What’s the People factor in your Innovation equation?

Innovation is the hot new buzzword of our time. Everyone seems to be badly smitten by it. Going by the popular literature, those who don’t innovate are assured to perish sooner than later. Given that previous silver bullets Total Quality Management of 80s, Business Process Reengineering of 90s, and the most recent of them all – Outsourcing in early 21st century – have still left a LOT to be desired, there is clearly enough interest and expectation if Innovation can finally deliver! Coupled with a world still edgy after major Global Financial Crisis and an uncertain Euro zone, and we have perfect conditions to embrace Innovation in all shapes and forms – right from black magic to a holistic way of doing business – even if it still turns out to be a whimper.

Wait! Of course, it would be blasphemy to even as much as suggest that innovation could turn out to be a whimper! Like all of you good people, I too believe innovation is the key to sustainable competitive advantage in the increasingly uncertain and hyper-dynamic world. But, let’s just rollback to 80s for a moment – didn’t they say the same about TQM in those good old days? Or about BPR in 90s? Or about outsourcing until the last decade? Each generation came up with its own silver bullet fervently believing in its potent powers to slay the demons of poor corporate performance (in whatever metrics what you measure – be it topline revenue, or bottomline profits, or marketshare, or employee engagement and so on). And yet, history – the roughest of them all teachers – has reminded us time and again how naïve and wrong we were all along! All these management systems – well thought out and backed by years of irrefutable research and solid data – were heralded as the ultimate panacea in their heydays. However, they lasted only till the next crisis! The next sets of crises were much more powerful, much bigger and more ‘new’ than the previous ones, and like the stains of bacteria that grow resistant with each new antibiotics, they were invincible with the then start of art methods. Clearly something was amiss.

Here’s my take – all these systems were exactly that – just systems! They sought to fix the processes without really putting people in the middle of the equation – even though all the work was carried out by humans. I think we took Frederick Winslow Taylor a tad too seriously when he said, “in the past, the man has been first; in the future, the system must be first” in The Principles of Scientific Management back in 1911. Of course, we forgot to read the next two lines right after this sentence, “This in no sense, however, implies that great men are not needed. On the contrary, the first object of any good system must be that of developing first-class men; and under systemic management the best man rises to the top more certainly and more rapidly than ever before”. We simply delinked people from process and attacked the process performance problem without acknowledging that if people are not motivated enough, the performance improvement payoffs might either be short-lived and might not sustain at the same levels in the long run.

So, is Innovation is also going to meet similar fate and become another exhibit at the Museum of Management Systems? Maybe, or maybe not! Depends on how we change our strategy this time. If we continue to pay lip service to innovation as yet another management mantra, I am sure we will see another new management system in next few years. But if done right, we could certainly create better results that could last much longer than previous generations of management systems. Actually, there is just one thing that needs to be done right – get the people factor back into the equation.

Somewhere in mid-90s and beyond, we started throwing around the words ‘knowledge economy’ to represent the shift towards an economy that primarily dealt with ‘knowledge’ as opposed to, say, manufactured products. It signaled the Negraponte Switch from ‘atoms’ to ‘bits’. The term ‘knowledge’ worker’ came to be known as the move from blue-collar worker to white-collar worker  to pink-collar worker and finally to what I call as the ‘round-collar worker’ – someone who makes money from their ‘brain’ more than their predecessor cohorts of workers, and often have slightest regard for a formal workplace power structure and thrive in informal and empowered environment. They are on the top of their game, and don’t require any hierarchy to support them. Of course, the ’round-collar’ in their moniker comes from the quintessential round-collar tees that not just signify a more relaxed taste in dressing-down, but also brings a sense of confidence and swagger that typically comes from someone who knows their stuff.

Another less visible but far more important thing to note here is that in last couple of management systems, this is perhaps the first time that the worker has sprinted ahead of the system, and has become much more important – so much so that they has made the system redundant. And needless to say, the existing top crop has no clue how to deal with it!

Now let’s get back to the innovation story.

Imagine going back into a modern workplace, full of knowledge workers and telling that from tomorrow we have a new management system, and it is known as innovation. I will leave you to visualize rest of the conversation in your minds :).

So, how do we get it right? Unlike the previous generations of workers, where each of the management systems was imposed top-down, I don’t think this approach can work anymore in flat and egalitarian workplaces of today. Innovation process must be driven bottoms-up that unleashes individual human potential for creativity and challenging the status quo. So far, we hired and groomed professionals who ‘complied’ with our laid-down processes – we hired those who ‘fitted’ in our culture, we promoted those who furthered our existing thought process. Power hierarchy in those organizations was perfectly designed to promote compliance. There was hardly any place for non-believers, doubters, questioners, diagreers, dissenters or harbingers of change.

The current and upcoming generation is anything but that!

How are you going to channelize their talent and energy into something that works for you? How are going to enter the short-term vs. long-term battle? How are you going to embrace a higher risk/reward equation? How are you going to deal with the brash and young workforce that might give you maximum a few months as an employer before going out across the street and creating a new startup that might eventually buy you out a few years down the line?

By writing a new management system that once again puts checks and balances and builds a system of mistrust which saps their energies and stifles their creativity, or by trusting in their abilities and further liberating them? Depending on what approach you take, you will be deciding whether innovation is going to work for you, or will just end up becoming yet another exercise in futility. Eric Douglas has some thoughts on how leaders can make or break the people factor by how they comes across to people. Richard Branson places much higher premium on getting the right people for entrepreneurial success, which is perhaps strongest form of innovation, for nothing could be as audacious and risky as taking an idea and creating a business ground-up. I had blogged about some of the reasons why people don’t innovate in organisations (but rather end up leaving them and do it on their own!).

Goran Ekvall has identified ten innovation climate dimensions that could serve as a great starting point for organizations to self-assess how ready they are to embrace innovation:

  1. Challenge How challenged, emotionally involved,and committed are employees to the work?
  2. Freedom How free is the staff to decide how to do their job?
  3. Idea time Do employees have time to think things through before having to act?
  4. Dynamism the eventfulness of life in the organisation
  5. Idea support Are there resources to give new ideas a try?
  6. Trust and openness Do people feel safe speaking their minds and offering different points of view?
  7. Playfulness and humor How relaxed is the workplace-is it okay to have fun?
  8. Conflicts To what degree do people engage in interpersonal conflict or ‘warfare?”
  9. Debates To what degree do people engage in lively debates about the issues’
  10. Risk-taking Is it okay to fail?

There is enough literature, theory and evidence to suggest the people factor is core to the culture of innovation. Yet, I continue to be amazed that smart organizations tend to create an elaborate management system to ‘support’ and ‘control’ the innovation process. When I meet folks form industry and listen to presentations and papers, I am repeatedly shocked to discover how much focus is on process part of yet compared to how to really enable people and democratize the process of innovation! I hope that understand this can’t be yet another checklist item on their marketing brochure that can win them next contract – it is much deeper and bigger than that. It’s their future that they can’t afford to shortchange!

So, what’s the people factor in your innovation equation?

2 thoughts on “What’s the People factor in your Innovation equation?

  1. Michelle Symonds

    I remember, and was involved in, TQM, BPR and outsourcing and it would be a tragedy if “Innovation” went the same way. Your description of how large organisations seek to control innovation is very apt and the whole culture of large organisations (even those proclaiming their meritocratic structure) simply does not encourage innovation. Maybe if they start viewing people as real people rather than resources or money-making machines they might find that real people can and will innovate (and make money while they are at it) – but somehow I doubt this cultural change will be coming along anytime soon in major corporations.

    I’m just about to read your post on why people don’t innovate in organisations

    1. Tathagat Varma

      Thanks Michelle for sharing your views. You are spot on with your views on the importance of people. Hopefully, the economics of innovation will motivate organizations (or force them – maybe the choice is still there!) to reconsider their policies…

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