Preserving our Forest

Cross Functional Teams (CFT)

These teams help break down turf protection. However, they need to be carefully managed. Just including people from many departments does not automatically make a CFT more effective. Too much information can just confuse everybody. Clarity of goals and top management support as well as recognition and rewards are critical to the process. Managing cross-functional teams is one of the challenges of new product development. Yet, how members from different functional areas come together, interact, and arrive at consensus, is a poorly understood process.

Flexibility and adaptability is key to Innovation

Adapting to change and proactively responding to opportunities are daunting tasks. Top management needs to handhold teams through these risky processes. Failures need to be dealt with in a way that protects and encourages risk taking. Only CEOs can provide the time and resources required for companies to be outwardly focused, scanning the environment of competitors, customers, academicians, suppliers and even different industries. Such companies have a better chance of becoming innovation stars. CEOs can provide courage, zest, enthusiasm and speed to the whole organization. It is this energy that will drive an Innovation Initiative. Large, traditional companies have a tendency to become more bureaucratic. Bureaucracy produces politics, red tape and power struggles. People find a hundred rules to protect themselves from acting. This can repress the natural energy and enthusiasm of the organization. CEOs can prevent this deadening disease.

The Power of CEO

CEOs can ensure a culture of innovation that highlights the importance of harnessing the talent of the entire organization. Only CEOs can lead such quantum shifts in strategy. They alone can create an organizational climate, where fundamental assumptions are open to question. A real gap in Indian companies seems to be CEOs who nurture companywide innovation. While many CEOs are ‘visionary leaders,’ most are not enthusiastic champions of company-wide innovation. Both financial and psychological support from top management is critical for the culture of innovation. One of the main inhibitors of innovation is the attitude of the ‘Do it my way.’ Leaders need an effective communication system to share their business vision with the grassroots. This helps to empower all levels of the organization.

Consistent Innovation

Once the returns from an innovation start to pour in, the organization may begin to focus on maximizing the returns through routine implementation. Harvesting is a mechanical and essential process. Perhaps every organization requires a section of its people to focus on creativity and innovation. An Innovation Center could provide the foundation for a long-term initiative. Large, tradition bound, successful organizations, tend to prefer the stability that formalized procedures provide. Older organizations tend to become more bureaucratic. Large companies may have more resources, while smaller companies may find it easier to change course. Even though most companies accept the idea of innovation being important for success, most are not committed enough to practice it on a long-term basis. Most are not aware of the underlying process required to make it work on a consistent basis. In the Innovation Movement itself, there are not enough clearly defined structures and processes that a company could follow. There are few consultant organizations, which can handhold and support long-term innovation initiatives. There is a feeling that innovation and creativity is for intellectuals or geniuses. Innovation as a concept needs to be demystified for use across the organization. Management is bottom-line driven. They are extremely result oriented in the short term and lose faith in concepts very fast. Innovation is a concept that requires a long-term buy-in and takes time to be fully ingrained in the organizational culture.

Innovation in the various stages of organizational development

The metamorphosis model of organizational development, passing through the cycles of growth and decline, describes the organizational life cycle of companies: Emergence-Growth-Decay-Death Focus on innovation, may rescue an organization in the declining phase of the organizational life cycle. Re-innovation or renovation becomes important when an old, traditional company goes into decline. The first phase is often entrepreneurial and innovative with a sudden burst of energy capturing a new space in the market. This creative phase is terminated in a leadership crisis. It was Schumpeter who said, “It is rare for anyone always to remain an entrepreneur throughout the decades of his active life.” This cycle progresses from entrepreneurship to an organization that becomes slow and complacent.