Moving Towards Globally Integrated Innovation

There are so many books out there on innovation that it sometimes gets just hard to decide which to buy and read, to invest time into. I’ve got a growing stack of books sitting on my coffee table or in my e-reader file all shouting “read me, read me!”

Managing Global InnovationWell one I recently finished has been one of those rare books that got the Paul Hobcraft treatment; considerable underlining, scribbles in the margins, circles around some pages that I want to refer back too as quickly as I can. You can never achieve that same sense of ‘ownership’ and possession through the e-reader can you, or am I missing something there?

So the book that joined that elite pantheon to the innovation gods on my top shelf was one written by Yves Doz and Keeley Wilson entitled “Managing Global Innovation – frameworks for integrating capabilities around the World”, printed by Harvard Business Review Press. I really recommend it.

The Key to bridging your Global Innovation Gap

The book is all about providing the understanding of integrating your global resources to build and leverage a global innovation network. I think it does a good job in explaining the different parts, the considerations and the tougher aspects of making this work for you.

Ok, I’m a sucker when it starts off by discussing the innovation challenges, then starts climbing into chapters on optimizing the innovation footprint, then communications, receptivity and then how to organize for global projects focusing on collaborative and integrated innovation, it does draw you in.

I’ll leave you to explore this in your own time, if global innovation and integrating is your bag. Equally I think it will be more than helpful in thinking this fully through or recognizing gaps within your present operations.

What the book does for me

Why it is one of those books for me is where it keeps coming back and placing the focus, on knowledge attainment, seeking out receptivity, transferring and integrating complex and codified knowledge. This emphasis fits so much with my own passion and constantly pushing “Absorptive Capacity” that it felt like coming home, that reaffirming feeling. The difference was the book took you through a different level of journey and understanding to add a whole lot more in my own thinking around this area.

Collaborative diffusion, building distributed innovation ecosystems, compatible strategic ambitions, cultural compatibility and discussing the interdependencies all challenge your thinking. As the authors nicely sum up in Chapter 7 it is how the behaviour of decision makers needs to move from that in-built notion of “being successful by competing” on their individual level and changing their mindset for more collaborative innovation across this diverse and global network.

The authors suggest this new way of managing is a difficult one to adopt and sustain but suggest the best way, perhaps the only way, is through constant practice and having a positive reinforcement of what makes for successful collaborations. I’d also add that ability to experiment, to learn from others around you constantly and recognizing ‘winning and being successful’ is not reliant on just yourself, it is leveraging everything that is all around you that builds your experience and knowledge.

Globally Integrated Innovation

Connected WorldWe live in a world of huge diversity and dispersion of knowledge. There is a growth and constant push into new markets, emerging new competitors that are increasingly challenging us to find solutions to this management of global networks, both inside and outside our organizations in more integrative approaches to capture the ‘best’ of innovation.

Today’s present structures of the innovation organization, the systems required, the processes, the diversity of cultures, different mindsets and the focus on extracting the best from this mix of structure and resources is hard and complex.

The authors argue the scope and scale of the tasks should not become an impediment to action and suggest three dimensions of change to help in this. I’ll leave you to search for these.

They warn there is one huge caveat to achievement.

Senior management’s vision, their commitment and attention to this will not achieve this globally integrated network alone.  It is the recognition that failure to implement strategic change is often this lack of buy-in from groups of middle managers who remain happy with the status-quo or unaware of the need and rationale for the required change.

These gaps within organizations are due to the lack of dialogue, openly discussing threats and challenges and being inclusive in the implementation. This took me back, again, to my own arguments and suggested solutions to bridge that gap, through the Executive Innovation Work Mat.

“Knowledge is increasingly dispersed”

We return to knowledge in the wrap up within the book, where the authors have identified five radical shifts taking place that will lead to greater knowledge diffusion and diversity: 1) globalization and the opening of new markets; 2) increasing technological complexity and convergence; 3) demographic changes; 4) greater external pressures, in particular environmental concerns (and scarcity); 5) offshore outposts and outsourcing.

Knowing what makes up the complexities of global innovation and managing and harnessing this in dispersed networks is a real challenge and there is no better place to start than in picking up a copy of this book and working through it thoughtfully and thoroughly, to “organize, build and manage a global innovation capability from design to execution”

My final thought – beyond the previous boundaries of innovation

With innovation increasingly moving beyond its previous boundaries of simply leaving it to the scientists or marketing departments has long gone, for today and in the future, innovation is about open, inclusive, exploration and harmonization to extract the best.

Innovation has moved beyond products into new services, changing value propositions and business models and needs this constant reorganization around changing the innovation activities. Technology- based alone is not enough pursuing greater functionality; we are increasingly in the disruptive era of simplification, which captures far more of the imagination and where the increased movement of wealth generating opportunities lie.

Look at the effects of reverse innovation, jugaad or frugal innovation and where this has potential, the strong underlying movement in start-ups that are far more ‘needs related’ or serving ‘unmet needs’ through lean approaches than those in the past, of simply cruising along for opportunity with a vague business concept.

Everything has become so much sharper in why we have to focus our minds down, it is far more on what and where innovation can give us the next growth opportunity and that comes from all the diversity we can muster. Managing in the global innovation space is no different, it needs a dedicated focus and understanding, to find the unique mix that suits your needs and knowledge accessing and translating becomes the global unlocking key.

Can we overturn built-in innovation legacy?

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.