Xbox’s Hollywood Bust – when culture eats strategy for breakfast

Shut down

It’s not only successful innovations that can get shut down (see “Shut down! Why Successful Innovations Die“) but also those that don’t get a chance to take of in the first place:  In the small print of Microsoft’s recent announcement to eliminate 18,000 jobs (mainly in the light of the Nokia acquisition) you could also find 200 jobs cut to end the Xbox Hollywood aspirations.

After a history of failures entering the hardware sector, Microsoft struck gold with its powerful Xbox gaming console series powered by popular games such as the epic HALO. Long forgotten seem the times of the “PocketPC” handheld to rival the PalmPilot or the “Zune” MP3 player to dwarf Apple’s iPod.  (Let’s keep the Surface tablets with its awful Windows 8 mosaic tile interface out of the equation for now – even a recent promotion is just a sad parody.)  

Without doubt, the Xbox is a success, Microsoft’s media flagship.  It faces serious competition, so creative and disruptive solutions are needed to dominate the console market.

Beyond gaming

To expand on this solid Xbox console foundation and fend off competitors, the idea was to produce engaging and original video content.  This added value would expand the Xbox platform to broaden Xbox attractiveness and deepen customer loyalty by appealing to its gamer audience in new ways.  The gap between gaming and film converged over the past years when new game productions became sophisticated, quality productions with celebrity actors and voice overs, music by top Hollywood composers, high-end visual effects and not only budgets to rival studio movie productions but revenue exceeding blockbuster movies.

Inspired by, for example, Netflix’s success in producing original content such as “Orange” and “House of Cards,”  this strategy looked very promising.  Well equipped with CBS’ highly accomplished Nancy Tellem and ties to Steven Spielberg, the Microsoft Hollywood team of 200 was up to a great start – or so it seemed.

Two years in, however, the there was very little to show for, so Microsoft finally divested.

– What went wrong?

Culture Clash

A key inhibitor for the Hollywood team, so it turned out, was clashing organizational cultures between Microsoft and the quick-paced and decision-friendly media world Tellem was used to from CBS.  Nanny Tellem learned the hard way that effectiveness of decision-making at the lower hierarchical levels and fast execution was not the strong suit of the established culture, red-tape processes and deep hierarchy of the Redmond software giant.  Down four levels in hierarchy under the CEO, Microsoft’s convoluted processes diluted Tellem’s authority and effectiveness.  It slowed down decisions to a point where the ambitious and energetic start-up became practically shackled and impotent to operate effectively in the media world.

Even the best strategy cannot be executed when unaligned with organizational culture or, as Peter Drucker has put it so famously, “Culture eats strategy for breakfast.”

Culture is what most employees say and do routinely.  It translates into a company’s processes, structures, systems, etc.  This is why failing to understand or outright ignoring culture can be so disastrous for leaders.  From my experience, the magic sauce is in aligning corporate culture and strategy with the passion of competent employees.

Learnings

Microsoft’s Hollywood adventure is just one more example how disruptive innovation struggles when measured and governed by processes of a mature and bureaucratic organization with matrix structure.  With reigns held too close and not leaving room to experiment, innovation suffers, as this missed opportunity for Microsoft demonstrates.

“Hindsight is 20/20” people say and in all honesty, other factors may have contributed too, but looking at it from the outside, perhaps this train wreck could have been prevented had Tellem paid closer attention to the culture of her new employer and ‘how we do business around here.’

Cultural fit with conductive structures and processes downstream are serious business factors that often get overlooked and then backfire for the blind-sided executive.  – Only perhaps there could have been a proper Hollywood ending.

After all, disruptive innovations is a delicate flower that needs some room to flourish – especially in mature organizations.

Want more?

Related posts on organizational culture include:

Shut down! Why Successful Innovations Die

Why successful innovations get shut down. WhIle we expect unsuccessful initiatives and projects to get shut down, what sense does it make to stop hugely successful ones?

Punished Despite Success

It doesn’t make sense to shut down profitable programs – or does it?  It happens all the time when the current yet wilting business model still tastes sweet.  Investing in building a disruptive, future business model appears less palatable as it takes uncomfortable transformation that comes with investment cost and lower profits initially.  The sobering reality is that short-term gains often win over long-term investments, sustainability and bold moves to explore uncertainty and white space.

Here is a quick example from the fossil oil and gas industry straight out of Bloomberg Businessweek, “Chevron Dims the Lights on Green Power” (June 2-8, 2014):  Chevrons renewable power group successfully launched several projects generating solar and geothermal power for over 65,000 homes.  Despite margins of 15-20%, the group was surprisingly dissolved earlier this year after they had just about doubled their projected profits from $15 million to $27 million in 2013, the first year of their full operation. – Why would you kill a profitable new business?

Clashing Business Models

As for reasons for the shut-down, a former Chevron employee and Director of Renewable Energy notes that Chevron’s core businesses, oil and gas, still remain more profitable than renewable energy.  This development signals that Chevron’s leadership is willing to experiment with renewable energy but does not seem fully committed – it makes Chevron’s slogan “Finding newer, cleaner ways to power the world” sound like lip-service.

Instead, Chevron continues to hold on tightly to their old business model to squeeze out the last drop of oil.  Chasing short-term profit margins may prove not only a questionable path for long-term company sustainability but also from a business model perspective.  While oil and gas prices have been on the rise for the past decades, it is well-known that these natural resources become scarce, so extraction from more challenging locations becomes increasingly expensive.  It cuts into the company’s profits and the consumers’ pockets.  To date, Chevron already pays a higher cost for extracting oil compared to competitors.

Chevron focuses on the upper tail of the S-curve of the current technology instead at the expense of preparing for the disruptive jump to the next technology platform. (See section “Technology S-curves” in 10x vs 10% – Are you still ready for breakthrough innovation?)
The risk here is to lose out on developing and acquiring new technologies that will be the make-or-break competitive advantage in the industry’s future.

Bio Fuels

Interestingly, Chevron’s competitor and largest oil company, Exxon-Mobil, takes a different approach.  Even after initial setbacks where proof-of-concept did not scale to industrial size, Exxon-Mobile now partnered with Craig Venter’s Synthetic Genomics to produce oil from micro-algae at industrial scale. Hopes are high that this bio-tech and bio-agriculture approach proves more practical, profitable and sustainable to replace fossil fuels in the future.

Sounds risky?  It sure is, but with profits from oil and gas still in the tens of billions this is the time to invest heavily in the jump on to the next technological S-curve. You may recall Craig Venter as a most successful entrepreneur and also the first to sequence the human genome, so there is no shortage of top bio-brainpower, which opens the flow also for more investment capital.

Nearsighted Decisions

Truth being told, several other bio-fuel ventures of this nature exist all around the world.  Neither made it to produce in industrial scale needed to satisfy the world demand for crude oil – yet.  There is no question, however, that the world is running out of affordable oil and gas at accelerating speed.  Disruptive technologies will emerge to fill the gap and redefine the energy sector.

Leadership is needed to prepare and transform the industry beyond short-term management of profit targets.  Not taking a bold step forward is the absence of leadership.  (More on the clashing goals in Leadership vs Management? What is wrong with middle management?)

Learnings

The learning here is that even profitable disruptive ventures get shut down at times when the leadership is comfortable and holds on tightly to the existing business model they are familiar with and doing what they always did rather than taking transformative steps to prepare the organization for the future.  Even with the writing clearly on the wall, the way of how profitability of a new venture is measured and the (still higher) margins of the established business (fossil fuels) make short-term focus attractive despite concerns over business model sustainability.  So often enough there is little patience to further develop even successful, transformative ventures of tomorrow in favor of enjoying the sweet but wilting fruits of today.

Somehow this short-term mindset painfully reminds me also of the established car industry who, obviously, had little interest to bring electric vehicles to market at scale over the past decades until a Tesla comes around to show them how it can and should be done.

As for our example, time will tell whether Chevron or Exxon-Mobil made the better choice in the long run to win the new business model race leading us into the post-crude oil era – or if they both get disrupted by an even different new technology altogether.

Balancing Risk of Innovation Project Portfolios

Risk of Disruption

Innovation projects are risky explorations.  Disruptive innovation projects even more so, and individual projects can be quite a gamble.  So, how can you limit the risk across your portfolio of innovation projects?  The goal is to increase the likelihood for the portfolio to succeed overall even if individual projects fail.

(Quick note for project management professionals: I am deliberately not differentiating terms like “portfolio” and “program” here.  My goal is to get the basic idea across.   More particular definitions don’t add value here.)

In mature organizations, incremental improvement can easily be and often is interpreted as ‘innovation’, which makes sense when optimizing a production environment, for example. Here, at the back-end of operations, big “elephant” projects tend to bind the organizations resources (How to grow innovation elephants in large organizations).  The innovation project portfolio I am referring to, in contrast, aims at the disruptive end: the “small elephant projects” with higher risk but the potential of extraordinarily high returns if they succeed.

Why to manage risk

In large organizations you hardly get a “carte blanche” to manage just highly risky projects.  With a corporate focus on predictable, short-term results there is too much concern of the portfolio easily becoming an unpredictable money pit.  You are likely to get shut down after playing around a while without demonstrating clear success in terms of return-of-investment.  Thus, you will need to come up with a strategy on how to compose your project portfolio to keep your stakeholders happy and your experimental playground open.

Risk Categories 

Managing risk across a project portfolio comes down to finding the right blend of high-risk/high-return projects and lower risk projects that come with less impressive potential for revenue or savings.  You also want to include a few projects that produce returns short-term to demonstrate you are making progress and reap some quick wins for impatient stakeholders while the longer-term projects need time to mature.

A common way to approach categorizing projects into into Core, Adjacent and Transformational based on their risk and return profiles:

  • Core projects are merely optimizations to improve the existing landscape of systems, processes, assets or products in existing markets and with existing customers.  These incremental improvements are the “safe bet” and “next small step” that, typically, comes with low risk, predictable outcomes but also limited returns.  They do not need high level sponsorship, are easy to predict and plan resources for, and so they are the favored playing field of mature, large organizations.  These can often be ‘large elephant’ projects seen as ‘necessary’ that the organization more easily buys into.
  • Adjacent projects come with more uncertainty and risks as they usually extend existing product lines into new markets.  Though not an entire novelty it is may be new territory for your company.  Sometime, ‘imitating’ a successful model in a different industry does the trick (read also: Imitators beat Innovators!).
    Adjacencies add to the existing business(es), which requires a higher level sponsorship (such as Vice President level) to move forward, to allocate resources and to accept the risk to fail.
  • Transformative projects are experimental and risky.  They create new markets and customers with bold, disruptive “break-through” products and new business model.  While the risk to fail is high, the returns could be huge when you succeed.  Highest level (C-level) sponsorship and support is crucial for this category not only to persist and get resources during the development phase but also for the mature organization to adopt and support it sustainably.

Finding the balance

When you manage a portfolio of disruptive (read: transformative) innovation projects, you should expect projects not to succeed most of the time.  Instead of calling it “failure,” see it as a learning opportunity.  As Thomas Edison put it so famously referring to his experiments leading to the invention of the light-bulb: “I have not failed. I’ve just found 10,000 ways that won’t work.”

The common rule for playing a safe portfolio is a 70-20-10 mix, i.e. 70% core, 20% adjacent and 10% transformative projects.  This way, many low-risk/low-return core projects keep the lights on while you play with few high-risk/high-return transformative projects.

Experiences

From my personal experience with the portfolio I manage, I leans towards accepting more risk, so you would expect and be comfortable with a lower success rate as a consequence but also higher returns.  To my own surprise, we completed 55% of our projects successfully and ended up discontinuing 26%.  Fortunately, also the average ROI from our “small elephant” projects is substantial and pays the bills for many years out.  Thus, for my portfolio, the 70-20-10 mix is too conservative.

As for how we select projects and fund projects, read also Angel Investing within the Company – Insights from an Internal Corporate Venture Capitalist and School for Intrapreneurs: Lessons from a FORTUNE Global 500 company.

Before re-balancing your portfolio in favor of a majority of risky transformative projects, however, make sure you have continued high-level sponsorship and alignment with strategy and organizational culture of your organization.  – If culture, strategy and sponsorship don’t align to support your innovation portfolio efforts, your risk increases for painful learning without sufficient business success.

> Interested in Project Management? – Don’t miss VASA’s historic project management lesson!

 

Angel Investing within the Company – Insights from an Internal Corporate Venture Capitalist

Breaking through the crust

One of my favorite and most successful approaches to building a powerful intrapreneuring ecosystem is internal corporate venturing!

It is an exquisite tool to cut through the crust of ‘red tape’ that bureaucracy builds up over time. Internal corporate venturing or “Angel investing” allows for nimble decision-making with a lean process to give disruptive innovation ideas a chance again in a large company.

Seed-funding promising ideas

How does it work?  Think of becoming a venture capitalist within the company: You invest in ventures within the organization and help building ‘intraprises’ in contrast to funding start-up enterprises outside the company. The difference is a you don’t venture for your own profit but for the better of your organization.

The idea here is to seed-fund promising disruptive ideas that otherwise would not be implemented or even seriously considered. These opportunities –typically‑ were rejected by the ‘corporate immune system’ previously, when an employee with an idea approached their line manager or a governance committee of sorts requesting approval to ‘try something out.’

POC over ROI

Often enough, there is no clear return-of-investment (ROI) predictable for these early ideas.  What you may be looking for is rather risky and experimental, a proof-of-concept (POC).  The metrics for payoff and ROI of disruptive ideas does not follow the same approach we are used to measure the more predictable returns of common cost reduction and incremental improvement projects. Disruptive POC projects often don’t have an ROI projection when you explore technology of sorts or its application that may become a game-changer for our future business.

In my experience, communicating the POC nature of the project over focusing on ROI can actually help!  It prevents the ‘organizational immune system’ from kicking in early on, since there is little threat to established practices.  Why?  It does not come across as competing with ‘big elephant’ projects over significant amounts of governed resources following the conventional processes of the company’s machinery.  Instead, we just try something out!  It’s a little experiment that doesn’t change anything, so it poses no threat to established practices, investments or the power-base of individuals defending their fiefdoms.

Aspired returns

Having said this, there is of course a commercial end to all projects. After all, we have no resources to waste and will have to demonstrate down the road that our ‘experiments’ pay off somehow. Our working assumption is that the disruption should lead to a ten-fold (10X) payoff – at least.

Personally, I prefer aiming at a bold 100X ROI target; two orders of magnitude, that is. It sets an ambitious target and -if things work out- a great success story. It’s a powerful point to make for disruptive innovation as part of our innovation ecosystem and shifting the mindset within an organization.  Sharing these success stories with executive stakeholders is crucial (for future support) as well as with employees (for future ideas).

Governance and authorization

Interestingly, what employees are looking for more than funds is authorization to do what is right and worthwhile for the company. Often, the obstacles are perceived and only exist in peoples’ minds. These barriers are formed by many factors over time, such as the management style they experienced and organizational silos that mold a company’s culture as well as the employees’ mindset.

In this particular company, a lean oversight board makes funding decisions. It is composed of a diverse team of more forward-thinking executives and a very lean decision process. The team acts as enabling ‘go-keeper’ for accelerated innovations instead of pushing the breaks as ‘gate-keeper.’

The little monies offered for trying something new only help smoothen the path for innovators in the company. The most important part is them feeling empowered and “authorized” to take action that overcomes complacency, inertia and organizational paralysis. On the spectrum of strategic innovation roles, the board serves as a “sponsor” and sometimes as a “coach,” when an idea aims to overcome internal barriers to increase efficiency, for example.

Dealing with Risk

The purpose of this governance board is to enable the exploration of disruptive ideas by giving internal innovators a chance. The focus is on projects that can be characterized as early stage experiments to explore transformative enabling technologies and value-adding services of higher risk or less predictable outcomes than conventional project portfolios in the mature organization would feel comfortable with.

Naturally, this approach comes with an elevated risk of failure when projects do not produce profitable outcomes or simply prove infeasible or poorly timed.  This ‘price’ is accepted as long as it generates learning.

The potential damage is low, since we are talking about swift and low-cost experimentation: try often and fail fast. Thus, these risky projects complement regular and more conservative project portfolios in the various businesses of the organization. In addition, the innovation project portfolio is somewhat risk-balanced, which avoids having too many high risk projects that may jeopardize the likelihood of profitability across the portfolio.  Reality is that also the disruptive innovation project portfolio has to demonstrate tangible returns over time, so the mature organization sees the economic benefit of experimenting and not shut down this ‘playground.’

Branding the projects as experiments with a proof-of-concept (POC) endpoint helps to calm the ‘organizational immune system’ and to argue that these risky ‘small elephant’ projects complement the other ‘big elephant’ project portfolios across the organization.

Getting Funds

Here are my experiences as an internal corporate venturer or ‘angel investor’ from the past years: First of all, I don’t have much money to spend. The budget I have for this kind of ventures is pathetically meager – and I overcommit it all the time! Nonetheless, I came in under budget once again by 46% last year. It sounds like an oxymoron, and since I don’t have a money tree growing in the backyard, how does this work?

The secret is in the psychology of acting as the “first investor.” Think of this way: when someone wants you to invest into their idea first with nobody else having made an investment before you, you are skeptical and most hesitant to put down your money, right?

All I do is to commit paying for an idea in full to overcome this initial threshold and get things started.  What typically happens next is that an executive from the business affected by or potentially benefiting from the project hears of my investment, reconsiders and wants to get on board too – as a second investor. Once the ‘innovation guys’ have put money down first, the investment in the idea appears less risky to the business executive, so either we split the bill or the business takes on the cost completely!

I’ve seen it happen many times with managers turning around 180 degrees after they had rejected the idea previously. This is how to deal with them: to save (their) face, don’t point out their earlier resistance but rather thank and recognize them for their support and foresight as valued contributors to change and success for the organization.  Celebrate them as enablers, win them over as allies and keep the connection for future collaborations!

Alignment and validation

Don’t be mistaken, funding by the business is not only crucial given the fact that my funds are few.  It is even more important because it validates that the idea makes sense to the business.  It aligns with strategy and goals of the organization but also helps implementing it once the business has ‘skin’ in the game! Otherwise, even if I funded a project alone, the intrapreneur running it would have a hard time getting it implemented without the support of a business sponsor.

So all it takes is making it easy for business executives to invest in a good ideas by making them feel comfortable not to invest first, which reduces their perceived risk and lowers their threshold to act.

Key Learnings

  • The lean innovation governance board is an instrument for reasonable oversight that benefits from diverse perspectives.
  • The “Go keeper” instead of “Gate keeper” process is crucial as is the willingness to accept risk of failure for disruptive projects.
  • The model proves highly effective to get around a convoluted “red-tape” bureaucracy as well as generating a surprisingly high return-of-investment (ROI) – even without the latter being the primary focus.
  • The “first investor” psychology validates the alignment of ideas with business needs and strategy while opening the flow of funds from the businesses and facilitating the implementation.
  • This internal corporate venturing or “angel investing” approach became a beacon of hope for employees and a very profitable innovation engine for the organization that starts to change the organizational culture to the better.

 

School for Intrapreneurs: Lessons from a FORTUNE Global 500 company

The earlier post “How you become the next Steve Jobs!” relies on an innovation ecosystem of sorts that already exists in your organization – but what if there is none?

What if you find yourself in a place that struggles with Why mature organizations can’t innovate and Overcoming the Three Big Hurdles to Innovation in Large Organizations?

It is not easy and takes time turning an organization’s mindset from what is into what if.  It’s a great and rewarding achievement, though, if you can pull it off!

Building an Ecosystem

So, let’s continue there:  If you find yourself in a company which does not provide an environment that supports intrapreneuring, you may need to build an innovation ecosystem within a large organization.  Practically, you choose to become a midwife helping ideas of your colleagues getting a chance to come to life.  This enables other aspiring intrapreneurs to step up, unite and act together.

It’s a bold step and disruptive approach but necessary to induce ability to meaningful and fundamental “10x” change again to an organization (see also 10x vs 10% – Are you still ready for breakthrough innovation?) as part of an ambitious Innovation Strategy: Do you innovate or renovate?

Based on my personal experience, here are some key ingredients to succeed following words of Steve Jobs that “Creativity means connecting things.”

sustainable environment consists, at least, of

  • A safe-haven for employees to  experiment
  • perpetual pipeline  of ideas from all areas of the organization,
  • A  process to develop them without triggering the “organizational immune system” early on and
  • A  transition mechanism to feed these ideas back into the regular organization to become funded and implemented with strategic alignment to company goals
  • Preparing management how deal with intrapreneurs. You will need to build or teach
  • A set of relevant  intrapreneurial  skills for employees
  • A  supportive team  and for you to maintain
  • A  positive attitude that you will need to persist and push on.

The “School for Intrapreneurs” (SFI)

A very powerful approach and critical puzzle piece in the ecosystem is the School for Intrapreneurs.  We achieved to build this school successfully together with help from like-minded and supportive colleagues that I was fortunate to meet along my crooked intrapreneurial career path, if you want to call it that.  The underlying premise of the SFI is that innovation skills can be taught, as mentioned in  “How you become the next Steve Jobs!”  – So, we teach them in this program.

In the end, results count or in the words I adopted from Accenture’s advertisement:  “It is not how many ideas you have.  It’s how many you make happen.”

Program Focus

Building intrapreneurial skills systematically, however, is only part of the deal. The real value of the program for the participants lays in experiencing the obstacles an intrapreneur faces in an organization themselves: the rocky road of rejection trying to get an idea on its feet.

We prepare our fellow employees in a process where they form supportive teams to collaborate in order to develop their ideas together and experiment.  This includes ways to communicate with management in constructive and non-threatening ways on How Intrapreneurs avoid “No!”, for example.  It culminates in pitching ideas to experts and potential sponsors for funding, implementation and support.

Executive sponsorship ensures strategic alignment of ideas with company interests.  It also increases the chances dramatically for idea transitions into the established processes of the regular organization, i.e. the idea becoming a project to be implemented.  This is why special emphasis needs to be put on preparing management how to support and benefit from intrapreneurs; after all, there are risks involved with intrapreneuring for the individual (see also  The Rise of the Intrapreneur).

This SFI program design addresses How to grow innovation elephants in large organizations and deliver big results along the lines of 10x vs 10% – Are you still ready for breakthrough innovation?. In fact, the return of the SFI program so far is a 1:10x return-of-investment (ROI), so we are right on 10x.

Building the School for Intrapreneurs together: Stephan Klaschka (left) and Gifford Pinchot III
Building the School for Intrapreneurs together: Stephan Klaschka (left) and Gifford Pinchot III

The three courses build upon each other; we named them DOORWAY, PATHWAY and JOURNEY:

  • DOORWAY is a two-hour awareness course that outlines how innovation happens in large organizations, what typical obstacles are, what is an intrapreneur and already hints towards what is offered in the succeeding courses, PATHWAY and JOURNEY.
  • PATHWAY is in its core an incubator and accelerator over a 12 weeks with a mix of training and group work.  Research suggests that approx. 5% of the workforce have the intrapreneurial spirit, which is consistent with our school’s enrollment numbers.  At the end of the course, the teams pitch their developed ideas to a panel of experts and managers representing different business functions for in-depth feedback and advice how to improve the ideas. – Think “Shark Tank” but without bloody teeth.  Teams with the most promising ideas then pitch to high level executives for sponsorship and support to turn their idea into an implementation project that enters the regular development processes in the organization.  Receiving executive sponsorship is another level of validation that confirms strategy alignment with company interests.
  • JOURNEY is a six-month course designed to accompany the team implementing their ideas by providing a mix of skill-building and team-customized coaching.  – Why is this needed and important?
    Even with executive sponsorship the project has neither been budgeted for nor are other resources planned and available for its implementation; so, the project still disrupts the establishment and may trigger resistance.

Shaping company culture

We also ask JOURNEY participants to connect with the next group going through the PATHWAY course to network, share their experiences and help guiding the “next generation” of graduates.  The goal is to achieve sustainability of the program by growing the number of like-minded, experienced and connected employees over time.

Over time, an increasing number of graduates keep the perpetual pipeline of fresh ideas open.  They also grow to become a powerful, far-reaching and growing network of active change-makers across all parts of the organization as they connect and pass on their knowledge to the next class going through the School for Intrapreneurs.

These are the self-identified leaders of change that share a common innovation terminology, skill-set and experience while they help shaping the organizational culture and mindset on the way towards a sustainable environment, an innovation ecosystem.

Lessons from the School for Intrapreneurs

My key learning from this challenge in a nutshell is as follows:

  • The personal journey and ‘intrapreneurial experience’ is of utmost importance for the School’s participants – a theoretical training alone does not do the trick.  It has to be hands-on and all the way to implementation.
  • This is why the participants value the safe space to operate and experiment in.
  • Typically, talent in large organizations is selected top-down by management.  In contrast, talent self-identifies bottom-up and based on –intrapreneurial- merits though the School for Intrapreneurs.
  • Alumni are hardened by their experience and become part of a growing community of capable and engaged change agents.
  • Successful pitches to executives validate the alignment with company strategy – not only for the individual idea but also broader for the entire program of the School for Intrapreneurs.
  • The program allows gives more disruptive, risky and outside-the-box ideas a chance that otherwise would not have been brought to executive attention, or so our executive sponsors said.
  • The School for Intrapreneurs is part of a larger framework to change company culture over time by cultivating discovery and 10x innovation capabilities once again.

 

Related Links:

Join me at the Pharmaceutical Multi-Channel Marketing Strategy Conference in Philadelphia, PA on April 24, 2014

Q1 Pharma Multi-Channel Marketing Strategy
Q1’s Pharmaceutical Multi-Channel Marketing Strategy

Location: Hilton Garden Inn Philadelphia Center City, 1100 Arch St., Philadelphia, PA 19107

Why mature organizations can’t innovate

Why mature organizations can’t innovate

Clayton Christensen is the icon and figurehead of disruptive innovation – after all, it was him who coined the term the first place!  (I am a big fan!)

Now, Professor Christensen concludes that large companies can’t innovate in his famous book “The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators” – and I’m out to prove him wrong!

Why? – In part, perhaps, driven by my passion for disruptive challenges but mostly out of compassion for my talented colleagues, and who deserve better; we we work hard every day to save and improve the lives of patients.

There must be a way of turning around a mature organization. After all, IBM reinvented itself several times and turned from a manufacturing to a services company, what a pivot is that!

Getting back to 10x innovation

So, can a mature pharmaceutical company adapt and pivot from within as well?  After all, innovation in ‘pharma’ is commonly understood to find, develop and bring to market new innovative medicinal drugs as the core business.  In a rapidly and fundamentally changing business environment (see “What is Digital Medicine?), however, the “selling pills” model alone runs flat, the company must find and adapt to new business models to survive and flourish.

Time will tell if “10x vs 10% – Are you still ready for breakthrough innovation?” is possible once again.  Question is, can mature organization turn around? And if so, how?

Shift from Discovery to Delivery

It starts with understanding why innovation slows down in maturing organizations (outliers may confirm the rule) but stay with me here to get the basic principle.  The answer lays in the natural business life cycle: in the start-up phase of an new company, the most important skills are around discovery, i.e. to explore a radically new business opportunity.

As the business gains traction and needs to grows, delivery skills are needed most. Management composition needs to change in order to develop and expand the business professionally; disruptive input is not in demand and can becomes rather inhibiting to the operation that needs to focus on delivering output reliably and at scale. Innovation shifts from disruption to incremental improvement and rightly so, yet it comes at a price as it leads to predictable obstacles (see Overcoming the Three Big Hurdles to Innovation in Large Organizations)

Research shows that disruptive innovators are typically not good at delivery and growing the company.  As the business matures, they need help and often move on to do what they do best: starting some new, while the company matures in the hands of management that can deliver.

Downfall

Over time, however, markets get saturated and the established business model may no longer work, profits decline. Now here comes the inflection point: the management was hired for its delivery skills.  They don’t really know how to renew the business, since they never created one.  What they do know is how to prolong the downturn by clinging to the outdated business model while squeezing out inefficiencies and saving cost.  Research confirms, little surprise, that the maturity managers are good at delivery but mediocre at best when it comes to discovery.

The company, a supertanker, became a slowly sinking ship.  Group-think, the mindset and engrained culture, prevents disruption from breaking through.  After all, no passionate out-of-the-box thinker or entrepreneur has been hired for years.  Instead, Ivy League graduates with MBAs are favored that runs the business more administratively, bureaucratically, without taking significant risks – who would ever take the risk and hire a crazy guy, right?

Turning to Intrapreneuring

So, where should the turnaround come from?  Here comes the The Rise of the Intrapreneur!

To connect things again in news ways to create and build an innovation-friendly ecosystem while chipping away the on the resistance of the “organizational immune system.”

Over the next posts we will introduce and explore intrapreneurial methods using the example of a pharmaceutical company and member of the FORTUNE Global 500 club.

Overcoming the Three Big Hurdles to Innovation in Large Organizations

Large organizations have vast resources – but this advantage inherently bears also a disadvantage: like large dinosaurs, with increasing size and maturity they lose the ability to adapt quickly to a changing environment as their smaller competitors can to seize business opportunities.

The Big Three

Let’s first identify the three typical obstacles that large organizations struggle with before we address how to disrupt and overcome them as intrapreneurs. The task at hand is to spark new energy, employee engagement and business growth opportunities in alignment with business strategy and company culture.
By the way, if you are new to intrapreneuring, see also The Rise of the Intrapreneur and the Top 10 posts for Intrapreneurs.

So, these three big hurdles are the

  1. Vertical Disconnect: Ideas from the bottom of the hierarchy do not find their way vertically to the top anymore to get implemented.
  2. Horizontal Divide: Functional silos separate the workforce horizontally which limits putting to effective action the full potential of the company’s resources and diversity in a concerted way.
  3. Inertia: More talking about change than taking action opens a widening gap between ideas and their implementation, as it is so much easier to lean back and improve incrementally than taking risks of major changes. Red-tape and ever mounting bureaucracy does its part to keep the wheels from turning and breeding a mindset of mediocrity.

These obstacles combine to form an unfavorable ecosystem of stagnation by containing innovative thoughts from growing and ripening, by inhibiting innovators to take action with passion and by blocking courageous action necessary to drive the organization’s future success and –possibly- survival.

Sketching a future innovation ecosystem

Here is what it takes to break the crust in order to reinvigorate and nourish innovation to flourish once again by creating an innovation-friendly ecosystem:

1. Vertical cut:  Connect grass-root ideas with executive sponsors

Too often, “middle management” gets blames from keeping ideas and funds flowing more freely up and down the hierarchy (see also Leadership vs Management? What is wrong with middle management?).

A mechanism is needed to pipe fresh and promising ideas in an appropriate format from the grass-roots to find their way to executives, where the ideas get recognized, sponsored and put into motion for the better of the company. This holds true for disruptive break-through ideas in particular and in contrast to the continuous incremental improvement (see also 10x vs 10% – Are you still ready for breakthrough innovation?) that typically makes up most of the organizations day work.

Don’t be mistaken, executives worth their salt seek good ideas like the air they breathe. They are generally more open to necessary change and course corrections than one may think. The executives also hold the keys to feeding the ideas back into the machinery of the larger organization to get implemented.

A mechanism is needed that allows cutting vertically through the red-tape and hierarchical boundaries of the mature organization. It creates a pipeline of ideas that connect the top with the bottom of the organization and everything in between with intrapreneurial passion.

2. Horizontal cut: Connect across functions and geographical silos

Large organizations tend to foster functional (and geographical) silos to increase efficiency, quality, and reliability in their operations (again, see Leadership vs Management? What is wrong with middle management?). This, however, effectively inhibits ideas of game-changing nature to flow freely and being developed with input from diverse perspectives to the benefit of the larger organization.

A wise saying goes: “Innovation happens at the intersection of disciplines.” It is these diverse perspectives and adding brains to a problem that help to improve and develop an idea to become more robust, innovative and feasible. Thus, a mechanism is needed to effectively cut horizontally through organizational walls to allow employees to effectively collaborate, network and connect the established silos and islands.

Are you stuck with organizational silos too?  (source: (communities.netapp.com)
Are you stuck with organizational silos too?
(source: (communities.netapp.com)

3. Tangible results: Bridge the “Idea to Implementation” gap

In the end, what we to achieve is giving good ideas a chance that otherwise would never get considered or implemented – especially in a mature business environment that favors low-risk incremental improvement over more risky breakthrough experimentation (see 10x vs 10% – Are you still ready for breakthrough innovation?).

We need a mechanism that frees the intrapreneurial spirit of employees and directs the passion and potential of our employees’ ideas to tangible results that, ultimately, drive new business growth.

How does it work?

The intrapreneurial instruments and mechanism of this innovation ecosystem include, for example:

  • School for Intrapreneurs,
  • Internal corporate venturing,
  • Networks for implementation and
  • Opening to outside perspectives.

Over the next blog posts I will address each of these approaches (and perhaps more) and share my experiences from implementing exactly that successfully in a FORTUNE Global 500 company. So, check back soon or get updates via Twitter @OrgChanger.

 

Be the next Steve Jobs!

Can you innovate?

It a strange question.  Isn’t it astonishing how many people say “I am not creative” or believe “innovators” are so much different from themselves.  As if innovators are an enlightened lot of geniuses that come up with breakthrough innovations that nobody else could have thought of or made happen but them.  Icons such as Steve Jobs (Apple), Elon Musk (Tesla) or Jeff Bezos (Amazon) stand out.  They apparently think differently and changed the world.

The question for the rest of us is: could I be a Steve Jobs too?  Or do have to be born gifted to be able to innovate in ways that “make a ding in the universe” like Steve Jobs?

Are you a Steve Jobs? (photo credit: http://scrapetv.com/News/News%20Pages/Technology/images/steve-jobs-3g-iphone.jpg)
Are you a Steve Jobs?
(photo credit: http://scrapetv.com/News/News%20Pages/Technology/images/steve-jobs-3g-iphone.jpg)

You can learn creativity!

If you ask kids in kindergarten or preschool if they are creative, they enthusiastically respond “Yes!”  At that age we are convinced we are creative and express our views, thoughts and ideas in many ways.  We design rockets to Mars or create new animals, nothing is out of bounds or out of reach.

What has happened to us that we believe as grown-ups and employees we can no longer create and change the world? I heard “I could never do that” and “nothing will change anyway” too many times.

Good news is that genetic predisposition only attributes one-third to your creativity and innovative-ness (if this is a word), while two-thirds are skills that can be learned, as research confirmed many times over (see Marvin Reznikoff et al, Creative abilities in identical and fraternal twins, Behavior Genetics 3, no. 4, 1973).

Therefore, innovation can be taught, “nurture trumps nature.”  So, you can learn it too!

Are you an intrapreneur or entrepreneur? 

However, not everyone wants to take the risk and uncertainty to make an entrepreneurial dream come true by starting a new business on their own.  Many of us work in large organizations and would like to improve the company from within somehow.

This is where intrapreneuring comes into play.  Intrapreneurs are also called corporate entrepreneurs, since they apply entrepreneurial methods within the organization to create intraprises.   (See also The Rise of the Intrapreneur)

What innovators have in common

So is there anything that great innovators share and which we ‘mortals’ can replicate or do similarly to succeed? – In fact, there is!

In his iconic book “The Innovator’s DNA,” famous disruptive innovation guru Clayton Christensen (who is also known for coining the term ‘disruptive innovation’) identified four common catalysts that sparked the great ideas:

  1. “a question that challenged the status quo,
  2. an observation of a technology, company, or customer,
  3. an experience or experiment where he was trying out something new,
  4. a conversation with someone who alerted him to an important piece of knowledge or opportunity”

This comes down to the four following behaviors, as Christensen found out:  questioning, observing, networking, and experimenting.

Thinking different

While, typically, the underlying information is not unique, the innovator’s associative thinking combines information and connects dots that seem random or unrelated to others.  They create a picture or vision of a need or opportunity to pursue.

Now, on your way to become an intrapreneur (or entrepreneur), how can you get to these insights, find a suitable target and make it happen?

There are two basic steps:

  1. Don’t work alone
  2. Seek a fertile environment.

1. Don’t work alone

An  African proverb says “If you want to walk fast, walk alone; but if you want to walk far, walk together”.  Developing and bringing a disruptive idea to life takes time, work and -more than anything- collaboration.  It’s not a fast shot and you will need help.  What you can do is tapping into more brains: ask others and bring together a diverse team around an idea.  You want to get as many different perspectives to see the fuller picture, risks, needs, opportunities to tackle the problem you are working on.

You may be blindsided or unaware of things critical for your success including much needed political cover, validating your assumptions or technical aspects outside your expertise.  If you try to do everything yourself, you are setting yourself up for failure for a simple reason: you are not an expert in everything!  Stick with what you are good at and let other experts help you with what they are good at.

2. Seek a fertile environment

If you want to start your own business as an entrepreneur, you may want to move where you find the best condition for a supportive business environment, an ecosystem.  For entrepreneurs, for example, Stanford University and Silicon Valley remain a major tech magnets with ample and easy access to top talent and money.  Also accelerators can serve this purpose.  Comparable conditions for an innovative ecosystem exist at the US-East coast in the Boston area.  Depending on your business idea, other locations and ecosystems may be more suitable – do your homework and find the right one for you.

As an intrapreneur, your available ecosystem seems more limited: it typically is the company you work in that defines the perimeter of your freedom to navigate.  Your advantage here can be that you already know the environment and who could be supporting or funding your idea.  If not your, you could more easily ask colleagues for help than people outside your company could, which significantly lowers the bar for access to resources.

Let’s continue by focusing on intrapreneuring.  Compared to the entrepreneurial world out there, within an organization you may have more opportunities to help shape the fertile ecosystem for breakthrough ideas if none exists yet.

Now, if you are stuck with a company that does not provide an environment that supports intrapreneuring, you may consider becoming the innovation leader (see How to become the strategic innovation leader? (part 2 of 3)) to build an ecosystem within a large organization.

– Stay tune to find out how.

Join me at the Customer Experience Summit 2014 in Princeton/NJ on March 6, 2014

Pharma Customer Experience Summit 2014 at The Nassau Inn Hotel, 10 Palmer Square, Princeton, NJ on March 6, 2014

Pharma Customer Experience Summit 2014 at The Nassau Inn Hotel, 10 Palmer Square, Princeton, NJ on March 6, 2014

Join me for the SAPA-CT Milestone Celebration Meeting at Yale University on Feb 22

“Bridging between US and China in Current Pharmaceutical World – Strategies, Innovation and Implementation”

Join me at 11:15am at the Sino-American Pharmaceutical Professionals Association‘s new Connecticut Chapter (SAPA-CT) Milestone Celebration Meeting held at Yale University (N107 The Anlyan Center, 300 Cedar St, New Haven, CT, 06511), 9:00 AM to 5:00 PM, Feb 22, 2014.

SAPA-CT Milestone Celebration Meeting, "Bridging between US and China in Current Pharmaceutical World - Strategies, Innovation and Implementation"
SAPA-CT, Boehringer Ingelheim, BMS, and Association of Chinese Students and Scholars at Yale (ACSSY) will co-sponsor this event

How open offices kill productivity – and how to make it work

Open offices are not a new invention.  They have been around for a long time as hallmark of start-up companies that simply cannot afford glitzy corporate skyscrapers with plush corner offices (yet). Open offices emerged less by deliberate design than driven by need.

Start-ups typically run on a vibrant culture of passionate people wanting to spend time together to create something great, everyone works together closely in the tight space available.  Information flows fast and freely.  Recreational elements and other services offered remove the need or motivation to leave.  Employees hang out to work maximum hours as a team in a fun, inspiring and supportive environment.  Productivity is up and work gets done.

Start-up open office (source: theepochtimes.com)
Start-up open office (source: theepochtimes.com)

Growing pains

Large companies are attracted by this powerful value-proposition for open offices – or so it seems.  Mature organizations struggle with their increasing size that, over time, entails increasing specialization and complexity with a stifling system of red tape and inertia.

While jobs are large in small companies and come with broad scope and high accountability, which are diluted when jobs narrow in large companies by increased specialization over time.  Functional silos emerge and sub-optimize often to the detriment of other business functions.

This siloed corporate world only contributes to a climate that works against diverse collaboration and inhibits breakthrough innovations; and business results degrade from 10x to 10%.  (See also 10x vs 10% – Are you still ready for breakthrough innovation?)

Cutting costs is a questionable driver

The reasons for large organizations moving to an open floor plan are often glorified and communicated as a measure to increase creativity and productivity in an appealing modern working environment: employees connect casually and spontaneously at the ‘water cooler’ to network and innovate together again.

The true and paramount driver for tearing down the office walls, however, is often more sobering: it comes down to simply cutting costs by reducing the expensive office footprint.  Fitting more people into less space comes at a price for the workforce.

Cost savings only get you so far.  It’s an easy approach but not a sustainable business model for productivity.  What do you really save if productivity goes down?  How sustainable is your business then?  Sacrificing productivity for cost savings is a narrow-minded approach lacking long-term perspective and, therefore, not worth it.  That is unless your goal is to achieve short-term gains without consideration for the future of the business, which is a disqualifying business perspective altogether.

The popular phenomenon in large companies is a move for the wrong reasons (the better driver being increased productivity) and entails serious consequences that jeopardize the company’s productivity, workforce satisfaction, and even the bottom line.

Design constraints

It gets even worse when the new environment is retrofitted space with structural limitations, founded in the legacy of existing buildings and investments, and if no flanking measures taken to enable effective collaboration needs.

A design from scratch has the potential support the collaboration needs and flow of the workforce best.  This is an advantage start-ups have when they can shape and rearrange loft space to their immediate needs without limitations carried forward.

Size matters

Controlling cost is necessary and reducing office footprint is an effective business measure.  Aetna, for example, has nearly half of their 35,000 employees working from home already, which saves ~15% to 25% on real estate costs – that’s about $80 million saving per year.

Do not get me wrong, there are undeniable benefits to open office spaces – when applied for the right reasons in the right context, with right priorities and proper execution.  The point I am making is that cost reduction alone is not a worthwhile driver if it sacrifices productivity.  There comes a point where a hard decision has to be made and if you prioritize cost savings, you sacrifice productivity and other aspects automatically.

Open Office Plan (source: Foundation 7)
Open Office Plan (source: Foundation 7)

What does it take?

Unfortunately, the start-up company model with open office space and its agile and enthusiastic does not scale for large organizations.  The corporate one-size-fits-all approach does not do the trick for several reasons.

Let us look at aspects that make the open office work:

  1. Tear down cost center walls
  2. Make presence easy
  3. Level the (remote) playing field
  4. Embrace work style differences

1.  Tear down cost center walls

Proximity favors who needs to work together closely.  In a start-up company, staff is few and jobs are big.  This ratio flips in large organizations where many employees work in highly specialized functions.  With increasing specialization comes complexity that leads to functional silos.  The employees become separated by every rising departmental and organizational walls.

In large organizations, work space is typically paid for by department and charged to cost centers.  Staff gets corralled this way and kept separated in functional clusters that are easier to administer but counteract productivity, streamlined workflow, and diverse collaboration cross-functionally.  After all, it wouldn’t make sense to have any department operating completely independent from the rest of the organization.

These artificial and structural boundaries make no sense (unless you are an accountant, perhaps).  Therefore, trade the urge for financial micro-management for what makes the workforce more productive, as this is the most important aspect of collaboration and, ultimately, the bottom line.

2.  Make presence easy

Make it easy for your employees to go the extra mile.  Now here is where large companies can learn from how start-ups: offer incentives for employees to hang out and remove reasons for them to leave to maximize time to work and collaborate.

The list seems endless: free beverages and food, services such as laundry, hair dresser, spa or receiving deliveries, exercise equipment, healthy snacks, child and pet care, and other useful perks that cost-cutting companies often omit.

Sounds like a waste to many large companies.  But is it really?  You get more out of your employees’ carefree working along longer than by pinching the free coffee and have them leave during the day or early to run their necessary errands.

3.  Level the (remote) playing field

It may sound counter-intuitive but when cost saving rules, the open office space often only works when not all employees are around at the same time.  If all employees showed up on the same day there may not be enough room and resources (seating, access to power and networks, etc.) to fit and accommodate everyone, since the physical office footprint is now too small ‑ a Catch-22.

When only a subset of employees can be present in the office at any given workday, the rest has to work remotely forming an –at least- virtual organization.  Consequently, the random personal connection “at the water cooler” becomes less likely as does spontaneous cooperation by “pulling together a team” since your pool of physically available staff is limited.

Management needs to take deliberate and determined measures to level the playing field for remote workers by giving them the same opportunities as colleagues present in the office.  Why?  “Out of sight, out of mind” is a powerful and human nature.  If not managed effectively, it only becomes worse when remote staff easily is continuously overlooked when it comes to projects staffing, development opportunities and promotions, for example. The resulting inequities undermine workforce cohesion, effectiveness, and talent development.

Read more on virtual teams at Why virtual teams fail, and how to make them work (part 1) and How to make virtual teams work! (part 2).

4.  Embrace work style differences

There are too many individual work styles to list them all – for example, just think of

FastCompany recently came up with a list of reasons by workers arguing against open offices, which is a good indicator where the pain-points are.  Representative or not, the list tends to resonate with people that experienced first-hand working in a corporate open office environment.

The key complaints are about

  • Distraction – hard to concentrate with surrounding noises of all sort; loud speaking coworkers; interruptions of coworkers stopping by at any given time
  • Discomfort – no privacy; by-passers looking at your screen and documents; food, bodily and other odors; white-noise generators blamed for headaches; spreading contagious illnesses; having to talk to people when you don’t feel like it; “hiding” by wearing earphones
  • Workflow obstacles – competing over quiet spaces, conference rooms or other rare resources; no place to store personal items or personalize the space.

In summary

One size does not fit all and it does not do the trick for large companies, in particular.  So if you have to downsize office space or accommodate more employees, take a sound and sustainable approach by making productivity the driving priority and not cost.

After all, we are human beings that work best when we have control over our work environment and schedule.  When we perform at our best, it is also for the better of the company as a whole.  Flexibility, empowerment and inclusion go a long way – otherwise, mind FastCompany’s warning: “What was supposed to be the ultimate space for collaboration and office culture was having the opposite effect” – also for the bottom line.

Join me in Boston for the Corporate Venturing in the Life Sciences conference this week!

Join me at the Corporate Venturing in the Life Sciences conference this week!
Join me at the Corporate Venturing in the Life Sciences conference this week!

How to grow innovation elephants in large organizations

Driving innovation in large organizations is like herding elephants.  Big and small elephants. – How so?

Elephants come in different sizes
Elephants come in different sizes

Big Elephants in the Back-Office

In large organizations, departments gravitate to sub-optimize their core business.  Silos form under local management to run their department more efficient – following the old mantra: do more with less.
(Read more about silos forming at Leadership vs Management? What is wrong with middle management?)

Although all business functions are affected, corporate Information Technology (IT) departments often lend themselves as best examples for a “big elephant” world: they are critical enablers in a pivotal position of every modern organization.  Even though the success of practically every business function hinges on IT, also IT is not immune to this silo-forming phenomenon in large organizations.

Over time and with ‘organizational maturity’, the IT department tends to end up focusing on what they do best: large back-office projects that cannot be funded or run by any business function in isolation, since they span across disciplines or impact the entire enterprise.  Just one examples for a “big elephant” project is implementing a comprehensive Enterprise Resource Planning (ERP) system across multiple locations internationally.

This is the back-office domain and comfort zone of IT with technology know-how, big budgets, long duration, high visibility, rigid governance and clear processes to follow.

Small Elephants in the Front-Office

In contrast, the front-office typically comprises Marketing, Sales and Product Development.  Here, a small tweak or agile change (that requires some IT input) can go a long way and have significant impact on organizational effectiveness and business results.  – These micro-innovations are “small elephants” as recent Gartner research coined them.

These little disruptions to the slower-moving big elephant world easily trigger the “corporate immune-system” that favors large elephants and suppressing small emerging ones.

Typically, most projects in large organization aim to reduce cost in some way.  Only a minority of projects address new business and growth opportunities that tend to come with uncertainty and greater risk.

While big elephants are typically incremental improvement project to save cost, it’s the small elephants that are more likely to be disruptive drivers of growth and future business opportunities: the much needed life-blood of sustaining business and future prosperity.

Barriers in the Big Elephant World

IT departments tend to struggle the farther they move away from their ‘core competency’ meaning leaving the big-elephant back-office and dealing with the myriad of small needs of the customer-facing units in the small-elephant front-office.

Many reasons contribute to say “No!” to emerging small elephants:

  • Small elephants are disruptive to the big elephant world, perhaps even threatening to the establishment
  • It is hard for the back-office to accept that there cannot be much standardization around these small small elephant solutions by the very nature of their scope and scale
  • It is cumbersome to plan and manage resources scattered across small projects that pop up left and right without significantly impacting big elephant projects.  Unfortunately, pressure to save cost only fuels the focus on fewer, bigger elephants.
    Gartner brings the dilemma to the point: “[..] the focus on optimization, standardization and commoditization that underlies IT’s success in the back office is contrary and even detrimental to the needs of the front office.”
  • Insights in front-end processes and customer needs are essential (and not usual IT back-office competencies) to seize small elephant opportunities, which are often disruptive and driven by the agile intrapreneurial spirit that makes full use of the diversity of thought and understanding customers deeply.
    – See also The Rise of the Intrapreneur
  • On top of it all, the challenge for IT is to understand the potential and pay-off for initiatives that rely on IT in a domain outside of IT’s expertise:  In the mature world of big elephants, ROI projections are demanded upfront and based on models that apply to mature organizations.  These models typically do not apply well to measure project ROI in the emergent worlds of small elephants, which puts the small elephants at a disadvantage; another disconnect that easily leads big elephant organizations to reject proposed small elephants.

As a bottom-line, for large IT departments it is simple and convenient to say ‘No!’ to requests for “micro-innovations” coming in from employees scattered across the front-offices.  And, sadly, often enough this is exactly what happens. Despite the lasting impact of “No!” (see also How Intrapreneurs avoid “No!”), turning ideas and proposals down too fast also leaves out opportunity for huge innovation potentials (see also 10x vs 10% – Are you still ready for breakthrough innovation?).

What happens to IT without small elephants?

Ignoring the need for micro-innovations and not supporting them effectively will not serve IT departments well in the long-run.  With only big-elephant focus IT departments are at high risk to lose sight of the needs of their internal customers.  Consequently, IT undermines and finally loses its broader usefulness, acceptance and footing in the business functions they intend to serve.

When small elephants are neglected or blocked, it practically forces the front-office to look for other resources sooner or later in order IT-services providing resources to get their needs taken care of.  Over time, the big IT department drifts to become more and more obsolete, and finally replaced by agile and responsive agencies and contractors that deliver on their front-office customer needs.

After all, IT’s general role is one of an enabler for the core businesses rather than being perceived by its customers as a stop-gap.

How to raise Small Elephants

So, what can a mature yet forward looking IT organization do to support micro-innovations – or ‘balance the herd,’ so to speak, to include a healthy number of small elephants in the mix?

  • Brad Kenney of Ernest&Young recommends limited but dedicated resources (including time) for micro-innovations in Ernest&Young’s 2011 report “Progressions – Building Pharma 3.0”;
    for example, dedicate 10% of the expert’s time to implement micro-innovations
  • Test changes in emerging markets first, if possible, where agility is high at a lower risk of jeopardizing the bottom line or threatening the established organization and its investments in mature markets
  • Establish effective collaboration platforms that make it easy for employees to openly and conveniently share content among each other as well as with external parties.

How Intrapreneuring helps

A systematic approach to Intrapreneuring can go a long way to help move these micro-innovations forward.  It starts with systematic intrapreneurial skill-building for employees across all levels of hierarchy and includes:

  • Understanding how innovation happens in large organizations, i.e. large and small elephants and the need for both to exist
  • Helping employees become aware of and overcome their own mental barriers and silo-thinking
  • Attracting, inspiring and engaging employees to take their idea forward knowing there are obstacles in their way
  • Training skills that help to frame, develop and pitch ideas to potential supporters and sponsors
  • Building and presenting a business case for review and improvement by peers and management
  • Enabling and empowering employees to bring their small elephants to life and sharing the story of their success to inspire others
  • Working to gradually change the mindset of the organization, its culture, as needed, to become more balanced on the elephant scale, to unlock the resources within the own workforce and to seize opportunities for growth and the future of the business.

Just as out there in the wild, without raising small elephants the life-span of organizations with only big elephants is limited.

Women in Life-Sciences: Pharma Think Tank at UCSF on Oct. 30, 2013

UCSF WILS BI Think Tank announcement
UCSF WILS BI Think Tank announcement

UB Innovators Series: How Entrepreneurs and Intrapreneurs are Change Business from the Inside Out

Innovator Series Announcement
University of Bridgeport, Innovator Series, Oct 9, 2013
“How Entrepreneurs and Intrapreneurs are changing Business From the Inside Out”

Join me in Boston for the Corporate Venturing in the Life Sciences conference this week!

Join me at the Corporate Venturing in the Life Sciences conference this week!
Join me in Boston this week: Corporate Venturing in the Life Sciences conference

Podcast on Innovation in Large Organizations, Intrapreneurs and Corporate Venturing

Podcast Announcement 2013-09-24futurethink spoke with Stephan Klaschka, Director of Global Innovation Management at Boehringer Ingelheim, who is responsible for encouraging disruptive innovation within the firm. He spoke about creating “intrapreneurs” in large organizations by instilling an entrepreneurial mindset into employees and ways to use partnerships to get to new ideas.

Click here to get to the podcast.

Stephan will be leading the session “Reassessing the Organizational Culture to Better Engage Corporate Venturing Prospects” at the upcoming Corporate Venturing in the Life Sciences Conference November 13-14, 2013 in Boston, MA

10x vs 10% – Are you still ready for breakthrough innovation?

Google co-founder and CEO, Larry Page, continues to have big expectations for his employees:  come up with products and services that are 10 times better than their competitors, hence “10x” – that’s one order of magnitude!

10X vs. 10%

Many entrepreneurs and start-up companies, they seem to ‘shoot for the moon’!  Far more than 90% of these ventures fail within just a few years.  Few, such as Google, succeeded and grew to dominate internet giants.  The question remains though if they can maintain the innovative pace of 10x when the innovation rate tends to sink closer to 10% in matured companies.

How big dreams changed the world

This challenge effects also other visionaries that changed the face of the world and transformed society in ways nobody has imagined, such as:

  • Apple building a micro-computer at times when mainframes ruled the digital world and only few could envision a demand for personal computing
"There is no reason anyone would want a computer in their home." - Ken Olsen, founder of Digital Equipment Corporation, 1977; just a few years before the first IBM PC was sold.
“There is no reason anyone would want a computer in their home.” – Ken Olsen, founder of Digital Equipment Corporation, 1977 – just a few years before the first IBM PC sold.
  • eBay establishing a new online sales model that millions around the globe use every day
  • Google taking over the browser market through simplicity, by giving everyone control to use the most complex machine on Earth, the Internet
  • Microsoft cultivated software licensing to sell one piece of software millions of times over effortlessly at minimal cost.

Innovation downshift

As disruptive and transformative ventures grow and mature, the definition of what is perceived ‘innovate’ changes.  Both momentum and focus shifts.  With size companies struggle to continue innovating similar to their nimble start-up origins.

What happens?  With size comes a downshift from disruptive to incremental change. Simplicity makes space for adding features.  Adding features makes products more complex and ultimately less usable and appealing to the majority of customers.

Look at Microsoft’s Offices products, for example:  Wouldn’t you wish they came out with a ‘light’ version with reduced feature complexity by let’s say 75%, so the software becomes easy to use again?

It also starts haunting Google, as their established products such as Search or Gmail need to be maintained.  Additional “improvements” aka. features creep in over time.  Perhaps you noticed yourself that recently Google search results seem to be less specific and all over the place while the experimentation-happy Gmail interface confuses with ever new features?

Even the most iconic and transformative companies experience the reduction of their innovative rate from 10X to an incremental 10% or so.

Technology S-curves

Funny thing is that -at least in technology- incremental improvement quickly becomes obsolete with the next disruptive jump.  The current technology matures up along the S-curve (see graphics) and generates revenue, but the next disruptive technology emerges.  Companies hold on as long as they can keeping revenue flowing by adding features or improvements of sorts to gain or maintain a marginal competitive advantage.  Thus, incremental improvement and process optimization found their place here to minimize cost and maximize profit in a market where the product became a commodity, so the competition is based only on price.

The new technology does not yet make significant money in the beginning at the beginning of the next S-curve.  The few early units produced are expensive, need refinement and are bought by enthusiasts and early adopters who are willing to pay a steep premium to get the product first.  Nonetheless, development reached the point of “breakthrough,” becomes appealing to many and quickly takes over the market:  the big jump onto the next S-curve gains momentum.  Suddenly, the former technology is ‘out’ and revenue streams deflate quickly.

S-curve (http://www.carteblancheleeway.wordpress.com)
S-curve (http://www.carteblancheleeway.wordpress.com)

(source: http://www.carteblancheleeway.wordpress.com)

Large and matured organizations ride on an S-curve as long as possible.  They focus top-down on optimizing operations.  Little effort is made to address the underlying limitation of the current technology and seeking out risky new successors.  Maturing companies tend to transform into a ‘machine’ that is supposed to run smoothly.  A mind shift happens to avoid risk in order to produce output predictably and reliably at a specific quality level to keep operations running and margins profitable.  Incremental process improvement becomes the new mantra and efficiency is the common interpretation of what now is considered ‘innovative’.

10X has turned into 10%.  To keep up with the ambitious 10x goal, companies would have to constantly re-invent themselves to replicate their previous disruptive successes.

How Goliath helps David

Even our recent iconic ‘giants’ find themselves in a tighter spot today:

  • Google struggles to integrate a fragmented product landscape and maintain the ambitious 10X pace of innovation
  • Microsoft suffocates loaded with features that make products bulky and increasingly unusable while consistently failing to launch new technologies in the growing mobile segment successfully
  • Apple waters down their appealing simple user interface by adding features and clinging to defend their proprietary standards from outside innovations.

On top of it, all giants tend to face the stiffening wind of governmental scrutiny and regulation that influences market dynamics to protect the consumers from overpowering monopolies that jeopardize competition and innovation.

This is a fertile ground for the next wave of innovators, small Davids, to conquer markets from the Goliaths with fresh ideas, agility, and appealing simplicity.  Where does your organization stand on the S-curve, riding the current curve with 10% or aiming high at the next with 10x?

Observing the down-shift

What can you observe when the down-shift happens?  How do you know you are not on the transformative boat anymore?  Here are just some examples:

  • Small Jobs – job descriptions appear that narrow down the field of each employee’s responsibility while limiting the scope by incentivizing employees to succeed within the given frame.
  • Safe Recruiting – practices shift to playing it safe by hiring specialists from a well-known school with a streamlined career path to fit the narrowly defined mold of the job description.  They newbies are expected to replicate what they achieved elsewhere.  To risk is taken to getting the ‘odd man out’ for the job, a person who took a more adventurous path in life and thinks completely different, as this may disrupt the process and jeopardize the routine output by shifting the focus away from operations.
  • Homogenized workforce – as a consequence of hiring ‘safely’, the workforce homogenized thereby lowering the innovative potential that comes with the diversity of thought and experience.
  • Visionaries leave – with the scope of business shifting, the visionary employees that drove innovation previously lose motivation when innovation and creativity slows.  Now they are held to operate in a business space where they do pretty much the same thing as their competition.  Naturally, these go-getters move on, as it is easy for them to find a challenging and more exciting new job in a more dynamic place. – This ‘leaky talent pipeline’ gets only worse and costly when the talent management focus shifts to talent acquisition and leaving talent retention behind.
  • Complexity creeps in – the temptation to constantly add features increases the complexity and starts a spiral that is hard to leave again (see also ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?)
  • Procedures for everything – operating procedures regulate every detail of the job.  The new ‘red tape’ is not limited to the necessary minimum but rather by the possible maximum.
  • Short-term focus – work output becomes mediocre and focuses on short-term goals and sales targets; the next quarter’s numbers or annual results take priority over following the big dream.
  • Sanitized communications – broader communications within the company become ‘managed’, monitored, ‘sanitized.’  A constant stream of (incremental) success stories pushes aside an open discussion to target the bigger problems.  Opportunities are missed for open dialogue and creative disruption that fuels the quantum leaps forward to outpace the competition.  Peer to peer communication is monitored to remain ‘appropriate’ and can even be actively censored.  Trust in management and subsequently also among employees erodes.

Management fear of being the first

The real problem is the shift of mindset in top management that quickly works its way down:  not wanting to take the risk of being first, which includes avoiding the risk to fail while chasing to next big opportunity or technology.  Instead, they sail the calmer waters among more predictable competition fighting for small advantages and holding on to the status quo opportunistically as long as they can.  In some cases, the management even acknowledges the strategy shift from ‘leader’ to ‘fast follower’ despite whatever the company motto proudly promotes – and thereby accepting 10% and avoiding to leap ahead of their competition by bold and game-changing 10x moves.

Interestingly, these same managers still love to look over the fence to awe the iconic leaders but steer away to take charge and work to become the leader again themselves.  The nagging question remains if they could actually pull it off getting into first place.

Outside-of-the-box thinking may still be encouraged in their organization but is not acted upon anymore. Internal creativity or ideation contests become more of an exercise to keep employees entertained and feeling engaged, but the ideas are hardly being funded and executed.  Instead, company resources are concentrated to run the incremental machine predictably and reliably at 10% as long as its profitable, no matter what.  – They simply have no resources to spare and dedicate to 10x!

Business Darwinism

These businesses undergo a cycle of breaking through by successful disruption in a narrow or completely new segment, then continued growth to a size where the organization slows down to an incremental pace and somewhat stagnating innovation.  It may then get driven out of business by the next disruptor or pro-actively break up into more competitive fragments that allow for agility and risk-taking once again to become leaders in their more closely defined space of business.  This closes the cycle they are to go through next.  There is a strong parallel between evolution and Charles Darwin’s survival of the fittest.

Keeping this cycle in mind, it becomes easier to see why management undergoes the mind shift to predictable and incremental improvement during the massive growth phase of the company in the center of the S-curve.  It is also the time when the disruptive innovators have jumped ship to join the next generation of cutting-edge innovators and risk-taking disrupters that prepare to take the leap working on the next S-curve.

Which way to turn?

The question is where you want to be:  the true risk-taker or the incremental improver?  Understanding the trajectory and current location of your company helps to make the right decision for you.  It can save you from frustration and be banging your head against corporate walls and be wasting your energy in a dinosaur organization that is just not ready anymore for your ‘big ideas’ and quick moves outside its production-house comfort zone.

This leaves some of us thinking which way to turn.  If you are looking for predictability, longer-term employment (an illusion these days one way or another) and good night sleep, this is the place you will feel comfortable in.

Otherwise, dare to follow the risk-taking visionaries like Elon Musk (the brain behind PayPal, SpaceX, and Tesla Motors; see his recent great interview) to move on.

And then there is ‘intrapreneuring’ as a third direction that tries to change the company from within. (See ‘The Rise of the Intrapreneur‘)

To say it with the words of Niccolo Machiavelli, the wise and sober realist: “All courses of action are risky, so prudence is not in avoiding danger (it’s impossible), but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.”

Shoot for the moon (or Mars, if you are Elon Musk), change the world no matter what and enjoy what you do!

How to make virtual teams work! (part 2)

This second part of the blog post looks at how to make virtual teams work.  Don’t miss the first part: Why virtual teams fail

Telecommuting is on the rise.  It leads to more ‘virtual teams’, which means co-workers collaborate separated from another by location and often also time.

Bitter-sweet 

There is a bright side and a dark side to telecommuting.

Here is the upside:  According to Staples Advantage’s study (see “Employers say work from home works“), 93% of employers found programs that allow employees to work from home benefits employees as well as companies.  Half of the employers report more productive employees and 75% agree that telecommuting makes their employees happier.  No wonder that the amount of telecommuters has roughly doubled in the US over the past 10-or-so years (http://www.globalworkplaceanalytics.com/telecommuting-statistics).

The stubborn tendency remains that work may get done at home, but careers are made in the office.  The benefit of control over one’s work place and time comes at a price for the career as a recent study by Stanford University revealed: working from home cuts the chances for a promotion in half!

Obviously, there is a disconnect between where the professional world is moving towards rapidly and our mindset that seem to adapt slower and less flexibly to change using digital interaction for effective collaboration.

Because the world is not flat…

Even the most advanced and latest ‘virtual presence’ technology does not offer the same bonding with senior management as face-time does.  The ones working from home can be overlooked or -when opportunity knocks- forgotten, even though they often work harder compared to in-office workers and their productivity is higher, as the study showed.

When it comes to telecommuting the world is not flat.  Simply put, the playing field is not level between in-office and at-home workers, explains the gap between the positive perception of remote working by employers and employees alike, and the sobering reality of career crunch.

Furthermore, it is not the remote workers alone that require attention and need to be managed differently.  It is also the staff remaining in the office (if there are any), since both parties are affected and need to perceive the same leveled plain.

Breaking habits

It is human nature to favor those whom we feel close to and whom we work and spend time with in close proximity. To make working-from-home (or from anywhere else outside the office) work successfully, it is the management’s responsibility to level this playing field effectively and sustainably.

Achieving this is anything but easy; in particular, if managers are used to working out of an office.  For them it means to break with their habits for the better of the organization.  – It’s not impossible though: our habits of sitting at a table in front of a computer all day is just as unnatural for humans; yet we get used to it.

Cover the bases

There are some key aspects to make remote working work:

1. The work itself
First, the work must lend itself to be conducted remotely.  Quite a no-brainer: other than in a factory setting, the necessary tangible tools and resources to collaborate cannot be concentrated in one place but must be accessible to the remote staff where ever they work from.  For example, remote working is not possible for a factory assembling gadgets along a conveyor belt, where each worker contributes to some part of the process assembling the product.  Tools are expensive and immobile, so resources need to be concentrated in around the tools to allow for efficient collaboration.

Not much different from factory workers, the collaboration of knowledge workers is enabled by tools to communicate and to share data and information.  The difference is that technology allows information to be transmitted, so we can collaborate effectively and efficiently from all corners of the world. Choosing the most suitable collaboration tools can become a differentiating competitive advantage; you don’t want to lose quality or effectiveness when collaborating remotely.

2. The workers

Working from home is not for everyone for different reasons.  It does require continued motivation and self-discipline to work from home as if in the office among co-workers.  It takes establishing a new work-day routine in the isolated home environment that is invisible to co-workers.  It becomes just as import for the home-workers to take regular breaks:  Burnout can easily become an issue when home-workers over-compensate because they either feel under scrutiny by management and/or co-workers in the office.  Also less interruptions at home can lead to missing breaks and working longer hours continuously than in the office.

When I introduced remote working as a pilot project in my department several years ago, one of my staff reported in the beginning that he felt guilty taking a bio-break at home, so not to appear unavailable to staff from other departments who remained working from the office.

3. The management

Managing a remote workforce requires a different management style.  Managers need to become more pro-active, use communication channels that the staff is comfortable with and adopt ways to communicate with their staff transparently and effectively.  Key points for managers are to:

  • Establish shared team goals
  • Establish communication best-practices together with the team; this also helps to mitigate timezone, language and cultural differences as well as choosing the proper communication channel depending on content
  • Manage by performance, not by face-time or physical presence
  • Actively create equal opportunities for on-site and off-site staff
  • Set clear rules for management and staff alike aiming to show transparency and leveling the playing field by incentivizing favorable behavior (a matter of organizational justice)
  • Remain flexible and ask your staff for ideas on how to improve knowledge-sharing and collaboration.

4. The performance metrics

Leveling the playing field comes down to truly embracing a performance culture that incentivizes results – not face-time.  Managers need to articulate clear and measurable goals for the team and its individuals in advance and sometimes also more frequently than they used to.  Acting transparently and objectively can be a serious challenge for managers and requires leaving the personal comfort zone.

To achieve this, training may be necessary to shift the culture of the organization and prepare management and their staff alike.

As an example, when I first introduced remote working, I asked my managers to establish and document weekly goals with each staff member and to review them for completion the following week.  After a couple of months, I left it to the managers to use any other way to set and track performance with their staff.  When some managers wanted to put away with the weekly goal agreement sheets, it was their staff who asked to keep them, as they valued the clear and documented goals in their hand.  The staff also found them helpful to discuss facts during their following periodic performance reviews.  Though not planned for, the weekly goal setting contributed measurably to increase trust of staff in their managers.

Plan for the “soft factors”

Interesting are the “soft factors”, which are the real make-or-break but often tend to get overlooked, forgotten or just not taken into account seriously.  What it boils down to is the relationship (trust) and interaction (communication) between managers and their staff as well as among the members of a virtual team.  These soft factors are subtile and often require behavioral changes or adaptation, more for managers than their staff.

Do you trust?

Take the time to ask yourself two questions honestly:

  • Do you trust yourself to be as productive working from home as in the office?

Now this:

  • Do you trust your coworkers or your direct reports to work as productive from home too?

My own experiences are consistent with the research: we trust ourselves more than others. – And this is where the problem starts.

Why trust matters

A trustful personal connection is unsurpassed to build trust as a foundation for robust and sustainable business relationships and collaboration.  Individuals trusting a person we don’t want to work or do business with this individual.

Trust also makes up much of the ‘social glue’ that holds together teams and organizations. Trust is critical for the success of virtual teams. With lack of trust also the willingness to share information dwindles and so does productivity.

When this happens, our energy gets wasted every day with concerns and redundant or counterproductive work.  Workers focus to avoid perceived threats from others, which takes over more and more of their work time, focus, and productivity. In contrast, for people we trust we happily go the ‘extra mile.’

Trust (or the absence thereof) has been identified as the pivotal element ranging from detailed investigations in hundreds of organizations (by Virtual Distance International) to recent bestsellers like “The Five Dysfunctions of a Team” by Patrick Lencioni.

Coming back to the two earlier questions, it proves hard turning the mirror towards ourselves and to accept that also we need to build trust with our co-workers to build and fuel our most robust and valuable business connects and relations.

What is trust?

Let’s take a closer look – what makes up trustful work relationships?  Trust is an interpersonal phenomenon. It comes down to three factors that make up trust at the workplace as Karen Sobel Lojeski, NYU professor at Stony Brook and CEO of Virtual Distance International explains:

  • Benevolence  –  our co-workers have your best interest at heart
  • Ability  –  our co-workers have the knowledge and ability to get the job done
  • Integrity  –  our co-workers will do what they promise.

Innovation needs trust
High trust correlates with more successful innovation – why?

When colleagues trust another they open up and share information. Besides the obvious benefit of cross-fertilization that leads to more ideas and creative approaches, by giving away our views and knowledge we become vulnerable as an individual and even more so in a competitive professional environment. This openness comes with a risk to fail that people are only willing to take if failure is acceptable and does not come with repercussions.

Sharing ideas alone is not enough though. Asking thoughtful questions, constructive criticism and mutual support lead to better solutions while curbing hostility and competitiveness. Opening up happens when a task-related conflict will not easily deteriorate into a personal conflict. Innovation within an organization relies on trust among colleagues as a key ingredient that cannot be substituted otherwise.

How we build trust

Trust requires communication and is built most effectively face-to-face with another person, which offers the broadest information channels.  An MIT study found a 47% higher performance in companies that are highly effective communicators.  Team success is consistently tied to robust team communications. (I wonder if this communication-related increase in performance was ever considered by companies focusing on saving cost…)

Customer-facing business knows that no technology today can offer the same quality and trust-building dialog as in person face-to-face.

Thus, travel to meet business partners and team members remains essential at least in the beginning. Traveling more to meet in person is out of the question for organizations who boarded the ‘cost-cutting’ train: it is considered too expensive.  Saving cost here, though, does not pay off over time when it cuts into building trust for good working relationships.

Even more important is trust-building when on-boarding new staff. It is a challenge if most or all work is done remotely by team members who already know and trust each other.  It comes back to human nature that we tend to rely on the same people we worked with before, which puts newcomers at a natural disadvantage.  Here, management must intervene to level the playing field and provide opportunities also for the new staff.

Perhaps, women are at a natural advantage to connect with others given a higher social sensitivity, i.e. the ability to ‘read’ other people’s emotions face to face better than men.  This is also one of the three criteria that increases group intelligence (see “Boost ‘Group Intelligence’ for better decisions!“)

Investing in trust and technology

Since it is not possible (and defeats the purpose) to meet in person especially in virtual teams, we use digital technology to bridge the distance.  Consequently, we need to invest in effective tools to remove communication barriers and open broad, information-rich channels of communication among all team members.

Rather than relying on one channel or system, it is more effective to enable the team to communicate by offering many channels that cater to the individual team member’s preferences; for example, phone, instant messaging, video chat, email, etc).  For example, waiting more than one minute to establish a video-conference connection is too long and already poses a significant communication barrier.

‘Tele-presence’ seems to be the gold-standard for remote communication but sadly often remains reserved only for executive use if the technology is invested in at all.

Nonetheless, enabling technology can also enhance performance and add value by

  • Indicating if people are online and available to communicate
  • Finding experts or collaborators easily within large organizations
  • Share and exchange information to relevant audiences directly and without delay.

In contrast, here are some examples for communication barriers of organizations with a cost-saving focus that tends to include also ‘technological disablement’ such as

  • Using slow or time-delaying communication or productivity equipment
  • Users spending more time trying to connect than actually communicating
  • Information-poor channels or poor call quality
  • Resolving technology-related problems consumes a long time or is a cumbersome process.

The Deep Dive

Virtual Distance ™ is a powerful framework to identify and quantify barriers within virtual teams.  This methodology helps not only to evaluate existing teams, but to anticipate barriers in future teams.  Virtual Distance makes for a superb strategic forecasting and planning tool to build effective virtual teams.

For more detail, see Virtual Distance International.

Too much trust can hurt innovation

Just as a side note for completeness, there is a risk that too much trust within a team can become and obstacle to innovation (see “Why too much trust hurts innovation“).

It comes down to management again to be observant and vigilant to detect and counteract such tendencies.

While introducing remote work in virtual teams comes with significant change and challenges for everyone involved, the burden and responsibility to make it work in the end remains with the manager.

Have you read part 1 yet? “Why virtual teams fail