Enabling innovation to stimulate a flexible organisation

“One does not discover new lands without consenting to lose sight of the shore for a very long time.” André Gide

And therein lies the rub. Most managers will agree that innovation, which used to be required for developing and maintaining competitive advantage, is now essential just for survival. But the same managers are also concerned with the need for control. And it is impossible to have both at the same time.  So a key question is how to unlock the contradiction, and ensure that innovative developments are aligned with strategic direction. First, consider some of the challenges to much conventional thinking.

The designed organisation

Organisation design mainly concerns strategy, structure and process. The idea is that strategy provides direction; structure distributes power; and process distributes tasks. The overall aim is to achieve stability, predictability and repeatability. All of that ensures that the strategy will be delivered.  The problem is that when it’s realised that the business environment is very turbulent, there is a demand that people innovate.  The implication is that people are being asked to produce instability, unpredictability and un-repeatability in an organisation designed to produce the exact opposite. And when they fail to deliver the required innovation, complaints are uttered about their lack of creativity and inability to innovate!

Command and control management styles

Telling people what to do and then checking up on them, accompanied by lots of KPIs, is a well worn but still popular approach to managing and control. The evidence suggests that it has never been successful in delivering high performance 1, but its application to innovation is a logical non-runner.  There are two dimensions to innovation.  The first is an act of creativity – thinking of a new way of doing something.  The second is the transformation of the new idea into action: someone has to do something that has never been done before.

The first cannot be commanded. The creative idea generally comes from reflection, often about a problem or opportunity, and most often arises when two or more people come together to share their ideas in pursuit of performance improvement.  The second is a matter of organisational climate – is it safe to try new ways of working, knowing that all such ventures are, by definition, risky? What will happen if an idea is tried and fails? What follows next might be shared learning, but it might be retribution! If it’s the latter, say goodbye to innovation.

Organisational permissions to create organisational flexibility

Exhortation does little to change behaviour. By contrast, permissions are the unwritten, unspoken messages contained in the design of organisation structures and processes, (as suggested above), and in the acts of individual managers, especially the senior variety. For example, an excessive focus on short term numbers and ‘micro’ management control are both sure-fire killers of innovation. The approach that works is for managers to seek negative, constraining permissions and replace them with positive, enabling permissions – specifically those that make it OK to test new ways of working, in the knowledge that what would follow failure would be shared learning, not retribution.

All of which leads to the conclusion that innovation can be enabled, but not managed. So, the challenge is how to develop a flexible innovation-enabling organisation. Fortunately, the challenge also contains the solution. Key Performance has a unique approach achieving innovation, enabling leadership and creating flexible/agile organisations.

1 - Managing by the evidence ~ McKinsey 2006