Two Critical Components Of Your Innovation Ecosystem
Written by Henry Doss, Contributor – Forbes –
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
T. S. Eliot
Last week I talked about five key reflections to consider as you build out a strategic framework and measurement strategy for your innovation ecosystem. If you followed through on these suggestions, you reached a critical point: You are not looking at the output of your organization and you are not looking at existing measures or conventions regarding measurement. You are focused on organizational, cultural and structural issues and you are being intentional about finding new, useful innovation indicators. Essentially, you are in the T. S. Eliot place: you’ve circled back around to where you started (no clear direction or ideas) — but with the aid of strategic reflection, you now “know the place.” What you know is: You need to look at your organization through a different lens. The choosing of this lens is a critical step in moving in the right direction.
Around you are all the elements of any complex organization, with its history, its people, its culture, its customers and its many different stakeholders. Your task is to increase, nurture and create innovation in this existing complex system. And as you look around at what makes up your organization, there should be one clear question:
“Where do I start?”
You start first by reminding yourself of this: Any framework that you use to understand your organization is a fiction. It is a tool you create to see the world better, not a truth that has revealed itself. And any paradigm is also a constraint, whether willingly chosen or just assumed. Pay attention to the constraints you have on your thinking, chosen or imposed, and recognize that whatever construct/framework you might pick as your tool for understanding innovation in your organization can both guide and limit you. Paradigms give and take in equal measure, and we sometimes forget about the “take” part.
All that being said, in our firm’s work on the “Rainforest Model” we posit a framework for thinking about organizations as being comprised of two structural parts: Assets (Hardware) and Culture (Software).
ASSETS: In our bipartite model, there are four principal organizational assets: people, professions, physical plant and policies. These assets function like the hardware of a computing system: they tend to be fixed over time and are changed on a relatively slow scale. They are the “processing” part of the organization, responding to inputs and delivering output. Most organizations have some variation of all of these hardware components and this part of the system is what gets the most attention — because it is the most visible.
This – hardware — is the easy part of innovation.
CULTURE: The cultural features of an organization in our model are: Diversity, Extra-rational Motivations, Social Trust; Rules of the Rainforest; and Interpretation of Rules. These elements function like the software of a computer system. They are the inputs, the instructions and the “code” that determines what the system can deliver. They tend to be complex, error-prone, in need of constant adjustment and “updates”; they are often a bit mysterious, because they operate behind the scenes and are often misunderstood. And they often get the least attention.
This – culture — is the hard part of innovation.
Assets and culture interact with each other to produce innovation, but it is the natural tendency of organizations to focus on the asset side. This is because actions on the hardware side – the asset side – are more easily measured, seen, displayed. It’s easy to throw money at an incubator, a tax incentive, a building. And doing this allows an organization to point at something “real” and say: “Look, we are being innovative.”
But these hardware assets are not worth very much without the software – the culture – piece. Absent trust, an incubator will not be very innovative. Absent willingness to fail, accelerator programs will not produce much acceleration. Absent the cultural elements that create innovative thinking and innovative dreaming, hardware investments are generally more show than substance.
This is why it is critical that strategic thinking, planning, conversation and execution be informed by a model that places the appropriate emphasis on innovation culture, relative to innovation assets.
There are several advantages to adopting this bipartite point of view — assets and culture – of innovation:
First, this framework can help you to focus on the hard part of innovation: The Culture. Oftentimes, innovation strategies are focused on the “asset” side of this model. The result is fiddling around with job descriptions, creating new innovation policies, building innovation “spaces” and so on. While none of these are inherently counter to innovation, they are at best low-hanging fruit; at worst they distract time and energy from the real work of driving cultural change.
Second, you might find yourself doing better strategic thinking about innovation. Adopting this framework gives you a shared organizational lexicon that can dramatically speed up thinking and planning. In every strategic conversation you can ask yourself: “Am I talking about assets or culture?” And answering this question will help you determine if you’re focusing on real change, or less-important change.
Finally, this framework will ensure that culture – the most critical piece of innovation – is on everyone’s agenda. Again, it’s easy to get distracted from doing hard work, through the allure of the less complex. Driving innovation is a matter of staying focused on culture changes (software). Yes, you upgrade hardware elements and, yes, you do pay attention to hardware maintenance. But it’s in the software that you’ll find the opportunity for differentiating change.
Assets and culture are mutually dependent, and the true innovation culture is one that is robust in both dimensions. This means that everyone is paying just as much attention to the cultural elements as they are to the more easily quantified asset elements. Easy to say, but very, very hard to do.
So, you might be saying something like this: “It’s all well and good to talk about “culture” in innovation, but what exactly is it? How do I measure it? How do I even talk about it?” Exactly.
NEXT WEEK: The Cultural Elements of Innovation: One by One
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