Organisational Change Management Volume 1

Framework 24 Innovation Solution for Change

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Design Rules For Radical Innovation

organisational development change management

Framework 24 Innovation Solution for Change


Comments on the Framework


Some questions that need to be asked

- how many people in your organisation understand the role industry revolution plays in wealth creation?

- how many know how to calculate the decay rate of current business frameworks?

- how many know how to identify and de-construct industry and organisational orthodoxies?

- how many are able to distil proprietary foresight out of an ocean of information on discontinuities?

- how many are adept at reviewing business concepts and reinventing old ones?

- how many feel personally responsible for business concept innovation?

- how many understand the principles of activism and would know how to launch a grassroots innovation campaign?

- how many would know how to build a low cost experiment to test a radical new idea?

- how many are working to apply the design rules of innovation to their parts of the organisation?


Some questions that need to be answered

- how many measures do you have in your organisation that focus explicitly on innovation (vs. optimisation)

- how many individuals in your organisation can say as much about your organisation's innovation performance as they could say about your organisation's cost efficiency

- how many people in your organisation have any personal performance metrics related to innovation?

- how does your organisation systematically benchmark other organisations on innovation?

Information technology

Information technology such as Internet, E-mails et al have dramatically changed the way organisations work.

Management processes

Supply chain integration was about minimising the time between an order and delivery; reinventing management processes for innovation is about accelerating the pay-offs for radical ideas.

Currently, most management processes are

- calendar driven, ie around budgets

- biased towards conservation rather than growth, ie focused on minimising variances rather than maximising opportunities with a premium on efficiency that undervalues, experimenting and exploring new competitive ideas

- taking the existing business frameworks as a point of departure, ie maintaining the status quo

- focusing on existing customers and markets, ie concentrating on serving existing customers better

- are controlled by defenders of the past

- are implicitly risk-averse, ie incrementalism is safe and radicalism is risky

- In general,

"management systems are designed to enforce conformance, alignment and continuity..."

Gary Hamel, 2000

Need to map the process across time and across the organisation by asking

- what are the milestones?

- who gets to participate?

- what are the inputs?

- what are the outputs?

- what kinds of decisions does the process produce?

- in what ways does the process hinder innovation and in what ways does it foster it?

- what was the process originally designed to do?

- is that goal still valid?

- is it possible to design a process that will meet the goal without killing innovation?

Remember: innovation is a dynamic process

Is your idea a brainwave or brain burp?

Sequence is imagine, design, experiment, assess and style

Innovation portfolio

"...your organisation's chance of creating new wealth is directly proportional to the number of ideas it fosters and number of experiments it starts......The logic of portfolio investing is to minimise the risk of the overall portfolio by diversifying your investments...."

Gary Hamel, 2000

The innovation portfolio has 3 parts

1. portfolio of ideas or possibilities (imagine and design)

2. portfolio of experiments (experiment and assess, ie identify and reduce market and technological risk)

3. portfolio of new ventures (scale, ie manage execution risk)

Under the portfolio of ventures one needs to consider the possibility of partnering by understanding

- financial commitments

- range of skills or assets required

- size of the strategic window

Furthermore, understand the key criteria for integration within the organisation or a stand-alone approach

- the fit between the venture and the organisation's long-term strategic goals

- dependency on terms, assets and competencies

- platform for other ventures

- potential for the venture to dramatically outperform other businesses

Generally, new ventures will get a tight fit with the organisation's long-term goals, will be only partly dependent on the organisation's existing assets and competencies, and will not be a gateway to a vast array of new opportunities.

One of the challenges is to marry innovation with discipline and execution, ie to merge the efficiency of a Toyota production line with the radical innovation of Silicon Valley, to blend religions and curiosity. A organisation must be systematic and spontaneous, highly focused and opportunistic, brutally efficient and wildly imaginative

Finding strategies - the skill is to look for patterns, for consistency and accumulativeness that will yield advantages of scale and scope across ideas, experiments and ventures. These take many forms

- allegiance to a standard, eg Microsoft to Windows

- a widely shared competency, eg GE's capital competence in risk management and deal structuring

- a set of values around the brand, eg Virgin and Disney

Are you ready?

- have individuals been given the training and the techniques they need to become business concept innovators?

- do the metrics in your organisation focus as much on innovation and wealth creation as on optimisation and wealth conservation?

- does your IT system support a corporate-wide electronic marketplace for innovation?

- has your organisation committed itself to systematically redesigning its core management processes to make them more innovation-friendly?

- does the wheel of innovation spin rapidly in your organisation, or is it limited by the speed of quarterly and annual processes?

- do would-be entrepreneurs in your organisation know how to design experiments around radical ideas?

- are there full mechanisms for capturing and monitoring the learning from innovation experiments?

- does your organisation get the very best talent behind the best new ideas, even when those ideas are at an early stage of development?

- is your organisation explicitly managing a portfolio of ideas, a portfolio of experiments and a portfolio of ventures?

- is your organisation flexible enough to design the right kind of institutional how-how for promising ventures?

- are you confident that your/this organisation is in charge of the transformation agenda in its industry?

New innovation agenda

- continuous improvement and non-linear innovation

- product and process innovation and business concept innovation

- releasing wealth and creating wealth

- serendipity and capability

- visionaries and activists

Organisations need to understand that developing new business concepts, or reinventing fading business concepts, is often a process of successive approximations - a succession of fast-paced experiments, each designed to test some particular aspect of a normal business concept.

Your customer is a co-developer. Use tools, such as the Internet, rapid cycle customer feedback to promote this approach

Some essential approaches

- be honest about what you don't know

- design tight, short experiments

- maximise the ratio of learning over investment

- bring your customers inside the tent

- love your project but kill it quickly if you find un-fixable flaws

Questions that you need to process yourself

- do you care enough about your integrity to speak the truth and challenge the little lies that jeopardise your organisation's future or that of your integrity?

- do you care enough about the future to argue with precedent and stick a thumb in the eye of tradition?

- do you care enough about your colleagues to help them get off the treadmill of progress?

- do you care so much about the magnificent difference you can make in this world that you are willing to try to change it with your bare hands?

- do you care enough about finding meaning and significance in the 80 percent of your life you devote to work that you are ready to start a movement within your organisation?

- do you care enough about the creative impulse that resides in every human breast that you are ready to help everyone be a revolutionary?

- do you care enough about doing something so wonderful and unexpected for customers that you are willing to put your organisation job on the line?

(source: Gary Hamel, 2000)


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