It’s sometimes hard to understand which stage your business is at, and what it will take to reach the "next level" of growth. More structure? More innovation? The stakes are high, and getting the balance right is critical to businesses’ long-term success.
Figuring out the dilemma becomes clearer when you consider whether your business or department is battling with complexity, or in a "treadmill mode" of doing the same things over and over, yet expecting a different result.
Where the rubber really hits the road around innovation is whether a business has Research and Development (R&D) in its budget. The questions that should follow include: "how much budget and time is dedicated to innovation", and "how is innovation managed within the business?" As Alex Osterwalder - author of the Business Model Canvas - says, a CEO needs to be spending at least 20% of their time on innovation projects. And if there is a lack of innovation in the organization, then that may need to be as much as 40%. But how do business leaders orient themselves, and where do they begin?
Les McKeown’s Predictable Success model (illustrated above) is very helpful when contemplating where a business is at in its lifecycle. Most organizations are going to find themselves somewhere between whitewater (complexity) and the treadmill phase of the lifecycle. Scaling startups are invariably in whitewater and corporates often find themselves over-engineered and in the treadmill phase. While startups have spades of vision and energy to innovate, corporates generally lose their vision and are likely doing the same thing repeatedly, even when the market changes around them.
The answer to complexity is clarity of process, and the answer to the treadmill is innovation.
"Predictable success" may be defined as the ability to scale with little to no internal barriers to whatever size the market allows. If the organization is at this stage, there are a few things that are needed:
Firstly, companies need to keep innovating, while maintaining the drive to retain efficiency and efficacy.
Secondly, they need to keep communicating a shared vision of where the organization is going, creating a shared consciousness across all teams.
Thirdly, empowered execution is vital, with decision-making driven as deep into the organization as possible, partnering in a peer-influenced network. Empowered execution creates "ownership", where team leaders make decisions and teams contribute towards the shared vision of where an organization is going.
Lastly, it's important to only keep good processes and lose the bad ones. How do you know the difference? Jason Fried, CEO of BandCamp, shared his insights in ReWork: “Policies are organizational scar tissue. They are codified overreactions to situations that are unlikely to happen again. They are collective punishment for the misdeeds of an individual. Don’t create a policy because one person did something wrong once. Policies are only meant for situations that come up over and over again.”
The Process and Innovation Highline
The image of a highline is an appropriate one when considering process vs innovation and Faith Dickey (who has walked highlines in high heels) provides a wonderful mental image of what this process can be like.
A tightrope walker walks on a steel cable which has little give, and uses a balance bar. But a highliner walks on a synthetic strip that has far more movement and they don’t carry a balance bar, making it a far more unstable activity which requires many balance adjustments using the body. This approach is more congruent with what it is like to walk between the need for innovation vs the need for process.
Safety in high-risk, or volatile, environments is important, and you will need an experienced support team to get you there. Need help figuring out where you are between whitewater and treadmill and what to do about it? Please get in touch with us here.
Also check out the previous post, Why Digital Transformation is So Hard, here.