Article: Whole Company Innovation
Innovation is becoming a group sport, says Garrick Jones, a research fellow at the London School of Economics and a partner at the Ludic Group
The collective knowledge in any commercial organization contains a wealth of contextual information – a vital source of ideas for innovation. Nobody knows more about the market, customers, issues, trends and opportunities than those who are working with these realities on a daily basis.
The question is how to best get at that knowledge in a way that takes maximum advantage of it and leads to real innovation in products and services?
We call this approach the whole company approach to innovation. It is a multi-layered, yet simple combination of people management, design events, product research and development, and lean continuous improvement principles that lead to rich, innovative outcomes. Through careful sequencing of multi-disciplinary events throughout the design process, new products and services are informed by the knowledge of those closest to the market. A model for this could be continuous cycles of learning, creating and communicating.
The nature of work is rapidly changing. Most innovation and production is project led, powered by workshops that disappear after its goals are achieved. This is becoming as true for aircraft production as it is for the development of new customer experience-based products in the service industry.
The rise of the Internet has also led to new conditions for work. On the one hand increased customer intimacy and knowledge, and on the other the loss of proximity between working teams. Teams may be working on components of a solution across geographic and time boundaries. The time that teams are able to spend together has become increasingly precious. How can the most be made of those interactions?
One response to tapping into the contextual knowledge resources of the workforce are Design Workshops (also known as Lab Events). No longer is innovation the domain of the specialist removed from the real world, cooking up new ideas in a distant lab. Innovation is the product of many stakeholders collaborating to create unique solutions to existing problems, or creating new markets, and new types of customer experiences.
For reasons to do with the growth of the knowledge economy, innovation and competitiveness, organizations require new skills, and are under pressure to be ‘porous’ using networks, strategic alliances and partnerships to achieve their aims.
Today, the economic and competitive pressures on organizations to grow are increasing, it is the means and the design process by which organizations innovate that makes the difference. The trend is clear – those companies who are shifting toward open, collaborative and multi-disciplinary practices have the advantage.
The design and innovation value advantage is clear to see in companies such as Apple Inc, who have a market capitalization 20 times the book value of the company. The same is becoming true for Samsung and LG, or the Scottish firm Linn who have focused on Design and Innovation as their key differentiators. All of these companies are defining the game as much as competing in it.
It is not only this commitment that creates the value, it is also their commitment to Design and Innovation as a whole company exercise that enables these outcomes.
Innovation is a group sport
There can be no doubt that bringing new products and services to market successfully requires the broad cooperation of many very different teams beyond just the ideas merchants. Marketers, product and service designers, programme managers, IP lawyers, distributors, advertisers, supply chain managers, producers and packagers all have to be factored in. In the most successful cases teams are working in parallel, kicking off processes that are vital to successful implementation long before the finished product has been decided. Boeing created the 777 and had it certified on both sides of the Atlantic simultaneously. It is no longer cost-effective to allow isolated design phases and research to hand over an idea in search of a market.
Today, ideas are developed and refined in conjunction with multiple stakeholders – customers, retailers, users, salespeople. Trust and flexibility are vital. Successful organizations create cultures of trust and enable flexible networks that promote mutual understanding, rapid learning and the ability to change course mid-stream. Competitive advantage can be described as the ability to learn, innovate or continuously reposition with respect to the competition.
Complex programme management requires many threads to operate in parallel. Alignment between these parallel processes is enabled by interaction and communication. Successful organizations, whether formally constructed or networks of affiliated companies, need to work hard at enabling both the relationships and the communication required. The best managers actively design opportunities to do so.
As we move to a networked economy the concept of the linear supply chain has transformed into that of the non-linear value web. Successful organizations are able to identify the members of their value web and create opportunities where all these resources are working in harmony, and focused on a single goal – getting the products or services to market on time, on budget and desirable to the consumer.
IBM, Sony and Toshiba are working together on new IT products, Sony-Ericsson have had to work together to stay in the market, and have been innovative as a result. The micro-projector (soon to be found in every mobile phone) is a joint production by multiple specialist technology companies. However, open innovation practices are not only limited to extending the traditional boundaries of the organization into its value web. Today, everybody within the organization who has a stake in the outcome of a project has a voice. This requires a different way of organizing projects; and very large-scale events or Design Labs are where the work is being done.
Collaboration, both formally and informally arranged, has significantly increased within organizations as a tool for strategic development, innovation, corporate education, and problem-solving purposes. Alongside collaborative practices, action research, activity-based systems and participatory media development are being employed as organizational processes for enabling active employee engagement. We call such approaches collaborative authored outcomes.
Space for innovation
Physical and virtual environments are evolving to support these new requirements for knowledge-led innovation.
Collaborative Learning Environments (CLE) are fully flexible workspaces equipped so that groups of different sizes may actively engage in learning-based decision-support processes. As group-based tools and techniques grow in sophistication, so too do the demands made on the environments in which innovation is taking place. Ranging in a typology from the informal to the highly structured, the improvised and mobile, the laboratory to the socially integrated, the physically static to the highly ephemeral – these structures are providing opportunities for the combination, and recombination of ideas through generative and instrumental mechanisms. Some exist as centres of decision-making, others exist only for the period in which the groups come together for a specific purpose.
Spaces for innovation are constructed fundamentally as learning and production environments – places where groups from across the disciplines and functions are able to get together to exchange contextually relevant information, and to put it into production. The idea is to put ideas into action there and then.
A physical environment
Imaginative environments for innovation full of toys, puzzles and books have been around for some time now. Everybody has seen the pictures of the Google offices. However, the playful interior often masks a serious infrastructure that means business. These workspaces are designed for creative work – and they often work very hard indeed. They are essentially theatres for large group work, which also contain smaller spaces to work individually or in teams. It may be possible to draw on the walls, but more significantly, there is ready access to information and focused databases, which enable rapid decision-making. There may also exist a team of people who are dedicated to capturing everything you produce and placing it in an easy-to-access web tool, seconds after you have produced it. These environments contain a matrix of electrical and audio-visual sub-systems in order to permit multiple configurations for group work and to ensure that when large groups get together, the experience is potent, useful and enjoyable. Where film-making has pre-production, production and post-production facilities to successfully create in a highly networked creative environment, so too does the innovation industry. The products may differ but the techniques are very similar.
A virtual knowledge environment
The collective knowledge inherent in any commercial context contains a wealth of information. Such a database exists physically, virtually and socially, both within our heads and within groups or teams. Paying attention to the knowledge environment in which a group is innovating enables more powerful decision-making. A support crew captures all the information generated by participants, in every format; documentation, video, sound, handwritten, photographic and the web. Making this generative knowledge-base available to participants seconds after its creation allows them to be used as powerful reflexive resources. The capture and display of information in multiple formats provides instantaneous feedback to large groups. Through ever-more increasing cycles of feedback, a group is able to navigate its way through labyrinths of information, providing documentation and knowledge bases for large groups asthey move through cycles of creativity, design and production creates a narrative of the journey of their development, as well as cataloguing both the end goal and the iterations that were needed to achieve it. Beyond a single project, these virtual records become powerful learning tools for the next set of programmes coming after. They also provide context-rich records, which enable those joining the teams later in the cycles to understand what has been going on.
Online tools exist that enable asynchronous development of ideas across geographies and time boundaries. Collaborative authoring tools, participatory media, project management tools and other social software are enabling very large groups to exchange information. Online ‘jams’ are being held as events across a number of days, to specifically generate vast numbers of employees focusing their ideas on a particular topic or set of prototypes. Video conferencing allows people to exchange ideas at their desktops.
However, despite the sophistication of online tools, nothing can substitute for the assiduous sequencing of events and information that leads to the successful development of an idea from conception through the launch in the market. This is a process that will always require careful design and nurturing.
Prototyping, simulation and play
When a large group is engaged in collaborative decision- making, it may be useful to construct all manner of models of conceptual ideas, and to test them. Simulation, the playing of games, the construction of small worlds, testing of hypotheses, questioning, the reordering of information, scenario testing are all tools used for innovation. A collaborative learning environment provides all the resources required to do so.
These may include construction materials for modelling, spreadsheets for financial modelling, large surfaces to write on and iterate ideas, surfaces for moving information around the space, screens for running simulations between groups, areas for role play, break-out spaces for groups in parallel, video facilities for groups to create scenarios. Networked technology is enabling parallel work by groups exploring the contextual field as they work through group processes of defining and refining options.
Essentially, whole company innovation is about connecting the right team with information, design resources, processes and documentation in a manner that enables deep understanding of the landscape of information, critical exploration of alternatives and opportunity to prototype ideas – and launch them into the market.
Flexibility and communication in a value web is directly related to the quality of interpersonal relationships – establish multiple opportunities for these to develop
As a system moves through the cycles from innovation, proof of concept, piloting, testing to production, marketing and distribution, the qualities and skills required of teams change. These phases have their own distinct personalities and qualities and it takes a savvy manager to promote the context, attitude and environment that are required for each team within each phase to be successful. During innovation phases, teams function best if they are:
Each phase in the lifecycle requires different skills to take the lead – in principle moving from the unstructured to the structured. Even self-organizing teams need to recognize that the leaders of creative phases are usually different from the leaders of piloting, testing, production and distribution phases. An important thing not to lose sight of though, is that as the baton changes hands, the teams are still checking in with customers and the entire value web. Rapid iterations and feedback cycles are best at all phases. Empowerment is vital – understand the acknowledged experts in the teams and let them make the decisions. Let packaging experts decided on packaging, let the logistics specialists decide on distribution, let designers make the design decisions. Flatten the hierarchies, and enable decision-making.
Check in with your value web
The opinions of your clients, employees, suppliers, customers and learning networks continue to be vital throughout the inexorable march to market. Encourage osmosis of ideas. In addition to generating ideas, you also begin to mobilize the users of the products, creating the buzz around the new products long before they are launched, and creating an influential user community in the process.
Rapid iterations and feedback cycles
Creating opportunities for rapid iterations and feedback increases the sophistication of the product. IDEO create project spaces and displays for their products in design and they are open for conversation with anyone who is passing. The products are always visible; the teams are always in close proximity to each other. The same holds true for the design of services, process flows, video scenarios and use-case descriptions enable the communication of these ideas. Encourage teams to build formal and informal feedback cycles into their processes, throughout the lifecycle of development and production.
Empowerment is vital
Flattened hierarchies only work when roles are clear and everybody knows who takes responsibility for what. Making these roles visible helps. This is not to say that everybody is allowed an opinion on everything – the eureka moment may come from anywhere on a team! However, the final decision should rest with the expert on the team.
The enabling role of leadership
The role of leadership within fast moving, complex networks is to enable teams to achieve their ultimate objectives – through facilitation, arbitration and demonstration. Leaders are required to be sensitive to changing moods of the network, to understand what blockages exist and to facilitate the opportunities for teams to solve the problems. Arbitration is vital when differences of opinion exist – to ensure differences are tested and to ensure that decisions are made in order to enable progress. Fundamentally, leaders model the behaviours they desire to encourage within the broader context of the programme.
Acknowledge the programme phase
Sensitivity to the phase of the programme enables a large group to be clear about what needs to be done and who needs to take the lead. Film production is a powerful example of this because it’s so visible. Studio time is costly, and everyone is aware of the phases of production – from filming, to editing, to screen testing and distribution. Acknowledge the programme phase and acknowledge the phase leader.
Incentives and measures
Although teams need to be autonomous, it is important that members of the teams feel rewarded for the work they are doing. Most learning takes place in failure and the design process honours failure. High volume, low-risk failure! However, business success is also a factor of time and budget – and incentives to meet these targets are vital. Measuring the success of teams against understood criteria, established clearly at the start, provides security. Getting things to market requires clear goals and deadlines. Healthy competition between teams allows the bar to be continuously raised on quality, outcome and sophistication. Teams find a sense of flow when they are challenged and tested in an environment that provides the skills necessary to achieve. All successful innovation, at the end of the day, is about people having fun.
The state of the art collaborative learning environment represents a complex ecology of support systems, environment, tools and technical systems, production systems, learning systems, project management and process support.
These represent the infrastructures required to enable a whole company approach to innovation.
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