Most remarkably innovative startups begin as a bad idea. A bad idea that a couple of people bat around, collaborate on and iterate until they turn that bad idea into a solid solution to a problem or an opportunity they've identified.
Those few people -- passionate and excited about their idea -- draw others to their startup. Now, what was two or three people becomes eight or ten. If the team excels at execution and marketing, customers come flocking and the organization grows. Ten employees become 50, 50 become 100, and soon what was once a bad idea batted about by a few has become a company.
Somewhere in this process a few important things slip through the cracks. A critical defect makes it into production. An important client's request gets dropped because, "I thought you had it." The company decides to organize to ensure that things do not slip through the cracks again.
Reporting structures are created, roles and responsibilities are developed. Duties and job descriptions are assigned. Slowly and quite organically, that innovative, collaborative and adaptive team morphs into a structured institution.
In their efforts to solve the problem of communication and coordination, however, these innovative startups unwittingly create another problem -- loss of agility and creativity. Thinking seriously about sustaining innovation gets short shrift. Is this the unavoidable future for any group that grows?
Traditional organizational models for structuring a company addressed different problems from many of the problems businesses face today. Traditional organizational models were designed to reduce or eliminate variation. They were designed for control and conformity, not for sustaining innovation. Henry Ford didn't want his line workers innovating a new transmission design on the shop floor. He wanted them to build more cars, faster. The delivery mode of the day created large batches of uniform products quickly.
No one should be surprised that when these traditional organizational models are applied today, the organization becomes uniform -- and less innovative.
Sustaining innovation requires new organizational models
Today's businesses need an organization that is innovative, fast-paced and disruptive. But what is the organization model to get that result? After all, you are in the business of creating innovative products, not innovative organizational models.
That's OK; I am in the business of creating innovative organizational models.
There has existed for some time a different model for organizing large numbers of people to achieve a goal -- a radically different model that allows for freedom and innovation. This is the design of social and political movements.
Movements align large numbers of people with a typically small set of deeply held values and a few guiderails that define the boundaries. Examples of movements include the Black Lives Matter movement of today, the civil rights movement of the 1960s, the democratic revolutions of the Arab Spring and of 1776. The 16th century Protestant Reformation is another example. Each of these movements had a small set of deeply held values at its core and a loose structure of organization.
In the civil rights movement of the 1960s, Martin Luther King Jr. had a set of values he believed in and sought to achieve: among them, equal rights for all people. He also had a clear set of guiderails: nonviolent, civil disobedience. If you held to these beliefs and stayed within these guiderails you were part of that movement. People and organizations that were outside of the values or the guiderails were a part of something else.
The goal of most movements -- at least in the beginning -- is less about control than about the spreading of the ideas and beliefs of that movement.
The more universal the ideas and beliefs of a movement are, the greater is their appeal to people from all kinds of backgrounds with a wide variety of experiences. The set of common, core beliefs holds this disparate group of people together and engenders a bond of trust and comradery. The wide net increases the likelihood that the movement will be revitalized by new perspectives. How to sustain innovation is built into how the movement is organized.
Knowing your purpose
Now let's look again at businesses and the problem of creating and sustaining innovation. The goal of most businesses is to solve a problem for a profit.
Employees don't work, create or innovate for you -- they don't get behind a business with their whole heart and mind -- just because you pay them or just because you make great products. They work, create and innovate because they believe in your purpose -- a set of ideas your company holds dear. Innovation and creativity need engagement, not just compliance. By forming around purpose, business and IT leaders can create organizations that foster and sustain innovation.
Once you have established the core set of ideas, the next step of building and sustaining innovation requires you to let go. You need to let go of the structures and models created in the industrial revolution to control and curtail variation. These models might work for a while, but if you really want to be fast-paced and disruptive -- if building and sustaining innovation -- is important to your organization's success, then you need something different.
Today, innovative companies are trying out a number of new organizational models. Nothing has really become the one right way. There is the holacracy approach made popular by Zappos. There is an innovative flat model used by Gore, the makers of Goretex. Pixar believes it has hit on a model for fostering and sustaining innovation, and Google's model scales great. At this point in management history, you will need to do some exploration of your own. Since this is not your core business, get some help. There are books on Zappos (Delivering Happiness), Google (Work Rules!) and Pixar (Creativity, Inc.). Start with these. Reach out to people at those companies or to industry experts like me.
What Leo Tolstoy wrote about families at the start of Anna Karenina is true about innovative and nimble organizations, "All happy families are alike; each unhappy family is unhappy in its own way." All nimble and innovative organizations have at their core a deep sense of purpose that guides the actions of every person in the organization. The extent to which you are willing to provide a deep why and let go of the old organizational models that eliminate variation is the extent to which your organization will retain its nimble and innovative advantage.
About the author:
Joseph Flahiff is an internationally recognized leadership and organizational agility expert at Whitewater Projects Inc. He has worked with Fortune 50 and Fortune 500 companies, government agencies, startups and publicly traded firms, where he has been recognized as an experienced, pragmatic and innovative adviser. He is the author of Being Agile in a Waterfall World: A practical guide for complex organizations. Learn more at www.whitewaterprojects.com.
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