So how do you manage exploiting and exploring for Innovation?

Innovation Exploit and Explore to TransformSo how do businesses organise their structures to be able to simultaneously manage the needs to exploit and explore innovation?

In this post I wanted to explain my thinking through on this ability to be ‘ambidextrous’, knowing the difference of when to exploit and when to explore as essential to leveraging innovation, in all its forms and watching out for some of the traps in not managing this well.

Managing this, in all honesty, though, is hard to get the balance right but highly valuable if you do achieve it, it can transform the business. Many of our organisations struggle to manage both successfully as they tend to focus more on separation mostly in organisational structures alone as their attempt to become ambidextrous. It is far more than ‘just’ this.  Get the balance right across the organisation’s design and in its leadership management, it becomes a very powerful mechanism for accelerating performances by delivering significantly new innovation and equally sustaining and leveraging the core business you have today.

Recently I contributed a blog post over on the Hype Innovation Blog ” Balancing Exploitation & Exploration for Changing Performance” that opens up the subject but then extensively dives into three examples of Apple, GE and Google that are working in highly ambidextrous ways, pursuing exploiting and exploring in their own unique ways.

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Making Agility Compatible For You

Learning Agility 2Is Agility compatible for many working in established businesses?

“To be agile” is often a badge of honor. It conveys your flexibility, nimbleness and your ability to be adaptive. Agility is today going far beyond just being responsive,it goes into constantly adjusting and being versatile, modifying to meet rapidly changing conditions.

Yet this often seems the very opposite within many of our organizations and the very people employed within them. They seem rigid, inflexible and determined to stay ‘resolute’ to the established ways and routines built up over years. They love stability, it is their bedrock but equally they do need a greater fluidity to their performance and structures as well.

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Striving for the innovation balance: between exploring and exploiting.

Exploit and ExploreWe never seem capable of adapting as well as we should do. Adapting always seems a work-in-progress, or it is often something where we are simply making little or no progress!

We often stay ‘stuck’ in the way we do ‘things’ around here, never seemingly able to break out into something new or different.

To adapt we need to open ourselves up to learning and adjusting our organizational ‘form’ in new ways.

In business there should be a constant battle to reconfigure the assets and extend the existing capabilities. Yet often these stay ‘static’ not learning or improving.  In our innovation activities there is an even greater pressing need to build into our thinking the ability to find more dynamic capabilities. It is a constant innovator’s dilemma to think through and get right.

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Building the new dynamics into our capacity to innovate

Exploit and ExploreDo we know what are the dependencies and requirements for building and sustaining your organizations innovation success? How do you sustain innovation, is it more through the structuring of everyday work, by creating a particular set of social rules and resources that foster specific routines? Or something different?

We work really hard at maintaining these re-occurring processes, never willing to extend and push them in different and new ways. We have actually become very static in our approaches and learning, we are not learning anew. We often simply end up with incremental innovation that might just ‘nudge’ the growth needle but does little more than sustain us in the present and can be ‘contained’ in a tidy process that makes many, including the ‘bean counters,’ very happy until someone changes the game.

Then we need to think differently but this is usually far too late.. As demand is more volatile today we need to experiment, explore, learn and adjust. What becomes more important is the ‘work to be done, and how we go about tackling this and not the work done’ where we often simply ‘default too. Surprisingly Adam Smith identified this important difference in work way back in 1776.

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Anticipating disruption by preparing adaptive pathways to respond

Option pathways

disruptive innovation pathway options

Option pathways are those viable alternatives available when you are suddenly confronted with the need to change.  By being proactive, anticipating and structuring the options ahead you can be more prepared for disruption, you can respond with more thoughtful reactions. Have you ever considered option pathways?

Having available options so you can react to sudden changes, as more sketched out scenario’s that are representing possible variables, the better prepared you might be to respond thoughtfully.

Preparation for blunting or neutralizing possible attacks, vulnerabilities and changing business conditions is more than helpful, because you have made some investments in different possible options and far more ready to respond in thoughtful ways and not simply in those knee-jerk reactions, simply needing to respond. Considered response, with significant parts already thought through can safe significantly on ill-considered ones.

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Making those increasing connections

I am always looking for innovations connections. This last week I’ve been working around some different themes that grew in interest the more I investigated them, both in their importance and messages.

I’m undertaking a rather exciting approach to describing innovation, within a collaboration venture, that gets more exhilarating and inspiring as we explore, clarify and document. Regretfully I can’t share this here at present but I certainly will when it gets to that point of ‘release’.

Some of the different areas or themes I’ve been investigating have flowed from one set of enquiries that have taken me into another and then yet another. These simply get my innovation juices flowing and really are allowing me to make so many new connections. Here is just a few of these in this last week that have emerged from some of my researching that provide a host of thoughts:

Leaders & Laggards

In this group of investigations I started in trying to gain a better perspective of the discussion of leaders and laggards and what differentiates them. Timely to these investigations has been some recent studies by Capgemini Consulting and IESE Business School with a recent leadership study “Managing Innovation: An Insider’s Perspective”

I’d suggest the slideshare presentation is well worth taking some time out to view and understand as it covers views from those leading and managing innovation in their organizations and how they think about the innovation function http://tinyurl.com/c9o7cuw

Then I have been reminded of the continued great work of Chris Zook and James Allen, both partners at the consulting firm, Bain & Company, in their article “The Great Repeatable Business Model” http://tinyurl.com/d483eqq

The message of differentiation and the level of focus on clear specific areas of innovation and its management makes a real difference for separating leaders and laggards.

Those that endure and adapt

In the article by Chris Zook and James Allen they speak of differentiation that tends to wear with age and often the real problem is internal. It is complexity and in this a complex organization forgets what it is good at, it proliferates, it losses key people, it moves away from its core business, it losses focus and it begins to have that ‘great disconnect’ between upper management and the front-line employees. It seems to me the organization just simply begins to break down and lags even more in performance and returns.

They go on and suggest a lack of consistency begins to kill the economies of scale and equally retards the organizations ability to learn that adds up to them struggling with increasing complexity and fading differentiation.

I was looking for some of the enduring points of what needs to be put into place. This was offered “When a company internalizes a set of principles, the message no longer gets garbled. A shared point of view, core beliefs, and a common vocabulary improve everyone’s ability to communicate and foster self-organization.” They go on and suggest “this increases the speed of business, you capture more growth opportunities ahead of competitors and accomplish more per unit of time.”

I also liked one comment they made that “up and down the organization, information slows and grows distorted.” I would suggest without a clear knowledge capturing and dispersing structure for information this is not the only thing that gets distorted, often it is the real values of the innovation activities themselves. Those products or concepts that emerge eventually as completely out of shape from what was intended initially, due to this complexity within the decision and approval process, become totally different before something eventually gets ‘out of the door’ in finished design. So much gets lost or ‘distorted’ along the way and the end result becomes far too compromised on the customer need it was intended to resolve.

Innovation effort may not be worth it

Equally I always enjoy the thinking of Vijay Govindarajan and in a recent article along with Manish Tangri entitled “Why that innovation effort may not be worth it” http://tinyurl.com/847ah4c they discuss two key factors of motivation and competence and how you can put your organization and its leaders to the test.

They ask two great questions “How hungry are you for innovation?” and “Is the initiative set up for success”. I did like the point made of “a leader provides direction under ambiguity” and how many of our leaders would be truly comfortable in doing this?

Looping back we need to ask  how far are you from your core?

We come back to increasing complexity, straying from our core, communicating mixed messages, showing a clear lack of decisiveness.  If your innovation message is not sharp and convincing up and down your organization, or even understood by your customers you eventually lose out, you become even more of a laggard and allow others to slip away into clear leaders.

Part of our need in organizations is to stop breaking down the parts, layering on that increased complexity. We should be designing the innovation framework and system to clarify and inspire more. We need to reinforce more on where the key differentiation points are. We need to be sharper in our understanding of true differentiation and stick to this.

The key here is the real need to simplify and focus down within organizations.  Also we need to seek consistency wherever we can, in communications, in our strategic intent and in our dialogues to clarify. We tend to do the opposite, we make it too complex and this is killing innovation, killing growth, killing organizations. Above all we need to work up and down the organization with some clear, compelling messages that give clarity, allows for the necessary linkages and make sure the parts reinforce one another.

The last part of my walkabout in my research was “Creative Destruction”.

I recently wrote a blog “The Innovating Era: Creative Destruction or Destructive Creation?” http://tinyurl.com/dyy964s and in particular the destructive creation part and how this was destroying more than what was coming in its place. I finished with this comment: “All I hope is it will let us make sure we put the emphasis back far more on the “creative” innovation part and not the ‘destructive’ nature we have moved towards recently”.

Chris Zook has just written on this “When Creative Destruction Destroys More than it Creates” in the last week in an HBR blog http://tinyurl.com/7pe8qvf and makes an important point (in my mind) that “the extinction of once-great innovators is less often caused by technological or market evolution, and more often by self-inflicted wounds and slow cycles of decision and adaptation.”

He brings us back to the point “it is internal complexity that turns companies into lumbering dinosaurs.” The suggestion is, if we can’t keep ourselves clear on simplicity and focus and really tackle complexity as this is the “silent killer of profitable growth,” and “the greatest inhibitor of adaptability”.

Leading the way does falls to leaders.

My last extraction was from another lead and laggard viewpoint:  “A leader doesn’t tell people what to do. A leader helps people understand what needs to be done and brings the people and resources together to make it happen”

We need to focus on our greatest strengths but to do this we do need to understand them. It seems to me, so many leaders surprisingly don’t have a clue on how and where innovation can contribute in lasting differentiation, where the growth should be coming from or how to galvanise the organization to be simply on the same page to make sure it can happen.

We need some consistency in how we set about innovation.  Sometimes what simply scares me is that this basic task is often missed off the leaders agenda to actually make sure it is happening, often because they has not been fully involved or understood their role in this.

A Rubik Cube Approach to Innovation

I’m sure we have all come across the Rubik Cube, a 3-D mechanical puzzle, invented in 1974 by Erno Rubik as one of the world’s best-selling toys.

The classic cube has six faces covered by nine stickers each offering a solid colour (white, red, blue, orange, green and yellow). The cube has a pivot mechanism enabling each face to turn independently, thus mixing up the colours. For the puzzle to be solved you must achieve that each face is to be made up of one consistent colour.

It was suggested the cube was originally built to aid students to understand 3D objects but actually Rubik’s actual purpose was solving the structural problems of the parts moving independently without the entire mechanism falling apart.

Innovation is equally a puzzle with moveable parts

We need to see Innovation as an entire structure where we constantly need to move the parts. We always want to seek alignment, perfect alignment. That dream of achieving all, within that specific aspect of innovation we are attempting, is fully lined up and then we are content. Impossible!

What we fail to realize the total structure within innovation is always turning; it is always altering its ‘face’ to adapt to the changes we need to adapt too. We can never achieve perfect alignment, the makeup of innovation is constantly changing, so what we must do is keep moving the different ‘faces’ around to meet at best, a temporary alignment. That is the best we can really do.

Permutations are infinitesimal within innovation

Unlike Rubik’s cube where you have 239,500,800 ways to arrange the edges, it does seem like innovation! In the Cube you have eight corners and twelve edges and eight ways to arrange the corner cubes. Seven can be orientated independently and the orientation of the eighth depends on the preceding seven giving 2,187 possibilities. You can even flip eleven edges independently with the flip of the twelfth depending on the preceding one, giving 2,048 possibilities here.  They suggest there are forty-three quintillion positions and perhaps even more but you are getting the ‘permutation’ picture of the Cube and perhaps of innovation!

The Move Notation

Attempting to align anything needs movement, a sequence of moves. Well if you think about it to achieve a certain innovation ‘state’ you need to bring a number of aspects or faces to closer alignment but these do need a planned sequence of moves in most cases. Relying alone on serendipity just may not work.

There are solutions to the Rubic cube that need less than 100 moves and in July 2010, a team of researchers including Rokicki, working with Google proved the so-called “God’s number” to be 20. I think you will agree there are many consultants offering the equivalent “God number” of ways to solve innovation, their “omniscience” moment.

I sometimes kid myself I’ve crack innovation only to recognize minutes later I had forgotten something or not fully accounted for it in my concept -it just keeps me going even more.

We need to take care we are not tilting at windmills

There is an episode in the novel Don Quixote by Miguel de Cervantes. In the novel, Don Quixote fights windmills that he imagines to be giants. Quixote sees the windmill blades as the giant’s arms, for instance. A relevant part of the novel that I sometimes feels relates to me and innovation states:

Yet Innovation is a consistent challenge, sometimes another millstone seemingly around our necks!

Yes the Rubik Cube feels often like innovation, you change one part and it has its consequences on another.  When you reflect on all the permutations required in innovation you recognise it is a constant, evolving, ever-changing puzzle. For me the enjoyment of the Rubik Cube is to keep thinking and moving around the different parts. I’ve never been able or patient enough to solve it but like innovation it still fascinates me. The difference is unlike the cube which can be solved, innovation as such, cannot. We can only arrive at a given point, and then it changes again. What keeps me motivated is moving the different parts so we do arrive at an improving situation but never a complete one. We need to keep moving the innovation parts constantly.

The best we can do is work consistently to attempting to align as much within the innovation puzzle (processes, culture, people, functions, concepts, technology etc) and get it as close as we think we can and push through the idea, constantly pivoting as we go, to achieve a better solution than before.

The quest is never-ending.

We can’t stop searching, we also can’t achieve perfect alignment for innovation but we can alway be constantly moving towards a certain harmony, that allows us to make sure we are making progress on where we were that time before.

Innovation is a puzzle, even if we felt we had got to that ‘aligned’ point I just bet you something will come along and mix it up again. A change in the market, a merger of two different organizations and their cultures, a new technology breakthrough that will all keep us constantly turning the different faces of the Innovation Cube to try to get back to that (illusive) ‘steady state.’

All we can do is keep turning those different faces of innovation and get closer to ‘alignment points’ but never, it seems, achieving the perfect alignment, that ultimate moment unlike the (simple) Rubik Cube. Perhaps the answer does live within the wind that drives the windmills.

References taken from Wikipedia, the free online encyclopaedia