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Monday, March 02, 2009

Innovation in business today Part IV

Innovation in business today Part IV

By Dr. Earl R. Smith II

In prior articles in this series, I focused on the management culture that establishes and maintains innovation. My focus was on the interaction between the tactical visions of the CEO and senior management team and the strategic visions of the Chairman of the Board and members of the Board of Directors. However, successfully managing the mixing of these ‘analytic’ and ‘creative’ types is only the first step in the process - one that enables but does not accomplish the cultivation of an innovative culture.

The core of any innovative culture is what we called the ‘beehive’ in one of my companies. This was innovation central. Its denizens were the deep thinkers who spent most of their time thinking outside - and sometimes way outside - the box. I admit that I found wandering into the beehive. I was exhilarating at times - you never knew what they were thinking about. I also realized that many of my ‘operational’ types found the experience somewhat unsettling. After one such incursion, my COO stopped by my office. “Chief, I hope the hell you know what is going on down there. I feel like I just fell down the rabbit hole.” She had it right. This was wonderland and just as dangerous.

The experience was often akin to herding cats. The management of the inclusion within the broader culture of the company presented a challenge. I divided the challenge into two distinct areas. The first was focusing on managing the beehive - or herding the cats. The second was managing the delivery of innovative thinking into the mainstream - into the parts of the corporate culture that specialized in converting ideas into revenue. In this article, I will focus on the first and return to the second in the next article.

The first hill to climb was making sure that the tendencies of the ‘creative’ types were focused in areas that were of interest to the company. The danger was that, without such guidance, the wandering tendencies within the beehive would produce ‘innovative’ ideas that were less useful to the company. We solved this problem by organizing a regular series of briefings - show and tell session - during which the senior team reviewed the ‘wins and losses’ that had resulted from recent deliveries from the beehive. A team from the operational side of the company also came with a shopping list of new ideas that they could use. This part of the meeting focused on the experiences that were coming from client interaction as well as new initiatives from our competitors. During the last part of the meetings, the beehive got to show off their ‘newest and greatest’ ideas. Some were welcomed with a hearty ‘wow’ while others received a polite yawn.

Meetings within the beehive and the senior management team followed up these sessions. Initially we scheduled these monthly, but in short order, we ended up running them twice a month. There result was an improved relevance of the production of the beehive and a more rapid translation of innovative ideas into revenue.

The second hill to climb was the efficient management of the beehive itself. Innovation and innovative cultures are much more difficult to manage than production lines or service delivery. You never know when one of the ‘creative’ types is going to get a good idea. It is also difficult to predict how long it will take to develop that good idea into something that can be transferred to the operational side of the company. However, you do need to establish a set of metrics that can be enforced. Efficiency has to have meaning inside the beehive. The key to this challenge turned out to be selecting the right person to manage the ‘creative’ types. It had to be someone who shared in the joy of discovery, had no trouble thinking outside of the box, spoke their language and both accepted the need for and had the ability to enforce performance metrics.

The third hill involved the migration of ideas from the beehive to the operational side of the company. With the beehive operating, we turned quickly to managing the evolution of ideas to the point that they could be shared with the operational side of the company. Bringing them out before they were completely formed produced less than optimal experiences and a lot of frustration. Groups of ‘advocates’ from within the beehive were tasked to develop their idea to the point that it could be described to a team or operational types who involved was a series of meeting with the operational types pushing for more refinement and additional functionality. The operational team leader and the beehive manager often had to work overtime to keep things from exploding. Frustration was a constant result. However, after a few experiences, both sides educated each other and the process came to work relatively smoothly.

One issue that constantly came up - and that I will address later on - was the question of compensation. Although the inhabitants of the beehive were more idealistic than those on the operational side, they did have a practical side - both in terms of compensation and budgeting. Solving that problem presented some interesting opportunities for experimentation.

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