Case Study - Experts Propose a Process for Increasing Innovation

Most great ideas for enhancing corporate growth and profits aren't discovered in the lab late at night, or in the isolation of the executive suite. They come from the people who daily fight the company's battles, who serve the customers, explore new markets and fend oft the competition.

In other words, the employees.

Companies that have successfully made innovation part of their regular continuing strategy did so by harnessing the creative energies and the insights of their employees across functions and ranks. That's easy to say. But how, exactly, did they do it? One powerful answer. we found, is in what we like to call innovation communities.

Every company does it a little differently, but innovation communities typically grow from a seed planted by senior management-a desire for a new product, market or business process. A forum of employees then work to-gether to make desire a reality.

Innovation communities tackle projects too big. too risky and too expensive to be pursued by individual operating units. They can be created with little additional cost, because no consultants are needed. After all, those in the midst of the fray already know most of the details relevant to the project.

Innovation communities are a way of giving new shape and purpose to knowledge that your employees already possess. The detailed discussions that take place, led by se¬nior managers, often represent a company's most productive and economical engine for increased profits.

Here, thcn, are seven key characteristics that we have identified as being part of successful innovation communities.

CREATE THE SPACE TO INNOVATE. Line managers and employees occupied with operational issues normally don't have the time to sit around and discuss ideas that lead to cross-organizational innovation. Innovation communities create a space in which employees from across the or-ganization can exchange ideas.

Each year at food retailer Supervalu Inc. 35 to 40 mid- and director-level managers break up into four teams to discuss strategic issues suggested by execu¬tives in the different business units. The managers discuss issues outside their own areas of expertise and work on their leadership development at the same time. Over periods of five to six months, they hold electronic

meetings at least weekly and meet in person at least five to six times, all while continuing to perform their regu¬lar duties.

GET A BROAD VARIETY OF VIEWPOINTS. It's es¬sential to involve people from different functions, locations and ranks, not only for their unique perspectives, but also to ensure buy-in throughout the company afterward. In¬novation communities focus on creating enthusiasm as well as new products. At Honda Motor Co. innovation groups in the US draw members from sales, engineering and de¬velopment, and from different business units across North America. Some companies, like General Electric Co, involve customers and business clients in the new-product discussions as well.

CREATE A CONVERSATION BETWEEN SENIOR MANAGEMENT AND PARTICIPANTS. By definition, innovation communities can't work in isolation: To create sustainable cross-organizational innovation, it's important that ideas flow to senior managers. If they don't, innova¬tions will tend to have limited, local effects that don't ben¬efit the organization as a whole.

But establishing effective strategic conservations is per-haps the most challenging factor for the success of innova¬tion communities. For example, they require that truth be allowed to speak to power. If participants are inhibited, ideas that result are likely to be limited in impact, affecting a few units instead of the entire organization.

Discussion shouldn't be without limits. Senior manag¬ers should set the topics and keep discussions on course, because "blue-sky" conversations. while fun, generally waste time.

PARTICIPANTS SHOULD BE PULLED TO JOIN, NOT PUSHED. Members need to be enthusiastic about participating. Employees can't be forced to reveal their thoughts or be imaginative.

Immediate rewards, like cash, usually drive people to focus on winning the prize instead of following the often-twisting but ultimately satisfying path to successful innovation. Instead, try explaining how the forum's work has the potential to benefit the organization, its customers, or broader social goals.

Questions for Discussion

1. How do innovation communities promote an open system?

2. How would the use of innovation communities help companies to learn from both success and failure! Discuss.

3. What type of organizational structure is represented by the use of innovation communities? Explain your rationale.

4. To what extent does the process to create innovative communities rely on the characteristics of organic or-ganizations? Provide examples.

5. To what extent is the process of creating innova-tive communities consistent with the model of innovation?

6. How does the process of creating innovative com-munities overcome the challenges of innovation? Explain.