Imagine: Your company is aspiring to be a market leader, quick to change to achieve competitive advantage. And this means creating new products and services, defining new business models, optimizing processes, and embracing technology that lets you get ahead. To plan, deploy, and execute a program of business innovation and growth you’ve hired Janet (a high-powered business consultant) and Robert (a respected technology service provider). The three of you are sitting and talking:
You:As the two of you know, we’re beginning an initiative to get closer to our customer base in an innovative way. This has been in the works for some time now, so I’ve got a pretty good idea of the things we need to accomplish.
You:First, we’re interested in improving customer segmentation. This means we’ll have to gather information across all our customer touch points . . .
Them:[Jotting down notes]
You:. . . and analyze this raw data. Also, we’d like to automate some field support activities and maybe do something with our call center . . .
You:So what do you think?
Robert:This sounds like a CRM installation to me...
Janet:. . . with BI and analytics
Robert:. . . maybe WAP
Janet:. . . and load balancing . . .
Robert:. . . distributed architecture...in the cloud...
The conversation seems to have spiraled out of your control, from business subjects you understand and appreciate—"customer base" and "segmentation"—to the arcane technology details required to implement your vision—CRM, WAP, load balancing, and cloud computing.
The problem here is common: you’ve hired two skilled resources that instinctively view the initiative from their own specialized perspectives—which you definitely don’t share. But despite all this, you’re still the leader, and you need to figure out a way to make sure that everybody comes together to achieve your vision, no matter how diverse your teams’ vocabulary.
In business innovation, it is not the invention of a new technology that matters so much as it is its application—understanding its role when developing a strategy or designing an organization or its processes. Organizations need a common language that’s bound by common objectives.
In our most recent book, The Power of Convergence, my co-authors and I extensively discuss the need for creating a management framework to drive business innovation with a common language. In this article I wanted to summarize some of the key concepts.
A Culture of Innovation
Establishing a common culture of business innovation begins with the creation of a common language. Creating that common language consumes a great deal of organizational energy, but is essential to overcoming the forces of inertia that prevent forward movement.
Successful companies manage innovation from concept to commercialization so that good ideas not only get created, but also find their way into the products and services portfolio. A culture of innovation is characterized by teams that can sense and respond to customers and evaluate what works and what does not work free of the organizational inertia—or friction—that is the enemy of change and its partner, innovation.
A successful culture of innovation requires an organization to master the art and science of collaborative management to:
•Improve strategic planning, business leadership, and management capability to support relentless execution.
•Encourage creative thinking and creative problem solving that can support rapid idea generation and diffusion across the enterprise.
•Drive rapid development of new and improved products, processes, or services that cultivate customer intimacy and build service dependency.
•Enable higher productivity, performance, and growth through collaboration and the capture and adoption of new learning practices.
•Develop new business models that aid in the differentiation of an organization’s core offerings from that of its competitors.
Once an idea has been successfully commercialized, respected champions emerge to drive new sources of the energy, creativity, discipline, and resources that sustain and grow an enduring culture of innovation. And this, along with charismatic leadership, requires a repeatable management framework and systems.
A Framework for Sustainable Success
A framework to lead and manage business innovation improves the allocation of resources and reduces program failures by allowing cross-functional groups to "sing from the same sheet of music". It generates a common vocabulary and metrics. It permits a comprehensive set of decisions to be made before action is taken, identifying and resolving conflicts.
Decisions to drive business innovation require structured thinking about what the business wants to achieve. An established management framework allows an organization to:
•Step 1: Ask what specific organizational capabilities must be put in place for you to meet your short-term and long-term business goals and objectives.
•Step 2: Prepare the processes to improve communications and educate the organization about interdependent business functions.
•Step 3: Decide what internal and external capabilities you need to execute on defined business strategies.
•Step 4: Understand and specify the business value to be pursued.
As a result, it creates a common language to help business leaders repeatedly make such decisions as:
•Analyzing implications and impacts of potential initiatives
•Setting target allocations for investment categories
•Evaluating the health of organizational assets
•Determining appropriate sequencing of major initiatives
•Managing risk mitigation across the organization
•Identifying and resolving critical issues
Innovation is a holistic human endeavor that requires both left-brained (analytical) and right-brained (creative) talents. Organizations who want to build a common culture of thinking, executing, and communicating will have to continue to mature its cross-collaborative management disciplines.
[Image: Flickr user Thomas Hawk]