HxRefactored 2014 in NYC on May 13-14 at the New York Marriott at the Brooklyn Bridge.
HxRefactored is a revolutionary design and technology conference that will gather over 500 designers, developers and leaders in health for two days of thought provoking talks, workshops and discussions on how to improve the quality of the health experience. The conference fuses the technical and creative elements of Health 2.0’s Health:Refactored and Mad*Pow’s Healthcare Experience Design Conference.
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.
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
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.
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:
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.
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?
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:
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
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.
Pharma Customer Experience Summit 2014 at The Nassau Inn Hotel, 10 Palmer Square, Princeton, NJ on March 6, 2014
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.
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.
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.
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
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
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.
Driving innovation in large organizations is like herding elephants. Big and small elephants. – How so?
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:
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?
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:
Just as out there in the wild, without raising small elephants the life-span of organizations with only big elephants is limited.
futurethink 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.
Say “No!”
Books teach us how to say “No!” – they fill up entire shelves in bookstores to help us achieve professional success and personal freedom. Rejecting requests from others helps us de-clutter our busy day and protect us from time-suckers and commitments we immediately regret.
On the other end, we are asked to delegate more to boost our productivity. This comes easier for your client or boss, who has a mandate or authority over what we work on and what process to follow. And then there are Intrapreneurs: champions of ideas they want to turn into reality within large organizations without mandate or authority. (Read also The Rise of the Intrapreneur)
The “No” trap for Intrapreneurs
Intrapreneurs are driven by their passion and belief in the idea they develop and seek support for. They also often stand outside the ordinary structure and processes of the organization. Intrapreneurs need to pull voluntary favors from people they have no control over in order to find support, funding, protection, expertise or whatever else their project requires to get off the ground or move forward.
For Intrapreneurs, avoiding the “No” becomes even more crucial: once they received a “No” to their proposal or request, it is hard to change their mind no matter how much sense the project makes.
– Why is that?
Why it’s hard to say “Yes” again
Put yourself in the shoes of a potential sponsor, lets say a manager, executive or technical expert: this Intrapreneur, a person you may or may not know well, walks into your office and requests resources, money, time, or whatever to fuel an uncalled for project with an uncertain outcome that was not budgeted for and that disrupts your operations.
The safe and easy thing is to say “No.” When rationalizing in retrospect, you just saved the company diverting and possibly wasting resources on this crazy project that may even have felt like a surprise attack! – And so you feel good, right?
Now, when the Intrapreneur comes back later to try his or her luck again, perhaps equipped with more data, what can you do? If you said “Yes” this time around, wouldn’t you be inconsistent with your previous position and possibly even undermine your own authority?
Subconsciously, you may already be biased and seeking a face-saving way to get over this discussion. So it’s safe again to stay with “No,” and remain consistent – and feel good! After all, it’s human nature!
“No” doesn’t turn to “Yes” easily
As an Intrapreneur, coming back to ask for a “Yes” again is an uphill battle, a double sell. You are basically wasting your energy fighting human nature rather than helping your cause effectively. Chances are you will not be able to turn around a previous “No” into a “Yes,” no matter how much more data and other good arguments you throw at the aspired sponsor. When seeking voluntary support from others, hearing a “No” is a huge obstacle that is hard to overcome.
So, for an Intrapreneur, the million-dollar question (perhaps literally!) is, how to avoid the “No” in the first place and get support for the idea.
How to avoid “No” and thrive your project
For an Intrapreneur, it is most important to listen closely and be open to the questions and concerns the sponsor to-be brings up: they may just as well uncover valid flaws or complementing areas to be addressed to make the idea succeed in the end.
Gifford Pinchot, the author of the best-selling book Intrapreneuring, suggests these nifty tactics for Intrapreneurs to approach helpers or sponsors in a non-threatening or overly demanding way that would trigger the negative response. A small step forward is better than a full stop of the “organizational immune system” kicking in. Don’t ask bluntly for resources of sorts. Instead, ask for advice or a reference to a co-worker!
People love to talk about themselves and being asked for their expertise and opinion. This works with employees on all levels of the hierarchy no matter if you seek a sponsor or advice from an expert.
By asking for advice, there is no Yes-or-No dead-end involved. It’s just a factual discussion among professionals about an idea and what it would take to improve it and to move it forward. Even softer is the question for help to find someone else, who could help or whom the Intrapreneur should talk to next. Even if not interested in the idea themselves, it allows the potential sponsor or expert to refer to another person, who is possibly better suited or more interested without losing face or appearing unsupportive.
Thumbs up all around
In case the idea or project tanks, as the expert/sponsor you didn’t waste any resources nor will you be held accountable. If, in contrast, the idea has a positive outcome down the road, you may even claim having supported it at an early stage or have made a key introduction that led to the project’s success. Now, that feels good no matter what happens with the Intrapreneur’s idea or project, right? That’s human nature too.
From the Intrapreneur’s perspective, for starters, you achieved to avoid the “No” kiss-of-death. You may have even got another lead or hint on what to improve or consider, something you overlooked or were not aware of before. Addressing this may require some more research, data or conversations, but for now, it drives your idea forward to take the next step, which is good and helpful.
It’s not really rocket-science but rather dealing with human nature in a resourceful and constructive way that keeps the intrapreneurial project moving forward.
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!
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.
This challenge effects also other visionaries that changed the face of the world and transformed society in ways nobody has imagined, such as:
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.
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.
(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:
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.
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:
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!
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.
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!
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:
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 subtle 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:
Now this:
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:
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
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
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“
Here are my Top 10 posts on innovation:
2. How to become the strategic innovation leader? (part 2 of 3)
What is an innovation leader? Is this role similar to an innovator? (The answer is ‘no’.) – Recognize the three key roles in innovation, how to find an approach and avoid critical pitfalls.
5. Why too much trust hurts innovation
Most managers understand that trust is a key ingredient to effective collaboration and innovation. Yet, few actively try to cultivate and nourish trust in their own organization to achieve the right mix between trust and constructive tension.
6. Imitators beat Innovators!
You thought Facebook was the original? Or YouTube? Or LinkedIn? – Get ready for your wake-up call! Break-through innovations are over-rated! Imitators are successful by combining someone else’s innovation with the imitator’s advantage and by doing so they can become innovators themselves!
7. Boost ‘Group Intelligence’ for better decisions!
Group intelligence can be increased and lead to better decision-making – or why not to rely on a group of geniuses! New research breaks the ground to understand collaborative intelligence and the – but how to apply it to the workplace?
8. Collective Intelligence: The Genomics of Crowds
Group intelligence beats individual brilliance – and businesses are willing to pay for the crowd’s wisdom in the social sphere. The MIT’s ‘genetic’ model allows combining social ‘genes’ to harness the collective intelligence of crowd wisdom successfully and sustainably; areas of application are scientific research or business/employee resource groups, for example.
9. Can movies innovate with only seven stories to tell?
How innovative are movies really – if at all? While AVATAR and THE ARTIST appear polar opposites, they share a similar story; so where is the innovation?
10. ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?
What is the key challenge in the coming years and how to prepare future leaders.
Don’t miss my Top 10 posts for Intrapreneurs!
Finding a sponsor can be frustrating!
Have you ever had a great idea and went to your manager for support but found they were just not interested in it? Did nothing come out of it in the end, and you were disappointed? Perhaps, you just turned to the wrong sponsor for your project, a common mistake of intrapreneurs. Here are some thoughts on whom to turn for with ideas to make them happen within an organization.
Intrapreneurs are ‘executive champions’ that connect people with specific ideas (‘technical champions’) to ‘business champions’ who can provide the resources to make this idea happen; typically an executive sponsor providing funding and political support. More on intrapreneurship at The Rise of the Intrapreneur and the intrapreneurial role of the executive champion at How to become the strategic innovation leader? (part 2 of 3).
Managers and leaders innovate differently
Let’s look at the ‘business champion’ or executive sponsor. It is crucial to understand the motivation of executive sponsors for a simple reason: only if your idea or proposition fits their agenda are they be willing to listen to you and getting actively involved. Consider that they take on risk too in supporting as poor results also reflect on them. You need to know whom to turn to for what kind of idea to find adequate support.
For an intrapreneur, it is critical to understand the nature of the executive position. More specifically if you approach a manager or leader to find support for an innovative idea.
Managers and leaders look at innovation differently, hence both groups innovate very differently and for different reasons. It translates directly into their understanding of what ‘innovation’ is, its risks and rewards, and consequently their willingness to listen to you. Turing to the wrong executive easily gets your idea rejected and you may not even know why.
Let’s take a look how the views of managers and leaders differ and how this molds their understanding of innovation and what kind of change. On a side note organizations need both, managers and leaders. Each role serves a different yet necessary purpose in the organization; see “Leadership vs. Management? What is wrong with middle management?”
Managers focus on predictability
Managers are charged with running the daily business smoothly. They manage a well-oiled ‘machine’ of people, tools and processes to deliver a certain output, a product or service, reliably and at a fixed cost ceiling.
The paramount goal for managers is business continuity – it is the daily bread and butter of the organization and what pays your employee salary today. Running a fast-food restaurant is a good example, the expectation here is predictability: to deliver food to the customer at a specific quality level with as little variability as possible at a defined cost and within a certain time. A competent manager delivers this predictability reliably over and over again.
With operational targets clearly defined, the appetite for improvements focuses on speeding up the process or cut cost here and there without compromising quality. Favorable changes to the status quo are small, gradual tweaks. This is the world of optimization and continuous improvement.
Little risk, little gain
Managers need to keep the risk small to fail or to jeopardize the production process with its predictable output. The low risk of disruption comes at a price though as it limits also returns.
Here innovations are primarily of non-disruptive nature, they are incremental or evolutionary. This approach is process driven. It lends itself to automation as it aims to make the process repeatable, reliable, predictable. No senior executive needs to be closely involved in operations to keep this ‘machine’ running; it comes down to the floor manager executing.
This is also the environment of a conventional development project, the ‘next version’ of something and ‘getting it right the first time.’
With an incremental change in focus, managers tend to look for ideas in their own organization, think ‘suggestion box’. It means following a clearly defined and detailed process with development stage-gates or other review mechanisms that filter ideas typically the criteria of cost, time, quality and, more recently, variations thereof such as customer satisfaction and being ‘green’ and sustainable.
Managers are interested in learning about ‘best practices’ from outside the organization but are often enough reluctant to adopt and implement them if they appear to be risky and disruptive.
Leading in uncertainty
Leaders face a different challenge. They ask: what needs to be done to prepare the organization for success several years down the road with much uncertainty ahead? – Well knowing that the answer may disrupt the established organization.
It is this uncertainty that opens up the so-called ‘fuzzy front-end’ (FFE) to develop entirely new products or services: It is too early to know exact specifications of a solution at this time, the future markets and technologies are yet unknown. Leaders focus is on getting a deep understanding of the problems that customers face to develop the technology and capability to address and monetize them.
Disruptive transformation
What we talk about here is, for example, a completely new product line, a major (adjacent) product line extension or a new (transformative) business model entirely. Think how Apple’s iTunes Store started selling digital media and apps has changed the way we use technology and whose devices we use (hint, hint) – this gamble worked out for Apple and was based on a deep understanding what customers are willing to pay for.
With nebulous solutions in far sight, a tightly governed development process with stage-gates makes little sense because this development model is designed for incremental change and tuned for refinement. It stifles the creative and broad view necessary to create something completely new in an unpredictable and yet undefined scenario of the FFE where much imagination, creativity, and flexibility is needed.
Creative with discipline
However, flexibility and creativity do not thrive only in the absence of discipline or some sense of order. The early-stage research or design process does not need to be chaotic – it’s quite the opposite. A company like IDEO, for example, operates successfully in this space and is famous for their disciplined process and methodology in producing creative and tangible prototypes over and over again.
Note, we are not talking about final products ready to go on the self in your neighborhood store tomorrow. Check out this case study on how IDEO works in more detail: What does it take to keep innovating? (part 1 of 3)
This transitional step narrows down the broad funnel of uncertainty to develop a range of concepts towards increasingly detailed specifications of the final product. The development of the final product itself is better left to the established development organization – back to the managers to cross the t’s and dot the i’s, if you will.
Active sponsorship needed
With disruption and revolutionary change comes high risk. The outcome is unpredictable and the reward uncertain, failure is likely. Yet, if the gamble works out the rewards can be enormous and the key players ‘rainmaker’.
When exploring which direction to go, the serial intrapreneur’s approach is trying many things. Expect to fail most of the time. See what ‘sticks’ and explore this option more.
Rather than rigid procedural guardrails, intrapreneurs need to secure top executive sponsorship for their continued active support, political weight and funding. Thus, for a unique and exploratory venture what you look for is a leader, not a manager. There is no staged process to follow really, only success determines what was right or wrong.
Maxwell Wessel’s blog for HBR on “How to Innovate with an Executive Sponsor” has some good practical tips for especially if your project takes the company down the disruptive, transformative route.
What kind of sponsor to you need?
Distinguishing the professional motives of managers and leaders comes down to the question of ‘Innovation Strategy: Do you innovate or renovate?‘
In general, leaders act more as strategic innovators and game-changers assuming the role of a Sponsor or an Architect while managers take more renovation-associate roles such as a Coach or an Orchestrator. Follow the above link for a more detailed description of these roles and when to chose which role.
What is my idea again?
Start by taking a hard look at your idea first to find out which category it falls into. Then decide what kind of sponsor, a manager or a leader, is best suited to approach and is, therefore, most likely to listen and catch interest.
Even better if you can already identify the role associated with the nature of your project (Coach, Orchestrator, etc.) which helps you framing and pitching the idea or a specific project to the appropriate executive sponsor in your organization.
A Splash of Innovation!
Gamification became a simple solution for a long-standing sanitation problem… observations of innovative toilet technology from around the world – or how an innovative fly solves the plaguing problem.
The Problem
When you travel to different countries, you can learn a lot. For example, how other cultures deal with common problems we share as humans and what solutions they find. One of these all-time problems is, for example, the cleanliness of urinals in men rest-rooms in high-traffic public restrooms (toilets) such as in airports and train stations.
Without diving deeper into the real mess that meets the eye, let’s just say that men sometimes seem to lack aim causing spatter and leading to an unpleasant sanitary situation in the surrounding area – you get the idea. This mess needs to be cleaned up several times a day. It is a job nobody likes at a cost that operators of restrooms would prefer not to spend.
So, how can the mess and the resulting cost be avoided in the first place?
Some background information
Did you know that urinals are actually designed to minimize unwanted splashing? Now, this works best if the stream is aimed to a certain area of the urinal bowl. While the designers go through great length to create this feature, their best effort does not seem to be communicated to the users effectively (or have you ever seen a user manual…?)
It is also hard to tell where exactly this ‘sweet spot’ is located since urinals come in a surprising variety of shapes and sizes. Therefore, even with the best intention the user lacks the necessary information to use the urinal in an as clean way as possible.
In summary, there are many aspects to consider in tackling the resulting problem. Think about it for a moment, how would you approach solving the problem? What ideas do you have?
A solution on the fly
Here is a solution that used gamification to reduce cost and favorably cleaner facilities as a by-product to the approach.
Instead of launching an educational campaign, print user manuals, enforce fines, or negotiate lower salaries of cleaning staff, the Dutch came up with an ingeniously simple idea: they put the picture of a common housefly right on the sweet spot in the urinal bowls in male restrooms at the busy Schiphol airport in Amsterdam/Netherlands!
The ‘fly’ started out as a low-cost peel-and-paste decal and is now also available already etched right into new bowls by the manufacturer.
Gamify it!
This little fly turns the ‘aiming’ handicap into an engaging little game challenge: It seems to appeal to a man’s inner child as well as waking deep-rooted hunter instincts. It also becomes a welcome pastime during an otherwise boring routine. It becomes a very personal and fun activity ‘shooting the fly’!
We discussed “Collective Intelligence: The Genomics of Crowds”, i.e. gamification from a crowd-sourcing perspective and that a well-designed game works by combining a basic set of ‘game genomes’ (strategy, staffing, structure/process, and rewards) successfully.
Interestingly, these same genomes can also be applied to this very personal ‘fly shooting’ game. Strategy relates to the aiming challenge and pastime as a goal. One person alone decides and does the ‘work’ of aiming with an immaterial reward that remains known only to the player.
University of Illinois’ Professor Mary Berenbaum confirms that men apparently have “a deep-seated instinct to aim at targets” that the fly satisfies and catches their attention.
Did it work? It does, according to Aad Keiboom, the manager at Schiphol Airport: the “spillage” reduced by 80% after applying ‘the fly’. The spreading and commercial success of urinals with etched-in flies is solid proof.
Does it have to be a fly?
Reportedly, the idea to use a fly to reduce “misdirected flow” is not new. It was traced back to maintenance man Jos Van Bedoff during his time with the Dutch Army in the 1960s. He noticed a similar result after red dots were applied in the barracks urinals.
Yet, neither Schiphol Airport nor the Dutch Army was the first to use ‘special targets’ in this sanitary context. The idea originated in Britain over a century ago. Back then, the picture of a honeybee was used in toilet bowls; however, we don’t see them anymore. It seems a ‘target’ with a stinger is less appealing a fly… and if only, perhaps, for the imaginary fear of being stung back…
What is new in one industry or setting may be an innovation in another (“Imitators beat Innovators!“). This principal also applies for “lost innovations” that get re-invented at a later time, like the bee that vanished and then re-emerged as a fly in a different country over a century later.
As a variation of the ‘fly target’, I recently found a candle with a flame that serves the same purpose as the fly in Germany – perhaps, the Germans have more empathy for insects?
Why not everywhere?
I noticed this gamified innovation in three countries: the Netherlands, Germany, and Japan.
– Why don’t we see the fly more in densely populated Asian countries or the USA?
While it is safe to assume that the sanitary issue is rather universal, what these three countries have in common is high labor cost. Therefore, they prefer solutions that build on automation technology and process over having a squad of cleaners attend to the mess several times a day.
Perhaps, airports help to spread this innovation internationally ‑ the ‘fly’ made it to Terminal 4 of John F. Kennedy International Airport in New York City. Let’s see where it lands next…
Not an arcade game but sparking the challenge: I recently found this “target pad” in Buenos Aires, Argentina:
If you want to try it out and start a low-cost experiment of your own, just get some ‘fly’ stickers!
More gamification in restrooms…?
So far, I found most advanced restroom technology in Japan at Tokyo’s Haneda airport. Aside from being as clean and inviting as a restroom can ever be, a number of buttons on the wall next to the toilet bowl allow a person to regulate not only warm water showers for different body areas built right into the toilet bowl.
To me, one particular function ranks somewhere between functional and entertainment. There is a button to generate flushing noises without actually flushing water! You can even regulate the volume of the flushing soundscapes! I am not sure what the practical need is for having this unique feature, but it’s fun to play with anyway.
I can’t wait to see what the next generation of gamification and innovation brings to what was a boring and messier place in the past…
You thought Facebook was the original? Or YouTube? Or LinkedIn? – Get ready for your wake-up call! Break-through innovations are over-rated! Imitators are successful by combining someone else’s innovation with the imitator’s advantage and by doing so they can become innovators themselves!
Believe it or not,
The list is endless and spans across industries – with Network 5460, Ecademy, Metacafe & Co. losing out on the commercial success.
Why is it that the pioneer are long forgotten while followers are often more successful?
Media hype about innovation. Even academia prefers to study innovators rather than the early adapters, which rule the marketplace while many originals perished. After all, We Innovate to Implement, to see our ideas become reality and change the world.
Over 70% of top managers interviewed named innovation as one of the top three strategic priorities according to Boston Consulting Group. Yet most projects fail especially in companies that focus on radical innovations.
In the high risk and upfront investment driven pharmaceutical industry, for example, only 10% of newly developed compounds survive the testing phase – and even if the market launch succeeds, only few pioneers reap the profits: Yale professor William D. Nordhaus found that they were only able to secure 2.2% of the new innovation’s value. The primary obstacles are skeptical customers and hesitant partners.
Oded Shenkar, business professor at Ohio State University, confirms that copycats often get better returns. While theft of intellectual property (IP) is illegal and out of the question, there lies much potential in the (legal) duplication of products, processes, or also business models.
Being an imitator lends itself to benefits inaccessible to the innovator: As a close follower, you can learn from the mistakes the innovator made earlier. Instead of doing all the initial Research and Development, imitators have the advantage to glimpsing around the corner ahead: It becomes easier for imitators to attract potential partners and customers as they already have a whiff of the success potential of an innovation. It can also enable imitators to simplify the original imitation in a radical way and reduce complexity making usage easier for users.
Often customers are not fast enough to recognize something new and its ‘timely newness’ at its early stage. They tend to notice novelty only later, when it already becomes visible in the marketplace or shows up (as an imitation) in another area or industry.
Here lies the power of open innovation and applying novelty successfully to a different industry; think anti-lock brakes for cars that originated in the aerospace industry, for example.
The word ‘imitation’ has a negative connotation reputation. However, you can look at it as the extension of innovation into other businesses and industries to benefit the customer by applying the novelty, more choices, or lowers prices.
It took companies that rely on novelty products, such as innovative pharmaceuticals, a while to understand the trend but then they opened up to go both ways: discover and develop new medicinal drug products under patent protection but also reap the profits from off-patent drugs in a separate generics business, so not to leave this significant business to imitators alone.
On an even larger scale, countries like China or South Korea are highly competitive and creative powerhouses in the world economy – and they became particularly good at turning imitation into innovation over the past few decades. The underlying pattern shows acquisition of technology abroad, and then to assimilate and improve it building up R&D of their own in a framework of government policy and a supportive socio-cultural environment.
As a strategy, imitation led to innovation. China, for example, is not only known for fast and creative mobile phone adaptations for their fast-paced and spontaneous domestic market. It shows the largest growth of patents filed in 2011, up 33% from 2010, far more than other countries according to the UN’s World Intellectual Property Organization (WIPO). Also South Korea has some of the most advanced companies and institutions on the planet today. The plan worked out.
Innovation is a team sport. Breakthrough innovations typically catalyze at the interfaces of disciplines. ‑ Once the dots are connected in seemingly new ways, who can say what has been there before intentionally or even unconsciously? Does it matter?
Imitation can be flattery; it can be an interpretation and adaptation by an entrepreneur, a venture capitalist, or an executive champion within a company or organization. (More on: How to become the strategic innovation leader?)
We will see how long the legal defense of intellectual property will hold in the global economy where open source, social collaboration, and digital transparency already changed the face of we look at ans conduct business. – In the end, business and progress thrive from both, innovation and innovation.
They are two value-adding sides of the same coin.
In IBM’s 2012 CEO Study, top leaders identified openness and collaboration as the critical areas to master change in the coming years – how do leadership and employees prepare for the new challenges?
About the CEO study
IBM conducts a ‘CEO Study’ every other year, interviewing more than 1,700 CEOs and public sector leaders from around the world on their views. The top leaders identified openness and collaboration as the critical areas to address and master our ‘connected economy’ over the coming years.
Two years ago, the focus of the 2010 study was on managing the increasing complexity raising the question: Complexity is the 2015 challenge! – Are leaders ready for ‘glocal’?
What’s new in 2012?
This year’s CEO Study looks into the future of 2015 to 2017. The focus shifts to leveraging the softer factors, namely people and innovation, to navigate and connect in an increasingly technology-driven world that reshapes the workplace and the marketplace. The CEOs agree that change is the only constant. There is no ‘normal’ anymore – say good-bye to a stable status quo and expect unpredictability!
Let’s look at some key findings:
Pivotal technology
Technology is the enabler for relationships and collaboration in the new age. What has changed is how people interact with others as well as with and within organizations. Technology now ranks number one of all external factors that influence organizations – surpassing people skills and market factors, which reflects a dramatic shift over the past years. This makes technology the driver and single most important differentiator for successful organizations as 75% of CEOs agree – and a field that organizations cannot afford to fall behind in.
Outperforming organizations prepare for the convergence we see in the “digital, social and mobile spheres – connecting customers, employees, and partners in new ways to organizations and to each other.” Thus, the driving forces for success in organizations remain with innovation and people to master and leverage technology.
Future leadership traits
What does this mean for leaders? What are the traits looked for in leaders to master the challenge?
Organizations look for leaders that inspire. Leaders who are obsessed with understanding their customer as a persona and what drives their individual behavior. Leaders who work as a team across the C-level suite to align and combine the organization’s assets and strengths.
Half of the CEOs expect social channels to be a primary way to engage customers. No wonder that outperforming organizations are those who have the ability to translate data effectively into insights and insights into action, or so 84% of the study responders believe.
These organizations manage change better. They are open to venture into other industries or explore even more disruptive innovation by creating entirely new industries and business models. Strong analytical capabilities to uncover patterns are only one side of the coin, where the other is creative and connected minds that can answer questions no one thought to ask in the first place.
Innovation dilemma
But what if your organization is not the out-performer? What does it take your organization to get there?
It is no secret that large companies tend to lose their innovative momentum; see Starting an ERG as a strategic innovation engine! (part 3 of 3). To compensate the lack of creativity within, they buy start-ups, for example, or focus on hiring only the best and brightest (a.k.a. ‘war on talent’) to fuel their future idea and product pipelines.
What happens in reality, however, is that hiring managers like to look at the ‘odd-ball’ applicant, the out-of-the-box thinker they acclaim to look for, but then play it safe when it comes to decision time and go with a ‘lower risk’ candidate instead.
This leads to the next dilemma: Job applicants noticed the trend and adapted. There is new truth to the survival of the fittest: When you look at applicants for management positions, you may notice that their resumes and interview responses became increasingly similar over the past years. They present themselves homogenous and ‘smooth’ with as little personal ‘edges’ as possible that may stick out and cause controversy. The common theme you hear is the mistakes the candidates would not make – rather than articulating what they would do in their new role.
Risk-avoidance wins over leadership taking charge. This mindset works its way down the hierarchy and across the organization. You can notice it in narrow job descriptions, many detailed rules, and processes full of ‘red tape’. It does not surprise that innovation perishes in large organizations and management turns to buy fresh ideas from the outside in one way or another.
Innovation from within
Innovation means taking risks; yet we tend to hire ‘safe’ and complacent managers and leaders that don’t rock the boat too much. What we get in the end is a somewhat harmonized workforce that lacks diversity of thought ‑ despite possibly matching more visible and publicly promotable diversity criteria (see also How to create innovation culture with diversity!).
Reinventing innovation from within an organization is not always easy. It requires top management commitment to build a strong internal framework and foster intrapreneurship throughout the workforce. It takes establishing a reliable, predictable, and continuous innovation process with room to experiment and learning from failure. For a simple reason, all this is necessary to succeed: you cannot leave your workforce behind if you seek creative ideas that lead to the next discovery and breakthrough. – Read more on How to become the strategic innovation leader? (part 2 of 3).
Employees of the Future
Ever-new technological advances shifted change to the unpredictable: pervasive smart-devices, mobility, virtual social networks and the ‘big data’ flood this combination generates, new business models they enable, and so on. Organizations cannot even anticipate anymore what skills their workforce will need in only three or so years from now.
Consequently, rather than looking for specific skills (which is the starting point for the “war on talent”) they look for flexibility in employees to create and respond to disruptive innovations and change to new businesses and business models. The most valued future employees must be comfortable with change and ambiguity, able to adapt and even reinvent themselves while leveraging their personal networks for professional success. This is why human capital is seen most important (by 71% of CEOs) to make connections that fuel creativity and innovation for sustained economic value and growth.
The 2012 ‘Pulse of the Profession’ study by Project Management Institute (PMI) comes to similar results from a project management perspective: It notes that organizations seek to become more agile by placing more importance on change management and project risk management as well as on talent management to grow and conquer new markets.
Lead with openness and values
It requires more than inspiration to tap into employees effectively and on a deeper level than what their job description outlines. Setting tight rules proves counterproductive, since the surrounding ambiguity makes it impossible to foresee and regulate all possible cases.
Quite the opposite is needed: opening up and establishing a framework of values that guide employees in their response and dealing with unforeseen situations and customer interactions. This value framework provides a bed for ideas to flow freely but also to connect with employees and let them to bring their whole self to work ‑ including their social networks.
Yet, in an increasingly connected world, innovation cannot come from inside of the organization alone. Out-performers take risks by accepting and inviting innovative sparks from outside their own organization in ‘win-win’ partnerships that amplify innovation for growth. Within, they communicate a clear purpose and mission with ethics and values that resonate with and guide their staff while fostering a collaborative environment.
Innovation Partnerships and Alliances
Many have tried to make it to the top alone but only few organizations truly understood how to integrate and control their entire value chain in sustainable ways. As a lesson to learn from, Apple stands as an example for a company that was close to losing everything but learned from its mistakes. Apple famously re-invented itself to become to most validated company worldwide (read more how Apples did it in Innovate to Implement!)
Success requires a broad organizational open-mindedness and flexibility to think and act disruptive were needed. The CEOs see the future in innovation partnerships and close alliances where organizations share their data and collaborate on a deeper level than before without holding tight control.
– Are you ready to taking the leap to open up?
How to increase group intelligence for better decision-making – or why not to rely on a group of geniuses! New research breaks the ground to understand collaborative intelligence – but how to apply it to the workplace?
Better alone than in a team?
Think about this: What teams make the best decisions?
We all experienced it at some point: Even a group of the best and brightest people often ends up with poor decisions that do not do its individual member’s intelligence justice.
What goes wrong? How does a group of smart individuals, even geniuses, end up with poor decisions when they stick their heads together? What are they missing? Moreover, how can we avoid those obstacles to come to better decisions as a group?
Measuring intelligence
Intelligence of individuals has been well studied for over a 100 years: A solid framework exists to measure the intelligence quotient (IQ). Individuals undergo a series of mental challenges under the premise that someone performing well in one task tends to perform well in most others too. Overall, the IQ is regarded as “a reliable predictor of a wide range of important life outcomes over a long span of time, including grades in school, success in many occupations, and even life expectancy,” as researchers put it.
Modern IQ tests consider an IQ close to 100 as average.
Does ‘Group Intelligence’ exist?
When we look at what it takes to make more intelligent decisions as a group than as individuals, the first question this raises is whether something like a measurable ‘group intelligence’ actually exists. If so, is it measurable and –perhaps‑ higher than the intelligence of its members?
Only recently, scientists took a deeper look at the intelligence of groups and made surprising findings. The joint team included MIT’s Tom Malone, whom we met previous in a post (“Collective Intelligence: The Genomics of Crowds”) as well as others from well-known academic institutions comprising the MIT, Carnegie Mellon, and Union College.
The researchers approached group intelligence following a similar systematic approach as the intelligence metrics for individuals. However, they linked group intelligence to performance as an endpoint, which makes their finding even more valuable for the workplace!
Outsmarting genius as a group
First, the researchers established that group intelligence in performance indeed exists and is measurable. They also found that the group’s intelligence does not add up to the sum of the intelligence of its individual members. In fact, the collective intelligence, or ‘c-factor’, shows only a weak correlation “with the average or maximum individual intelligence of group members” – this is remarkable finding! It means is that you cannot boost a group’s intelligence by composing or spiking the group with genius-level individuals!
Obviously, factors apply other than high individual IQ to increase the intelligence of the group.
The results from two studies consistently and overwhelmingly demonstrate that group intelligence outsmart individual intelligence – by far!
Here are more details on the science for those how want to dig deeper: Evidence for a Collective Intelligence Factor in the Performance of Human Groups.
Limited by a high IQ?
Individual intelligence only has a practical value to a certain point. There is an important difference between what an IQ test measures as general intelligence and what Robert J. Sternberg calls ‘practical intelligence’ in his book Successful Intelligence: How Practical and Creative Intelligence Determine Success in Life. The presence of one does not automatically imply the presence of the other.
What it comes down to is that a high general intelligence is merely a measurable value in the lab but it does not also translate into a more successful life! An individual IQ above 135 or so can lead to quite the opposite (for reference, ‘genius’ starts at 140 on Terman’s classification). The higher IQ becomes rather a hindrance than an advantage in real life: a very high IQ tends to clutter and confuse a genius’ mind with more irrelevant options, which make it harder for them to see the most applicable one and come to a decision.
In contrast, practical intelligence relates more to social savvy or ‘street smarts’ – a cunning and practical understanding that proves advantageous in the real world more than a high general IQ!
Here is the magic sauce!
Surprisingly, the strongest correlation of group intelligence is with three factors:
In a nutshell
When we bring it all together, what surprises me most is how little of this solid research has penetrated the workplace. Where employees and management teams make decisions, the survival of organizations is at stake and relies on leveraging the collective intelligence of the group effectively.
A myriad of practical applications for these findings come to mind. Here are just two examples:
Again, the female quota alone does not boost the group intelligence. We also need social sensitivity and equal shares of talking time. Thus, a flanking business application would go beyond how we compose teams based on gender. It considers social sensitivity measures and some structure to how we conduct group discussions or meetings to maximize the collective intelligence by including and engaging all participants. A challenge also for how we recruit, train, and evaluate our workforce.
Food for thought.
OrgChanger.com 
