3 Ways to Rethink Big Organizations to Create Innovation

Innovation is the incendiary of our era. Disruption is everywhere. How we buy. What we buy. How it is made. Even how it travels to get to our door.

No sector is immune. Change is burning down old certainties. Speeding up our world.

With the velocity of technological change accelerating, big organizations seem to be at a profound disadvantage. Slow, ponderous and even bureaucratic, large corporations seem ill-suited to digital habitat.

Decisions made in siloes limit creativity. Top-down cultures squeeze out innovation. Often, they favour stability and staying the course.

So what can leaders of big organizations do rethink themselves to become more innovative? When you take a look at “best in class” companies they do three things differently.

1. Think Networks, Not Hierarchies

Most corporations look like pyramids. A cascading division of roles where everyone has their place, task, and function.

While role clarity is valuable, the problem arises when different areas need to collaborate. Time, energy and talent are wasted negotiating the “rent” of resources to any cross-cutting project. Typically, these discussions hinge on how much a department must “give up” to make corporate priority succeed. At its worst, leaders seek to horde their resources and even stall key projects.

Networked organizations overturn some of the dysfunction of hierarchies. One approach is to restructure the organizations around key market or customer segments. The objective is to have a microcosm of talent, drawn from different disciplines (financial, marketing and client delivery), focused on serving a distinct customer group.

The benefits are more open and rapid communications: focus on the client not haggling over turf. Ability to grasp and bundle products for particular consumers: improving the offering. Finally, to being to see the world through your customer’s eyes: redesigning their experience.

Cleveland Clinic, the US healthcare provider, is one success story. From being organized on traditional medical specialties and functions, they recalibrated around different patient needs. The result: improved patient outcomes. Similarly, Nestle is another case of an innovative company that has decentralized around consumer groups leveraging the potential of shared knowledge and rapidity to deploy solutions to distinct markets.

2. Disrupt Yourself

Big businesses often fall into a comfortable cadence of their creation. Steady profits, stable products, and happy customers can lull leaders into limiting their ambition. However, no market is now watertight.

The competitive storm clouds of digitization and shifting consumer patterns are shattering the barriers between industries and evaporating the money needed to enter them.

Customers are looking for immediate service. They are looking for bridges to “vendors” who can meet their bespoke needs. Think Airbnb (hotels), Uber (taxis and deliveries) and retail (Amazon and Taobao).

Netflix is the exemplar of a self-disruptive company. It could have kept its content as a niche “snail mail” DVD lending library, serving a distinct but dwindling market segment. Instead, Netflix chose a different path. It punched through its “core competency” first by offering older movies on a video-streaming platform.

Then Netflix went further and broke the divide between content makers and “broadcasters.” It now produces its own TV series and movies. House of Cards, Arrested Development and Orange is the New Black being its most popular blockbusters, all without owning a single box-office. Today, it has 25 million subscribers.

3. Internal Competition

Good solutions come from talented people. However, great solutions emerge from creative abrasion, sparked by creative competition. All too often, corporate problems are tasked to the “think team” to resolve in isolation.

The result is one solution based on a narrow bandwidth of a select group. Take a leaf out of the design and digital world, set up multiple teams challenged with the same problem. Let them work and play with it. Then bring them all together, in a friendly competition, to pitch their ideas.

The aim is not to pick a winner. However, to undercover the positive aspects of each proposal. Blend the best aspects and set this as the starting point for the next round. Mix up the teams with each given the composite of the best product and service attributes. As you bridge toward a viable product and commercialization, evolve and enlist a wider team with production and marketing expertize. After all, half-baked is a prototype. A fully rounded product offering is shelf ready.

Regardless of your strategy, increasingly big organizations must innovate to survive. Networks create a laser-like focus on a key customer group. While business must remain viable, network organizations provide an energetic clustering of cross-functional talents to a common business problem. Similarly, self-disruption requires leadership to push away from the life raft of a comfortable business model and strike out anew. Lastly, internal competition draws on ideas from across the company. It does not assume only a few have the “right answers.” After all, innovation is a messy business. Finding “better answers” for your customers is often superior to perfect ones.

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About the Author

Simon Trevarthen is Founder and Chief Inspiration Officer of Elevate Your Greatness (EYG). EYG helps individuals, teams, and organizations unpack the secrets of success by becoming even better versions of themselves through dynamic keynotes, seminars, and workshops on innovation, inspiration and presentation excellence.

Learn more about Elevate Your Greatness see www.elevateyourgreatness.com

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