Often organizations are weighed down by legacy. This comes in many forms; in its culture, in its history, its core markets or products, in its systems, structures and processes built around innovation practice.
Today, we are confronted with a very different global market place than in the last century. National borders and regulations built to protect those that are ‘within’ in the past have rapidly become a major part of the ‘containing- restraining’ factors that are rendering many previously well-respected organizations as heading towards being obsolete and not in tune with today’s different world where global sourcing determines much.
They are increasingly trapped in declining markets, starved of the new capabilities and capacities to grow a business beyond ‘traditional’ borders, so this means they are unable to take up the new challenges that are confronting them. They see themselves as reliant on hanging on to the existing situation as long as they can, often powerless to make the necessary shifts, failing to open up, finding it increasingly more than difficult to find the ways of letting go, of changing. They are trapped in legacy.
Legacy can choke an organization in so many ways to limit expansion.
How can we break out of this and rethink? When we begin to investigate legacy to cut lose and design differently, it begins to infringe, it challenges, it simply attacks what has taken often years to build and those most involved become defensive and fit to hang onto what has been established, as it feels familiar. It feels like ‘their’ legacy is being destroyed and what they have fought hard to gain know needs protecting. Most organizations never feel fully capable to address legacy, they even will deliberately design duplication into their operating model, they will recognize they are far from optimal and more often than not, live with the consequences. In today’s world this is a real mistake.
The world is changing; you can’t afford to keep heads buried in the sand like an ostrich, although that’s actually a myth of when ostriches are faced with attack by predators they bury their heads. New global adversaries are altering our landscape and forcing us to become increasing competitive, forcing us to often reluctantly alter our established ways. We can’t afford not to refresh and renew on a constant basis. We need to not just adapt, become more agile but we must think through what, where and how we manage. We need to build a more dispersed network of connections within our organizations to gather and synthesize knowledge that have potential value and future worth.
Today, innovations new knowledge lies elsewhere
Increasingly we need to open up our organizations to different learning, experiences and knowledge. The growth of open innovation has been part of that. Equally we are recognizing increasingly, that basing everything in one central place is becoming severely limiting. We need to adopt a more genuine openness that increasingly relies on a collection of dispersing and gathering points, where knowledge obtained has been closer to its markets and customers to provide greater potential of discovering future value. Places where you have been able to gather these understandings and begin to quickly ‘translate’ them across a dispersed, highly connected networks of expertise, that can work on transforming this knowledge into new revenue opportunities that meets that identified need before others do, often set in 24 x 7 time to achieve the result.
Any journey starts with ‘letting go’
Control gives comfort; we constantly design this into the system. The larger we are, the greater the controls built into the system it seems but somehow, controlling for control sake, does need replacing; we need to let go of more than we realize to reduce the constraints placed on our business. We need to replace ‘command and control’ built up over numerous years with something different.
We need to begin to ask a range of strategic questions that question our legacy, so we can be released to move forward.
So what do these strategic questions cover?
I can’t do justice to all the avenues of this strategic inquiry but I can offer some of the most critical that will inevitably fuel others in your own specific situation.
Taking as an example an existing organization, caught increasingly in declining or stagnating markets, who are forced to address many important issues in designing into the organization, new, more diverse capabilities, that have significant ‘legacy’ issues running through them, let’s take a look at some of the most important ones to address.
- Legacy issues must be a significant ‘part and parcel’ of what needs to go, separated out from what needs to be kept and modified, or simply kept in place as it is strategically essential to the well-being and functioning of the organization. Managing legacy out of the innovation system, can be highly liberating.
- Where do you hold your core knowledge? – Is this centrally, perhaps in a home market or do you reflect on how you are going to disperse this across a more decentralized organizations. What has on-going value, what does not and can be dispensed with?
- What does it take to diversify your knowledge? Pushing knowledge to new centres needs carefully re-designing. You do not want to end up having even more islands or silos of knowledge; you need to think through carefully a more integrated (global) model. It needs to build in my 6F framework of formality, flexibility, facilitation, form, function and focus. You need to take out what is irrelevant.
- Taking any decision to ‘attract’ and ‘disperse’ knowledge you must set about building the competencies, confidences, trust and network to bring this together. This ‘gelling’ needs lots of communicating, collaborating, and consistent feedback mechanisms that are well-built into any new system. Don’t try and adapt old structures methodology to a radical change, it needs redesigning from the bottom up. Get rid of as much of the legacy as you can.
- Redesigning a new culture becomes essential. It needs to be an adapting one, one that places demands on all within the networked system, it needs an overarching set of innovation culture and environmental principles. It needs clear governance structures and well thought-through innovation processes and systems that allow innovation knowledge to flow where it simply needs to go. Again absorptive capacity principles are important to design and build in here. Don’t overlay practices that were based on being closed for ‘command and control’, design new ones that allow knowledge to simply flow and open up, in structures that can ‘encourage and compliment’
- Any ‘system’ has constraints. As you rid yourself of some, others quickly fill the space. It is how you manage constraints will determine you ability to make transformational change. The devil they say always lies in the details, and as you configure and design a new integrated model you have to constantly examine these trade-offs. There is lots of divergence and then convergence needs to be within the thinking this system through. Taking a whole lot of old practices out of the system is essential as they have no value or place in any new dispersed network. It simply works differently.
- When you are integrating in new ways requires certain like-mindedness of the people within the dispersed network. Building new teams that are spread out is hard, dedicated work. The recruiting, retaining and reallocating can make or break any new initiative in how they work together. Working within dispersed teams is demanding due to the make-up of cultural, education and time differences. You need increasing reliance on collaborative technology, creating as many face-to-face opportunities as possible but more importantly having projects where it becomes the unifier and common identifier. This unifies far more the cultural differences and tensions by focusing on the project outcomes itself, personalities are supplanted by the higher goal and motivation of working on ‘meaningful’ work . Tough as it may seem, root out the blockers, dispense with those not prepared to work in teams.
- Costs accrue for a fair time in any starting up and transferring of knowledge, before the benefits really ‘kick-in’ and accrue in greater innovation capability. The working through the design of a new integrated but dispersed structure, in its logic and its make-up of the parts that will contribute into building increased innovation capacity and capability all need to ‘add up’ to larger than within the existing design. Don’t delay this potential by weighing it down with inadequate commitments and lukewarm understanding. Commit to a radical redesign and be realistic on when the (higher) returns are likely.
Managing complex knowledge and dealing with codified knowledge
As you learn to manage increasingly outside one central resource, you quickly come up against one of the biggest challenges within ‘dispersed innovation’. What is needed to be put in place for you to capture and translate knowledge that can give increased value and (eventual) commercial benefit. Clearly that is the goal of any significant change in design but acquiring, assimilating, transforming and exploiting knowledge comes in many different ways.
Partly this depends on your industry and how you have allowed knowledge capture to evolve. Certain industries need to manage their knowledge differently. For instance the chemical, automotive or electronics industry have built up over many years significant ‘codified knowledge’ that is simply necessary to have in place. Other industries like consumer goods, pharmaceutical or the healthcare find it much harder to codify as they have a much more complex knowledge that requires greater understanding of differences to exploit each market.
This is not universal in its practice but knowledge should be valued, recognized and treated, partly in traditional ways but I would argue, it can be broken down in radical new ways where old constraints (legacy again) can be challenged in light of advances in technology, regulation, protection, intellectual property reinforcement, than in the past.
There are huge implications in the managing of innovation knowledge. The incentive to learn, absorb and translate knowledge is its unique value to you for ‘new to the world’ outcomes.
The essential need is to design for agility, flexibility and leveraging.
There is a need in any framework design in building a new integrated innovation network that it needs to have agility and flexibility. It is more than likely that in the past design, the legacy within existing systems needs radically dismantling and redesigning to reflect the multitude of changes happening. These need to account both internally, in making a new structure for crucial decisions, based on dispersion principles but also on the external, in how you will be reacting to competition and the challenges being presented in changing market conditions.
Increasing knowledge dispersion, shorter cycle times demanded to meet and respond to ‘breaking’ opportunities requires you to effectively manage these across your network in speedy response cycles, having in place a highly focused management and clarity of what is important and needing to worked upon. Even harder strategic choices, evaluating what gaps are needed to be filled in capability constraints, the ability to project and build a new collaborative culture play significant roles in any design and managing across this network.
Any new design has to carefully reflect on overcoming existing obstacles as well as anticipating and accounting (as best it can) new barriers. You consistently are working towards the maximisation and leverage of this new dispersed knowledge and what it can collectively bring in its contribute into that ‘greater’ competitive advantage than the old system was able to achieve.
Balancing legacy and new designs
The whole legacy issue needs those certain degrees of reciprocity, a moving or paring back initially to then move (significantly) forward. If you can’t understand the clear reasons why it is crucial to change the organizations ability to innovate across a more diverse network then simply don’t do it.
To make such a commitment, to make this sort of move, to a dispersed integrated innovation network requires huge commitment, in its sustaining and management of a growing complexity. But it is often absolutely essential to make these commitments in rapidly changing circumstances and global challenges to seek out innovations potential that lies across the globe. The more you are networked and closer to emerging opportunity, the greater chance to translate this (quickly) into new innovation value to meet different and common market needs.
We all have come to recognize today, that “all knowledge does not reside within one place” and how we set about dismantling and redesigning our organization for tapping into global innovation knowledge will determine our future place in any competitive race, the one we all are seemingly caught up in. Don’t let legacy be the reason to hold you back.