SUMMARY
I would recommend that they buy a forthcoming book by one of my
favorite project management authors… :)
My advice to your VP: First, figure out if the company is really
willing to accept the risk of innovation? If they are, then encourage
innovation, but start small, and ramp up. Make sure that current
business is being addressed, then provide some time time and
encourage innovation in incremental areas of business. One way to do
this is to implement something like “20% time.” If a big, bold idea
comes up then treat it as a new business idea and vet it through
appropriate management. Make sure to balance the risk of innovation
with the reward of the changes by setting up appropriate rewards and
controls.
BACKGROUND
First off: innovation is risk. If your organization is risk adverse,
your innovation efforts are going to fail spectacularly when people
realize that they will be penalized, passed over, or fired for
innovating. Companies like 3M didn’t start a culture of innovation
overnight. They built it up over a long time and have refined it
carefully over time.
In the Innovator’s Dilemma, the author explains that one of the
problems that innovators have is that they can’t get out of the “rut”
that they are in with their current technology, and therefore, they
miss the next innovation wave. This implies that companies should
continue to attempt to innovate, if possible.
However, innovation has to occur within the context of the business
goals that the company has. Having a database company innovate on
keel designs for America’s Cup boats is probably not the best use of
time, money, or people. (Are you listening, Larry?)
The current approach within the company seems to be “Innovate! There
is no such thing as a bad idea.” Which has caused a lot of
randomness. My recommendation here, would be to spur innovation along
areas where there are currently issues. Find a way to shorten sales
cycles, increase billing opportunities, reduce costs, or introduce
new services to meet new or existing customer demands.
Further, the innovation needs to be constrainted within certain
bounds to be useful. For example, it’s fine to innovate, but not at
the cost of the current business. Therefore, existing goals need to
be met, but innovation is encouraged. Failure to execute on business
goals today will mean that customers are suffering or business is
suffering, or likely both. This will cause customer erosion, brand
erosion, and increased service costs in the near term. This is not
what you are after.
Many innovative companies such as Amazon, Google and others have the
concept of “20% time.” That is that 20% of the employees time is
provided for the employee to focus on new areas of their interest.
The time is expected to be something that is in the customer interest
(working on your tan is not something that would be an approved 20%
time project. :)) However, this time is really about innovating. Some
innovations may be little: fixing bugs that don’t make it through a
triage bar, some may be huge: building a new business to tackle an
emerging business need. The nice thing about 20% time is that it is
reasonably self-constraining.
Large investments, such as building a new business, will require
careful vetting by a group of senior management. All of the rigor
about building a business plan holds here–it’s creating a new
business, and you need to make sure that business will meet the goals
of the parent company from a business and financial aspect.
Finally, balance out the risk and the reward for innovation, and keep
track. Reward people who innovate, and really reward those that
innovate successfully. If someone has an innovation that saves your
company $1M/year, consider giving them a piece of the action. And do
it publicly. Make sure that you have controls in place to keep
innovations that don’t work from taxing your budget or business. Just
like any other risk, build contingencies, and trigger points to stop
work on an innovation if it’s not working.
However, it’s critical to encourage people to take the risks if you
want to innovate. You can’t tell at the outset which idea will work.
You have to let them run with it a bit. Realize that you are going to
seem somewhere between 1-20% success rate. Over time, this may
improve somewhat (though it’s statistically unlikely to go above
about 20%), as you get better about what things work and what things
don’t, but it’s not a “sure bet” under any circumstances. In order to
get the benefit out of innovation, you have to encourage people to
take the risk–fully understanding that their work isn’t likely to
pan out.
-mark
On Oct 30, 2006, at 10:41 AM, Scott Berkun wrote:
Here’s this week’s situation:
Is innovation for innovation’s sake a good idea? I think not, but my
new VP has it in his head that our entire organization needs to be
more innovative - despite his lack of clarity about what that means.
So all of the team leads (including myself) are like a pack of
wolves, pacing and racing around our projects. New ideas are flying
all over the place (reorgs, new technologies, new directions), but
progress on existing projects has stalled, morale is volatile (rising
and falling daily), and there is a shortage on meaningful decisions
about why we’re changing things, or how those changes will be made.
How can I help my VP sort out what innovation means? (Or is this some
kind of leadership game where he’s testing us by watching our
responses)? Or more cynically, protect my team and existing projects
from this chaos until it passes?
- Innovate or die
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PM Clinic -
www.scottberkun.com/forums/pmclinic/
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PM Clinic - www.scottberkun.com/forums/pmclinic/
