Creating innovation opportunities
I am busy discussing the issue of learning innovation through practising it. Talking and showing does not make innovation happen. Innovation does not happen through doing studies, preparing reports, or making presentations or recommendations. Organisations can become more innovative only if their managers are forced to innovate, experiment, succeed and learn, i.e. taking action on ideas. So the challenge then becomes to figure out how the organisation can create such an environment.
Creating opportunities for taking action
The premise here is that with innovation (as with any new skill), learning comes from doing and an organisation will only become more innovative if managers are given the opportunity to actually “practice” innovation.
There are two good structured approaches for building innovation into on-going business activity. One is the breakthrough strategy and the other is the “Work-Out” process that originated at General Electric (GE). Breakthrough projects are planned undertakings aimed at achieving tangible, bottom-line results in a short period of time. They are designed to unleash participants’ creativity and drive, and provide real experience in implementing change. I want to focus on the GE Work-Out process in this article.
The GE Work-Out process is a method for bringing a large number of people together to jointly pursue some urgent and challenging business goals and reach conclusions quickly. Work-Out is straightforward. Simply put, small teams of employees from different functions and levels get together to talk about problems, come up with suggestions and then offer them at a “town meeting”, where a senior person makes an immediate go or no-go decision. Individuals take responsibility for implementing the decisions and the leader holds them accountable, following up to see that the promised results do indeed materialise.
A case study I found of where this approach was followed (outside of GE off course) was an insurance company that was losing large amounts of money, which focused its initial Work-Out sessions on reducing claims and general administrative costs. One of the early Work-Outs yielded a set of projects to reduce average costs per motor claim repair by 10 per cent over the previous year without reducing customer satisfaction. No one was told to be innovative, but it was clear to everyone that they would never reach the goal they had set for themselves without new approaches. Every team experimented with new ways to reach their goal. As the initial goals were achieved, tougher goals were set, and teams had to constantly push into fresh territory to achieve them. Within a few years the company became profitable, and what had been a losing company became a winning one. It was also a perfect example of how taking action to achieve pressing managerial goals impels innovation.
Why does the Work-Out process work?
Work-Out allows people to cut across formal and informal barriers and talk to each other. Senior managers get unfiltered messages from lower levels of the organisation. Workers on the front line know they have the ear of management. Without any red tape or delay, people get the power to do what makes sense. Furthermore, Work-Out is not only about ideas but is also about results. People do not only make suggestions, they make things happen. Every Work-Out session puts someone in place to be responsible and accountable for implementing each decision. This person does not individually and independently solve the problem, but rather brings together the people and resources needed to solve it.
Clearly, this approach would be subject to some pretty significant culture changes in some organisations, but if that’s what it will take to propel people into action, then it is part of the “package”.
Next time I will go into more detail on the breakthrough strategy as an option of how the organisation can create opportunities for taking action in order to start “practising” innovation. I conclude with a quote from the big man himself, Mr Jack Welch: “An organisation’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage”.
Ulrich, D., Kerr S., and Ashkenas, R. 2002. The GE WorkOut: Implementing GE’s Revolutionary Method for Busting Bureaucracy and Attacking Organizational Problems. New York: McGraw-Hill.