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There was a time, not so long ago, that innovation was something cooked up in corporate secret labs across the globe. It was all hush-hush. The internal workings were closely guarded from a perceived army of corporate spies.
Unfortunately, all did not go as planned. In the end, walling up the garden kept as many good ideas out as it kept in.
"There is a realization in corporate management that the current innovation models are unsustainable, and that taking advantage of rapid development and external capabilities is critical for continued growth," says Chris Maresca, former managing partner at consultancy Concept32 and now chief operating officer at Project Inertia, a construction project management firm.
You might be tempted to point out the difference between invention and innovation: the former something that never before existed, the latter something simply done better. However, typical R&D departments made no such distinction. Yes, there is a wide gulf between the invention of the silicon chip and the innovation of commercially sliced bread. Yet both invention and innovation came under the province of R&D departments, or in its equivalent: the tiny, closed circles of company thinkers.
The trouble is that ideas, inventions, and innovations trapped in a protective silo can't always find their true state of profitability. Take, for example, the famous Post-it tale. Surely everyone knows this story: Dr. Spencer Silver, a chemist at 3M, developed a weak glue that proved to be pressure-sensitive and reusable—the exact opposite of what he set out to invent. Nonetheless, the good Dr. Silver spent the next five years or so peddling his invention inside 3M's walls, to no avail. His appeared to be an invention without a problem to solve or a market to exploit. It wasn't until his colleague, Arthur Fry, needed a bookmark for his church hymnal that the glue found a purpose—and the Post-it note was created.
What is less commonly known about that innovation story is that the Post-it would not have become the market success story that it is today if 3M had not had a permissive "bootlegging" policy. Bootlegging, you see, is an unstructured, disorganized, bottom-up innovation process that happens without official direction from company management but is, nonetheless, for the benefit of the company. In other words, bootlegging is innovation that happens outside the R&D department and beyond company dictation.
Keep in mind, 3M's bootlegging policy helped enable an invention in 1968 to become a marketable product in the 1980s, way before current trends of crowdsourcing and open innovation. Tearing down R&D walls to allow innovation room to grow is no new and passing trend. However, it is becoming the rule rather than the exception.
"Innovation needs to be open sourced and collaborative to be successful in today's environment," says Billee Howard, formerly managing director of Allison & Partners' Brand Innovation Group and currently CEO of BRANDthropologie Media, a creativity consultancy.
"No longer is innovation a siloed function found at the beginning stages of the supply chain and housed in R&D. It's an attitude and intrinsic part of an organization's culture," she says.
Does this mean that R&D departments should be dismantled en masse and the innovation process thrown into a free-for-all idea fest? Of course not. Chaos does little to move anything forward.
"Open innovation is a channel for input, not the channel for input," says self-proclaimed "anti-futurist" strategist Daniel W. Rasmus, author of Management by Design. "It should complement other innovation happening inside the firm, where people are much more closely tied to the technology, the mission, the constraints, etc., of the organization."
Cost is one of the biggest pitfalls of creativity run amok. Roland Hughes, president of Logikal Solutions, recalls a distant open-innovation effort at a landfill management system company; it led to disastrous results. At the time, nearly every group at the company had its own PC-based IT team. Each team was tasked with creating innovations that would help grow profits. Each group had its own set of files and servers, and its own favorite PC hacker product to churn out "solutions" in Clipper, FoxPro, PowerBuilder, Turbo Pascal, Clarion, and pretty much every other product on the market at the time. "The licensing and redundancy costs were astronomical," he says.
Management at the company reacted to the staggering costs as one might expect: by consolidating all the development groups and servers. They tossed many of the software packages to boot. "When they tried to curb the cost of disk storage, the new server managers went around asking who owned what directory," explains Hughes. "If they got no response within a certain time, they backed it up to tape and nuked the tree. The tapes were recycled after four months."
Eight months later, Hughes got a frantic call asking if he had a copy of the source code to software he had developed months ago. "They were in the process of opening up a multimillion-dollar transfer station with a completely new scale vendor and they needed to tweak the software to support that brand of scale along with the four brands it currently supported," he says. "The source code had been in one of the directory trees which got nuked." While the programmer who put it there was still with the company, he had been moved to a different IT area and thus didn't get the email message about the directory. And a new manager apparently didn't know the right questions to ask during the turnover. "I had to re-create the software from a very old listing found on a development machine," says Hughes.
This was only the tip of that company's problems. "All of those ‘innovative' applications used data storage methods which couldn't be shared with any other system," says Hughes. "Most of the jobs were run out of a desk drawer without standardized backup and recovery procedures. Worst of all, upper management, the ultimate decision-makers, couldn't look at any of the data."
The moral of the story is that while ideas must be allowed to flow freely from multiple directions, the workflow must also be managed so that good ideas aren't lost and the company doesn't go bust in the effort. However, management tools and policies must be streamlined and crafted in such a way as to avoid forming a bottleneck or, worse still, a stopper for the bottle.
Historically, most companies operated in a top-down fashion, whereby management sat at the top of the pyramid and orders flowed down to mid-management and the workers below. Ideas could be developed by those below the lofty peak, but those ideas were usually formed or pursued at the direction of senior management. That, in part, is the logic behind high pay for senior executives: They are compensated partly for their perceived value as idea generators.
However, somewhere along the timeline of the emergence of enterprise behemoths, the world grew more complex and flatter—meaning more agile, open, and competitive. Thanks to new technologies, markets became favorable to nearly all competitors, big and small. One result was that C-level executives at enterprise giants were no match for the idea-generating power of the masses. Making matters worse, senior managers often failed to spot competitive ideas until it was far too late. As a result, the traditional organizational pyramid started to collapse. In part, companies flattened in order to leverage all the brain power within, rather than bet the future on a handful of isolated thinkers.
"No longer do we see organizations headed by a ‘culture of one' despotic ruler," explains BRANDthropologie Media's Howard. "We are increasingly seeing the paradigm change to a ‘culture of many' innovators." As an example, she points to Samsung and its team of innovators that span the globe, ranging from engineers to academics. "This is a shift that will continue to play out until the seismic balance of power reaches its final evolution."
This shift is hard for large companies to follow because policies, practices, and traditional thinking get in the way. In an effort to become more agile, management sometimes tries to outsource innovation. PCDWorks (the PCD stands for Product Concept Development), a company of engineers, mathematicians, and architects, is just such an "innovation for hire" company. Mike Rainone, IDSA, vice president of PCDWorks, often laments over why America just can't seem to innovate to any appreciable degree. He frequently points to blinders built into the very conversation on innovation.
"In the minds of the svelte and young, it seems technology is only information technology: iPods, iPads, laptops, displays, and cell phones ad nauseam," he says in a recent blog post on Manufacturing.net. "The concept of technology that you and I might define as the real iron that once drove this country—motors, valves, machinery, presses—that stuff that required the skills of engineers and craftspeople in this country to design and build never seemed to cross the minds of the beautiful."
This is, of course, is the great paradox of the innovation process. Innovators tend to think in terms of whatever they are most familiar with. The creative process is then limited by the parameters they unconsciously set. You break this restriction by bringing in colleagues with different comfort zones and interests. If you increase the number and variety of minds looking at a problem, an opportunity, or even just the status quo, true innovation will emerge because limits are increasingly removed from the equation.
Successful innovators also tend to solve problems they encounter up close, hence the value of opening the task of innovation to every member of an organization.
"In our day jobs as design consultants for land planning and development, facility energy performance, and property renovation and adaptive reuse, our staff regularly uncovers opportunities for innovation through our day-to-day interactions on projects," says Derek Lunde, a former marketing director at BCRA who is currently senior marketing director at Red Propeller.
Lunde added that at the time of the adoption of this new companywide open innovation process, BCRA had two provisional patents on new products and services, and at least a dozen more in the pipeline to be analyzed for their market suitability.
The value of the individual in this method of channeling creativity is not diminished by crowdsourcing or open innovation. Quite the opposite is true. Individuals have more voice in the process and can participate on more equal footing than their job title alone might afford. Further, individuals are both appreciated and leveraged for more than just their work personas.
"Leading organizations today are mirroring the cultural cues taking place outside the walls of corporate America and recognizing that the newly vocal and emboldened consumer is also the newly able and self-directed employee," explains Howard.
Innovation, while not a one-person job, is not beyond one individual's reach. But it is the collective that will magnify individual efforts and ultimately hone the company's competitive edge.
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.