„The organizational designs that support innovation are very different from those that support delivery of current performance.“ John Roberts, Professor of Economics, Strategic Management, and International Business Stanford Graduate School of Business
Some thoughts on how to organize for innovation and growth.
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„The organizational designs that support innovation are very different from those that support delivery of current performance.“
John Roberts, Professor of Economics, Strategic Management, and International Business Stanford Graduate School of Business
Making innovation a central topic in Whirlpool‘s leadership development programs.
Setting aside a substantial share of capital spending every year for projects that were truly innovative.
Requiring every product-development plan to contain a sizable component of new-to-market innovation.
Training more than 600 innovation mentors charged with supporting innovation throughout the company.
Enrolling every employee in an online course on business innovation.
Establishing innovation as a large component of top management‘s long-term bonus plan.
Setting aside time in quarterly business review meetings for an in-depth discussion of each unit‘s innovation performance
Creating an Innovation Board to review and fast-track the company‘s most promising ideas.
Building an innovation portal to give employees access to a compendium of innovation tools, data on the company‘s global innovation pipeline, and the chance to input their ideas.
Developing a set of metrics to track innovation inputs, throughputs, and outputs.
14 March 2008 Gary Hamel „The Future of Management“ Harvard Business School Press 2007, page 30
„…firms must develop multiple business opportunities, and to continue to grow and survive they must do this on an ongoing basis.“
John Roberts, Professor of Economics, Strategic Management, and International Business Stanford Graduate School of Business
„Searching for new opportunities, selecting among identified opportunities, building new businesses, running existing ones, exiting others – all may need to be done at once.“
John Roberts, Professor of Economics, Strategic Management, and International Business Stanford Graduate School of Business
Strategic and organizational choices must be made holistically, recognizing the interdependencies
Scope of the Firm: what, where, how, for whom
How is it going to distinguish itself from competition, gain competitive advantage, create value
Right people must be attracted, retained, assigned to different roles
Formal architecture must be crafted to allow effective coordination and motivation
The processes, procedures, and routines that guide and control behavior must be be developed
The fundamental beliefs, and norms that will be shared across the firm must be created, transmitted, and adopted
All these must mesh properly with one another, so the organization really does allow the strategy to be executed.
The people, the networks among them, and the routines they follow must give the firm the capabilities it needs to create value.
The system of incentives must motivate the particulat people that have been attracted to deliver the strategy and let the firm reach ist goals.
The formal structure and the allocation of decision authority need to be aligned with where expertise liea and with what motivates the people.
Finally, all the elements of the strategy and organization need to fit with the competitive, technological, social, legal, and regulatory realities the firm face.
14 March 2008 Following John Roberts „The Modern Firm“ Oxford University Press 2004
People throughout the firm must be involved, the knowledge of how things really work, how customers really behave, how choices really interact is highly dispersed.
Leaders must provide a vision of the strategy and organization, indicating the underlying principles and how the basic trade-offs are to be resolved. They need to communicate the model in a clear and compelling way, so that others understand and embrace it and are motivated to try to realize it in designing their parts of the organization.
The formal elements of the design can influence the networks and culture, so managers can have some indirect control over them.
Leadship must play a crucial role in successfully shaping the culture.
Leaders must give specific meaning to the values, which then sets the basis for the generating of expected behavior.
Solving the problems of strategy and organization is an act of real creativity.
Chasing after best practices is largely futile if the aim is to achieve differentiation.
14 March 2008 Following John Roberts „The Modern Firm“ Oxford University Press 2004
The Organizational Context of Strategic Innovation
14 March 2008
Research has shown that strategically innovative companies are characterized by a distinctive organizational context enabling strategic innovation.
Characteristics of Strategically Innovative Companies
Culture Questioning attitudeRewards success and failure, punishes inactionTolerates mistakesWelcomes changeSupports risk taking and changeSupports teamwork and collaboration
Structure Fast and flatSmall unitsEncourages collaborationAutonomous teams at the front line
Processes Fast and unbureaucraticDecentralized decision makingSupport idea generation, experimentation and execution
Systems Support the process of strategic innovationEnable collaborationEnable the use and creation of knowledgeReward risk taking and actionUsed to create relationships with customers
People Variety (internal and external)CollaborationEducated in regard to the strategy and skills needed