A really hard part of managing in larger organizations is in managing the layers and competing forces. Hierarchy dominates the speed of what we do.

Often we forget to reinforce the very design within our organizational structures, we leave role structures incomplete and uncertain and we set the deliverables in often ‘woolly’ ways so we can side step the often intransigence within our organizations way of working . This just further promotes uncertainly and it is not an adaptive organization but one left open so the leadership can side step when it suites their purpose.

In leaving this so open to ignoring one minute, using it as the ‘whipping boy’ the next they slowly immobilize those underneath. These create unnatural built-in tensions and often create a shearing effect.

They grind against each other, like tectonic plates that force further disruption and upheaval.

They ‘freeze out’ creativity unless it ‘arrives’ from the top of the organization. Eventually the organization dies as it is not generating new forms of creativity from within, this has been hollowed out by this imposing from the top.

Organization design needs to change. We need to ensure creative knowledge flows up and down organizations. We need to change our thinking from layers into a network of connected parts that we keep small, flat and focused but constantly aware their existence is dependent on others outside their mini ecosystem. Today these different layers actually require several levels of reconfiguration designed into the organization. We add layers onto our layers and each time we are constraining the organizations or the individuals to explore, they stay ‘trapped’ within their space.

Imposing the killer effect of time just because of a financial calendar is stupid – it hurts innovation significantly

Just look at how organizations impose time on us. One really critical one to address and to ‘kill off,’ is the pressure of time. Imposing time as a condition for innovation can be a real killer. Time horizons to achieve different tasks often cannot be ‘legislated’ or ‘dictated’ but sadly they are forced on reluctant innovators responsible for delivery of new concepts.

We need to re-establish the difference between goals – within a certain period covered (one year), objectives – attained later but are progressed within the period and finally ideals– those unattainable but clearly possible concepts, that progress at slower rates and go well beyond normal goals. Innovation works within this environment, actually it will thrive.

Not just the incremental, but the radical, disruptive and breakthrough innovation craved for by the top management, can finally have a ‘decent’ time horizon to be managed through. Planning needs to account for all three horizons and managing across these needs different mindsets, irrespective of the industry you are in, it does not matter if you are building planes or developing food products. Managing innovation across the three horizon methodology helps reduce tensions, design innovations that can be more radical or breakthrough.

Tacking the incompatibles to ease the tensions

We really should stop pretending that innovation is not so hard and actually state it is often incompatible to much of what we perform on a daily basis. The task of managing intangibles (unknowns) alongside the tangibles (known) needs greater appreciation of their complexities, and the difficulties of balancing the two for achieving  a ‘decent’ result.

Leadership, I believe, would need to understand innovation far more in this demanding environment of inquiry. No wonder it is often ducked and just vaguely talked about as much of innovation understanding is still poorly understood in its impacts and effect. We do need to address this lack of serious innovation management within our organizations.

Reducing activities and replacing these with outcome orientation

Innovation is no different from what we expect from efficiency or effectiveness; we want to see the outcomes.  Outcome orientation holds a precious key to think about far more.  We have struggled on many occasions to clearly establish the really good metrics for judging innovation. They seem to get lost within organizations. Part of the innovation activities has been assigned to some other cost centre, or the capacity was already established and we often don’t break these down and assign these clearly enough to the different activities, we should, but into outcome orientation ones. Were the activities contributing to efficiency or innovation? We judge these through effectiveness of the outcome.

We need to balance existing performance engines for repeatable everyday tasks with innovation delivery engines for new activities to make our organizations function more effectively. Vijay Govindarajan and Chris Trimble have offered some thoughts on this at the implementation stage, although these still need more examination and exploration.

Also Scott Anthony has pointed out in his article “Negotiating Innovation and Control’ on the different ways to balance tension there is one, in my opinion, that needs deeper investigation and development and that is the ‘ambidextrous’ one. This makes distinctions but links the parts of the whole organization by developing competing frames, not competing forces. Roger Martin suggests in one of his books “The Opposable Mind” that we need to develop “integrative thinking” as part of this need to change.

Innovation should be alongside as a equal partner to efficiency. It becomes efficient innovation and core to what you do and how you operate

Seeking constant efficiencies is actually slowing down our organizations. We need to do the opposite, to speed them up and capitalize on finding innovation opportunities quickly and then knowing how to scale them equally fast. We need to do this by developing the competencies and understandings of experimentation, piloting, prototyping in fast, discreet and measured ways

The worrying thing is any dynamics within the system are dominated by the slow components, and the rapid components simply have to follow along.

“Slow constrains quick, slow controls quick”.

The only way to ensure a speeding up is to be coherent on the purpose, clarify the bounds and governing principles that need to be enacted and evolve the organization design away from layers and hierarchy. We need to build up a series of inner networks that depend on each other but constantly reach out to connect, share and exchange but more within a organizational design that is flat but highly responsive and inter dependent to work well. This needs orchestration not hierarchy in its managing.

Simply by consciously working on all the dysfunction points within an organization will certainly reduce the tensions, reduce the ‘shearing effects’ and allow the organization in all its layers to ‘react’ and be allowed to come back into a balance, where innovation sits equally alongside efficiency, especially if both focus on outcome orientation and that certainly is not the current business way we often see today.

The post Innovation tension lies in our layers and structures first appeared on Building Your Innovation & Ecosystem Intelligence.

In this post I wanted to explain my thinking through on this ability to be ‘ambidextrous’, knowing the difference of when to exploit and when to explore as essential to leveraging innovation, in all its forms and watching out for some of the traps in not managing this well.

Managing this, in all honesty, though, is hard to get the balance right but highly valuable if you do achieve it, it can transform the business. Many of our organisations struggle to manage both successfully as they tend to focus more on separation mostly in organisational structures alone as their attempt to become ambidextrous. It is far more than ‘just’ this.  Get the balance right across the organisation’s design and in its leadership management, it becomes a very powerful mechanism for accelerating performances by delivering significantly new innovation and equally sustaining and leveraging the core business you have today.

Recently I contributed a blog post over on the Hype Innovation Blog ” Balancing Exploitation & Exploration for Changing Performance” that opens up the subject but then extensively dives into three examples of Apple, GE and Google that are working in highly ambidextrous ways, pursuing exploiting and exploring in their own unique ways.

The important point is that the make-up of how, when, what and where to exploit and explore, can certainly be very different for each organisation, all dealing in their different contextual settings. You need to develop a “dual mentality” in managing and be watchful for dealing with this as it can create a real deep-lying set of tensions, yet it is within these tensions and how they are managed will determine eventual success of getting this balance right.

We often face conflicts on knowledge acquisition, absorption and translation

How do you switch from the pursuit of efficiencies, from what is often well-established, into the probing of the unknown or not easily quantifiable? We need to balance the interplay between the two.

As we pursue the alignment and adaptation of the two, this is where we get into a serious conflict by attempting to manage this in one fixed ‘state’ or the other. You start questioning, looking for synergies, searching (often by default) for the complementary, attempting definitions, drawing connotations and meaning from these far too early and this has consequences. You muddle your thinking between when to exploit and when to explore effectively. Management is often looking to close something down, to make a decision based on the present known facts, exploiting as quickly as possible what we do best, yet there are many occasions they should stay open, wait and allow time to explore more, to gain more insight. Knowing when to do one or the other is the judgement needed.

You can so easily get into further conflict as exploitation tends to be built on past knowledge, or pursuing and acquire new knowledge to build on existing knowledge. Whereas the kind of knowledge needed for exploration, is significant new knowledge acquisition and requires rapid absorption, and one might not be necessarily helpful to the other, as the purpose and need are sometimes radically different.

You struggle to find the consistency of purpose or even commonality when the type of knowledge that is required can be so starkly different, built either on the known or in pursuit of the unknown. This is why gaining an absorptive capacity understanding becomes important in the context of what you are attempting to do. Knowledge ‘feeds’ advancement and equally provides the ‘fuel’ for innovation but they mostly come at you differently to manage, absorb and translate into their meaning.

Managing exploit and explore depends on your situation

Unless you have a “guiding star” that comes partly from a vision market understanding and mission, that can help you decide the emphasis between these two, it makes managing these dual activities as simply difficult. Is it one that is focused on productivity, cutting costs, ensuring ongoing quality and building reputation, or one pushing out by experimenting, adapting constantly and searching for viability and its validation, how can you determine where you put your emphasis?

I would argue it really does depend on your orientation and what you want to achieve. It is where the organisational focus lies and the necessary defining conditions  and the market dynamics will mostly decide that? How volatile or challenging is the market, is it growing steadily or rapidly undergoing dynamic growth? Do we have to pursue a more radical agenda of innovation or can we evolve on a more incremental path? Do we place our emphasis on consolidating our core or searching for concepts that radically alter our position?

Are you in pursuit of a logical and hopefully, coherent business model, leveraging all the efficiencies which need to work in an orderly, functioning, well planned and managed ways, one where you are making sure your innovation activity is built into its well-established structures and processes? Or are you wanting to encourage a greater freedom for individuals to make personal decisions and encourage the taking of initiatives to be more radical and distinctive in their innovation approaches, deliberately introducing this into their work design, offering high levels of flexibility and self-organizing, allowing for an emerging model to emerge as against fitting into a well-established and often rigid model.

The case for clear separation

There is a number of highly respected people who suggest clear separation must occur. They pose the questions: “Are exploiting and exploring at two ends of a spectrum?” Are they not so different that they need clear separation? We need to separate out the present day-to-day work, with the innovation future work. This has merit.

I think if you foresee a radically different business emerging then this clear separation makes greater sense but how do you reconcile some of the underlying values? How important is the culture, the history, the brand or image, how do you rotate or attract the necessary talent. How do you fund the ’emerging’ business, does this existing business finance this and if so, will it constrain the new business in open or hidden ways? if you create distinct entities, giving them completely different operating environment, will they be capable of being merged back later?

In my examples I used on the Hype post, the one that is a real test of management is the Google decision to separate out its moonshot’s from its core, by creating a new holding company, Alphabet, to treat them distinctly differently. As the founders, their view has been: “the whole point is that Alphabet companies should have independence and develop their own brands”, then separation becomes a clear decision. Yet it does seems there are some initial tensions occurring that will need well-managing and different management thinking to manage this transition, it will be an interesting one to watch how this evolves.

A dual management approach

The argument goes and it might surprise you, by supporting core businesses and new emerging innovation units actually requires leadership to be constantly inconsistent. They must totally live the dual agenda otherwise, it fails. It needs significant management attention to managing the tensions this duality brings. When leaders do take this ambidextrous approach, they are forcing change but it can be very demanding to get this exploit and explore balance right.

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The post So how do you manage exploiting and exploring for Innovation? first appeared on Building Your Innovation & Ecosystem Intelligence.

We all sense this pressing need to react and become more responsive, becoming more adaptive to changing environments and business challenges, that are often unknown, unexpected, or not yet explored or exploited. The question is how much and how far can we go?

Organizations are facing increasing a dilemma in how they organize and manage within their systems and structures.They are being forced to deal in increasingly complexity and environmental turbulence and ‘adapting the appropriate response’ remains increasingly a difficult one to master, within the existing regime they have in place.

On the one hand the value in stability is still essential; working within specific routines and practices gives a clear ‘path dependence.’ This stability allows for efficiencies and effectiveness to be constantly at practice, constantly building the problem-solving processes, to master tasks in complex environments to resolve ‘known’ problems in ‘given’ ways but this relies on this stable flow and that is not the case of much of what we have to handle today.

We are being challenged more and more on this efficiency and effectiveness focus. It is often not working to deliver the results. We are missing a new way of working.

We increasingly have this dilemma of needing stability but trying to build increased fluidity.

Stability and fluidity- how can both work alongside each other? They are opposites yet we need both to thrive in today’s world. Many theorists have suggested, of having in place the ‘ambidextrous organization.’ This would need organizations to design their organizations in their structures, people and processes to either be focused on ‘being efficient’ or being ‘change orientated’. An increased level of duality. The mindset of exploiting or exploring but can we have both, I certainly think so, it mostly depends on what we are about to do to get this mental picture of which frame of thinking should dominate but not be exclusive.

I have been drawn to this ‘dual’ system of ambidextrous as it helps resolve one of the consistent stumbling blocks for innovation to ‘take hold’ and evolve. Innovation is constantly fluid, needing to be adaptive as we learn and adjust to new learning and this is constantly requiring a very change orientated approach. Often innovation comes up against a rigid system and for many “just seems not to fit”

Innovation struggles as it often remains outside the prevailing system. Innovation constantly challenges against the dominant mindset within organizations, who like the idea of innovation but are mostly measured to drive efficiency and effectiveness, keeping highly focused on the short-term performance as their role, reward, advancement and key to ongoing career success, so innovation ‘sits outside’ their domain of focus.

Something needs to change if innovation is really important.

Yet the very essence of our stability in organizations is under threat.

There is so much change being undertaken, the growing call for quick improvisation and ad hoc responses all needs to take us away from those rigid processes into open and far more fluids ones.

The solutions of fluid, agile and adaptive are aiming to develop highly flexible and responsive organizations as an attractive answer to manage in more uncertain times as the way to move forward. The ability to make this very defining and shaping move in any organizations does seem very fraught with risk.

We do need to extend our thinking about fluidity far more to see how we can evolve our thinking more towards this fluid state, within ourselves and our organizations design.

To achieve a more organic fluidity, moving from hierarchies to networks, from formal rules and high levels of coordination into far more spontaneous interactions, improvised processes that resolved specific issues is one huge challenge. It takes time to learn and adapt to this as we all are ‘stuck in our ways.

The appeal of us constantly forming and dissolving project teams where far more lateral organization-wide communications take place is a set of real challenges but so highly prized and will be of increasing value.

Everything seems to be flowing faster and we do have to respond

We are seeing far more fluidity in relationships where the knowledge is flowing within, across and between organizations. The boundaries are blurring, that increasing fuzziness needs shifting our style of decision-making and solution finding.

There is also this growing sense that innovation knowledge is endless, unrelenting in its flow into us, if we care to open ourselves up to it. It never stops but simply shifts from one stage to another, hopping from one idea to another, requiring us to loop back to be re-evaluated and think the implications through.

We are increasingly recognizing that the old linear processes are not working, the need for fast results gets stacked up in this type of process. Our reaction times need speeding up, our learning and adjusting is a constant, all along the pipeline development process and requires a higher level of fluidness to deal with it. We have to adjust to this increasing demand forced upon us.

We are still struggling with the dominant linear logic of much of what we do in organizations, and often this constrains innovation, restricts us to provide radically different business models and limits our abilities to change fast enough. We are learning to be far more adaptive in our learning but this is constantly meeting up with resistance of this linear logic.

There is this nagging feeling of relentless destruction or disturbance, the very opposite of the stable equilibrium we seemed to enjoy in the past. Those that become capable of managing the constant change and disequilibrium will thrive.

We must face this paradox of fluidity and stability.

Those growing conditions of uncertainty and complexity also need boundary building, identity formation and problem solving architectures that are stable and can provide replication of essential actions or activities. We need to seek out and maintain yet constantly challenge to “undo” and redesign.

So can we find competencies that would help embed a more fluid way of working?

We need to look for or deliberately design into our thinking the following:

We are all becoming far more digital, fluid and fast, we are absorbing and responding at faster rates and we are adapting to a constant, multifaceted world of connections, systems and knowledge that need piecing together, un-stitching and re-stiching to combine up into different ‘wholes’ and needs to solve specific issues and challenges. So what is needed?

• To get there we need to be far more nimble, we need to learn navigation skills far more, we are increasingly assignment driven, less exploratory in many things, and technology is taking on this role.

• We need to become increasing agile, iterative, be experimenting, and constantly determined to execute to drive our results and value-add.

• We need to seek empowerment, focus on delivery and collaboration outcomes far more resolutely.

• We need to grasp the make-up of value creation and why innovation is becoming new business models in its potential.

• We need to establish within ourselves and the working environment we work within, this sound conflict resolution pathway and strive for authenticity and trust within the ways we operate.

• Lastly here, a real willingness to seek out diversity, to be visible, and be wanting to have this constant entry and exit to project and challenges to drive our personal satisfaction and worth up.

Finally, we should examine characteristics or factors that create barriers for fluidity

Our over reliance on past models – when the near future closely resembles the recent past, relying on existing models to determine appropriate actions and investments is rational.  Instead companies must assess the amount of change and to recognize the need to ‘let go’ to reduce the reliance on existing models that are constraining future performance in a fluid world.

Change proficiency/capability – in most companies, people receive training and develop skills based on their specific roles and responsibilities, but rarely develop skills that actively encourage, enable or accelerate change without it being instigated form a higher level. We cannot expect companies and cultures to change frequently and capably if people don’t have the skills, capabilities or proficiency to change effectively and be empowered with the mandate to investigate and recommend.

Preferences for stability over change – people, organizations and cultures prefer stability to change. Change is uncertain and demands new learning and new expertise, while stability reinforces existing knowledge and skills. Over time, the desire for stability leads to inertia and active resistance to change. Companies must create a preference for more change, reducing inertia and building change capabilities. That “making change constant” needs enactment.

Focus on short-term profits rather than longer term viability – Since change is uncertain and distracts from efficient day-to-day operations, and there is an ever-increasing focus on short-term profitability, change always takes a back seat to efficient operations and short-term profits. Longer term viability suffers because of an over reliance on an increasingly out of date business model, infrequent innovation and a lack of change capacity. This shift in corporate mind-set and shareholder need is becoming an imperative to finally change. It is stopping long-term growth, mortgaging our futures.

In summary

We need to relentlessly challenge and push out our own boundaries and knowledge and adapt these to be designed to exploit constantly. We need to be increasingly fluid in how we ‘go about this.’

We need a new mantra of “adapting, exploring and simply responding to the need seen” in rapidly changing markets and across our customer base – past, present and future and within ourselves, on how to cope with this increasing need for agility and this fluidity we all need today.

The post Achieving a Level of Fluidity in Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

Adapting always seems a work-in-progress, or it is often something where we are simply making little or no progress!

We often stay ‘stuck’ in the way we do ‘things’ around here, never seemed able to break out into something new or different.

To adapt we need to open ourselves up to learning and adjusting our organizational ‘form’ in new ways.

In business, there should be a constant battle to reconfigure the assets and extend the existing capabilities. Yet often these stay ‘static’ not learning or improving.

In our innovation activities, there is an even greater pressing need to build into our thinking the ability to find more dynamic capabilities. It is a constant innovator’s dilemma to think through and get right.

What might help?
Recognizing our need to think differently
Here I am wanting to outline some opening thoughts for you to consider in becoming a more adaptive organization.

There has been a lot of discussion about finding new organizational forms that need to somehow reflect on pushing out and developing around unique combinations building into our existing structures these four distinct ‘classification’ states: a) collaborative, b) learning, c) emergent and finally d) ambidextrous.

These ‘states’ are viewed to be really helpful in accelerating an organization’s growth potential and improving greatly on the innovation cycles.

Partly this is being driven by a recognition that we are becoming more dependent on a growing set of challenges that include: a) gathering and synthesizing far more knowledge than ever before, b) the fact we are increasingly becoming dependent on the performance of others, c) the assets that we simply own and have in place are just not good enough today and d) our abilities to “read, react and respond” to changes occurring that just seem to be constantly accelerating away are becoming more difficult to keep adjusting too in our present organizational structures.

Somehow we need to respond in more agile, fluid and adaptive ways. Roger Martin suggested some time back “that modern leaders need integrative thinking to embrace complexity, tolerate uncertainty and manage tension in searching for creating solutions to problems“. It is learning to make different choices in a far more creative process, often more disruptive to our established norms.

All these are challenging our existing organization’s systems, structures and processes and it is a growing process of understanding that will emerge to form these new ways of operating, far more reliant on technology, rapidly available and adaptive systems and flexible thinking and design.

The need to become bolder in our thinking

We need to encourage fresh and bolder investments in knowledge, in infrastructure, systems and in managing these. Ones that focus on activities that pursue new approaches that lead to exciting innovation, that really does spurs growth. These are about learning, searching and delivering the winning value on the new innovation value scale of ‘new generation activity’ from recognizing how we balance out exploitation (extending the life) and exploration (new understanding). We need to appreciate the separation effect for innovation.

Most of our organizations today struggle with applying the ‘appropriate’ resources into these two ‘dual’ approaches. Many try to separate them, often hiving off the more radical innovation development part to protect it from being overwhelmed by the often overbearing focus on the short-term and exploitation. Yet this is a real mistake, as they are necessary to be combined to improve what we have, as well as add in a significant change to keep the business healthy (efficient and effective) and equally growing (through innovation)

We are living in a world of apparent contradictions

We need to manage with one eye on austerity, the other on emphasizing the need for innovation. The popular ‘answer’ to this is simultaneously exploring and exploiting, yet these two organizing and managing styles are hard to find the right balance we need. We want to have a stable environment but we need to equally be dynamic, constantly improving and introducing new innovations.

These are a significant range of questions we have to consider before we decide to establish the ‘appropriate’ position of how much we need to emphasise on the exploit and explore, both needed to be balancing the stability and delivering the dynamic. Much is dependent on the diversity and dynamism of the business environment we are operating under, the resources we have available or can call upon, the market conditions we are facing, as well as predicting where all of it is heading. Easy huh!

Equally, it is dependent on what we are attempting to do.

Exploitation is the “refinement and extension of existing competencies, technologies and existing knowledge” whereas exploration is “our ability to experiment with new alternatives” and each is certainly built on our learning and accumulating experiences. Exploitation on its own, or if heavily emphasized to the exclusion of exploration, can eventually lead to failure, whereas too much exploring and experimentation can limit exploitation. Each can become a “failure trap”.

The “success trap” is when exploration leads to exploitation and exploitation to more exploration, a reinforcing cycle through clarity of mindset and managing between routines and experimentation. These can have very different activities to manage and are the cause of many of the tensions within the balance needed in organizations to innovate the new and manage the existing. Each is often competing for scarce resources, a constant interplay.

The argument for establishing an ambidextrous organization has proffered different opinions for pushing for variations based on: a) clear separation, b) developing the abilities to switch, c) become self-organizing or d) using an external ecosystem thinking to establish the right mix between exploit and explore. Each is determined by a unique mix of considerations.

The answer for each of us is that it really does depend. It has a paradox only you can solve in your unique situation. It comes down to trade-offs. So what do we need to consider? Do you tightly couple these or seek degrees of separation?

We need to seek balance, strive for dynamism and accelerate innovations
With this ever-increasing set of tensions, we are in real need to shape capabilities. It has been suggested * that we have to resolve four closely interrelated ‘tensions’ to help us in leading to understand what, where and how we design ambidexterity into our management within organizations.

We need to consider how we would balance these four tensions:

1. Differentiation and Integration. How do we separate our exploitative and exploratory activities into distinct organizational activities or units? Integration is deciding the mechanisms that can address these. This deciding point between these two will often boil down to the degree of importance placed on the need for exploitation and exploration; these should not become mutually exclusive positions.

We must balance in constantly adaptive ways this duality. It is the specific task or activity that can largely determine this but it needs a conscious designing in.

2. Individual or at the Organizational level. The ability to ‘fuse’ any approach across multiple levels of need at organizational design and the individual’s ability to explore and exploit together, or at separate times, needs resolving. Having different teams, one exploring, one exploiting or having individuals who have a higher propensity for one or the other, to be blended into a diverse team solving a complex challenge that needs this dual thinking purpose are some suggested approaches.

Again it comes back to the challenges that need to be addressed, as the management of contradictions and conflicts needs different alternatives, in our creative thinking. The orientation between the short-term and longer-term need equally to be well thought through. We need to fit innovation into its appropriate context, contributions and characteristics of the people working on this.

Finally, here, it is the diversity in knowledge coupled with experiences. that give us richer linkages for innovation. It is the working consciously on the alignment and adaptability within the mix and at these different levels required. There is a fluid need to move between these levels of design and need.

3. Static versus dynamic perspectives. We do need to find a way to simultaneously pursue the two activities of exploring and exploiting. We need to reduce the static and emphasis the dynamic, by constantly adopting ‘certain’ configurations to meet the innovation needs we are working towards. Achieving a sequential state or pushing for a simultaneous pursuit of the two becomes the key consideration.

The key is to repeatedly and intentionally orchestrate the firm resources; it is striving to gain interactions not separating them. Hiving exploring off into a discrete unit creates problems in any down the line handing off back to the operating unit responsible for the execution of innovation. There is this real need to think through a more comprehensive innovation life cycle here, as innovation is certainly far more dynamic (or should be)

4. Internal versus External Acquisition and Interplay. The need is to gain and utilize the knowledge and this ideally comes from both internal and external resources. The stronger we have in place alliances, outsourcing arrangements and partnerships, we are building our ‘combinative capabilities’ and how we can consciously apply a more absorptive capacity approach to synthesize, apply, acquire and absorb knowledge.

This allows us to develop a higher degree of knowledge flexibility across organizational boundaries and find different ways to integrate this into our innovation thinking. We are always in need of novel, diverse alternatives to any innovative thinking.

Knowledge diffusion becomes vital to manage the exploit and explore and this needs to flow across the organization, not stay limited within one part, reducing the opportunities to leverage this acquired knowledge. Here lies the seeding of corporate renewal.

Each of these interrelated tensions needs a high level of resolution.

The level of insights into the strategies, structures and processes that allow them to be in this ‘dynamic tension’ for innovation to occur, is one we must constantly strive towards a balance and harmonization between the two activities of exploitation and exploration. These tensions will actually require a high level of constant and often contradictory levels of requirements. How can we design this into the fabric of the organization?

This set of challenges does require this deeper thinking about the development of a more ambidextrous approach to innovation. How can the organization be designed in adaptive ways around this constantly evolving innovation need.

The real hard questions to answer will eventually lie in asking “what are the similarities, differences and interactions between the individuals, a group’s and an organization’s creative capacity, diffusion capacity, absorptive capacity for knowledge and risk-taking capacity”.

Where are the balances needed to be achieved in organizational adaptation, innovation need and learning? How can we design the type of dynamic environment that I believe can evolve by an appropriate design unique to you, one that I regard as requiring the understanding of building our innovation fitness landscapes

Building these changing landscapes to meet opportunities and situations to respond to, at you need to adapt,  manage and operate within; then determining what you need to have available, knowing the how to go about bridging the gaps, to arrive at a state of being constantly adaptable as your goals adjust and change?

It is certainly complex and we all need to learn, adapt and work through this balance in our exploitation and exploration needs. It is one critical part of future organizational design. It does need individually working through to meet your own specific needs for growth and protection.

It does mean that the level of sensing, seizing and reconfiguring is critical to work upon and that means it has to be highly dynamic, in building the dynamic capabilities required for innovating because nothing can be static for very long in today’s world.

The key reference used is drawn from the paper “Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance” written by Sebastian Rush, Julian Birkinshaw, Gilbert Probst and Michael Tushman. This paper has been at the core of the post.
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The post Striving for the innovation balance: between exploring and exploiting. first appeared on Building Your Innovation & Ecosystem Intelligence.

How do you sustain innovation, is it more through the structuring of everyday work, by creating a particular set of social rules and resources that foster specific routines? Or something different?

We work really hard at maintaining these re-occurring processes, never willing to extend and push them in different and new ways. We have actually become very static in our approaches and learning, we are not learning anew.

We often simply end up with incremental innovation that might just ‘nudge’ the growth needle but does little more than sustain us in the present and can be ‘contained’ in a tidy process that makes many, including the ‘bean counters,’ very happy until someone changes the game.

Then we need to think differently but this is usually far too late.. As demand is more volatile today we need to experiment, explore, learn and adjust. What becomes more important is the ‘work to be done, and how we go about tackling this and not the work done where we often simply ‘default too. Surprisingly Adam Smith identified this important difference in work way back in 1776.
This can be explained as the ‘work done’ is the accumulated knowledge, which has built up and been embodied in the firms results with the innovations achieved in the past and is seen as the tangible capital that we continue to leverage..

The work to be done is how well it can adapt to change or what needs to be brought in to help in this new work. In the past century we operated in mass production era, with systems with standard goods and stable market conditions the ‘work done’ was equivalent to the ‘work to be done’.

In today’s global market, with its rapid technology diffusion, disruptive and constant change, with an emphasis on serving the ‘work to be done’ as more important than the ‘work done’ and identifying and growing our intangible assets are fundamental to this. This is where we need a more radical, evolving innovation set of capabilities to push our business growth beyond the normal.

Work to be done is the need for our future growth and well-being to be derived through innovation activities. These are so much made up of intangible parts, the growing innovation capital, that will provide the new wealth of organizations in the knowledge sharing economy of today and the near future.

Certainly I buy the argument that Innovation should become part of everyone’s job on a daily basis so they have the space and potential to work on it constantly but what does this require? This is part of our journey within seeking innovation fitness through its dynamics.

Part of our innovation debate is what is “dynamic” or “routine” for managing future innovation success?

For me the argument points to the capacity to build “dynamic capabilities for innovation” around the critical situation we are all finding ourselves in, that we are all in an age of rapid ongoing change.

‘Rapid change’ calls for constantly developing and leveraging new understanding, building knowledge that is based on dynamic capabilities, it evolves and changes all the time. These need to be fully understood so the appropriate resource and commitment can be placed behind them.

The world of innovation is based on something that is very clear: it is consistently changing and challenging, has never-ending competition, a constant price/performance rivalry, increasing quest for improving returns and the ‘creative destruction’ of existing competencies all certainly contribute to rapid change no doubt.

This is a highly dynamic environment we are all living and operating in today. Are you building those skills and capabilities to adapt and react?

Building new capabilities or stuck in the past?

Are our organizations building the capabilities to become highly dynamic or are they stuck in the past, looking for routine and repeating established procedures expecting these to get them through this volatile world? They will find this path of repeating established practices like the one to their own demise and eventual destruction.

What are the firm-specific capabilities that can be sources of real evolving but equally lasting advantage? How can combinations of competencies and resources be developed, deployed, nurtured and protected? These need to be difficult-to-imitate combinations and integrative enough to give new sources of competitive advantage to stimulate new growth and financial return.

In my work, I have spent considerable time investigating what makes up the dynamics that accelerate our abilities to innovate in better ways, so it sustains and equally evolves to ‘battle’ the increasing volatility we will be facing on an ongoing basis. These

Strategic innovation often changes the ‘game’; what it explores and exploits to stay dynamic.

Firstly we need to go back and understand “What are dynamic capabilities?

Dynamic capabilities are those skills, processes, routines, organizational structures and disciplines to build, employ and orchestrate intangible assets that are not replicated easily by others and constantly change to meet customers’ needs.

Dynamic Innovation Capabilities need to advance knowledge creation and absorption, extend and integrate what is learnt into something more worthwhile, something new. These capabilities need to learn how to modify constantly the way we operate, reconfigure and redeploy.

This involves the dynamic of sensing, seizing and transforming (Teece et.all) at the three interdependent levels of the individual, firm and network to coordinate/ integrate, learn and transform constantly and to reflect the constant change that is taking place.

Two different academic views but does one lead to the other?

Dynamic Capabilities are defined by Teece, Pisano & Shuen in their different papers on the subject as “the firm’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments so as to achieve new and innovative forms of competitive advantage”.

Everyday Dynamics are where people know what is expected of them and what to expect from others and have a common ground for negotiating collective action in particular situations that create an ongoing social fabric where innovation naturally flows. Zollo & Winter suggest a dynamic capability “is a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness”

Both definitions require learning through equally exploiting and exploring
Both of these ‘dynamics’ arise from learning and this within organizations more likely to come from systematic methods.  Innovation nearly always requires structure, process and being worked through in systematic ways unless you perhaps are a sole inventor/ innovator.

To work with others successfully you need a certain structure, a process and a given environment and culture to deliver innovation.

We have to realize that capabilities for innovation are complex, they are structured and multi-dimensional.

Often today organizations strive to keep these far too much in “equilibrium” (zero level) but the reality is that our markets being served are not in this ‘equilibrium’ and are constantly being disruptive, more ‘dynamic’ than ever. We cannot keep a ‘business as usual’ mindset we need to recognize we are operating in a potential set of constantly unstable circumstances. Business is a complex adaptive affair.

We need to become far more aware of the dynamics that surround us that are needed for innovation to work constantly. We need our journey to evolve.

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The post Seeking fresh winds and new directions first appeared on Building Your Innovation & Ecosystem Intelligence.

You often hear of volatile trading conditions, a more complex market and situations changing constantly and moving faster than ever. ‘Much’ seems to be closing in on us.

We do know we need to re-equip ourselves for constant disruption; we are really beginning to see a shift from the classic bell curve into more of a shark fin for adopting change.

One that is characterized by sudden, even violent success or an event, some moments of brilliant dominance, followed by a dramatic change in conditions as others have spotted the same opportunity and you hit a rapid decline, the race to the bottom of competition constantly negating one another.

Market are segmenting, the life cycle is shortening or having an even longer tail of dealing with slow decline and constant erosion of any competitive position. The sharks are arriving even earlier and in a greater need to show their dominance.

It does seem “creative destruction” is a central force in many of our activities. Activities where innovation is continually replacing not just in products and new services but in designing radically different business models, searching to replace less adaptive competitors in the marketplace at faster rates.

The post The sharks that prey are arriving a lot earlier now first appeared on Building Your Innovation & Ecosystem Intelligence.

Option pathways are those viable alternatives available when you are suddenly confronted with the need to change.

By being proactive, anticipating and structuring the options ahead you can be more prepared for disruption, you can respond with more thoughtful reactions. Have you ever considered option pathways?

Having available options so you can react to sudden changes, as more sketched out scenario’s that are representing possible variables, the better prepared you might be to respond thoughtfully.

Preparation for blunting or neutralizing possible attacks, vulnerabilities and changing business conditions is more than helpful, because you have made some investments in different possible options and far more ready to respond in thoughtful ways and not simply in those knee-jerk reactions, simply needing to respond.

Considered response, with significant parts already thought through, can safe significantly on ill-considered ones.
Also, it is valuable to begin to prepare and cost out different decisions ahead to be ready, have these fleshed out, then discussed across the people involved in those disruptive force decisions so you are ahead in your thinking on how to respond.

One recommendation suggested by Haydn Shaughnessy a proponent of this thinking (link to White Paper ) is having these option pathways walked fully through with the CFO, so it gives him the understanding well before hard decisions are being made, when you are in the middle of handling the dynamics of disruption.

This seems to help work out option pathways well within my mind, of their value in our needs to be far more prepared for our disrupting moments, bearing in mind these are occurring more frequently.
What more can I learn or even add to this?
I decided to widen the idea out a little and came across some (nearly buried) academic papers, but thanks to Google they came alive for me. These identified Adaptive Pathways and they fit within a policy approach.
The two papers that ‘worked for me’ in what I was looking for were mainly dealing in the environmental change dynamics where you had to have a lot more adaptive thinking within the planning process that describe different types of actions (for example mitigating and hedging actions).

The view here is as we anticipate and determine, we experience and learn, as the future unfolds.
The more we are open to this the more we can become responsive to disruption. The more we talk and describe “uncertainty” where we can paint different visions, or by using Haydn’s “decision model canvas” to promote learning and awareness, so we have ‘options’ in place when situations change, or even when you feel the conditions are right for you to prompt that disruption yourselves.

Let me offer a couple of visual here from the two papers (details shown below)

And the more dynamic thinking

I think these are useful as thinking through the sequence, with some adjustments to account for a business environment and its planning and future casting needs. I felt these two frameworks help me add even more to Haydn’s option pathway thinking.

Mapping the terrain of options of where you would like to be.
You need to develop a preferred road map of where you want your innovation to take you but you certainly need to have developed your options, as no pathway is straight and uncomplicated. By fleshing out your ‘terrain of different realities,’ you are able to describe much of the work, design, thinking and preferences that give you an enduring strategy.

You are formulating a fluid plan that sets out detailed reasoning of how you can disrupt others or react to disruption from others, simply by the amount of organizing principle and details you build into these option pathways. Identifying these potential future forces shape your choices and ‘informs’ your innovation activities you need to develop and provides the scoping possibilities to be far more ready to respond to these forces of disruption.

The crafting of your possible options
Any option pathway needs crafting, it certainly needs fleshing out, it can help inform yourselves and others around you about different alternatives and actions.

Thinking through disruption is not just very healthy to do but essential, in order to survive and prosper. We need to look towards the future and be as ready as we can, in anticipating its disrupting forces that are constantly bearing down on us.
Sources:

• Download Haydn Shaughnessy’s White Paper written for Hype entitled “How companies address the disruption challenge”. This was the triggering point for me to go off and explore option pathways.
  

• Academic papers both from Utrecht University, Department of Geosciences, Twente University, Department of Water Engineering & Management
• Designing Adaptive Policy Pathways for Sustainable Water Management under Uncertainty: Lessons Learned from Two Cases Marjolijn Haasnoot, Jan H. Kwakkel, Warren E. Walker
• Dynamic Adaptive Policy Pathways: A method for crafting robust decisions for a deeply uncertain world . Marjolijn Haasnoot, Jan H. Kwakkel, Warren E. Walker and Judith ter Maat.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have republished it on my own site with some small adjustments. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit.

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A really hard part of managing in larger organizations is in managing the layers and competing forces. Hierarchy dominates the speed of what we do.

Often we forget to reinforce the very design within our organizational structures, we leave role structures incomplete and uncertain and we set the deliverables in often ‘woolly’ ways so we can side step the often intransigence within our organizations way of working . This just further promotes uncertainly and it is not an adaptive organization but one left open so the leadership can side step when it suites their purpose.

In leaving this so open to ignoring one minute, using it as the ‘whipping boy’ the next they slowly immobilize those underneath. These create unnatural built-in tensions and often create a shearing effect.

They grind against each other, like tectonic plates that force further disruption and upheaval.

They ‘freeze out’ creativity unless it ‘arrives’ from the top of the organization. Eventually the organization dies as it is not generating new forms of creativity from within, this has been hollowed out by this imposing from the top.

Organization design needs to change. We need to ensure creative knowledge flows up and down organizations. We need to change our thinking from layers into a network of connected parts that we keep small, flat and focused but constantly aware their existence is dependent on others outside their mini ecosystem. Today these different layers actually require several levels of reconfiguration designed into the organization. We add layers onto our layers and each time we are constraining the organizations or the individuals to explore, they stay ‘trapped’ within their space.

Imposing the killer effect of time just because of a financial calendar is stupid – it hurts innovation significantly

Just look at how organizations impose time on us. One really critical one to address and to ‘kill off,’ is the pressure of time. Imposing time as a condition for innovation can be a real killer. Time horizons to achieve different tasks often cannot be ‘legislated’ or ‘dictated’ but sadly they are forced on reluctant innovators responsible for delivery of new concepts.

We need to re-establish the difference between goals – within a certain period covered (one year), objectives – attained later but are progressed within the period and finally ideals– those unattainable but clearly possible concepts, that progress at slower rates and go well beyond normal goals. Innovation works within this environment, actually it will thrive.

Not just the incremental, but the radical, disruptive and breakthrough innovation craved for by the top management, can finally have a ‘decent’ time horizon to be managed through. Planning needs to account for all three horizons and managing across these needs different mindsets, irrespective of the industry you are in, it does not matter if you are building planes or developing food products. Managing innovation across the three horizon methodology helps reduce tensions, design innovations that can be more radical or breakthrough.

Tacking the incompatibles to ease the tensions

We really should stop pretending that innovation is not so hard and actually state it is often incompatible to much of what we perform on a daily basis. The task of managing intangibles (unknowns) alongside the tangibles (known) needs greater appreciation of their complexities, and the difficulties of balancing the two for achieving  a ‘decent’ result.

Leadership, I believe, would need to understand innovation far more in this demanding environment of inquiry. No wonder it is often ducked and just vaguely talked about as much of innovation understanding is still poorly understood in its impacts and effect. We do need to address this lack of serious innovation management within our organizations.

Reducing activities and replacing these with outcome orientation

Innovation is no different from what we expect from efficiency or effectiveness; we want to see the outcomes.  Outcome orientation holds a precious key to think about far more.  We have struggled on many occasions to clearly establish the really good metrics for judging innovation. They seem to get lost within organizations. Part of the innovation activities has been assigned to some other cost centre, or the capacity was already established and we often don’t break these down and assign these clearly enough to the different activities, we should, but into outcome orientation ones. Were the activities contributing to efficiency or innovation? We judge these through effectiveness of the outcome.

We need to balance existing performance engines for repeatable everyday tasks with innovation delivery engines for new activities to make our organizations function more effectively. Vijay Govindarajan and Chris Trimble have offered some thoughts on this at the implementation stage, although these still need more examination and exploration.

Also Scott Anthony has pointed out in his article “Negotiating Innovation and Control’ on the different ways to balance tension there is one, in my opinion, that needs deeper investigation and development and that is the ‘ambidextrous’ one. This makes distinctions but links the parts of the whole organization by developing competing frames, not competing forces. Roger Martin suggests in one of his books “The Opposable Mind” that we need to develop “integrative thinking” as part of this need to change.

Innovation should be alongside as a equal partner to efficiency. It becomes efficient innovation and core to what you do and how you operate

Seeking constant efficiencies is actually slowing down our organizations. We need to do the opposite, to speed them up and capitalize on finding innovation opportunities quickly and then knowing how to scale them equally fast. We need to do this by developing the competencies and understandings of experimentation, piloting, prototyping in fast, discreet and measured ways

The worrying thing is any dynamics within the system are dominated by the slow components, and the rapid components simply have to follow along.

“Slow constrains quick, slow controls quick”.

The only way to ensure a speeding up is to be coherent on the purpose, clarify the bounds and governing principles that need to be enacted and evolve the organization design away from layers and hierarchy. We need to build up a series of inner networks that depend on each other but constantly reach out to connect, share and exchange but more within a organizational design that is flat but highly responsive and inter dependent to work well. This needs orchestration not hierarchy in its managing.

Simply by consciously working on all the dysfunction points within an organization will certainly reduce the tensions, reduce the ‘shearing effects’ and allow the organization in all its layers to ‘react’ and be allowed to come back into a balance, where innovation sits equally alongside efficiency, especially if both focus on outcome orientation and that certainly is not the current business way we often see today.

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Has anyone not come across some or all of these?

Dysfunctional leadership symptoms and those typical warning signs of dictatorial leadership, no feedback on performance, personal agendas, more ‘political’ compensation than ‘performance related ones, inefficient use of resources, empire-building practices, unequal workload distribution, too much management, fragmented organization efforts.

There is simply just too much talk, ineffective and incessant meetings, a lack of collaboration across departments, ‘selective’ low productivity when you are working way beyond the normal, feeling in a constant crisis mode, watching a morale deterioration take place before your eyes, the backstabbing, starving projects of essential resources and finally, working in highly stressful workplaces.

A pretty depressing list isn’t it? I’m sure you can think of a few more besides.
When you are up against some or all of these how can you feel trust, belief and be innovative? Partly from what I’ve been reading and from my own perspective let me offer some thoughts to reduce some of these unhealthy tensions organizations seem to have, that certainly act as real constraints for innovation to really take hold.

How can you break into this and design something different?
Recently a number of comments have triggered my thinking about this whole area of blockages that seem to not allow innovation to take hold in organizations the way it needs too.

The writing of Scott Anthony recently under the article “Negotiating Innovation & Control”, the book “Relentless Innovation” and stream of thought provoking views of Jeffrey Phillips wanting us to challenge the “Business as Usual” approach.

Then we have Gary Hamel in his new book “What Matters Now”  where he shares his agenda for building organizations, that can flourish in a world of diminished hopes, relentless change and ferocious competition. This is not a book about doing better.

This is an impassioned plea to reinvent management as we know it—to rethink the fundamental assumptions we have about capitalism, organizational life, and the meaning of work.

Each has a theme running through them in different ways, the need to achieve continuous innovation needs a massive change in mindset and in managing the ‘heart’ of the organization. This heart is unhealthy and will need new values, new processes and new belief systems.

You add in calls from John Hagel, John Seely Brown, Ranjay Gulati  and countless others, we are in need of a more radical agenda to rethink management, not just for innovation management.

The legend of the Gordian Knot

Some time back Chuck Frey, well known in innovation circles, wrote about the Gordian Knot. “For people the world over, the Gordian Knot represents the difficult, the intractable and often the insolvable problem. Today’s systemic business problems are the modern-day equivalent of this seemingly impossible challenge.

According to Greek mythology,  the huge, ball-like Turkish knot with no ends exposed was impossible to untie. An oracle had predicted that the first person to do so would become the ruler of all Asia. Thousands of people had tried, without success, to unlock its complex riddles.

Alexander of Macedonia, son of King Philip II of Macedon, solved this puzzle simply and very creatively – by cutting it in half with his sword, exposing its ends and making it possible to untie. Alexander the Great went on to conquer all of Asia, just as the oracle predicted”.

So how can we cut the intractable knot inside organizations and survive?
We all face increasing uncertainties and are having our trust battered. We are seemingly not rising to the challenges that seem to be growing in complexity in global and organizational context.Innovation has a vital role to play but it must be ‘treated’ differently.

Where do we start? Firstly we need to revisit the work on “adaptive enterprises and systems”. We need to find ways to deal with unpredictable, discontinuous change and make this more predictable for us to manage.

We lack often a real coherence of purpose; we lurch from one opportunity to another, from one quarter of results into another with often no consistency in our activities. Performance has been taken over by opportunistic behaviors.  Innovation often takes the real brunt of this.

Our intended strategy, moves suddenly into a deliberate strategy, and then somehow this gets abandoned or unrealized and slowly we replace this with a emergent strategy that is rapidly become our realized strategy that we present to the world, as a response to ‘factors outside our control’ for our often indifferent performance. Who really talks about the EXACT results achieved from innovation for instance? All we hear is just a general reference to it, to cloak innovation often in the ineffectiveness that lies within.

For innovation and many things going on within organizations they often lack a real coherence, they ‘signal’ inconsistent behaviors, especially within the organization. These bad signals simply build up all the tensions and dysfunctional aspects that middle order management and the organization in general has to mop up and cope with.

How can innovation thrive in this sort of chaotic mess? No wonder it never takes hold, it just has nothing ‘permanent’ to attach too and grow. Management needs a radical overhaul so innovation can be the vehicle for what is articulated but often poorly delivered on a consistent basis.

Context & Coordination needs designing in purposefully.

Again, where do we start? We start with ‘disconnect’ that organizations often have. The understanding of the underlying purpose of the organization beyond just making money and keeping the shareholders happy does need a deeper primary function, it needs re-articulating. Some organizations do a reasonable job of this but many simply don’t.

We need to restate our primary function and purpose far more in its societal contribution. We need to express the bounds as a governing set of principles that are known, reinforced and measured against. We then need to set about building in a consistent way, the capabilities that are able to produce the outcomes.

We need to build in the accountability into the roles that reflect that need to combine innovation, effectiveness and efficiency, that is needed so they can be managed equally side by side. We need to teach the ability to be adaptable and recognize the differences so as to actively manage the ‘creative’ conflicts and tensions.

Reduce the tension in the layers or structures

The really hard part of managing in larger organizations is in managing the layers and competing forces. Often we forget to reinforce acceptable behaviors, we leave role structures lose and incomplete and we set deliverables in often ‘woolly’ ways.

This just promotes uncertainly and it is not an adaptive organization in leaving this so open. These unnatural built-in tensions create this shearing effect. They grind against each other, like tectonic plates that force further disruption and upheaval.

These different layers actually require several levels of reconfiguration designed into the organization. One really critical one to address and to ‘kill off,’ is the pressure of time. Time horizons to achieve different tasks often cannot be ‘legislated’ or ‘dictated’ but sadly they are forced on reluctant innovators responsible for delivery of new concepts.

We need to re-establish the difference between goals– within a certain period covered (one year), objectives– attained later but are progressed within the period and finally ideals– those unattainable but clearly possible concepts, that progress at slower rates and go well beyond normal goals.

Innovation works within this environment, actually it will thrive.

Not just the incremental, but the radical, disruptive and breakthrough innovation craved for by the top management, can finally have a ‘decent’ time horizon to be managed through.

Planning needs to account for all three horizons and publically discussed, irrespective of the industry you are in, it does not matter if you are building planes or developing food products.

We really should stop pretending that innovation is not so hard and actually state it is often incompatible to much of what we perform on a daily basis.

The task of managing intangibles (unknowns) alongside tangibles (the known) needs greater appreciation of their complexities, and the difficulties of balancing the two for achieving  a ‘decent’ result.

Leadership, I believe, would need to understand innovation far more in this demanding environment of inquiry. No wonder it is often ducked and just vaguely talked about, about as much of innovation understanding is still poorly understood in its impacts and effect.

The opportunity of the network economy

Again, the realization of the growing web of networks that we are constantly engaging with, is our need to become part of a growing new more adaptive innovating enterprise.

We need to encourage more empowerment to engage with outside parties, to explore, to investigate, to bring in and then diffuse and disperse in new ways. For this we need to design around more absorptive capacity that I’ve often written about. (See   http://bit.ly/zdfmba).

Reducing activities and replacing these with outcome orientation

Innovation is no different from what we expect from efficiency or effectiveness; we want to see the outcomes.   We have struggled on many parts of this establishing of the really good metrics for judging innovation.

They seem to get lost within organizations. Part of the innovation activities has been assigned to some other cost centre, or the capacity was already established and thus accounted for, and we often don’t revisit these and break these down and assign these clearly enough to the different activities.

It is in new ways to capture ‘real costs’ we should revise our metrics, but into outcome orientation ones that show a meaningful ‘return’ on investments put in. So many different, more thought-provoking questions can be asked for a greater engagement in the innovation process.

Were the activities contributing to efficiency or innovation? We can judge these far better through the effectiveness of the outcome.

We need to balance existing performance engines for repeatable everyday tasks with innovation delivery engines for new activities. This split can help to make our organizations function more effectively. Vijay Govindarajan and Chris Trimble have offered some thoughts on this at the implementation stage, although this thinking still needs more examination and discussion.

As Scott Anthony points out in his article “Negotiating Innovation and Control’ on the different ways to balance tension, there is one, in my opinion, that needs deeper investigation and development and that is the ‘ambidextrous’ one.

This makes distinctions but links the parts of the whole organization by developing competing frames, not competing forces.I believe exploitation and exploration as natural break points within innovation. Roger Martin suggests in one of his books “The Opposable Mind” that we need to develop “integrative thinking” as part of this need to change but still work in these ambidextrous ways..

Ecosystems often reflect the shearing effect.

In any environment the ‘rates of exchange’ of the different components or constituents operate at different speeds. Interactions clearly occur far more at your own level of contribution, the different layers sometimes you are simply oblivious to or just ignore.

The ‘in-spite of’ syndrome often kicks in to explain sometimes surprising success. Sometimes though, something catastrophic does occur and then you do have to pay attention to this ( a merger, layoffs, threat of closure, withdrawal of funds) but the real reality is, different layers within organizations tend to be often simply oblivious, even impervious, to necessary change and just ‘does its job’ and it moves along, each actually constrains the others, not facilitating them as they could..

Maybe then, this is why so many organizations seem dysfunctional but do continue to survive, to limp along, until something really does disrupt their world, as the existing ecosystem just seems to allow different interactions and speeds. Can we not alter this though, perhaps in more thoughtful ways, rather than the ‘carrot and the stick’ approach or ‘fear and retribution’ methodologies often employed to achieve results?

The worrying thing is any dynamics within the system are dominated by the slow components, and the rapid components simply have to follow along. Slow constrains quick, slow controls quick. The only way to ensure a speeding up is to be coherent on the purpose, clarify the bounds and governing principles that need to be enacted.

Simply by consciously working on all the dysfunction points within an organization will certainly reduce the tensions, reduce the shearing and allow the organization in all its layers to ‘react’ and be allowed to come back into a balance, where innovation sits equally alongside efficiency, especially if both focus on outcome orientation and that certainly is not the current business as usual we see today.

Perhaps working on these dysfunctional spots it might free up some real, much-needed space for innovation to take a deeper hold.

It does seem with all the suggested emphasis on efficiency and effectiveness, if you accept this argument, it might be a good idea to have innovation alongside, as it does thrives more when there is creative tensions around!

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