Now Reading: You can innovate in large organizations; The Other Side of Innovation

There is a popular narrative among a newer generation of employees/leaders that it’s very difficult, if not impossible, to innovate in large organizations, and through this narrative a lot of entrepreneurial thinking and action develops, and terms like “big company disease,” come about. This book is a great read in challenging that notion, I think effectively, and backing it up with research, examples, and pragmatic steps. In fact, after reading it, it seems more clear that it’s hard to innovate outside a large organization.

Innovation, what’s the definition?

I’ve been playing close attention to this wherever I go, and I’m seeing congruence:

  • Victor Montori, MD ( @Vmontori ) at the Mayo Clinic said to a group I was in, “Innovation is a novelty that adds value.”
  • Authors Govindarajan and Trimble (I’ll follow The Economist’s abbreviation hereafter: G&T) say it is : “ideas + execution”
  • Tim Brown, in “Change by Design” (I’ll review next), confirms this from the Design Thinking world : “Too much emphasis falls on the first half of that proposition (“Innovation is a good idea executed well”). I have seen countless examples of good ideas that never gained traction for the simple reason of good execution.”

This is where the book sits, on “the other side,” which is executing and ultimately commercializing / taking to a market a good idea. Bigger organizations have the latter capability, if done well.

G&T state the inherent conflict that exists in an organization:

You can’t ask the group that is in charge of today to also be in charge of tomorrow, because the urgent always squeezes out the important.

And labels the two groups in a helpful way – the “Performance Engine” and the “Dedicated Team.” Put in this context, it’s understandable that the part of the organization that is responsible for the reliable return of value, with ever-increasing incremental improvement, is not positioned well to temporarily break that pattern and reboot. The implication is that they probably should not, and further, people/innovators should not see or behave in a way that treats this relationship as adversarial:

One person against “the system” is an extraordinarily bad bet.

I think the framing is very helpful, to create platforms and a discussion for “what is the way to work with the Performance Engine?” G&T talk about everything from the way a Dedicated Team should be chosen, to the way it is named, compensated and measured (avoid creating a “mini-Performance engine” – they say).

I realize looking back on my experience that I have been in several innovation initiatives in large organizations that had features of the best practices described in the book. A lot of it is common sense to great leaders, some is helpful detail, such as the way you measure and compensate Dedicated Team members, based on ability to learn from mistakes quickly (which, as I have said here many times is what patients want from their health care system, not perfection).

The book significantly includes a well-documented review of the literature relevant to each section, so if people (like me) are wondering where the evidence is, it’s well described in the appendix. This is extremely helpful. My other saying is that the business world understands behavioral health way better than the medical world, in my opinion….

Changing up your business is not easy

The case studies included are helpfully posted on the book’s website, and the illustrate that an innovation that seems natural for a customer really takes a lot of work. I was particularly intrigued by the Wall Street Journal (Dow Jones & Company) Case Study, which describes quite well how that organization was set up to perform in the creation of the printed page, and what it took to integrate online services.

Ironically, the challenge of this integration can be seen in the Harvard Business Review’s own online offerings today – take a look at the image below (linked from here):

Need help? Chat with customer service right now….not reallyHarvard Business Review‘s web site

It says: “Chat with customer service right now,” and then when you go through the effort of entering your name, e-mail address, and reason for chatting (not shown), you are greeted with the non-greeting. This comes about because even though you may have “activated” your print subscription, you may not actually be able to access any articles behind a paywall. It’s not clear that “activating” in this case does anything, and if you navigate through the site here and there, you can see the telltale signs of Dow Jones & Company Performance Engine – the print operations segregated from the online operations, attached with a thin wisp of HTML redirects.

I only bring this up to show that even a model organization, one that actually promoted this book, can find it challenging to adopt the approach described by G&T. So this is the other side of the other side, it still takes discipline. However, there are enough examples that I’ve read here and experienced in my own work that I know it can be done, and I’ll say probably more impressively than that narrative about the big organization says.

Both the Economist and Harvard Business Review produced videocasts about this work that you can see here.

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