particular field or function like marketing, research, etc

- uses its hard assets differently from competitors like unusual standardisation or diversity of machines or other equipment.

Some examples include

- Whole Foods Market (starting in the 1980s it has radically decentralised management, with each store composed of self-directed teams that

"...manage departments with unusual autonomy - making decisions about what products to stock and how to display them. Importantly, each team also makes decisions about who to hire; joining a team requires 2/3 of its current members' approval. Each store is measured as an independent line on its profit and loss statement, and each team within the store has very clear performance targets..."

Larry Keeley et al, 2013)

There is a free flow of detailed information within the organisation, ie members in each department know how they and other departments are performing.

- WL Gore (starting in 1958, used a flat lattice organisational model, ie

"...internal teams are deliberately kept small to encourage input and innovation from all, activities are managed by 'commitments' rather than dictates. Each employee becomes a shareholder after one year..."

Larry Keeley et al, 2013)

- Southwest Airlines (initially they only flew one kind of aircraft, ie Boeing 737. This

"...reduced service costs, streamlined operations, and allowed teams to execute fast turnarounds at the airport gates..."

Larry Keeley et al, 2013)

Airlines only make money when the planes are in the air carrying passengers.

- Trinity Health (its hospitals and clinics use standardised and highly integrated IT infrastructure which allows easy access to patient data and serves the basis of other programs including

"...data-driven initiatives to improve quality of care, and tele-medicine to serve patients in rural clinics..."

Larry Keeley et al, 2013)

NB need to differentiate between structural and process innovations, ie structural innovation refers to how you organise your talent and assets; while process innovation is around how the assets have actually been used in practice

 

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