Organizing for Innovation

A short excerpt from something I wrote for
Fabriquer le futur
L’imaginaire au service de l’innovation
(Creating the Future: The Imagination in service to Innovation)
By Pierre Musso, Laurent Ponthou, and Éric Seulliet
Published by Village Mondial, Paris, January 2005

In the old days, organizations - especially big ones - were often thought of as silos. Each department was separate; there was little integration; perfection was when all the silos did their little job well. Only top management worried about integrating all the silos into a whole.

This was a world of relative stability, a world in which change was slow, and seemed predictable; a world in which the future would be like the past.

We don’t live in that world, and the siloed organization is not the right one for our times. The evidence for this is all around us, in the form of old-style organizations falling one after another to the rigors of modern, omni-directional competition.

So what is the new organization?

It is the company that is built around innovation, around the constant and pressing need to come up with the new right new stuff that will enable our company to remain in the game, or even to gain an advantage. Because it is now clear that constant innovation is the only sustainable competitive advantage. So what else could we possibly do but organize the company around innovation?!

The attributes of innovation, and of innovative organizations, are clear. They embrace novelty; they create it, they recognize it, they seek it out. They are diverse, because innovation and creativity thrive in diversity as they wither and die in uniformity. They are also thoughtful, purposeful, and often very frugal.

What’s different about this new organization? How people work, especially how they work together. How people think, and what they think about. How they are measured and compensated. How they manage knowledge. How they manage people. And their goals may also be different.

We work, frequently, in teams. Most of us are members of many teams. These teams are multi-disciplinary; multi-departmental; closely facilitated; highly productive.

We think about change, and how it is happening, and what will be changing next, and after that. We think about the new knowledge we will need to remain competitive tomorrow, and how we can get that knowledge today.

We know that people perform according to how they are measured and compensated, and what we care about is the success of the organization as a whole, so we are compensated only partially for our individual efforts, but more and more as members of teams and especially as an organization as a whole.

We pay close attention to knowledge because we are competing in a knowledge economy and knowledge is often the difference between success and failure.

And people, being the sources, creators, and “repositories” of knowledge, are managed mostly by themselves. Of course there are managers and CEOs, but each part of the organization has significant influence on its own managers, through “360 degree” feedback systems, open communications, and a culture of dialog and honesty.

As to their goals, well, they don’t just want to be a successful company; they want to dominate the market, overwhelm the competition, inspire their customers. And change the world!

To the old style manager, looking on in horror, this is sheer, ghastly chaos. But to the new-style manager, it is merely controlled chaos. Ah, what a difference! Controlled chaos has the critical potential that the old style organization lacked, the possibility to create the new idea, the new service, the new product, just in time to meet the need of the customer, and to gain thereby, the future!

The silos are gone - all that there is, is work done well, imaginatively, measured by its contribution to the whole, and rewarded by longevity - because innovative organizations survive, and thrive.

In this organization, “R&D” is not something that happens just in labs; it happens everywhere. Everyone in the company works for R&D, because everyone in the company thinks about what they’re doing and what the customer is doing, and what they want to do better.