Drive around almost any big city in the world and you’re likely to hit traffic jams sooner or later. It’s like innovation in large companies, where the sheer size and complexity can inhibit the smooth flow of new offerings.
Most of them are organized like city transport systems, where the major routes end up at the centre. A classic structure has a CEO with functional reporting of supply, marketing, R&D, finance, etc together with geographic regions responsible for customers.
This has, of course, many strengths and is probably the optimum for the short term delivery of sales and profits. But there is usually one word missing in the structure – innovation. Even if there is a Chief Innovation Officer, the organization rarely changes to adopt this role as even close to the centre of gravity. This is the challenge – how do we connect the routes together to deliver innovation?
A compounding factor is that most of the functions and all of the customer-facing groups are focused on delivering today’s business. There is nothing inherently wrong with this, but all too often the urgent delays the important.
Innovation then has to work like the ring road that connects the major transport arteries, giving it the space, management time and resource it needs. Innovation also needs its own direct route to the CEO. To bend the metaphor a bit, let’s say it needs to regularly call Uber.
The first and most important step in linking it all together needs to come from the CEO – clear communication about the priority, coupled most importantly with concrete action and consistent follow up. It has to be more than just words. The CEO needs to tell people to use the innovation ring road.
Next, the way that senior leaders are rewarded and recognised should change to further cement the priority of innovation. It also has to be consistent across disciplines; there is no point just allocating bonusable objectives for innovation just to say, the head of R&D. There needs to be incentives to use the ring road.
Next, enabling structures and processes should be in place. These include a simple stage-gate process and multi-functional teams (MFTs). The latter would normally be led by a marketeer, with representation from the key functions such as R&D, market research and supply. These functional groups should be joined by representatives from key countries. Essentially there need to be enough lanes in the ring road to accommodate the innovation traffic flow.
MFTs are nothing new but they don’t always deliver, seemingly for simple reasons.
1. The representation is too junior. People turn up to report what they’ve done and take away questions to be answered by somebody else.
2. All the decisions and approvals come from senior functional leaders outside the MFT.
3. The MFT labours under an unwieldy and bureaucratic Stage/Gate process where decisions are taken by other people.
The MFT is then a progress committee, where extra journeys and diversions are needed and traffic jams often slow down that progress. Instead it should be a responsible, committed decision-making body where the innovation traffic flows smoothly.
The organisational transport routes need to fulfil other functions. They should ensure that scientists develop new products with the end user in mind rather than just the beauty of the technology. There should be a regular dual carriageway flow so that they get to understand what consumers think, feel, do, believe and act, let alone what they want and need.
This is essential for Horizon 1 (supporting existing business) and Horizon 2 (supporting rapidly growing platforms). But here’s a paradox – for teams working on Horizon 3 opportunities that could open up new areas of future business, being too close to today’s situation could limit the imagination and potential. They should only be loosely connected to the main organisational transport routes. Instead a location in a metaphorical suburb with a rapid transit underground connection to the CEO and the Head of R&D makes more sense.
Driving round a big city isn’t as fast and traffic free as driving in the countryside, but there are many ways for city designers to invest, facilitating efficient movement and minimising unnecessary travel. It’s the same with innovation in big companies. In both cases, nobody likes a traffic jam.
image credit: beijing.english.china.org