Ambidextrous organizations are coming, are you ready?
Insights - 01.07.2020
The COVID-19 crisis forces companies to innovate. But companies are not built for innovation, they are built for efficiency. Ambidextrous organizations simultaneously combine operational excellence with increased innovation.
New innovation trends: ambidextrous organizations and people-centric innovation
In a recent talk during Innov8rs Connect – Talent & Teams, Peter Daels linked two trends in innovation management: the ambidextrous organization and the central role of people in innovation.
He explains why people need to be the greatest focus in innovation, and why they are also an organization’s greatest innovation challenge. Finally, Peter provides a comprehensive outline of the ways that you can create your own Innovation Dream team through the analysis of employee skills and profiles.
The first study Peter references is a 2020 analysis of the trends in innovation management over the past few decades. The study, performed by innovation consulting firm Creax, includes results from 15,789 scientific papers screened using AI software. The software helped researchers to sort information by topic and pull from a variety of sources without the bias inherent in human-based research.
The study determined that the trend of Innovation Management started in 2000, as increasing levels of technology were becoming more widely available to the public. Around 2000 we also saw the introduction of Nokia cell phones, digital cameras, computer display monitors, and detailed computer games. A lot has changed in 20 years.
Although the creax research focused on a broad range of both high- and low-volume publications and pulled information on both trending and cold topics, the two that Peter chose to focus on, ambidextrous organization and people, are unique in that they currently have low publication volume, but they are very trending topics.
Fact #1: Business organizations are not built for innovation, they are built to optimize efficiency.
You may be familiar with the term ambidextrous. When referring to individuals, it denotes the ability of a person to perform detailed work with both hands without a loss of quality.
Similarly, organizational ambidexterity refers to an organization’s ability to incorporate efficient management of today’s business (Operational Excellence) with adaptive management to cope with tomorrow’s changing demands (Innovation Excellence).
Hallmarks of Operational Excellence
Operational Excellence is characterized by its commitment to the maintenance of the current state of affairs of the business or organization. Characteristics typical of operational excellence include:
- Operate within the organization’s comfort zone: Operational Excellence focuses on fine-tuning the performance engine.
- Incremental innovations: Organizations focused on operational excellence prefer to innovate slowly and in little steps, optimizing their efficiency.
- Driven by daily business Unit Leadership: Internal operations are organized, and roles and responsibilities are clearly delineated.
- Short-term focus: Operational excellence focuses on the effects and goals for current and short-term operations, not the long game.
- Current cash cows: An organization focused on operational excellence will focus on business that is already established and reliable, rather than spending resources breaking into new areas.
- Traditional Key Performance Indicators (KPI's): Key performance indicators are quality &/or financially-oriented, short-term goals with the expectation that business will continue as usual.
- Leads to commodities: Operational excellence helps to ensure a stable and reliable income for the organization through the production of commodities that have proven valuable.
Characteristics of Innovation Excellence
Innovation excellence is based on the idea of changing the standard operation of an organization through the introduction of new products, processes, and goals. Organizations that incorporate innovation excellence typically display the following features:
- Radical/ disruptive thinking: Organizations with innovative excellence are driven by change & will display outside-the-box thinking that encourages growth in new directions.
- Transformational innovations: The organization will develop innovations that affect the entire operational structure of the organization.
- Driven by strategic leadership: For an organization to innovate successfully, leadership must take responsibility and provide reliable and enthusiastic for innovative change.
- Long-term focus: Unlike operational excellence, innovation excellence models, and analyzes future trends in order to create timely innovations for long-term, sustainable growth.
- Future cash cows: Rather than investing in the tried-and-true core business, an innovative organization will consider opportunities that explore the potential for income outside their typical business.
- Traditional KPI's less effective: Since innovation is based on entirely uncharted ideas, it is virtually impossible to predict or gauge innovative businesses using traditional Key Performance Indicators.
- Differentiator: An organization that exhibits a healthy level of innovation excellence will stand out from the crowd. It is these organizations that provide new products and services that define new markets.
In order to achieve ideal operation, an organization must exhibit a high level of ambidexterity that can incorporate both operational excellence and innovation excellence.
People for Innovation
Fact #2: Innovation starts with ideas generated and implemented by people. Still, we don’t often succeed in converting ideas into value with impact.
Peter defines innovation as a means by which business is transformed by creating value for the organization such as revenue growth and operational efficiency. This transformation can be effected through new products, services, operations, or business models; however, the most important aspect of any innovation process is the people.
He supports this with a research project entitled “Benchmarking Innovation Impact 2020”, performed by Innovation Leader LLC and KPMG LLP. The study, published in 2020 is based on data collected from 215 respondents over the course of 2019. Of these 215 participants, 25 were from “role model companies”, companies that are considered leaders in innovation.
According to the study, both the primary challenges and fundamental keys to success were people-based. Role models found that the main challenge to innovation in their organization was trouble recruiting individuals with the high demand skill sets that they required for their innovation teams. Similarly, their greatest challenge to scaling innovation was human capital.
However, the same study indicated that the primary enabler of success in innovation endeavors for role model companies was having the right team or type of employees. In fact, approximately half of all respondents considered people to be the most important consideration for successful innovation.
It is clear from this study that people on the innovation team take a central role in the success or failure of an innovative endeavor. For this reason, it is important that any company which plans to expand through innovation must invest in people.
Innovation Dream Teams
Fact #3: 79% of innovation outperformers have dedicated innovation teams.
One of the most important aspects of innovation is the need for a team dedicated to innovation. When your employees are distracted and wear several hats, they will not be able to bring their strengths to bear on the challenges and solutions of the innovation process. The benchmarking study outlines this clearly.
While companies that were not innovation role models typically had small innovation teams with 1-9 members, the majority of role model organizations had innovation teams of 500+ members.
The companies who have invested in dedicated innovation teams are better able to accelerate their capacity to innovate and scale up than their less committed competitors.
Similar to top-performing sports teams, innovation requires dedicated leadership in order to function effectively. The key leadership aspects are the same:
• Strategy and Vision: Create a clear idea and means of enacting it.
• Coach: Provide clear, useful, and concise feedback, and be sure to provide a high level of encouragement for innovation. Mistakes are part of the process, and investment of resources is key to innovation success.
• Team: Invest in a dedicated team whose only role is to focus on the creation, development, deployment, and scale-up of innovative ideas and products.
• Complementary Skills: Create a diverse team with a variety of skills and knowledge.
Not only do you need creators, but you also need advocates and implementers. Be sure to people your team with individuals whose skills and knowledge complement each other.
What Skills do you Need to Build an Innovation Dream Team?
So, why are some people more innovative than others? Because traditional self-assessments have little value in the evaluation of skills, Peter and his team went to Prof. dr. Frederik Anseel, Professor of Work Psychology and Behavioral Economics at Ghent University. The cooperation with prof. dr. Anseel, who currently serves as Professor of Management and Associate Dean Research, at the UNSW Business School Sydney, led to INNDUCE.me, a unique assessment tool mapping the innovation skills of people in an objective & scientifically based manner.
Based on the results of INNDUCE.me organizations can build their own Innovation Dream Team. When constructing your Innovation Dream Team, Peter recommends selecting individuals with three particular skills: The Ideator, The Champion, and The Implementer.
The Ideator is the initial creator of the idea. Individuals with this skill will excel in:
• Problem Recognition
• Problem Analysis
• Generating Solutions
• Evaluating All Ideas
• Selecting the Best Solution
The Ideator is the creative entrepreneurial force in the innovation process, but it can be easy to populate your team with Ideators and overlook the other critical skills necessary for a successful Innovation Dream Team.
The Champion is the most overlooked skill in the innovation team roster but is critical to the success of your innovative endeavor. A dedicated champion will ensure that you receive the support and enthusiasm you need within the organization to make your idea a reality. A good champion will:
• Help the Organization to Gain Enthusiasm
• Collect Organizational and Partner Support
• Create a Compelling Story to Build a Coalition of Supporters
• Obtain Leadership and Partner Approval
• Procure Financing
While the creation and implementation of your innovation are important, your Champion will ensure that you have the financial and organizational support to fund and grow your project.
Finally, the Implementer takes on the organizational role from the beginning through implementation. This is the skill that will keep all your projects operating on time, within budget. To operate successfully within an Innovation Dream Team, the Implementer should:
• Realize the Opportunity for Development
• Design and Build Prototypes
• Regularly Communicate the Project’s Progress
• Monitor and Follow-up on Implementation Activities
• Ensure Optimization of Time and Resources
A successful Innovation Dream Team will incorporate individuals who exhibit a combination of these complementary skills.
What Your Innovation Dream Team Needs
In order to create the perfect Innovation Dream Team for your organization, you must proactively seek out the perfect balance of skills and processes to foster and grow ideas.
Your Innovation Dream Team must have individuals who exhibit the three main innovation skills: Ideator, Champion, and Innovator. These innovation profiles must work within the team simultaneously from start to finish, not in sequence.
All three innovation skills may be present in some individuals, which makes them ideal for selection as an Innovation Coach to help direct and encourage the team through the innovation process.
Through exhaustive research and experience, they have discovered that it is the people who make innovation successful. The right combination of individual skills and leadership can help make your Innovation Dream Team a success that generates value for your organization.
As Peter says, ”The magic happens when you mix up people.”
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