Wednesday, October 15, 2008

The manager’s role in encouraging innovation.

The challenge for managers in innovative organizations is to improve the fit between strategy, structure, culture and process, while simultaneously preparing for the revolutions required by discontinuous change. This requires the skills to compete in a mature market where cost, efficiency, and incremental innovation are key, while at the same time developing new products and services where radical innovation, speed and flexibility are critical. While a focus on either one of these skill sets is conceptually easy, focusing on only one brings short-term success but long-term failure.

Management's new job is to learn to adapt proactively by positioning themselves to take advantage of what's coming, much like a surfer prepares to ride a wave. This new job description includes a willingness to undertake an endless quest for “The Next Big Thing." The role of management changes from manager-as-pilot to manager-as-lookout - a lookout who spots emerging developments and figures out what impact they can have on different aspects of the business. Finding, evaluating, acquiring and integrating useful technologies and innovations from external sources - customers, suppliers, other companies, both large and small, universities consulting organizations and individual inventors - will increasingly be a part of management’s overall business process.

The manager as architect uses strategy, structure, competency, and culture as tools to build innovative organizations. The manager as network builder and politician builds cliques and coalitions in the service of innovation and change. Perhaps most important, managers are asked to build in and integrate the tensions and contradictions inherent in innovative organizations and while also managing for today and tomorrow. The best management teams have the competency and behavioral flexibility to develop innovation streams on the one hand and to lead organizational renewal on the other.

Managing an organization that can succeed at both incremental and radical innovation is like juggling. A juggler who’s very good at manipulating just a couple of balls isn’t very interesting. It’s only when the juggler can handle multiple balls at one time that his or her skill is respected. For organizations, success for both today and tomorrow requires managers who can simultaneously juggle several inconsistent organizational structures and cultures and thius build and maintain innovative organizations.

Like good jugglers, managers must balance the contradictory structures, skills and cultures required to compete successfully. The dilemma confronting them is this: In the short run, they must respond to changes in their marketing environment with step-by-step changes to see that they survive as the fittest competitor. But in the long run, they may have to shelve the very strategy or product that has made their organization successful. These contrasting managerial demands require that managers periodically destroy what’s been created in order to reconstruct a new organization better suited for the next wave of competition or technology.

Creating new knowledge isn’t something that can be managed in the traditional sense. It’s the capacity of people and communities, continuously generated and renewed in their conversations, to meet new challenges and opportunities. People who create value with their knowledge need to be inspired and supported rather than directed and controlled. So managers have to work to develop an open culture of communication and collaboration that encourages the sharing of innovative work and business practices.

Traditional management's carrot and stick motivators are good to drive people to do the same things over and over, more reliably and maybe even faster. But to get people to innovate, they have to be driven primarily by intrinsic interest and fun in the work itself. Money, such as the payoff from a successful start-up, provides powerful reinforcement to the intrinsic drives, but can never replace them. Only a playful mind can be creative, and only people doing what they enjoy can come up with something original. Managers need to consider the whole person when creating an innovative environment

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