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The Challenge and Opportunity of Open Innovation – p1

Open innovation has been defined as the exploitation of both internal and external knowledge to accelerate the process and expand potential commercialisation of innovations (Chesbrough et al, 2006). It can be traced back to Silicon Valley tech start-ups in 80’s and 90’s, where superior R&D budgets of organisations like Xerox and Bell Labs were unable to compete with resource deficient smaller businesses. Studies into these anomalies noted a more collaborative/open approach to innovation was evident, this has now become an excepted norm regards general management and strategy within many technical businesses, especially software (Gassman, et al, 2010).

Organisations becoming concerned where the next innovative idea will come from have begun to explore the option of open innovation and crowd-sourcing. Some organisations are concerned with venturing into an entirely new innovation process. Others did not fully appreciate the risks, or opportunities, engaging external resources with innovate. Open innovation principles stem from classic innovation principles such as idea generation and selection (Campbell, 1965). As with all processes, success relies on implementing suitable methods to organize, monitor and manage progress.

Organisations understand of the potential for idea-generation through the open innovation as one of the significant advantages: the sheer volume of prospective ideas. As organisations’ main experience of cultivating ideas is internal; open innovation has been used build high-quality ideas banks. Rather than being constrained to the finite number of employees to produce ideas for existing problems, external experience and intelligence could be utilized. The logic is simple: if anyone can provide solution ideas, the statistical principle is, the more ideas generated, the better the quality of the best one is likely to be. The advantage to casting the net widely to capture significant quantity of ideas may mean the average the quality of ideas falls; yet the possibility of one to be spectacular is greater.

Secondly, lesser-known advantage of open innovation is that the value of ideas generally increases with the level of variability. Studies found organisations believed only employees possessing the industry and strategic knowledge could judge on validity of ideas. Yet opening idea-selection process externally could generate significant value, harnessing distinctive expertise and perspectives, in selecting most successful ideas.

 

 

Campbell, D.C. (1965) “Variation and Selective Retention in Socio-Cultural Evolution,’’ in “Social Change in Developing Areas: A Reinterpretation of Evolutionary Theory,” ed. H.R. Barringer, G.I. Blanksten and R.W. Mack (Cambridge, Massachusetts: Schenkman Publishing, 1965).

Chesbrough, H.W., West, J. and Vanhaverbeke, W. (2006) Open Innovation: Researching a New Paradigm. Oxford: Oxford University Press.

Gassmann, O., Enkel, E. and Chesbrough, H. (2010), The future of open innovation. R&D Management, 40: 213–221. doi: 10.1111/j.1467-9310.2010.00605.x

Leadership Is About Doing, Not Saying

We’ve all seen those inspirational posters that started to appear on office walls in the 90’s. We’ve heard the inspiring mottos, lovingly lambasted in films like Men in Black; “The best of the best!” I’m sure that many businesses across the western world have spent millions on agonising over the latest buzzwords, management speak and the slogans. Just imagine how much time and money has been expended morphing these stated goals to keep up with the latest trends. Businesses may start with pushing for “Customer Satisfaction” then move to “Total Customer Satisfaction”, before reaching the point of aiming for “Customer Delight”.

 

Organisations have taken these beautifully created phrases and words and adorned the walls of numerous offices. All of these have been designed to with the intention of modifying employees’ behaviour, as we all know when we read the mere act of reading the pronouncement of “strategy and values” will instantly change deep seated attitudes. Writing “Trust” or “Collaboration” in big letters on a poster will not change opinions towards each other and especially the organisations leaders.

 

Talking a Good Game

Regardless of the near obsessive focus on the words some may have, a very large problem exists: there is rarely any correlation between the words agonised over and displayed on walls and the behaviour of the organisations leaders. I don’t think I’ve heard of a company that hasn’t espoused or valued “integrity”, “respect for employees”, “quality”, “customer satisfaction”, “innovation” and so on. As, in essence, all businesses are striving for the same behavioural objectives, these slogans lose meaning with employees and customers.

 

Enrol is a good example. Before their very well publicised collapse in 2011, they had created a very professionally produced show-reel on Enron’s ethics and integrity. This highlighted their philanthropic activities and community work; the character of the Executive team were of particular note. Clearly Enron had spent a considerable sum on “packaging” the messages and marketing these values. In the end it didn’t have any bearing on what was to follow. As you will be away many on the top executives subsequently ended up in prison or indicted.

 

Leadership Development

In a study by Business Week in 2006, involving more than 11,000 managers across 8 large organisations in the USA, looked at the impact of leadership development programs in changing and shaping leaders’ behaviour. Each of the eight businesses espoused different values through very different words describing their ideal leadership behaviours.

 

The study discovered that the different words or phrasing made absolutely no difference in determining the behaviour of the leaders. One of the business in the study have spent thousands of hours crafting the precise words to best express its view on how their leaders should act, this appears to have been in vain. The first draft, if grammatically correct may have been just as valuable as the final polished version. The study found the deciding factor as to the effectiveness of any initiative was how seriously the participants took the feedback and training. Those who made a personal commitment to improvement and followed up with their fellow attendees became more effective. The Leaders who dutifully attended sessions, listened but took no immediate action or made no personal commitment were found to develop at the same level as those that had not attended the presentations or workshops.

 

Actions Speak Loudest

The businesses that that are the most successful at living up to their espoused values and produce ethical employees, including leaders, realise that the key to success – or failure- is always the people, not the words that are in the corporate literature. Rather than expending time feverously revamping the slogans and behaviour posters to find the precise words to capture the desired leadership conduct. Businesses that ensure that leaders get (and act upon) feedback from employees and customers, those who actually observe the leadership behaviours, see tangible results.

 

The preoccupation of modifying performance appraisal forms and scoring mechanisms was found by the study to provide little value at the higher levels of the organisation. It suggested that business leaders should focus their energy on providing coaching and learning from employees removing perceived barriers.

 

Ultimately, leaders’ actions will be more powerful message to employees about values and the competence of the leadership than the words used. If the actions of the leadership are clear and purposeful, the words that emblazon the walls of the offices will be of very little importance regardless of how ‘prefect’ they may be. Conversely, if the leadership actions are at odds with the wonderfully crafted words displayed the walls of the offices they will look more ridiculous.

Ask Your Direct Reports Their Opinion and They May Hate You Less

Probably your direct reports don’t hate you, Things are not that bad. It might be mild discontent. But, what could explain the fact that they don’t seem to get it. If only they could stop driving you crazy and just do their job like they are supposed to. Is that the attitude you had when they first joined your team?

“Just do your job and don’t drive me crazy and we will get along fine.”

If this has been your general approach toward your employees, I urge you to consider pursuing a role as an individual contributor, not a leader. It will serve everyone better.

When an employee first joined your organization (or you took the reins of an existing team), you shared expectations, communication preferences, point of view, and boundaries. All with hopeful anticipation and valued camaraderie. “Welcome to the team,” you likely said.

So what happened?

Over time, things got sloppy. Perhaps you got used to each other and replaced communication with assumption.

“She’s been here long enough, she knows what I mean.”

The layman’s term for this is, ‘lazy’. It can happen even when everything is humming along; costs contained, profits up, technology has magically fixed your problems, and you are getting home at a decent hour. The effective leader knows; the garden still has to be tended with a diligent and caring eye.

Although they seldom like to hear it, I frequently remind clients, “Your manager knows more than you.” This has nothing to do with intelligence or common sense. It is about perspective. Your manager attends different meetings than you, receives different reports, is under different scrutiny, and is responsible for more. These are not things a leader should tell their direct reports because at best it comes across as a humble brag, at worst it is sanctimonious.

It is rare for your direct reports to see things from your vantage point. They view the world from their perspective, so it shouldn’t come as a surprise to learn the reverse is also true. Your direct reports know more than you. They are closer to the end-user. They get the latest tactical information in real time, well before your excel spreadsheet turns from yellow to red. Every day they see successes and failures that you never do, or if you once did, you’ve long since forgotten.

When you stop communicating, collaborating, and soliciting opinions, you break an implicit compact. The point of a team is the realization of a strategic imperative. It is the recognition that the accomplishment of something important cannot be successful without the diversity of thought, experience, skill, and perspective. Without that you do not have a high-performing team, you have a group of people who barely tolerate each other, and there is no strategic benefit to that.

So, go ask your direct reports their opinion. Let them know ahead of time that you may or may not agree with or act on what they share, but you still want to hear their opinion because you value their perspective.