How To Manage Innovation: Dynamic Tension is the Key.

© David L. Francis, PhD 2018

Innovation is the generative force in organizations. It drives all improvement, adaptation, strengthening and renewal. If an organization were a living creature then innovation would be the evolutionary imperative, providing the means to gain and sustain relative advantage and, consequently, survival.

Although innovation is a fundamental driving force within organizations, it is not the only one. Innovation co-exists in an uneasy relationship with three other fundamental driving forces: the need for order, alignment and prudence.

Organizations need to be orderly so that they are understandable, efficient and predictable. For example, in a public swimming pool the quality of the water needs to be checked daily, swimmers must be observed constantly by a lifeguard and the Pool must be opened at predictable hours so that swimmers know when they can take their morning exercise. The pool must be orderly.

Organizations need alignment. The parts cannot pull in too many different directions; they must be directed, just as a magnet causes iron filings to be oriented in the same direction. Alignment is essential because it is not possible to do everything well; focus is needed. A hotel cannot be both a five-star retreat for the rich and famous and a backpacker’s hostel. Choices must be made and alignment follows. Alignment must be in values, strategies and systems as well as in the competencies and attitudes of employees. At the deepest level, shapes how people feel about their work identity: employees come to embody the organization, becoming its DNA.

Prudence is the last of the grand driving forces. It combines economy with appropriate concern for inappropriate risk. So, those running a fine hotel need to be protective, cautious and expect the worst – concern for the customer can be neglected through ignorance, complacency or indifference; costs can escalate; a fire can engulf the building; a rival hotel can offer superior facilities. It is always necessary to prepare for the unexpected, the hazardous and the dangerous. In doing so, it is necessary to fight tendencies towards disintegration, neglect, laziness and self-serving behaviour.

Innovation cannot be understood in isolation. It co-exists in a dynamic relationship with the other three grand driving forces, each pushing and pulling and, through dynamic conflict, providing the foundation for understanding, commitment and action. Pursuing any of the grand forces leads to a distinctive obsession, so that there is always an uneasy tension between competing imperatives as decisions are made. Operating in the space between the pushes and pulls of competing obsessions is not just necessary; it is essential to success. No single driving force has sufficient embedded wisdom to provide an organization that is entirely fit for purpose. Although the drive for order, alignment and prudence may serve to limit, confine and constrain innovation, it is important to understand that they too are elemental and, like the juggler’s balls in motion, the four forces are indivisible.

Although innovation is the generative force, it is rarely constant. There are periods when innovation is the dominant force, but at other times it needs to be curbed, evaluated and targeted. Unchecked innovation is a bold strategy - possibly a foolhardy approach. The push and pull between the four grand forces provides the fundamental rhythm – sometimes harmonious, sometimes discordant – that frames decisions, large and small.

It is the task of those who make choices about what to do and how to do things, to pay sufficient attention to each of the grand forces and to maintain them in dynamic tension

MANAGING INNOVATION

Traditionally we see management in terms of discipline, focus and assessment. In short, related to order, alignment and prudence. Innovation is more difficult to frame using management language, because by its very nature it is organic - prone to be speculative, uncertain, dispersed and exploratory – at least at the early stages.

No matter how experienced or clever we are - innovation and uncertainty will always be constant companions. In biology, many mutations fail to provide survival advantage. The same is true of innovation. We need to recognise that undertaking innovation is akin to putting money on a horse in a race: there is always an element of gambling. The innovation manager needs to strive to increase the probability of success but this cannot be assured (if it could all bookmakers would be paupers!).

So there is a distinctive mindset for those who would be innovators. Challenge, novelty and risk have to be embraced but not with a cavalier disrespect for analysis, caution and reflection. Managers struggle when asked to accept and learn from failure, yet many successful innovators and innovative organizations follow the maxim, “fail fast, learn from it and go forward.” Failure is a companion of innovation and has to be managed to provide the benefits of the learning gained through taking risks.

Innovation is driven by competition, ambition and opportunity. Consider a company like Toyota, in an industry in which intense competitive forces are dominant. It is necessary to make both big and small innovation commitments, perhaps investing millions in new technologies and creating new markets, while also facilitating the development of thousands of ideas for process improvement. (Toyota’s attitude toward what others see as “process improvement” is that it is about removing obstacles to perfection rather than improving on existing processes).

It is in the diversity of purposes and forms of innovation that prevents single prescription from being effective. A simple policy change, a few rousing words from the Chief Executive or paying lip services to the principles of Kaizen cannot achieve such a breadth and depth of innovation initiatives. The organisation has to be designed to innovate predictably in ways that are cost effective, aligned and in quantity.

Despite the inevitable complexity and uncertainty embedded in innovation, it has been estimated that 80% of the wealth generated in the last 100 years has come from innovation. This is not to say that all innovations are functional: there are spectacular stories where the pursuit of a possibility burned resources, swallowed management attention, caused multiple distractions but resulted in, at best, nothing more than a salutary case study to inform thousands of MBA students what not to do!

So, what do we conclude about the nature of innovation from a manager’s perspective? Firstly, it should never be ignored; secondly it should never run unchecked; thirdly, it demands persistence, commitment and passion; fourthly, there is always an element of chance and, lastly, it may not be fun but it certainly keeps us alive!