As the bigger you are, the more difficult it is to share active knowledge, how can we set-up a so-called “knowledge creating company” and speed up knowledge exchanges within big companies?
In this speech at Management School, L’Ecole de Paris, I suggest creating small dedicated and agile structures led by innovation professionals with specific management methods reffered all together as “creative tension“. Then the question becomes: how to insert their work and align with group innovation strategies?
Moving fom linear to interactions model
In the 1950s, innovation management could be described in a linear way: new ideas were given to R&D and transformed into products and services; these were then transferred to the marketing and eventually to the distribution departments. Today, this chain of events has fallen apart. Instead, the identity of innovation has been gradually shaped by multiple interactions between different levels of a company with other external entities.
Innovation identity is the fruit of exchanges of knowledge between sciences, technology, the market, the team in charge of innovation and other departments of the company.
Why fast innovation?
The goal is to speed up the exchanges to bring a new concept and stay competitive, not only with companies of the same type and who compete from another part of the world; but also, with companies from other fields, where innovation cycles can be very different from yours.
Several years back, phone operators have been threatened by Internet “kiddos”, who developed products and services far more quickly than any traditional operator.
On the other hand, innovation speed can sometimes help exploring new markets: attack is sometimes the best defense!
The duration of innovation can vary from one sector to another. In the digital sphere, it’s a matter of weeks or months. In the car industry, we’re talking of years and in the pharmaceutical industry, of decades. Each industry must update its innovation processes according to its own identity and goals. For the drug industry, rather than speeding up innovation, the issue could be to innovate deeply on parallel fronts and renovate the patent stock.
Research needs its own time; nonetheless, innovation can accelerate once a new technology is about to arrive. And yet, the issue of fast innovation is far from resolved.
Abundant innovation and dedicated structures
The professional thesis I wrote at HEC Paris led me to review the academic sources and innovation models from over 15 different companies. I differentiated three main archetypes.
Some companies, such as 3M, have innovation in their DNA. Not only did this company develop innovation as an inner culture, it also achieved translating this culture into figures: 35% of their turnover has to be brought by products less than 3 years old on the market. Procter & Gamble also responds to this model, by promoting open innovation. Cisco, also called “Pac Man” because it regularly takes hold of young sprouts; and Renault, thanks to its project organization or “creative units”, are other examples of this archetype.
Making a big company evolve from a culture where innovation isn’t important to a culture where it plays a leading part, like in 3M, involves a lot of time and effort. At Procter & Gambler, this goal was achieved thanks to a very strong leadership and also, because the CEOs set precise numerical goals for innovation.
This kind of success is quite rare. That’s why it makes sense creating an independent entity, capable of exploring new threads very quickly, as well as preparing the difficult steps for integration, through permanent interactions with all the concerned players in the future development.
Innovation supported by dedicated structures.
Most companies judge they aren’t capable of promoting fast enough this culture of innovation into their whole organization system. Mainly because they are afraid of stumbling on the classic difficulties: fear of “cannibalization” of the existing business, impossibility to predict with certainty the results of innovation, or else, the fact that not anyone can handle innovation management; not to mention that taking risks isn’t well regarded in any company.
For all these reasons, many companies prefer to create a dedicated independent team, specifically aimed at implementing innovation. It’s also a way of isolating risks.
That’s exactly how Lockheed proceeded with Skunk Works. They were in charge of exploring, in complete secrecy and independence, projects linked with military aeronautics. Other examples include General Motors with the project Saturn, created in the 1980s to compete with Japanese vehicles by launching a new line of vehicles, detached from the parent company; or more recently, EDF, with its corporate venture structure, purchases shares in young companies, likely to bring creativity and knowledge of new markets to the group.
But skunkwork teams may have trouble integrating their ideas within the needs of mainstream operations : the danger for the innovation team is to become an isolated island, working in competition with the rest of the organization.
Innovation developed quicker in dedicated structures than in the abundant model; and yet, the main difficulty remains in bringing the value of innovation into the parent company. That’s why some companies mix a well-shared culture of innovation with the flexibility of small-sized entities: Gore, a very innovating company, builds on small autonomous units; Decathlon joins an innovation culture led by their central design and R&D management, with different autonomous series of decentralized R&D units.
A model for speeding up innovation
The innovation speedup model I propose targets the best of both worlds: keeping the flexibility and independence of a dedicated structure, as well as promoting the value of innovations within the rest of the company.
1. A dedicated agile structure.
The first step towards this model consists in implementing an independent unit, whose mission isn’t to become a spin-off or create only financial value for the firm, but to enlarge the innovation portfolio of the parent company. It’s an “inside-outside” type of unit. This dedicated structure will allow a greater freedom when it comes to using the budget (purchases, recruitments, partnerships) and launching projects: this opens the way to faster innovation in big companies, which are held to a number of procedures; but it also aims at enlarging the company’s portfolio.
2. The creative tension.
This entity builds on recognized methods of innovation management: design thinking, open innovation, rapid and iterative prototyping, lead user design and rugby approach, are all part of it.
In all these approaches, I keep in mind the necessity for building a framework: a creative tension which will also help the acceleration of innovation, with two components: a culture of diversity and a framework for ambitious goals, or in other terms, a “focus”.
The variety of capabilities that are involved in a team provokes “molecular impacts” which open the way for innovation. The team must be formed by people who bring very different specializations (engineers, marketing managers, sociologists, designers, vendors, customer service…) but also capable of openness. In his “design thinking” approach, Tim Brown, the IDEO boss, calls them the “T-shaped people”: the vertical part of the T stands for specialty and the horizontal part, for openness.
Besides, if the innovation team doesn’t want to get lost in the woods, we need to define a perimeter, a focus: that’s where the “why?” and the framework of goals become important, for instance, to resolve a problem in a given time or to overcome a level of performance.
Successful innovation isn’t necessarily the one that offers dozens of new features to imitate or surpass competitors. Rather, successful innovation focuses on two or three breakthrough features, capable of reaching to people’s imagination. The objective is to invent objects and services which meet with deep expectations, hopes, ideals, desires; with an intuitive interface which makes easy handling the product or the service. It could even include an emotional contact, as in the very tactile interface of the iPhone and iPad.
To create such products, traditional capabilities of engineering, marketing or sales are generally not enough. That’s why we saw an increase of design capabilities within innovation teams.
Focusing on a precise goal also brings another advantage, as pointed out in the article “The New New Product Development Game”, published in the Harvard Business Review in 1986, by Hirotaka Takeuchi and Ikujiro Nonaka. This article compares the way a project team works to a rugby team that moves forward by continuously passing the ball. This way of working was also analyzed by Christophe Midler in L’auto qui n’existait pas. Management des projets et transformations de l’entreprise (The car that didn’t exist. Project management and transformations inside companies, 1993). To organize collective work, you need to be very clear from the start on a conviction or belief that will help team members to cooperate with a common goal and a same language. It’s often design which defines this conviction and acts as cement for the team.
Iterative prototyping helps refining the focus. Quick and iterative prototyping is particularly well adapted to the digital world, where prototypes are cheap. In three or four months, as soon as you hold a concept that seems to work, you can materialize it through a prototype written in a language of the same kind as Html5. You can then test it in focus group, learn from the results and start over a few months later. In my previous experiments, prototyping was rather a first version and wouldn’t intervene until a year time. But after a year, the group’s capacity to listen had decreased considerably: they had thought such a long time over their concept that they weren’t really ready to let consumers interfere into anything they had defined. When you submit to the same experiment after only three months, it’s much easier to correct the first draft and get rid of everything unnecessary in the definition of your innovation.
3. Alignment with the group’s strategy.
The mission of the dedicated structure is ultimately to repatriate value for the parent. It must therefore understand the group’s innovation strategy, which means to develop a genuine spirit of cooperation and a strong capacity for dialogue.
The ideal situation is one where the parent has established an innovation strategy and has an Innovation Committee responsible for allocating the roles between the different units. But sometimes the group hasn’t formalized its innovation strategy, or it hasn’t defined a specific process to implement it. In this case, we must still ensure consistency of the parent’s and the small structure’s strategies.
Two types of tools can help:
The first type of tools aims at setting up a permanent dialogue between all parts. For instance, some employees could second some projects on 50% to 100% of their time, to bring capabilities to projects and serve as ambassadors for their parent company. Decision-makers could also be identified to fully support future innovations. Regular exchanges would enable to take in account the way their problems evolve. The parent company could also be requested to financially invest into the product. That would create a client/provider relationship with many constraints, but with the advantage of being transparent and clear.
The second type of tools seeks to integrate projects corresponding to the parent company’s specific objectives into its innovation portfolio.
Of course, an innovation unit is fundamentally aimed at leading disruptive projects, but it’s also important to think of quick-win projects for sustained growth. Thanks to its flexibility, it can quickly resolve some short-term problems and prove its efficiency and usefulness. A third type of project can also be developed: design probes, exploration prototypes that materialize the concepts and are used to test a potential use. Even if the project isn’t fully finished, prototypes open the way for upstream dialogue with the parent company and feed the innovation pipeline.
Finally, a new approach of collaborative design could be put in practice: instead of making finished applications, determined components are brought into limited areas. They are eventually integrated by other teams within the company’s new services. These teams still manage their own application, to which a new component is added to gain time.
Application in the context of Orange
If we take Orange as an example, I wasn’t immediately aware of the density of the road map and the number of innovation candidates. I thought once our innovations would be developed, they would naturally integrate into the road map. The first project I worked on, a social network with circles of friends (a concept that Google+ developed 2 years later), arouse difficult technical problems, but above all, we weren’t able to make our project meet the priorities of the company and join the mainstream roadmap.
Today, I have understood that is was crucial to develop interactions to create desire for our projects, and create the need for change which is fundamental for any innovation. I now spend 70% of my time working on projects and 30% searching for landing points by determining the expectations of my partners from Orange: it’s all about building “with”, what I call collaborative design.
I seek to build these relationships before the innovation is totally defined, to let my partners take over the product and finalize it as they want: it’s more about “conceiving with” than “conceiving for”. Innovation is a collaborative platform more than a finished product.
This method is illustrated by our Blended TV project, developed in the social TV field. It involves social networks in helping our clients choose a program, then, during the broadcast, let them take part in online chats on the given program. This feature digitally revives another, much older practice: chatting during a TV show, in the living room. It’s especially used during political debates, news, sports, and all programs that present variations of intensity. Much less in movies, that keep a strong narrative tension all along.
We started by making a multidisciplinary team, with a design team that also possessed capabilities in observing habits; an engineer team in charge of transforming the design into a usable interface on an iPad or a smartphone. This requires knowledge in Html5, video management, as well as social network access. A start-up specialized in semantic analysis on social networks (capable, for instance, of locating on Twitter or Facebook the formula “pblv” which stands for Plus belle la vie, a popular French TV show). And last, a specialist of focus groups organization, to test prototypes with groups of consumers.
We gave ourselves three months to launch the first iteration. We defined a perimeter, chose the features we wanted to develop and made graphic models. Then, we organized interactions with consumers. Last, we prototyped the new features by integrating them into the design, development and semantics.
A budget cut forced us to reduce our innovation to a single feature in making our demonstration product: that’s what focus is all about!
With this iteration and the demonstration product in hand, I contacted executives from Orange – those who I thought might be interested in this project and could include it to their roadmap. What they saw was a very well-thought product, built on a collaborative platform, which would leave a great deal of space and freedom for their own applications.
The product was warmly welcomed, as it met with their need to develop their services with social DNA, without giving up their control on implementation.
We went on developing Blended TV as a program, with an API (Application Program Interface) that helped applications to access our unit through at least twenty different methods as well as presenting and rearranging the answers into the user interface, and allow parent applications to build value on top of our data.
This program is connected to a dozen of Orange services and bring them a social framework easy to handle. All these developments are growing in parallel, at the same time. On the whole, the project was finalized quickly enough and with a reasonably small budget.
Knowledge flowed through the team and to the parent company; this new feature should give entire satisfaction to the clients.
image credits: libertic.wordpress.com, decision-achats.fr, genengnews.com, hotelauxmaldives.com, wonderfulworld.fr, uludagsozluk.com, tourismnewzealand.com, wpprobusiness.com, orange-everywhere by Manuela Szekely
Nicolas Bry is a Senior VP at Orange. He’s developed strong expertise in innovation management, creating digital business units with international challenges. He completed a professional thesis on rapid innovation at HEC Business School.