If we build it, will they come? Innovation & the Boom hangover
August 13, 2010 by Andrew (Drew) · 4 Comments
Exploring how R&D spending points toward a widespread desire for innovation in large companies but not necessarily an economic upturn any time soon.
I would gladly pay you Tuesday for a hamburger today.
- Wimpy
The way companies position their investments in research and development (R&D) or capital programs speaks volumes about the kind of innovation culture they possess. Increasingly, large companies stick to their innovation investment programs in the face of broader internal cuts in expenses. According to Booz & Co.’s special report “Profits Down, Spending Steady: The Global Innovation 1000,” by Barry Jaruzelski and Kevin Dehoff, some companies are even increasing their innovation spending in the hope of being better positioned for the longed-for economic upturn. Which would seem to be a sign that things will improve soon, right?
Not so fast.
Big Business does not represent the national economy
An article by Zachary Karabell in Time magazine recently described the divergence of large, market-capitalized companies’ performance from the respective economic performance of their headquarter nation-states, where previously they were linked quite closely:
Stocks are no longer mirrors of national economies; they are not — as is so commonly said — magical forecasting mechanisms. They are small slices of ownership in specific companies, and today, those companies have less connection to any one national economy than ever before.
The key message was that because of their ability to spread both their exposure and investment across multiple geographies, large companies had inoculated themselves against the impact of any single national economy. The ability of USA-based companies to straddle economies, in some cases by deriving more than 50 percent of their revenues overseas, has meant that they’re no longer profoundly impacted by the US economy, nor are they a true indicator of US economic status.
The economic upturn fake-out
While the US economy languishes with unemployment near 10 percent, faces housing foreclosures once again on the rise, and wrestles with a multi-trillion dollar plus-sized deficit, companies live in a different world (or possibly a parallel universe). The majority of publicly traded companies are beating analysts’ earnings estimates (250 beat estimates and 54 disappointed) and sales estimates. The gap between the US economy’s performance and US-based companies’ performance is also reflected to a lesser extent in the dire straits of the European economy and the reasonable success of EU-based companies. They, too, continue to thrive and spend on innovation.
At the heart of our success lies our commitment to innovation.
- Steve Ballmer, Microsoft CEO
Why are companies spending big on innovation when all indications say that we are in this economic mess for the long haul? The problem with a strategy that cuts back on all expenditures during an economic downturn is that you discover unpleasant consequences years later — when you’re lagging behind your competitors. By then it’s too late. It seems today’s companies have learned the lessons of the past. Immediately following the dot-com bust of the early 2000s, companies pulled back so far that their response to the economic upturn was delayed to the extent that competitors gained toeholds, or their enterprises folded, origami-like, in on themselves. They became small, misshapen relics of their former glorious selves.
Consider the examples of Nortel, Corning, and Cisco. Nortel died (its shares trading on their final day at $0.185, down from a high in 2000 when it comprised a third of the S&P/TSX composite index). Corning has taken the better part of a decade to recover (notwithstanding the emergence of its current breakthrough product—Gorilla Glass—discovered in, oh yes, 1962!). And Cisco, once the most valuable company in the world, finally figured out that having all one’s eggs in a single basket wasn’t a safe bet under any economic conditions, and is now built for survival.
Diversification via innovation is now seen as key. Hurray! Which is fine, but what happens if all this innovation takes place but there’s no one willing to buy it? Consumers without jobs don’t consume.
Is innovation really the answer to our economic woes?
Certainly the consumer space in the USA has tightened up remarkably, an indication that things won’t be turning upward any time soon. During this recession, the trend of consumers switching to store-brand labels and other cheaper alternatives has dug into the profits and dominant market shares of brands owned by P&G, the world’s biggest consumer-product maker and seller of many of the most premium-priced household products on store shelves. Of note was the recent news that for many of its core brand staples, P&G has reduced prices by as much as 10 percent. As for its premium-priced brands, the so called “nice-to-haves,” expect those prices to increase to offset the high volume product price drop.
The reality is that if you are doing well in this economy, either as a company or an individual, you will continue to do well regardless of a statistical double dip.
- Zachary Karabell, “A Double Dip Recession? Who Cares?” Time Magazine
The challenge with the current economic situation, and its associated strong company performance, is that investment in innovation by large companies will do little to improve the lot of the many people still living in recession conditions. In a report released earlier this month, the US Congress Joint Economic Committee observed fragile and uneven growth for the US manufacturing industry. The report cites 136,000 new jobs that the manufacturing sector created in the first half of 2010, but notes that inventory restocking may be responsible for much of those gains. For the millions of jobs lost, adding a little more than a hundred thousand is but a drop in an ocean. The unemployment rate is just under 10 percent, but that doesn’t begin to cover the enormous chaos on the job front.
The “true” unemployment rate (combining figures for workers who have dropped out of looking for work, to the underemployed working multiple part-time jobs, and those actually counted in the unemployment roster), is figured at closer to 17 percent. Total hours worked and total compensation have both declined. And the easy consumer credit and housing-backed affluence have gone, never to return. Essentially the economy has bifurcated.
Are we cheered up yet? No? There is a way forward.
Each month 400,000 new small and micro-businesses start in the USA. At present, there are 5 million (yes, million) small businesses (100 employees or less) employing far more people than the Fortune 100. If we are going to look to innovation as a transformative tool for unleashing creativity and improving the economic outlook of the majority of the population, it is to small businesses that we must turn. If we help build them, more could come to the table to promote a stronger economic upturn. They could be active participants in energizing an economy that not only helps people survive, it could once again be an economy where many could thrive.
Big business innovation is not the answer. It simply can’t create the number of jobs fast enough to pull us out of this economic funk. What can we build together to unleash the innovation residing in small and mid-sized enterprises?
A Better Yardstick / A Better Meter Rule – Measuring Innovation Performance
April 6, 2010 by Andrew (Drew) · Leave a Comment
Just because you can measure it doesn’t mean you should
Any measurement must take into account the position of the observer. There is no such thing as measurement absolute, there is only measurement relative.
- Jeneatte Winterson
One of the great challenges for those focused on improving their organization’s innovation culture is the desire, at the end of the day, to be able to point to something and say, “that’s better than it was before.” That desire, to measure our performance against an agreed upon set of measures, is not a bad thing. The way that need is acted out in the organization is where it comes undone. This is most problematic when the push is to measure in purely financial terms.
The drive to see some kind of return on innovation investment has a strong pull. In a time when every penny, cent, fen, or kopek is being counted with scrupulous accuracy, the notion of not counting the programmatic contribution of innovation in monetary terms seems ludicrous. Unfortunately, if you were going to spend money on a program that offered fast return on your investment, spending on changing your innovation culture would not be the wisest investment. Investing on your innovation culture is a long-term play, as they say. Yet, it should be a focus for investment and it should be measured.
The key initial measures to watch for when building an improved innovation culture are:
Overall we are talking about a process that reduces cycle time.
In fact, the Boston Consulting Group’s 2009 Annual Innovation Report highlighted the fact that cycle time, specifically “time to market,” was one of the most “chronically underutilized metrics” in their survey of companies. Which they also saw as being highly ironic given that many companies identified a lack of speed as their greatest weakness.
I’ll know it when I see it
Our scientific age demands that we provide definitions, measurements, and statistics in order to be taken seriously. Yet most of the important things in life cannot be precisely defined or measured. Can we define or measure love, beauty, friendship, or decency, for example?
- Dennis Prager
Cycle time reduction is a great first measure because it can be applied across all aspects of the innovation processes at play in your organization. From decision-making, to selection of team members, applying the measure of cycle time reduction sharpens the way all innovation is approached. It has a distillation effect. In helping you to focus on speeding up the process of concentrating the right resources on the most beneficial projects, cycle time reduction also demands attention on quality, too.
Poor quality actually results in a systemic drag later in your innovation process. That initial poor quality may also have a knock-on effect, causing an escalation of poor quality further down the line as corners are cut in order to meet the initial cycle time reduction. By managing all cycle times and aligning them with quality practices your organization becomes more robust and resilient. The outcome is not only better performance but faster performance which can be seen across the whole organization.
I can count it but I can’t count on it
The only man who behaved sensibly was my tailor; he took my measurement anew every time he saw me, while all the rest went on with their old measurements and expected them to fit me.
- George Bernard Shaw
In a world of constraints, meting out investments may be a matter of short-term economic survival, but it will not build a foundation for long-term success. To create and improve and innovation culture – a culture that fosters economic expansion and delivers to the top and bottom lines – organizations need to invest in those processes and practices that change behavior. In the post, Working The Processes of Innovation – Learning to Love & Live Failure, we explored the power that comes from building a tolerance for appropriate failure. Recently this was reinforced in Megan McArdle’s piece in Time magazine, In Defense of Failure,
It sounds like a dubious aspiration, but one of the more pressing priorities for America this decade is to preserve our cherished freedom to fail in this country…America allows its citizens room to fail — and if they don’t succeed, to try, try again. Somewhere between two-thirds and three-quarters of all Americans report that they have considered starting their own business, whereas in Europe that number is only 40%.
Here McArdle talks about the power of this freedom:
McArdle on America\'s Need to Support Failure
How do we measure failure and the power of failure in moving us toward a better, brighter, more abundant future? It should be interesting to note that measuring innovation is also top of mind of one of the world’s most active philanthropists, Bill Gates. His concern is not that we aren’t measuring innovation failure, although he did popularize the concept of “fail forward fast” during his time leading Microsoft, his concern is that most people are failing to measure innovation at all.
When all is said and done – have the right satisfaction measures improved?
Without a measureless and perpetual uncertainty, the drama of human life would be destroyed.
- Winston Churchill
Once again the Boston Consulting Group’s 2009 Annual Innovation Report offers another key insight into the dynamic tension that exists in measuring innovation performance in terms of outcomes. The top measure employed by companies seeking to assess their innovation performance was customer satisfaction but the second highest measure was overall revenue growth. The expense of increasing the former measure would seem to have a direct negative effect on the latter and yet there they are parked beside each other at the top of list of robust measures for innovation performance.
The performance of any innovation truly is measured in the eyes of the customer, be they an internal customer or a market-based customer. Customer satisfaction is the end-of-the-line measure for all innovation. If an innovation cannot drive the performance of that measure then what purpose does it serve? One of the most powerful tools for revealing the impact of an innovation is the Net Promoter® Score (NPS). This concept was first widely made known through the work of Fred Reichheld in his book, The Ultimate Question.
The NPS is both a loyalty metric and a discipline for using customer feedback to directly influence behavior within an organization. One company using NPS to measure its innovation effectiveness is Logitech, the computer peripheral manufacturer, which uses it as the final consumer acceptance testing measure. By using this score Logitech can tweak late-stage products to maximize their effectiveness on release to market. They test. They measure. They tweak. They hold or go to market. It should be noted that the best performing products, with the highest NPS, are also the products with the highest revenue on release.
So, it would seem you can serve one goal with two measures, after all!
There are two possible outcomes: if the result confirms the hypothesis, then you’ve made a measurement. If the result is contrary to the hypothesis, then you’ve made a discovery.
- Enrico Fermi
What have you discovered as you attempt to measure your innovation?
Knowledge Management – the Engine for Innovation
March 20, 2010 by Andrew (Drew) · Leave a Comment
In advocating for innovation it seems as though “innovation happens” is the mindset carried by many mistaken adherents to the cause. You just have to trust it and it will come, they say (or not). This is the equivalent of saying “magic happens” when faced with a “Mechanical Turk”. Data goes in one end, magic happens, and a desired output comes out the other end. I’m sorry – innovation is not based in gold-pooping unicorns, nor is it something that should be left to the whims of inevitability or caprice. Innovation needs to be specifically and studiously fed a fuel of knowledge in order to succeed. And if knowledge is the fuel, then knowledge management is the engine that drives innovation.
It’s not what you know, it’s what you do with what you know
Of central importance is the changing nature of competitive advantage – not based on market position, size and power as in times past, but on the incorporation of knowledge into all of an organization’s activities.
- Leif Edvinsson Swedish Intellectual Capital Guru
When Peter Senge defined The Fifth Discipline (as opposed to The Fifth Element) in 1994, one of the tenets of embracing the concept of becoming a “learning organization” was the use of effective knowledge management. Knowledge management in his model was a way to accelerate the performance of the organization so that it might better think holistically and systemically, and thereby design better solutions to its challenges faster. It required that organizations not only attract and retain bright people, but that they harness the thinking of those bright people in such a way that their efforts could be captured and populated across the organization.
The issue with knowledge in organizations is not that it isn’t available; the problem is that knowledge is not readily available at the time and point of need. As this dilemma relates to innovation, it is an even bigger issue. Innovation places huge knowledge demands on organizations. To be truly effective it must reach across all knowledge sources both internal to the organization and increasingly, thanks to open innovation practices, external to it. Knowledge must be easily and freely available for recombinant thinking approaches and to be applied directly to pressing challenges. Unfortunately, many knowledge management solutions sacrifice ease and access to the twin overlords or taxonomy and ownership.
Permission-based knowledge management systems, the ones that sequester information into functional groups with associated administrative and rights management restrictions, do not foster and promote the kind of knowledge transfer for which the learning organization calls. They kill it. Is there a place for intellectual property protection and management? Absolutely. But knowledge management need to head towards greater freedom to be of better value for innovation.
Groups filled with big brains and bright ideas applied to thorny issues equals…
Imagination is more important than knowledge
- Albert Einstein
What is the promise of knowledge management? For one thing it enables organizations to leverage their tacit knowledge more broadly among their members. By applying knowledge management to key data sources, and capturing the experience of organization members in an explicit and coordinated manner, the opportunities to decrease the innovation cycle time are correspondingly increased.
To better coordinate knowledge management, via systems and processes not only technologies, user-led innovation communities may be created. Innovation communities when people within an organization who work together explore and create new approaches and then implement them. They are usually a subset of communities of practice or information communities (both of which are commonly tied to functional expertise.) Communities of practice are communities or networks of individuals and/or organizations that coalesce around an information commons, usually a body of knowledge that is open to all on equal terms. The Project Management Institute is one such community of practice.
Knowledge management will never work until corporations realize it’s not about how you capture knowledge but how you create and leverage it.
- Etienne Wenger
From communities of practice, innovation communities may form to directly apply their shared knowledge in new and interesting ways. As the costs of diffusing knowledge are getting steadily lower, as computing and communication bandwidth expand, the geographic dispersion and cultural diversity of these groups may increase, too. This makes the notion of having the big brains all in the same room for innovation to occur (e.g., the Manhattan Project) is no longer a necessity. But as a proponent of both knowledge management and face-to-face communication (and relationship-building) I see a place for them both to continue to coexist.
Dick Brandon once said that, “documentation is like sex: when it is good, it is very, very good; and when it is bad, it is still better than nothing.” In a sense, knowledge management exists in a similar vein. Some, no matter how rudimentary, can be helpful in the development of innovation. The challenge is to “wire up” knowledge so that it is readily available to inform innovation practices, such as, design thinking, ethnographic study, and prototyping. That process is often best addressed at the human interface level.
The innovation wisdom of individuals, crowds, communities, countries
Knowledge without wisdom is a load of books on the back of an ass.
- Japanese proverb
The purpose of knowledge management is to help an organization marshal and management it’s knowledge for the best gain. Knowing who to connect and what to connect them to is a part of the wiring up previously mentioned. It takes a clear understanding of the social network at play in an organization to understand who those people might be that can most benefit from both access and connection. It takes a form of organizational wisdom that many organization’s lack.
In a previous post I discussed a variety of impacts that may be felt through an over-reliance on the formal power resident in the organization chart. Knowledge management cannot fall prey to the turf battles that organization charts so often represent. Instead it must be liberated so that the cross-pollination often necessary for the greatest innovations might occur. Because even if you manage your knowledge carefully – you organize it, structure and store it, within an inch of perfection – if people aren’t using it to help make your organization more effective, efficient, and successful, what’s the point. A better filing system is not the heart of creativity. But knowing and using what you know?
There’s genius lurking in those files. It is just waiting for the right people to use it.
There’s no such thing as knowledge management; there are only knowledgeable people. Information only becomes knowledge in the hands of someone who knows what to do with it.
- Peter Drucker
Eyes on the Prize – In a CoIN a flexible approach to changing conditions means more wins
December 7, 2009 by Andrew (Drew) · Leave a Comment
In his fascinating research on collaborative innovation Peter Gloor, a Research Scientist at MIT’s Sloan School for Management Center for Collective Intelligence, identified a model he termed CoIN for, Collaborative Innovation Networks. He first named this model in the popular press in his book, Swarm Creativity: Competitive Advantage through Collaborative Innovation Networks. His stated goal was to make CoIN’s the widespread model for organized innovation. A CoIN is a team of self-motivated people linked virtually that shares a collective vision, enabled by technology to collaborate in achieving a common mission (a specific innovation) by sharing ideas, information, and work.
Now for those business leaders sold on the concept, their primary concern may be that with limited resources they now feel that they must invest in creating CoIN’s across their organizations to create or sustain a competitive. This is not the case.
CoIN’s already exist across most organizations. What needs to take place is their rapid identification and ongoing nourishment. In order to achieve this we need to prime the organization to be receptive to fluid teams focused on delivering a specific value. The way these teams are buoyed is through shared context – they need to share a vision, mission, purpose that draws them together and they needs an organization that fosters the identification of those things and supports their pursuit.
Organizations improving their culture of innovation when utilizing CoINs create virtuous cycles of success. The shared victories of the teams over problems become their own reward. This environment of collaboration focused on innovation creates a collective efficiency that is self-perpetuating.
“When a company is growing and profitable, we tend to infer that it has a brilliant strategy, a visionary CEO, motivated people, and a vibrant culture. When performance falters, we’re quick to say the strategy was misguided, the CEO became arrogant, the people were complacent, and the culture stodgy.” – from The Halo Effect
One of the inherent pitfalls of CoINs (when they are working) is the the impact of the Halo Effect if they are not occasionally disrupted. The Halo Effect, based on the work of Phil Rosenzweig, highlights the fallacy of so much of the research of day which emphasizes the repetition of “best practices” and our tendency to make specific evaluations of performance based on an elemental impression. If a CoIN falls into a pattern of attempting to repeat it’s success it may make choices about it’s approach to innovation that are not based on the shifting business context.
The Halo Effect highlights the fact that performance is relative, not absolute. Based on this understanding it follows that the way in which companies succeed is when they make choices and do things differently than rivals. In essence it moves from a world geared toward management by via benchmarks and best practices to one which is governed by making choices under conditions of uncertainty. And this is where CoINs come into their own – they create a fluid platform for innovation that can respond effectively to changing conditions.
What this demands of leadership and innovation teams is a much more rigorous approach to reward-seeking and risk-mitigating behavior. The Halo Effect shifts our thinking about performance from one that looks for a formula for success, toward one that sees the world in terms of probabilities and possibilities. Innovation leadership is about making choices, under uncertainty, that have the best chance to raise the probabilities of success, while never imagining that success can be predictably achieved. Even good decisions may lead to unfavorable outcomes, but that doesn’t mean the decision was wrong. It simply provides an opportunity for the innovation team to make a new decision and find a new path to success.
Innovation Trapped – Rethinking the flow of ideas to market
November 10, 2009 by Andrew (Drew) · Leave a Comment
I think we do need to move very swiftly in creating value for consumers and reacting to the economics.
- Brian Becker
On BusinessWeek’s website recently (November 9, 2009), Vivek Wadhwa posted a ViewPoint column focused on the implication of globally outsourced innovation. While what he reviewed was not necessarily earth-shattering in its revelations it did highlight a series of long-held but little discussed ways for the USA (or any country) to position itself in the new exchange of research and development ideas.
Wadhwa catalogued the inherent risks in the present shifting innovation landscape: over 50% of US companies have developed outsourced innovation initiatives; US inflexibility in partnering with offshore resources is negatively impacting domestic innovation performance; cost may have been the initial driver for embracing outsourced solutions, but tapping global talent is the new fundamental necessity; and, the support roles previously outsourced have been superseded by much more complex jobs involving complex thinking, research, and solution design. If the most complex jobs are moving off-shore, what remains of the innovation-driven US economy?
In response he offered four approaches to help the US retain its innovation edge:
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1. Increase the global awareness of American workers as they will be looking off-shore for ideas to apply at home in new and interesting ways, to drive the US economy domestically and globally,
2. Mid-tier companies cannot afford to outsource so better policies need to be developed to make it easier for them to use technology and provide them tax breaks for research,
3. Outsourcing is inherently disruptive so we must upgrade our investment in workforce training and development and make these items more of a corporate priority (as well as a national one akin to Singapore’s approach, perhaps?), and,
4. As early-stage ventures create the highest percentage of value per capita during the lifespan of companies, we need to harness this innovation treasure by building mechanisms to break the innovation logjam at the source, inside the research institutions and organizations where good ideas too often die.
Of the four areas for action defined, it is perhaps the last one which can provide the most immediate positive impact to both the innovation standing of the USA and to the need to generate new jobs to replace those lost in the current economic turmoil – or “Great Recession” as I heard it so glowingly defined recently. It is not a question of, “does America need to try harder on the innovation front?” Far from it. What needs to occur is a fundamental rethinking of the way current innovations, often set aside due to missteps and poor advocacy, so that they can receive a full and frank assessment for market potential.
A case in point. I was recently attending a fundraiser for the 80th anniversary of the non-profit nursery school for which I serve on the Board of Trustees. In the middle of meeting-and-greeting I began a conversation with John, the Alumni Relations and Development Director for a local high school, about the nursery school which in turn led to a discussion of my role on the Board and my work away from the Board (in the “real” world). After explaining my consulting approach, which is focused on helping people bring their ideas to market as fast as possible, John said, “that’s interesting…”
(If ever there was an opening!)
John then recounted an innovation lost story of his own. It seems he was asked to provide support to a pair of university professors who had developed a serious piece of heads-up display technology. It was truly mobile and ground-breaking. The professors were evidently excited by their breakthrough and eager to present it to possible venture capitalists. John, in working with them closely recognized that the professors needed some additional preparation. They simply were not ready for “prime time.” He tried to address his greatest fear, that they would not present their concept in the best light, by spending extensive time with the professors in advance of the impending demonstration. The professors tolerated his involvement, but kept insisting that their ideas would speak for themselves.
On the day of the presentation, John reinforced the fact that the demonstration needed to go off without a hitch. The display equipment, all very beta, was a little unwieldy. The professors, eager to show off their creative genius, asked the venture capitalist to try it on as it was very impressive when you were immersed in the data display. For the wearer the experience was like a 20 foot video screen was floating before you. Or, at least that was what was meant to happen. No sooner was the headgear clamped to the head of the venture capitalist than the arm holding the small display snapped at its base and the arm swung down driving the display into his shocked and open mouth, chipping a tooth.
In an instant he went from interested party to injured party.
Needless to say, no money was to be offered that day, or any day as word got around about what had transpired. The professors couldn’t understand why no one was willing to take a chance. John, in frustration, walked away from the deal. His parting comment to me, “if we can’t help our best and brightest bring their sharpest ideas to market we’ll all suffer in the long-term.”
So, here’s the challenge, how can we help unlock those innovations, many already fully formed, so that they can flow to the market? No matter where they are, in the heads of our scientists and researchers, or in the work of our offshore partners, how can we capitalize on them as swiftly as possible. I’ll look for your ideas in the comments and will offer my own in future posts.
The Future of Improved Team Performance Begins With Individual Self-awareness
October 20, 2009 by Andrew (Drew) · Leave a Comment
He who knows others is wise. He who knows himself is enlightened.
- Lao Tzu
In last Sunday’s New York Times appeared a condensed and edited version of an interview by Adam Bryant with Carol Bartz, CEO of Yahoo. In response to Bryant’s question, “What should business schools teach more of, or less of?” Bartz replied:
I think there ought to be some classes for people to get more philosophical about who they are and what motivates them, and therefore why they act like they act.
Some of the most fantastic training I’ve had over the years is the tests and the feedback I’ve gotten on what drives me as a person, and to sort of face up to it. What’s important to me and therefore why would I make certain decisions?…Now you could say the dark side of that is maybe that would drive me to make risky decisions that I shouldn’t make. It actually drives me the other way. It drives me to be more conservative, so I’ve had to teach myself to get out of that conservative zone….What motivates you? What are you scared of? Knowing that will help inform how you lead, how you make choices, how you face the day. And I don’t think we do enough of that.
Shortly afterward I was reading Braden Kelley’s review of his day spent with Gary Hamel, the noted strategist and trusted advisor to many executives. In the review Hamel made several comments about the future of organizations:
…the biggest thing that may limit organizational success most going forward is our organization’s ability to evolve their management models. But an even bigger handicap to future success may be the fact that our management models were not built to manage innovation but precision, stability, discipline, and reliability.
The fact is, the future of improved designs for organization structures (including their systems and process models) is fundamentally grounded in the self-awareness of the individuals of which they are comprised. If we don’t know ourselves how can we help others to help us achieve our goals? When this principle is considered in light of an expanded need for innovation, not just in product and service development, but in the way we engage with our customers and markets, it is vital that self-awareness be an anchor tenet of our approach to improving team performance over time and our organizations in the long-term. We need new thinking to help us find a way out of our current economic circumstances and our old models, given that they got us here in the first place, will not apply.
Now this is not intended to devolve all consideration of organization psychology into an ego-centric examination. But the chaos that is wrought in organizations in which leaders don’t know who they are and what they need, demands that this be an early focus. Regardless of our overarching organization’s strategic and performance intent authenticity derived from self-awareness is essential. This focus leads us beyond our obsession with “conscious capacities” (like, IQ) as David Brooks described them, and may “give us a firmer understanding of the motivation, equilibrium, sensitivity and other unconscious capacities.” Which confirms why a CEO like Carol Bartz not only appreciates the insight derived self-examination, she understands that it is vital to her effective leadership of her organization. Without it, she might struggle to frame what she needs to be successful and jeopardize the performance of the company overall
At a lesser scale, in a product development or innovation-focused team, the need is no less important. One of the reasons for the need for self-awareness at this level is the fact that many teams in this space are drawn from a cross the organization. Where a stable team processing accounts in Finance has a common language and common set of established business practices to fall back on in order to smooth the way for effective communication and collaboration, a product development team does not. They may have practices such as project management, but even that approach is driven by the content of the project and its deliverables. To make up for the deficit in communication short cuts an increased degree of authenticity is required in order for the team to perform at a higher level.
Could they achieve success without individual self awareness? Possibly. They might even “fake it ’til they make it.” But they will not have created a foundation for enduring performance
For long-term success the product development team members need to strike a series of mutually beneficial agreements based on trust. That trust will be founded in an exchange of accountability, commitment and expectations and those require that a demonstrated capability and an ongoing credibility be foremost in the interpersonal relationships. Self-awareness, the state of being aware of oneself, including one’s proclivities, thought patterns, traits, feelings, and behaviors underpins all this. Without it, the challenge is twofold – creating something new while wrestling with what is hidden. Which is not a recipe for improved performance but will most likely produce chaos at best and a disaster at worst. So we must ask ourselves:
What can we do to capitalize on who we are so that our organizations can become the best they can be?
Squeezing more ideas from product teardowns – McKinsey Quarterly – Operations – Product Development
September 22, 2009 by Andrew (Drew) · Leave a Comment
Margin improvements from product teardowns.
Squeezing more ideas from product teardowns – McKinsey Quarterly – Operations – Product Development.
See their interactive here, too.
People are People – Teams do not equal performance
September 18, 2009 by Andrew (Drew) · Leave a Comment
People are people
So, why should it be
You and I should get along so awfully?
- Depeche Mode, song “People are People”
All organizations are seeking to do more with less. The rising unemployment rates around the world are testament to the fact that dynamic movement of people between organizations has gone, at least for the time being. It remains that even as businesses have shed employees they seek ways to return to growth. That search is leading them to reach beyond the cost-saving paradigm and into the realm of innovation. The very notion of spending time, energy and money on efforts that involve any amount of risk is almost too much for many organizations to bear. To address this risk aversion senior leaders often seek to safeguard the resources of their organizations while creating hoped-for new products and services.
Organizations often implement teams to improve performance. This is increasingly common as organizations wrestle with their approach to innovation and cross- organization participation and engagement. Such restructuring does not automatically address poor performance. There is a clear relationship between team members’ negative moods and team processes (social cohesion, workload sharing, team conflict) regardless of the intention behind the team’s design. Negative mood has a detrimental effect on team performance via the disruption to team processes. The question remains: what can you do to create a team with the best chance of success?
There are four key elements to establishing the best possible foundation for success:
1. Purpose that is constantly reinforced
2. Performance expectations linked to mutual commitments
3. Production focused on results (both quick wins and long-term goals), and,
4. Positive recognition for accomplishments established at the outset.
It’s interesting to me how often lessons about what works can arise out of what so clearly is not working. While working with a business unit in a global client I experienced the absence of all four “P’s” and the dissatisfaction at the team level was palpable. Established by a senior team to accomplish a critical strategic project, the team had been pulled together from company representatives around the world and co-located in a city near the corporate headquarters. As for a sharing a common purpose, the business leader who initiated the project provided input to the kick-off meeting and then disappeared from view. Without that kind of an anchor the other essential elements for team success never fully materialized.
There was no framework for sharing expectations among team members and therefore no basis for mutual commitments to the team’s success. No only that, but it seemed that some members felt a duty to work on their “day jobs” at the expense of the core team project while others struggled to pick up their slack and complete essential project tasks. Milestones were passed without review for completion. Deadlines, well let’s just say that they were flexible. Bitterness inside the team began to grow, internal conflict became rife as the team began to eat itself from the inside, and a gallows humor became pervasive.
I love deadlines. I like the whooshing sound they make as they fly by.
- Douglas Adams, novelist
With this kind of laxity in team process adherence productivity slumped dramatically. The team members had devolved into a team in name only. As for results, there were no quick wins, just slow successes eked out by a committed few. Overall, when the project finally was closed, the members dissolved without fanfare. The job was over. The project less-than-stellar. Certainly no one paused long enough to reflect on what might have been.
It seems to me, that if we get the leaders we deserve, we also get the teams we deserve. The situation described above was never irrecoverable. At any point a choice could have been made to reset and rebuild a commitment to the initial purpose for action. But it never should have arrived at this point. If companies are choosing to create teams focused on innovation, then they also need to take care to plan, care and feed (psychologically) those teams in order to give them the best chance of success. Without that clear initiating intent why bother to make a half-hearted effort? You waste time, resources and money – the very things you are trying to avoid risking.
Where Great Workplaces Start
September 16, 2009 by Andrew (Drew) · Leave a Comment
From the Blog Where Great Workplaces Start – The Keys to Creating an Innovative Organization
Research seems to suggest that there are two “entry-ways” towards innovation. Both opportunity and necessity/limited resources stimulate creativity. In fact, in addition to new opportunities that present themselves (such as new technology), pressing problems, necessities and distress with the status quo can cause organizations to become more innovative. Perhaps even in the face of a difficult recession, organizations, more than ever before, have a reason to innovate and think differently about how they are conducting business (Bledow, Frese, Anderson, Eres, & Farr, 2009).
Service Offerings
September 3, 2009 by Andrew (Drew) · Leave a Comment
Primed Associates offers a set of services to meet the needs of an organization seeking to rapidly improve its return on innovation investment. See a more detailed overview of our service offerings here. No matter where you find yourself – be it wrestling with the place of innovation within your over-arching strategy, or tackling the behavioral transformation required to support effective innovation – we will help you improve your innovation culture.
Twitter: DrewCM
- Last few days in Australia before returning to the USA. Great trip.
- Greetings from Uluru / Ayers Rock! Where it is raining but the views and surroundings are spectacular. (And the internet access is spotty!)
- Better late than never: #innochat Transcript – 19 August – Innovation Backwards? With thanks to @CASUDI & @Renee_Hopkins http://ht.ly/2tOe3
- For those looking for #innochat transcript this weekend - it is coming - just a little slowly due to the time difference! (mine, that is)
- Thanks for #FF and RTs @innovatorsmix @MeghanMBiro @Jabaldaia @CreativeSage @FHInnovation @Renee_Hopkins @Gwen_Ishmael and #innochat gang