Change Implementation Techniques for Forming Transitional Team, Creating Alignment, Maximizing Connectedness and Creativity

Technique 6.5 Building Perpetually Innovative Organisations

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(some guidelines and comments)

To determine whether or not an organisation is perpetually innovative, answer the following questions

i) Does the organisation set unreasonable expectations? Yes No

(NB No organisation out-performs its aspirations, and non-linear innovation begins with unreasonable goals. When setting unreasonable goals, be careful of people who will take shortcuts, ie mega acquisitions, deep price cuts, rebates, etc

ii) Does your organisation have an elastic business definition? Yes No

Some questions that will help understand your business definition, ie

a) who are we?

b) where does our opportunity horizon begin and end?

c) what do we currently regard as "out of scope"?

(NB Too many organisations define themselves by what they do, rather than by what they know (core competencies) and what they own (strategic assets), ie leverage competencies and assets. For the Virgin group, there are no assumptions about what business Virgin should be in or shouldn't be in. Remember: parochialism is one of innovation's most deadly enemies

iii) Does your organisation develop a cause, not a business? Yes No

(NB The more noble the cause, the better. One of the most unsettling things about business conception innovation is the need to write off one's own depreciating intellectual capital. The following questions need to be asked

a) will my skills and my relationships be as valuable in this new world as they were in the old?

b) how much will I be asked to learn?

c) how much effort will it take for me to adapt myself to a new order of things?

d) what am I actually working for?

e) what kind of difference would I like to make?

f) who will thank me?

g) do I have a calling, or just the job?

iv) Does your organisation listen to new voices? Yes No

(NB More often than not, industries get reinvented by outsiders: newcomers - free from the prejudices of industry veterans. New voices involve 3 areas:

a) let youth be heard, ie reverse mentoring, shadow/second board concept, etc

b) listen to the periphery, ie the capacity for radical innovation increases proportionately with distance from headquarters. At the periphery, people have fewer resources and are forced to be more creative; also, they are less controllable than those at headquarters

c) let newcomers have their say, ie encourage people from outside your organisation to join and encourage diversity of thinking.)

v) Does the organisation encourage an open market for ideas? Yes No

(NB This can be achieved by allowing all staff to have direct contact with the top manager. Furthermore,

- the market for ideas is linked with the markets for capital and talent

- staff need to realise that rule-breaking ideas are the surest way to wealth creation

- in most companies, the marketplace for ideas is a monopsony, ie only one buyer (senior management)

vi) Is there an open market for capital to finance new ideas? Yes No

vii) Is there an open market for talent to identify and develop new ideas?

Yes No

viii) Does the organisation encourage low-risk experimentation? Yes No

(NB Need to be aware that most new ventures will fail; need to understand the different risks, ie

a) project risk (which is the function of 1 project)

b) portfolio risk (is the function of several projects)

c) actual risk (is a function of uncertainty)

d) perceived risk (a function of ignorance).

ix) Does the organisation embrace cellular division? Yes No

(NB Large organisations need to divide into revolutionary cells, ie division and differentiation. - speed, flexibility and focus are of vital importance

x) Does the organisation facilitate personal wealth accumulation? Yes No

NB Need to pay people like entrepreneurs. Need to spectacularly reward people who make a non-linear change in the business.


"...orthodoxy rather than size is the enemy of innovation..."

Gary Hamel, 2000


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