The McKinsey Quarterly recently had a good discussion on the topic of innovation management (might require free membership to access the content). As Gary Hamel summarizes, the discussion is about the changes that are occurring with management practices and organizational designs.

How do you build organizations that are as nimble as change itself? How do you mobilize and monetize the imagination of every employee, every day? How do you create organizations that are highly engaging places to work in? And these challenges simply can’t be met without reinventing our 100-year-old management model.

Managing creatives, knowledge workers, freelancers, …, is not an easy process. It requires a careful balancing of freedom to explore and directing energies in a productive way that ultimately profits the firm and society. From Lowell Bryan:

These thinking-intensive people are increasingly self-directed. In fact, they’re directed as much by their peers as they are by supervisors. The management challenge is akin to urban planning. The art of it is that you must enable people to make thousands and thousands of individual decisions about how to live and work, but you have to create the infrastructure to make it easy for them to do so.

Insight from Gary Hamel:

The outlines of the 21st-century management model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position. In terms of the future of management, we’re at the beginning of what will be a fairly long journey. You can see some of the pieces starting to come together, but we’re not there yet.

And finally, Gary Hamel’s questions to the CEOs that are serious about innovation, which should be asked and compared at all levels of the organization:

• “How have you been trained as a business innovator? What investment has the company made in teaching you how to innovate?”
• “If you have a new idea, how much bureaucracy do you have to go through to get a small increment of experimental capital? How long is it going to take you to get 20 percent of your time and $5,000 to test your idea? Is that a matter of months or is it very easy for that to happen?”
• “Are you actually being measured on your innovation performance or your team’s innovation? Does it influence your compensation?”
• “As you look at the management processes in your company, do they tend to help you work as an innovator or get in the way?”

Enjoy the article.

Technorati Tags: innovative management, Gary Hamel, Lowell Bryan, McKinsey

Today’s WSJ published an article on IBM and virtual teams: How Teams Can Work Well Together From Far Apart (you might need a subscription). By using their global team, IBM has been able to cut down the development time of WebSphere from 18-24 months to 4 months. Based on the article, here is what makes the team productive:

• Have a common understanding of the task
• Clarify roles and responsibilities
• Set firm ground rules
• Get to know other team members
• Communicate often

Aside from wikis and instant-messaging software, the team breaks down the deliverables into small, well-defined chunks (these tasks are shared with everyone, globally and around the clock.) This, combined with the discipline to continuously update the wikis, helps to keep the miscommunication down. They also highlight the importance of communicating (even if it means interrupting someone) and being open with ideas and information.

It is nice to see a truly virtual development team environment that is also successful. If you know of any others, please share.

Technorati Tags: virtual teams, WSJ.com

The lack of white space management is one of the leading causes of project failures and delays, especially in siloed organizations. As frustrating as white space can be, its successful management and analysis can bring fruitful innovations and sustain competitive advantage to the firm.

So, what is white space? It is basically the gap, the fuzzy space and separation between what is known and understood. It is vague and ill-defined as to the ownership, the strategy, the process, the opportunity, … Yet, when it is analyzed and utilized well, it gives clarity, structure and emphasis to an opportunity or to a specific issue.

Our traditional project management processes are quite task oriented, where the focus is the successful execution of each individual task. No doubt you need to focus on execution. Unfortunately, constructing the forest one tree at a time works only if you have built the forest before and now working on an update. In this case, your main challenge is the hand off process, where your well-defined inputs/outputs and ownership, along with critical metrics will help reduce the size of your white space. If you are swimming in uncharted waters, you need to manage things differently and here are some ideas for your toolbox.

• Clearly understand what your customers value. In many cases, the cross-functional areas are in need of white space management, such as product installation, upgrades or 3rd party solution integration. Define the problem and key performance vectors from the perspective of the customer. Favor simple over complex and adopt the KISS principle as your motto.
• Setup a virtual war room to improve communication and coordination among teams. Make sure to include the updated versions of key project information, team member’s names/roles, competitive intelligence knowledge, project status, risks, milestones, … Leverage this to establish a sense of urgency that is shared by all.
• Use the staged-freeze process to group and manage critical tasks (Building a Project-Driven Enterprise: How to Slash Waste and Boost Profits Through Lean Project Management). As Ronald Mascitelli describes, this is very similar to building a house. You work with your builder to determine how best to schedule key decision points that support important building stages while accelerating work and reducing waste. After all, deciding to install in floor heating after the concrete floors are poured is an expensive proposition. You can extend this process to manage risk areas, resource constraints/schedules and key marketing events.
• Know, monitor and manage your critical path. These should be identified and regularly reviewed as the project progresses. Critical path is any activity that puts the complete project schedule at risk. Not only identify the risk, but also determine objective metrics to monitor their status.
• Utilize dedicated teams and task forces where possible. Many studies have already shown the impact of multitasking to productivity. If you can’t ensure dedicated teams, establish small task forces with clear charter, objectives, milestones, and metrics, where they are guaranteed to spend some of their time on these specific issues. Just remember not to go task force happy. It is contagious, and too much of a good thing can loose its value.

Remember, innovation is a system and new ideas come to fruition in the cracks: cross-functional areas, in between business units and products as well as shifts that occur within the value chain with partners and customers and market analysis. Middle managers play a crucial role as integrators and white space managers. This is especially true in siloed organizations where there is no one person that is assigned to managing the project end-to-end. Here are some of the characteristics of successful white space managers.

• They see their firm, partners and customers as part of the larger ecosystem. It is not about each individual group’s performance or ownership rights, but how the collective community operates together as a system.
• They recognize it is about the customer and creating that compelling customer experience. They continuously look for ways to go beyond traditional methods to create new value for the customer.
• They focus on the idea and the problem at hand and how it should best be handled as part of this system. They set performance goals that reflect the total system rather than separate parts.
• They recognize the glue that connects the dots is temporary, and look for ways to ensure the organization learns to self-sustain. This can be through coaching/mentoring, recommendation for structural changes and/or processes as well as influencing the organization’s culture and values.

Innovating in white space can represent quite a challenge for established firms. It is one thing to fund an idea, but another to push to full-scale implementation and commercialization while answering the strategic questions of who, what, where, how as Jeffrey Phillips points out. Here are key success factors to innovate in this space.

• Your innovation culture is key to success. It needs to have tolerance for risk-taking and failure, but also encourage experimentation, learning and recognition to challenge the status quo .
• Recognize that ideas need a platform for testing and validation. As a manager, not only support this process but also help ensure its success by providing the needed expertise, information and knowledge, ground cover during the attack, …
• Be creative and persistent as you look for ways to bootstrap resources. Focus on demonstrating value quickly while working with what you can gather up. Remember, it is about negotiations and making people realize they are getting more than giving.
• Engage your entire organization by “extracting resources from context to repurpose for core“, where core is your competitive differentiation (Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution). Include as part of your strategic planning processes the reapplication of critical resources to drive innovative projects.
• Ensure the support of a senior executive for your venture. This executive plays the role of a champion, sponsor, financial supporter, coach and mentor during your commercialization process.

In summary, in your projects remember to focus on both sides of the coin. Analyze and assess the opportunities embedded in the white space. Find those gems and polish them to improve your competitive standing. But, also don’t neglect the operational side of the white space. Focus on your execution to improve your efficiency, effectiveness and overall performance.

Technorati Tags: white space management, innovation management, middle managers, project management

There is actually a silver bullet for increasing your organization’s effectiveness: hire well. More specifically hire good leaders that will step up and raise your organization’s performance bar and set a new standard. Peter Drucker summarized this straight-forward recipe in his book The Effective Executive (Drucker Series).

…[Effective executive] knows, moreover, that the standard of any human group is set by the performance of the leaders. And he, therefore, never allows leadership performance to be based on anything but true strength.
…In human affairs, the distance between leaders and the average is a constant. If leadership performance is high, the average will go up. The effective executive knows that it is easier to raise the performance of one leader than it is to raise the performance of a whole mass. He therefore makes sure that he puts into the leadership position, into the standard-setting, the performance-making position, the man who has the strength to do the outstanding, the pace-setting job.

Exceptional leaders can deliver the impossible while building the organization, creating excitement about the future, enhancing communication and team morale while strengthening customer and partner loyalty. No wonder “bet on the jockey, not on the horse” is a mantra that drives VC investment decisions.

There are many studies on what constitutes an effective and exceptional leader. These individuals share some common characteristics:

• They challenge the established processes, search for new opportunities and experiment with new ideas. However, they do this in a participatory fashion where they are inclusive of others. They listen well, consistently request feedback, encourage and share and in return they are persuasive, persistent and as they tend to be politically savvy, they use discretion.
• They are focused on key priorities, keep it simple, celebrate small wins and are clear about their values. This enables them to build a compelling vision for the future, create a nurturing environment and provide motivation to rally a team behind this shared vision where everyone understands how they fit into the big picture.
• They understand the importance of accountability and ownership, for themselves and for the teams they manage. They enable others to act by involving them in decisions, and continuously look for ways to coach and mentor their team for individual growth. They build on other’s strengths and use it to motivate them.
• They focus on results and prefer to ask for forgiveness over permission. They share the rewards and recognition while taking responsibility for setbacks.
• They have a presence that brings credibility to what they do and say. They build confidence as they are thorough, professional and insightful.

If you are in a people management position and struggling with raising your team’s performance bar to the next level, consider the following:

• Do a self-analysis of your own management style, observe yourself in action and request feedback from others. Are you emphasizing accountability and ownership, or micro-managing everything short of chewing the food for them? Are you building on the strengths of your team, or just bluntly pointing out their weaknesses expecting them to overcome it overnight?
• Analyze your organizational circumstances. You can certainly build a dynamic and high-performance team, but your organization might have put the choke collar on you. Powerlessness over external resources, lack of cooperation, issues of trust and openness are certainly frustrating experiences. Some could be solved by organizational restructuring, for others you will need to sharpen your political savvyness.
• Evaluate the cultural aspects of your organization. Is it participative and inclusive, or more command and control? There is a time and place for different styles, such as in case of emergencies where command and control can be most effective. However, in general this style destroys motivation, creativity and lends itself to just tell me what to do attitudes.
• Study information and knowledge sharing patterns of your organization. Ideas and innovations are built on other ideas, and transparency/openness creates an environment conducive to sharing, understanding and motivating.
• Be honest, are there egos at play? Effective leaders learn to supress their egos in favor of the team.
• Take a survey; is the problem with lack of focus and having unrealistic optimism? Too much task switching reduces productivity, expectations that are obviously impossible to meet kill any potential for motivation.

At the end of the day, you need to model the way. Demonstrate your new performance standards by setting the pace, by having challenging, exciting yet achievable goals, by motivating and coaching others to contribute their best to the team. And, don’t forget to celebrate small victories along the way.

Technorati Tags: leadership, raise performance of teams, characteristics of exceptional leaders, high performance teams, effective leadership

To which I ask “if everybody before you has jumped off the bridge, would you follow?” Yup, we’ve always done it this way is one of my pet peeves. I believe there is a time and place for everything, and things/circumstances do change.

Organizational memory is a valuable asset for the firm. It is defined as shared data, information or knowledge of past experiences that are relevant to an organization’s present activities. As such, it lives in the collective memory of the employees and evolves with them. Improvement in the overall effectiveness and success of the organization is dependent on the quality of its memory and how well it learns from the past. Yet, organizations routinely “forget” what they have done in the past and why they have done it, which reminds me of the classic Thanksgiving turkey story:

A teenager was watching her mom carefully stuff and prepare the turkey for the oven. As part of the preparation, prior to putting the turkey into the oven, mom cut about 3″ from the tail of the bird. When the teenager asked why that was, mom simply said “I don’t know… Mom always did it this way. Why don’t you ask your grandmother?”. Later on that night at the dinner table, the teen queried grandma, to which she responded “Well you see… My oven was too small, so in order to fit my 20lb turkey, I always had to cut off about 3″ from the tail.”

Yup, things and circumstances usually do change… Alzheimer-like poor organizational memory usually results from a lack of leadership focus on learning from past success and failures, and where the organizational processes do not require employees to document and share organizational actions, outcomes, and to apply those learnings to new problems. The information overload that we experience daily certainly makes the problem more challenging to deal with. As the firm heavily relies on individuals to be the keeper of organizational experience, turnover, attrition and downsizing eventually erodes precious knowledge, learnings and insights. With that, effective organizational memory is compromised of three parts:

1. Explicit knowledge, information, facts, policies or rules that are embodied within the culture;
2. Tacit knowledge, insights, knowledge of the rationale, discussions, assumptions behind those explicit knowledge and information that is shared and understood by the organization;
3. Application of this knowledge, recognition of the knowledge, its context and successful internalization, associations and utilization of the knowledge by the organization;

Basically, you need to be able to move from “we’ve always done it that way”, to be able to share why, how and other relevant context, to successfully recognize how those experiences might be relevant to a new problem or that the circumstances have changed and it’s time for an update.

Companies heavily rely on groupware tools (wikis, Microsoft Sharepoint, …) to capture and manage their organizational memory. Given that the organizational memory lives as part of the collective memory of the employees, you can see the challenges associated with managing a living organism. However, the real competitive advantage comes from the application of this knowledge within the appropriate context of the new problem that needs to be solved. So, unless the organization successfully fires on all three cylinders and builds a learning organization, it will not be effective at utilizing their collective knowledge for new ideas, inventions or innovations.

If you think your organization is suffering from (hopefully) a temporary case of amnesia, here are some suggestions to improve the overall effectiveness of your organization’s memory.

• Formalize processes for creating and using organizational memory. This includes holding project postmortems where you capture the learnings, but also a specific action plan that would be applicable to the overall organization as well as next project. And, make it part of your project initiation phase to review prior postmortem reports.
• Build a learning organization by insisting on learning from past success and failures. As with life, learning is multi-dimensional, it is individual and collective. So, be inclusive and encouraging in your learning process.
• Make it easy for the organization to capture the knowledge by investing in tools to easily capture, catalog and organize knowledge and information being exchanged. However, focus on building a learning culture by putting in processes that requires connection with the rationale and assumptions of past decisions and learn from it in a way that would be applied to today’s problems.
• Continuously expand on the organization’s memory and experience. New knowledge can be gained through customer surveys, tradeshows, hiring people with relevant experience, … You can utilize your vision, your core competencies and strategic objectives as a method for determining where you want to enhance your learnings.
• Remember, people are fallible and our memories are flawed. As you remember and apply past learnings, make sure it is within the context of the new problems. Otherwise, you are dealing with apples vs. oranges.
• As with anything you want to improve, focus on measuring your initiatives. This can be simply implemented as assessment surveys, utilization of knowledge management and collaboration tools and measures of your best practices in the organization.

So, next time you catch yourself arguing “we’ve always done it this way”, stop and think. Recognize that it just might be the right time to question the so called wisdom.

Technorati Tags: organizational memory, organizational learning, best practices

What follows below is my interpretation and application of Werner Heisenberg’s uncertainty principle and Einstein’s relativity theory to innovation management. It is meant as a philosophical thought provoking reading, and I hope you will enjoy it. Afterwards, please share your thoughts with us. Of course, now that I asked for comments, I have already impacted your ideas and conclusions, but I won’t say how.

In extreme simple terms, the uncertainty principle states that it is impossible to determine exactly both the position and the velocity of a particle at the same moment: the more accurately you try to measure one, the less accurate the other becomes. This principle had profound impacts on how we view the world, as we now have a non-deterministic model for the universe. On top of that, just the aspect of observing in the present state could change future events! This interesting paradox has been contemplated by Erwin Schrödinger with his Schrödinger’s cat experiement: is the cat dead or alive? With all that and more, we know have quantum mechanics theory, where instead of a definite single prediction for a given event, we have a number of different possible outcomes and likelyhoods.

Einstein’s theory of relativity basically states that there is no absolute or universal time that all clocks would measure. Instead, each observer has his own measure of time, as illustrated in the twins paradox. Furthermore, Stephen Hawking showed that the time would come to an end inside a black hole, where no light can escape.

So, we are living in a universe where nothing is deterministic, where the even the thought of measuring will likely change the outcome that is being measured, and even then, everyone has their own measures… Not to mention, with an ever expending universe, everything will eventually collapse on itself and become a black hole. Conceptually, I can’t imagine anything better that describes the challenges of innovation management and offers suggestions for coping.

Is the cat dead or alive? Now, ask the same question of your innovation or your new product that is about to be launched. As attractive as it is to have a ‘yes/no’ answer, the more appropriate approach is to measure the probability of various key outcomes. Think about it, how many times has a project been canceled because it didn’t meet a revenue projection plan, or a certain market size, or competitive foothold in the market place before the product even made it through the doors? Just like a quantum state, which is a combination of position and velocity, our project’s factors and likelihood of its success is a representation of a project’s quantum state. It is a combination of various key variables, usually specific to the given project, with their own set of measurement challenges, as it is impossible to accurately measure one variable without impacting others.

So, as the uncertainty principle states, your innovation doesn’t have a definite path, but more likely follows a probability distribution. How you measure and capture its progress and likely outcome of your innovation, as well as where in the life cycle you do it will certainly implicate the path that your innovation follows. The point here is not that this is good or bad, but more how do you get to a repeatable success story, I mean, probability distribution? At its core, this is the essence of innovation management.

Well, this is where your culture comes in. By embedding the needed aspects of innovation management and related measurement systems into your culture, you no longer introduce a random element into the system due to an observer interfering with the experiment and creating unintended entanglement. Rather, the process and its measurement is now a natural part of the system. In other words, you no longer need to worry about the cat. Now, the cat feeds itself and cares for itself until such time when the cat’s time comes to an end naturally or via a black hole where the concept of time no longer applies.

This brings us to the theory of relativity, which unfortunately also holds true for the innovation process. From experience, each stakeholder in the innovation system tends to have their own idea of success, priorities and objectives. Again, this is not good or bad, but just a fact. Through a good communication and an alignment process, it is quite possible to establish an agreed upon definitions for success, priorities and objectives. However, while this will hold true for a given point in time, it requires ongoing realignment in order to stay aligned.

Things do come to an end, eventually. Even for super products and innovations, where the product no longer generates necessary revenue to balance the force of its cost of maintenance. In the case of stars, they continue to shrink under pressure eventually becoming black holes, where light doesn’t escape and the concept of time no longer applies. Again, how is this different from products that are well past their useful life and should have been discontinued long ago? Where creativity, talent and other useful assets of the firm are shrinking away without any reasonable probability for creating a big bang? Yes, things do and should come to an end, eventually.

There is much we can learn and apply from theories that surround us. As I relearned recently, the more things change, the more they stay the same. Remember, early on I asked for comments. But, now that I asked, the probability of you actually doing that is next to nill. So, why don’t you surprise me anyhow.

Technorati Tags: innovation management, uncertainty principle, theory of relativity, Einstein, Heisenberg, Schrödinger, quantum mechanics

I am a WSJ (Wall Street Journal) reader. I find the articles insightful and interesting, which makes it an enjoyable experience, especially with my morning coffee. However, I can’t say the same thing for their customer service experience. So, Mr. Murdoch, I hope you are reading this post and will take this customer’s recommendations to heart as you are developing your strategic plans.

I almost posted about my WSJ customer experience couple of months ago. You see, their Online Journal and Print Edition are two very different organizations, and they don’t share any subscription information at all. So, early this year, when I re-subscribed through WSJ Online which also gave me a print subscription, their Print Edition group had no idea. This wouldn’t normally be a problem, except I kept getting letters for subscription offers, which didn’t make any sense to me. Unfortunately, they also sent a letter accusing me of taking advantage of their good will for continuing my print subscription and urging me to re-subscribe for something that I already paid for! This issue was finally resolved when I got in touch with their print subscription service representative that admitted she doesn’t receive any notice from the Online WSJ group regarding the print subscriptions offered through their promotions.

Today, I ran into a different issue with WSJ services group. Guess what, for every new WSJ account, you need to create yet another user account to manage it. I actually called up their 800 number as I thought they could update my user information with the new account number, but no go… It is bad enough that I have a spreadsheet to manage my accounts/passwords, but now I have 3 different user accounts for one site and one is no longer valid???

When I asked how I can provide customer feedback and suggestions for their Website Services group, I was told that they would be happy to pass my feedback along. However, they don’t have any mechanism to submit it directly to them. Lack of customer connection is in my top 10 list of how NOT to innovate!

This is quite different than my UPS delivery experiences. I always enjoyed using UPS and their online tracking services. Yesterday, however, I was introduced to a new service from them, which has apparently been around for the past 6 months. It is an automated voice message that they send out when the package they are delivering requires a signature. The service today cannot give a specific delivery time (sometime between 8am-7pm). However, with the latest technology advances, I wouldn’t be surprised if we see an updated service integrated with their SMS messaging to give a 1-3 hour delivery window within the next 6 months.

Thank you for listening. For more on the importance of quality of your customer service and dangers of siloed organizations, please read my previous posts. If you happen to have one of these siloed customer service organizations, please take action today and put a strategic plan in place with specific milestones to fix it. How well you service your customers can be your strategic differentiation or a sign of your deteriorating brand.

• Innovate with quality
• Strategy 101: Revisiting Low-Cost Leadership with Dell
• Good, Bad and Ugly: Organizational Silos

Technorati Tags: WSJ, Wall Street Journal, customer service, Murdoch, UPS

Deming’s philosophy on management that was first published in the 1950s. His leadership fundamentals revolve around the concept of “Everything is a system, and we are part of it.” Below are the leadership competencies that are elaborated by Scholtes (The Leader’s Handbook: Making Things Happen, Getting Things Done) from Deming’s System of Profound Knowledge.

• The ability to think in terms of systems and knowing how to lead systems;
• The ability to understand variability of work in planning and problem solving;
• Understanding how we learn, develop, and improve, and leading true learning and improvement;
• Understanding people and why they behave as they do;
• Understanding the interdependence and interaction between systems, variation, learning, and human behavior. Knowing how each affects the others;
• Giving vision, meaning, direction, and focus to the organization.

Today, 50 years later, his vision of leadership is even more relevant in the global, complex, fast pace world we live in. Simply, we as leaders need to understand the system, as we need to be integrators, not insulators; team players, not team captains; communicators, not commanders.

I previously wrote how creativity, invention and knowledge are the key ingredients for innovation. Innovation thrives in environments that nurture new ideas, creativity and sharing as it is built on existing ideas, knowledge and inventions. As a system, innovation is collaborative, multidisciplinary and requires diverging viewpoints and experiences. It is also inclusive, and it is about bridging and extending linkages and interactions to build something that is greater than its parts.

On the other hand, organizational silos are barriers to innovation. As the name represents, they are highly-vertical, where the communication and collaboration outside of the organization is at best minimal. It seems, as a business matures, it becomes impossible to avoid becoming a victim of a silo mentality. This is mainly due to the nature of business and people: the essence of success strives to keep order and maintain the status-quo that created it in the first place. With that, it is a challenge and a requirement for businesses to reinvent themselves, as recently demonstrated by the Yahoo Memo: The ‘Peanut Butter Manifesto.

Organizational silos come in different shapes and sizes. Some are obvious as they bring out the worst in people: us vs. them attitude, playing schedule chicken, finger pointing, CYA (cover your a**) syndrome, political turf fighting, and power struggles are all common examples where the situation eventually leads to attrition of good people. Hopefully this does not describe your current workplace, however you have probably experienced some of the other types of organizational silos.

• Geographical silos — Globalization increases the urgency to break down geographical silos. Lack of customer information and understanding, disconnected systems, and inconsistent hand-offs between teams in different geographical locations often result in missed opportunities, unhappy customers and waste as everything gets duplicated at all locations.
• Functional silos — These tend to surface between departments where the authority rests with the functional managers, such as marketing, sales, R&D, etc. Although R&D and Marketing collaboration problems are frequently noted, you can experience silos forming within the same department where there are differing types of functional responsibilities. The QA team feeling like a 2nd class citizen compared to developers, or the usability team not feeling listened to are common complaints.
• Organizational silos — Organizational silos usually occur between business units. As a customer, we are the ultimate losers and we feel the impacts of the firm’s disfunction the most. Usually in the form of products that lack interoperability, different customer experiences, purchasing processes, usability, … Basically a lack of company brand.
• Project silos — Lack of best-practice sharing and the inexistence of organizational level project management processes and standards result in project silos. On the surface this might seem innocent, yet it results in inaccurate and inconsistent project status reports with major challenges for implementing an effective portfolio management process, not to mention lack of quality, usability and delayed project releases due to difficulty of managing resources and budgets between projects. This is why there is an increase in PMO (Project Management Office) creation and centralization of project management activities.
• Technology silos — Usually driven by NIH (not invented here) syndrome, needless technology silos result in interoperability issues between products from the same organization, wasted development and testing efforts, increased development costs and increased time to market.

In summary, organizational silos are bad for innovation, bad for the organization and bad for the firm. Fortunately, the symptoms of the illness caused by organizational silos are pretty obvious. So, you know you have a silo problem when:

• You cannot share knowledge or information for developing new ideas or resolving problems;
• You are sure that any information about your firm’s customers, markets or competitors is classified as top secret;
• You gave up on any hope of leveraging and building on your firm’s existing assets, such as IT infrastructure, manufacturing, operations for new ideas and products;
• For every forward step you take, you seem to take 2 steps back and you see its impact in decelerated cycle time of new product introductions;
• You have a culture that values personal expertise and knowledge creation over teamwork;
• Deja vu is your middle name. You feel like you are stuck in the twilight zone, wondering why the history repeats itself, and if you will ever escape;
• You are stuck with bureaucracy and endless pointless meetings even over simple problems, and you are certain that having a root canal would be less painful than this;
• You are stuck in a cycle of incremental improvements and about to suffocate as you are trapped in the confines of the capabilities of your organization;
• Everyone seems to completely lack awareness of who does what in the organization, resulting in duplication of efforts and more needless waste;
• You are convinced they were thinking of your organization when they defined brain drain;

Silos are generally the result of organizational structures, senior-management priorities and values, and the culture that is created through the existing reward system. Using a 5-prong approach, you can break through the silo mentality and bring down the walls.

Emphasise the appropriate values

Trust, respect, honesty, communication and collaboration are the needed values to build your organizational culture around. As you shift from top-down driven organizational dynamics, you need to promote values that will enhance your organizations communication and collaboration capability and enable your teams to resolve conflict and improve their decision making capability at their level.

Build a culture of collaboration

Cultural changes need to start at the top: leaders will need to consistently and constantly communicate and demonstrate the importance of sharing, leveraging and collaborating across the organizational silos. Certainly the reward system can kick start the needed transformation by focusing on making collaborative performance objectives part of the employee review process. Recognition of people who work across the organizational boundaries will also reduce the emphasis on individual achievement, and shift the focus to collaboration.

However, building a culture of collaboration is more than just encouraging better communication and sharing. It is focused on creating value by effectively and efficiently utilizing the available assets (knowledge, people, tools, …) and bridging the gaps regardless of job title, functional expertise or organizational belonging. This requires not only a sense of shared purpose, but also a greater understanding of how everyone contributes to the organization’s success. To create that understanding, invest in job rotations and international assignments, utilize cross-functional teams and invite others from different areas to your meetings.

Rally around a shared purpose

Rather than top-down direction setting, build a sense of shared vision and purpose, personal accountability and empowerment throughout the organization. Shared purpose allows everyone to connect to an idea that is bigger than them, and allows them to see how their day-to-day activities contribute to the bigger goal.

To further the cause, bring systems thinking to your organization by integrating your departments, and building in collaboration by utilizing cross-functional teams, ignoring org charts and focusing on innovation and customers. With that, increase the transparency in your organization, openly communicate decisions, priorities, financial challenges, competitive pressures, and strategic initiatives to all.

Make it easy to connect and share

Lets face it, developers are not the most outgoing kind, but they are curious and usually hungry. And, there are ample opportunities to connect and share. So, look at ways to bring people together in your firm through idea exchange days, open house days, best practices exchanges, internal seminars, brown bag discussions. But don’t stop there, find ways to extend your collaboration network outside of your firm by bringing speakers and scientists, tap into your customers and suppliers.

Also, utilize collaboration technology and social networks to connect your project members, experts, hobbyists, early adopters and visionaries. Make these tools and communities work for you.

Focus on the important stuff and measure accordingly

As I mentioned before, what gets measured gets done. So, focus on the important stuff like your customers and innovation. This further encourages cross-pollination of ideas and collaboration. Furthermore, set aggressive goals that require collaboration, such as the case with P&G where they expect 50% of the company’s new products to come from outside the P&G labs. This requires building a network of outside innovators, scientists, customers and suppliers to tap into new ideas and develop new products.

Also revisit your brand identity and make sure it emphasizes working-togetherness and having one-voice. The standardization of your brand image will not only improve your relationship with your customers, but will further promote a sense of one company, one organization and one team.

There is a right time for everything, including building silos

Though silos are bad, there are times when you do need them, but more clearly what they represent: an enclosed structure and/or a protective shelter.

• Prevent technology and idea contamination in situations where your competitor also becomes your partner. This is more common than you may think, especially in large organizations. It is crucial to limit interaction between your product development teams and teams that are working closely with your competitor to avoid any potential contaminations and lawsuits. It is also a good business behavior.
• Cultivating a new business within a mature organization requires tender care and protection from the big corporate mentality and culture.
• M&A process highlights the tension between staying in full compliance with government rules governing mergers and acquisitions, yet accelerating the integration process as the M&A finalizes. Utilizing the clean room concept, you can gather and analyze sensitive information from both companies, and in turn support the merger teams and accelerate the integration process.

These are certainly valid cases for building a silo and limiting communication to the outside world. However, in your organization, it is still important to maintain an awareness of why, what and how-long this silo will last. Basically, be transparent within a reason.

Technorati Tags: organizational silos, barriers to innovation, collaboration, silos, break through the silo, building a silo

The desire for growth is built into our DNA. Today, growth is not just expected but demanded from every company. Somewhere along the way, the definition of business growth skewed and became synonymous with an increase in size, number, value or strength. We have seen too many examples of bad growth driven by short-term focus on the wrong measures of performance. Classic examples are the dot-com bubble burst, Enron, implications of population growth on our natural resources, and even the growing pains felt by firms, including Google.

I found Robert M. Tomasko’s definition of growth refreshing: moving beyond your self-imposed boundaries and constraints to achieve your full potential and deliver unique value (Bigger Isn’t Always Better: The New Mindset for Real Business Growth). As he outlines, the growth process, as with purposeful change management, involves:

1. putting aside old ways of perceiving the situation;
2. leading change, first within yourself and then within the organization, towards this new perspective;
3. building capabilities to support this new perspective;
4. reorienting and readjusting your value delivery chain and ecosystem to align with this new perspective;

I previously wrote about creativity, invention and knowledge and how they are the foundation for innovation. Here, innovation, implementation of a new idea for the purpose of creating value, is the fuel for growth. And, innovation management is your control system. Combined, they will help achieve sustainable growth for your firm. So, here are the necessary conditions for sustainable growth.

• Offer clear value and benefit to the company, customers, suppliers, industry and the market through this change or new perspective. It is ultimately about people: it is a change of behavior, processes, how people work and produce work. If there is no clear and compelling benefit, it won’t stick. So build close linkages with your workforce, lead users, customers and suppliers. Strive to go beyond relationship building to achieve an emotional connection with them. As Guy Kawasaki stated, make evangelists, not sales (Rules For Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services).
• Recognize that growth is not a destination, but a path and on-going process. It requires developing the needed capabilities and competencies in awareness, adaptability, and building a learning organization. It requires much mindfulness, being aware of the present moment to exploit opportunities so as to keep the bigger picture and vision in mind. At the same time, it requires effective risk management: understanding/recognizing possible uncertainties and unexpectedness’, adjusting and adapting as needed. It is about impermanence, understanding that everything changes and is in flux, and learning to let go and adapt.
• Be resilient. You’ll have plenty of failures, nay-sayers and set backs. So, build your capacity for change and dealing with change, even under negative and unexpected circumstances. I once heard that forgiveness is hoping for a better past. So, don’t dwell in your past failures. Failure is inevitable and it is part of your learning process. The key to success is to fail early, learn from it and move on with greater understanding. Just remember Guy’s coin phrase: churn, baby churn.
• Utilize both sides of your brain: don’t just be creative but also be analytical to successfully exploit the opportunity. Think out of the box, look for connections even seemingly unrelated, be open to and seek new experiences and ideas, be observative and keenly inquisitive. Know that the future is unwritten and full of opportunities. Be positive, hopeful and optimistic, regardless of the current situation. But, while dreaming big, start small, simple and with focus. Iteratively build on your previous successes, and create your future one step at a time.
• Build a culture of trust, commitment, accountability and focus on results. Commitment is key, and it should not be confused with consensus, as it is about having the courage and wisdom to move forward even when not everyone agrees. Accountability is about the personal ownership for delivering the agreed upon performance to the company and to the team. Focus on results is recognizing what really matters and what ultimately delivers value.
• Achieve the right balance between:
  • long-term and short-term;
  • leading and managing;
  • idea-generating and doing;
  • being supportive and driving the needed change, however uncomfortable;
  • providing resources/funding and placing constraints, even if they are artificial;

So, instead of pursuing the popular definition of growth, contemplate your unique value and how to further it. Whether it maybe building the next great product/service, or how you go about developing and delivering it. Whatever it is, keep the focus on achieving sustainable growth.

Technorati Tags: Robert M. Tomasko, Bigger Isn’t Always Better: The New Mindset for Real Business Growth, innovation, sustainable growth, conditions for sustainable growth