FDQ 2b – Experts Propose a Process for Increasing Innovation

Experts Propose a Process for Increasing Innovation


Most great ideas for enhancing corporate growth and prof- its aren’t discovered in the lab late at night, or in the isolation of the executive suite. They come from the people who daily fight the company’s battles, who serve the customers, explore new markets and fend off the competition. In other words, the employees. Companies that have successfully made innovation part of their regular continuing strategy did so by harnessing the creative energies and the insights of their employees across functions and ranks. That’s easy to say. But how, exactly, did they do it? One powerful answer, we found, is in what we like to call innovation communities. Every company does it a little differently, but innovation communities typically grow from a seed planted by senior management—a desire for a new product, market or business process. A forum of employees then work together to make desire a reality. Innovation communities tackle projects too big, too risky and too expensive to be pursued by individual operating units. They can be created with little additional cost, because no consultants are needed. After all, those in the midst of the fray already know most of the details relevant to the project. . . . Innovation communities are a way of giving new shape and purpose to knowledge that your employees already possess. The detailed discussions that take place, led by senior managers, often represent a company’s most productive and economical engine for increased profits. Here, then, are seven key characteristics that we have identified as being part of successful innovation communities.


CREATE THE SPACE TO INNOVATE. Line managers and employees occupied with operational issues normally don’t have the time to sit around and discuss ideas that lead to cross-organizational innovation. Innovation communities create a space in which employees from across the organization can exchange ideas. . . . Each year at food retailer Supervalu Inc, 35 to 40 mid- and director-level managers break up into four teams to discuss strategic issues suggested by executives in the different business units. The managers dis- cuss issues outside their own areas of expertise and work on their leadership development at the same time. Over periods of five to six months, they hold electronic meetings at least weekly and meet in person at least five to six times, all while continuing to perform their regular duties. . . .


GET A BROAD VARIETY OF VIEWPOINTS. It’s essential to involve people from different functions, locations and ranks, not only for their unique perspectives, but also to ensure buy-in throughout the company afterward. In- novation communities focus on creating enthusiasm as well as new products. At Honda Motor Co, innovation groups in the US draw members from sales, engineering and development, and from different business units across North America. Some companies, like General Electric Co, involve customers and business clients in the new-product discussions as well. . . .


CREATE A CONVERSATION BETWEEN SENIOR MANAGEMENT AND PARTICIPANTS. By definition, innovation communities can’t work in isolation: To create sustainable cross-organizational innovation, it’s important that ideas flow to senior managers. If they don’t, innovations will tend to have limited, local effects that don’t benefit the organization as a whole. . . . But establishing effective strategic conservations is per- haps the most challenging factor for the success of innovation communities. For example, they require that truth be allowed to speak to power. If participants are inhibited, ideas that result are likely to be limited in impact, affecting a few units instead of the entire organization. Discussion shouldn’t be without limits. Senior managers should set the topics and keep discussions on course, because “blue-sky” conversations, while fun, generally waste time. . .


PARTICIPANTS SHOULD BE PULLED TO JOIN, NOT PUSHED. Members need to be enthusiastic about participating. Employees can’t be forced to reveal their thoughts or be imaginative. Immediate rewards, like cash, usually drive people to focus on winning the prize instead of following the often- twisting but ultimately satisfying path to successful innovation. Instead, try explaining how the forum’s work has the potential to benefit the organization, its customers, or broader social goals. Another incentive: Make it clear that participation in innovation communities will be helpful for career advancement.


TAPPING UNUSED TALENT AND ENERGY KEEPS PRODUCT-DEVELOPMENT COSTS LOW. One rea- son these forums are economical is because they tap into unused energy. An innovation community sends a message that senior management is listening and that employees will benefit from participating. In many cases potential contributors are just waiting to be asked. Permanent structures aren’t required and productivity needn’t suffer. Innovation-community leaders and teams participate for a limited time as they must continue to per- form their regular roles.


COLLATERAL BENEFITS CAN BE AS IMPORTANT AS THE INNOVATIONS THEMSELVES. Innovation communities promote learning on both a personal and organizational level by bringing people together to exchange ideas. The repeated discussions and problem-solving missions can give rise to valuable social networks that lead to further exchanges of ideas in the future. . . .


MEASUREMENT IS KEY. Innovation communities are sustainable only if they can produce demonstrable value. Otherwise senior management loses interest.

All of the organizations we’ve noted try to gauge the success of their communities, based on how many ideas are implemented and with what results.


Questions for Discussion

  1. How do innovation communities promote an open system?
  2. How would the use of innovation communities help companies to learn from both success and failure? Discuss.
  3. What type of organizational structure is represented by the use of innovation communities? Explain your rationale.
  4. To what extent does the process to create innovative communities rely on the characteristics of organic organizations? Provide examples.
  5. To what extent is the process of creating innovative communities consistent with the model of innovation? 6. How does the process of creating innovative com- munities overcome the challenges of innovation? Explain.


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