How do large organisations innovate?
There is more room now than ever before for start-ups and completely new business models. At the same time, many existing organisations (particularly large ones) are struggling with their inability to respond rapidly to all kinds of new developments. Their size makes them subject to a degree of inertia; it’s hard to break free of the multitude of rules and procedures that are a feature of these types of organisations.
Many of them are attempting to get ahead of the competition by using the start-up principles described by authors such as Eric Ries (The Lean Startup and The Startup Way, for instance). They also establish internal, but fairly self-contained innovation departments to minimise any ‘burden’ caused by existing structures and processes. Unlike genuine start-up teams, these innovation teams are made up of employees on the payroll of these large organisations. They are invited to participate in the innovation assignment concerned, and do not run any financial or other risks if the team’s results are disappointing. Yet they still have to be able to think and work like an entrepreneur – like a start-up.
The lean start-up in a nutshell
The core of the lean start-up method is a cycle that involves building a ‘minimum viable product’, measuring and testing it in the marketplace (validation) to gain input for learning about your product, then starting the whole process all over again. Listening to your customer is essential at this stage; in the words of serial entrepreneur Steve Blank: ‘Get out of the building!’ The knowledge that you gain from this often leads to a ‘pivot’ – the modification of your product or your market segment. This adjustment to your original idea requires significant agility and ability on the part of the team. One of the dilemmas confronting an effective innovation team is that it must be highly motivated and go all out to achieve its goal, while at the same listening to the market and asking itself, ‘Whose problem are we solving now?’ There are numerous examples of start-ups that were sure they had a fantastic product, only to find out that the market had no need for it. In our experience, the quality of the team is often more important than the original idea. A good team is open to learning and changing, while a less effective team may stubbornly stick with a product or service that no one actually wants.
How do you assemble an effective innovation team?
Corporate innovation teams are generally made up of enthusiasts and employees who love new projects and plans. This makes sense; they have often indicated in their development plans that they are keen on such challenges. Analysing the personality profiles of these employees reveals that they are on average more extroverted than many others, love new things and teamwork, experience greater difficulty in completing things, and are averse to procedures and details. Many innovation teams are more concerned with starting an innovation rather than finishing it, scaling it up and marketing it. In addition to this, their internal clients often have a very different perspective and are focused on scalability, product/market combinations, margins and market share. We’re aware of many keen innovation teams that failed to take their internal client’s corporate perspective into account in their progress presentations, as a result of which their projects were shot down.
Are diverse teams more successful?
Research indicates that there is a correlation between a team leader’s personality and the team’s effectiveness. The most successful teams tend to have motivated, creative and outward-looking leaders. However at the same time, the foregoing arguments make the case for greater diversity in the composition of innovation teams. Who are the finishers, for example, and which members dare to pose critical questions, point out an idea’s disadvantages, or query its feasibility? And more importantly: who is capable of taking the internal client’s perspective? There appears to be a clear correlation between a team’s diversity and its ultimate success, but diversity has to be managed. Without this management, widely varying perspectives or approaches may be experienced as overly annoying or startling.
Eight tips for innovation teams
In the process of consulting with hundreds of teams, we’ve gleaned a number of success factors:
- Ensure that there is diversity and a variety of personalities in a team – this improves the team’s output, particularly when it comes to innovation.
- Differences between team members are not always pleasant and can complicate collaboration, except when you are aware of them and can value and benefit from them.
- Being aware of the other person’s perspective increases understanding and makes teamwork easier. Therefore, gather knowledge on each other’s perspectives, for example by using a good personality questionnaire, like Facet5 TeamScape.
- Consider the ‘fit’ between someone’s formal role on the team and their personality. Those who have a role that is closely aligned with their personal preferences and qualities almost always experience greater success and enjoyment in their work.
- Look at your product or service from your internal client’s perspective; consider the feasibility, risks, margins and markets, so that you don’t have any unpleasant surprises during your progress meeting.
- Ask your client the following question: ‘What question should I really be asking?’ You’ll be surprised by the answer.
- Accept that a ‘pivot’ is part of the innovation process, no matter how frustrating it may feel at first.
- Scaling up is different from starting up. It requires greater discipline, the ability to establish procedures and structures, and – probably – different people on your team.