Fostering Innovation in Small and Mid-Size Companies

『Innovation in the News』経由、The CEO Refresher 『Fostering Innovation in Small and Mid-Size Companies』に、イノベーションをどうやって起こすのかについて、とても共感することが書いてある。

Small and mid-size companies can gain significant advantage by fostering innovation. Innovation is a powerful competitive advantage that is available to any firm that seeks and develops the necessary skills. Innovation depends more on the intention to innovate than it does upon corporate size or wealth.（Summaryより引用)

Making the case for innovation

They say that, "Necessity is the mother of invention." Have you ever thought deeply about that old saw and its implications? To me it means that people need provocation to break the bounds of their usual mindsets. We generally don't do it until it becomes clear that what we are doing won't generate the outcome we are trying to achieve.

We formalize our assumptions into our mental models of reality and until some outside influence provokes us, once we accept our assumptions as valid we seldom reassess them.

Innovations in companies like these created the necessity for others to evolve; they turned former business leaders into followers.

In almost every company there are maverick thinkers, people who are always looking for ways to improve things, solve problems and generally make things better, more efficient, more convenient… just because they like to do it. Their necessity comes from their restless natures. These people often represent undervalued intellectual capital in a company. In the context of business as usual, these people are often treated as irritants and disruptors. Their potential contribution is often squandered in smaller companies simply because there is no process in place to channel the potential of their thinking into the general consciousness of the organization. Others, capable of innovative thinking never bother to develop their ideas or bring them forth because there is no vehicle to elicit that behavior. Yet in a company framed to encourage innovative thought this potential is actively employed in the process of producing value.

First comes the intention to innovate

In a business setting, innovation is closely attached to the purpose of the enterprise. We look to be innovative in order to do something different and better than we are doing it today. When our purpose is to continue to do what we do without disrupting the status quo, innovation doesn't occur.

Innovative cultures require permeability of processes and procedures. They are messier than traditional organizations and unlikely to function well in a regimented environment. Cultures supportive of innovation can appear to be and often are more chaotic than more traditional organizations. While there is a loose order to innovation, it cannot thrive in an environment of strict controls. Strict control seeks to keep things within boundaries. Innovation, by its definition, tests those boundaries. Creating a culture of innovation requires a continuous balancing act between focused attention and a questioning mind. Few leaders feel confident about their ability to juggle that complexity and tend to naturally gravitate toward tighter control and order unless there is a culture designed to foster innovative thought.

Innovation is the art of doing something different, of creating something new. It requires the freedom to imagine, to play with ideas, to take reasonable risks and the freedom to question the fundamental assumptions of the status quo.

Second, the muscles for innovative thinking have to be developed

For a company to innovate there has to be a launching pad for new ideas and different points of view. This launch pad is, in essence, a workforce that knows how to think well, practices rigorous thinking, and believes that their thoughts are valued. Without such a launch pad in place, new ideas seldom arise spontaneously and the muscles for innovative thinking are not up to the snuff when innovation is required.

The muscles for innovative thinking have to be developed, strengthened if you will, within the day-to-day workings of the organization. Rigorous thinking must be expected. The art of productively questioning assumptions and validating hypotheses has to be practiced. Collaborative thinking has to have a valued place along side critical thinking. Curiosity and imagination have to be elicited on a regular basis. Individuals and groups of thinkers have to be comfortable in shifting perspectives and looking at familiar events from novel points of view. These skills do not spring up in a crisis.

Third, a culture of reasonable risk taking needs to be established

Innovators actively follow their ideas and learn from their mistakes. Innovators turn the impractical into the viable by envisioning ways of changing the game or adding new elements to the formula. This is not a clean or easy process.

These risks, however, need to be balanced against the risk of doing nothing or of doing the same things when they are no longer potent.

As a result the organization lacks a realistic plan for adapting to changing conditions.

Innovation requires the ability to embrace reality; to see what is as it is, no matter how distasteful or disruptive. It is only by embracing reality that companies can accurately perceive their options and make necessary adaptations to their business models.

Fourth, innovation requires skill at corporate imagining

Innovation requires the ability to see the unexpected or the unpredicted. The ability to see what isn't obvious, to see unexpected connections, to envision an end state that does not yet exist is fundamental to the innovative process. The ability to see the unexpected goes against the way that the mind usually works. The human brain is set up to see what it expects to see.

Businesses can apply the same thinking within their own frames of reference by anticipating possible future threats or opportunities. We can do this by posing provocative questions to our thinkers.

Small and mid-size companies can create their own innovative think tank, comprised of the best thinkers within the company, regardless of their title or level of authority. These people can meet regularly with the goal of generating innovative ideas, challenging assumptions and engage in "what if" thinking. You do not need a corporate division of engineers or product developers to think innovatively.

Companies that are successful in innovating are often well practiced in the work of building ideas, incorporating elements of different perspectives into a new, robust idea. These companies encourage people to borrow ideas from others, to share credit, and to value the products of good thinking more than the individuals involved in doing the thinking.

Any company that thinks well has a leadership team that places a premium on rigorous thinking. It is expected. Weak or sloppy thinking is challenged. Research is expected. Preparation is demanded. People are expected to continue to learn and to evolve their ideas based upon that learning.

Creating a process of innovation

As with the end products of innovative thinking there are many ways to get there. However, to institute innovative thinking, a company needs to have a process that fits its circumstances.

The process suggested below starts by envisioning a desired end state that would provide value for the customer. It requires an accurate assessment of what you are doing today and what capabilities and drawbacks might be inherent in your process given current market realities. It looks at how you might reconfigure what you do if you were starting today with a clean slate. Yet it is framed within what is possible within the realities of your business potential.

Practicality is essential to this thinking and it provides the context for a useable solution.

The Launch Pad - A Thinking Organization
Imagining: 1a. Seeing the desired end state

Imagining: 1b. How would it work?

Embracing reality: 1c. Why is this desirable - purpose ... advantages?

Resourcefulness: 2. What elements have to be in place to support the end state?

Resourcefulness: 3. What's required to support these element?

Critical thinking: 4. What can we use from what we have?

Embracing reality: 5. Where are we today?

Imagining: 5a. If we started today, how would we do it differently?

Summary

In order to live the intention to innovate there are several things that any organization must do. It must develop the appetite for rigorous thinking and build the muscles that sustain it. It must establish a culture that embraces reasonable risk. It requires the exercise of a corporate imagination. Finally, it requires the creation of an innovation process, a way of stimulating innovative thinking and channeling it into the mainstream of the organization's thought processes.

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