How to integrate innovation in your organization…with your IT dept.


I’coming back on an article titled “Teaming Up to Crack Innovation Enterprise Integration” and issued in the Harvard Business Review in last november. It has many interests : it’s about the vital problematic of innovation, it shows this so-called innovation can only be distributed and rely on sharing, it shows how such principles can be put at work within companies and explain the role of IT.

• The principle

Growth rely on two factors : innovation (ability to propose new products that meet the maket’s expectation and conceive new processes and business models) and integration (ability to make separate entities work together in order to lower structural costs, higer overall production capacity and discover new opportunities).

• The constraints

Integration and innovation share a common point : they are not in most of corporate DNAs. Innovation because it breaks with traditional habits and is more often stifled than promoted, integration because it goes against local optimization that it tries to replace with a systemic approach.

More, because they suppose more exchanges and an increased work on information, these logics need a strong support from IT departments and yet the article mentions a survey that shows that if half the IT depts are in charge of integration and a third of innovation, very few of them are in charge of both.

• Issues

On the innovation side the problem is not the generation of new ideas, companies being full of them. But they need to be identified, harnessed and resources have to be allocated to develop them. The search for ideas must take place both inside and outside the company, and ideas can come from anybody.

On the integration side, efficient operations need transparency which is very hard to bring into organization because of the logics of silos and the lack of courage from manager.

• Operating mode

The authors propose to create two groups

• A distributed innovation group

These people are not themselves innovators but facilitators. Scattered in the organization they also scan what’s happening outside and serve as internal expertise centers.

• An integration group

In charge of giving an horizontal consistency to local initiatives, sometimes disorganized or even competing. It develops management practices making it easier to integrate the initiatives in the company’s business.

• The role of the IT dept.

It’s to provide the tools that makes it possible to articulate global and local. It’s also to provide a framework and the tools for experimentation. And to end, it’s to make it possible for people located inside and outside the organization to interact together. In viewpoint, IT depts will have to acquire skills about both innovation processes and social networking tools.

So three requirements :

– deploy platforms made of reusable elements instead of a traditional information system with poor functional perimeter.

– external services : in order to focus on innovation and inegration, IT depts will more and more rely on external services providers. To stay up to date and benefit from the best talents, it’s better to put specialists in charge and don’t spend resources to maintain things. In other words, hosting one’s information system on premises will become less and less justifiable.

– web 2.0 : IT depts must get used to it and understand what these tools can bring for communication and sharing purposes, in order to gather, use and reuse information in a more productive way. Web 2.0 tools will make the link between adhoc and formalized activities.

• Examples

They are not that new but we can mention them again.

• Procter&Gamble and its “connect and develop” program about which I have bookmarked some links here in the past. Result : the ideas catched from the outside increase by 50% while the productivity of the R&D doubled.

• Nokia designed a collaborative process involving clients, suppliers, academics, inventors and its own innovation labs.

• Nokia a mis en place un process collaboratif incluant ses clients, ses fournisseurs, des académiques, des inventeurs, ses laboratoires d’innovation.

• Royal Dutch Shell and its “GameChanger” program. In addition to R&D which was working on short term, distributed innovation groups working with 10% of the R&D budget worked on long term issues. Everyone can propose an idea in order to fund a proof a concept. Since 1% of the R&D budget goes to GameChanger, the initiatives coming from the program incubate 30% of its projects.

• To be noticed…

Anticipation is key. The authors note that, too often, new tools are deployed and, then after, people learn to manage differently. It’s a real weakness of these integration initiatives. Companies have to anticipate and visualize how things should be, what would happen, how people should work and the implied changes in order to facilitate them.

It’s important to think globally, not locally.

Il faut penser systèmiquement et non localement.