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Much more for much less: towards the innovative organization

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How much efficiency potential are we losing?
“How is it possible, that within three days we have accomplished more than in years of meetings?” asked herself a participant in an innovation talent training hold a couple of days ago. She wondered about the quality and the feasibility of her project designed to optimize public resources. Also recently the employees of an educational institution that were participating in a collaborative innovation project wondered on “all the potential we have and we never have applied”.

It is remarcable that 90% of participant in this kind of actions ensure, that this way of working is much more efficient than conventional work and 85% say they are more productive. Interesting enough, 80% believe that their organization is not capable of working in an innovative way.

Source:ValueCreation

Source:ValueCreation

Limits of productivity and efficiency
How is it possible that so much potential is lost? Mainly due to the industrialist mentality of managers and also due to the fear middle managers feel about their employees and customers achieving performance beyond their control. And this is what managers are taught to: control.In some former posts we described how the race to become more and more productive and efficient may produce the contrary effect; especially by applying always the same formula: standardization and automation. The case of shared services is very representative on how to reach the limits of efficiency without the possibility to reach more significant savings or improvements after  a couple of years.

The idea that efficieny is limited by standardization and automation is not mine, but acknowledged authors like José Miguel Bolívar observe now what Peter Drucker predicted when he coined the term knowledge workers or when Robert Reich, Secretary of Labor under the Clinton Administration described the workers of technology, biotechnology or management as “symbolic analysts”. Despite of that, productivity in non industrial jobs is still managed from an industrial perspective.

Does this mean that there are limits to productivity and efficiency? Not necessarily. It means that the marginal performance of productivity and efficiency strategies such as standardization and automation in knowledge and management environments is sharply decreasing. This fact is known since in the 70s Harry Barverman described the processes of de-skilling at work: we simply have reached the point predicted by Braverman.

Innovation works like quantum leaps, but it needs collaborative talent
It is not by chance that innovation has become fashionable. Innovation has become a sort of mantra that is quoted so often that it risks losing its meaning. But it is true that in order to get out of a dead end it is necessary to climb a wall or jump over it. Innovation is the way to achieve these “organizational quantum leaps”. Yet, exacltly like industrial efficiency and productivity approaches have limits when applied to to knowledge and analysis environments, innovation as applied in R&D or in industry (quality, kanban, kaizen), being very useful and necessary has also limits.

This is the cause why the noun “innovation” is preceded more and more in company of adjectives like “open” “collaborative” or described as “2.0” “user centered” or simply called “co-creation”. This sound familiar to you, doesn’t it?

The reason is simple: employees, users and customers working towards innovation are able of mobilizing far more capacities and resources than by standardized tasks. In fact, standardized work hides and covers most of employee’s and customer’s potential. First of all, many new ideas are generated by the very fact that people from different backgrounds and different perspectives join together working outside of hierarchy and power relations (how much energy is lost in cross department projects in demonstrating who is the boss or what department is more important). The key point is not that new and good ideas are generated: they get implemented!

Amazing results
The examples of the projects we are working this quarter that is ending now are amazing: third sector entities that open themselves to work with user potential. Private clinics that share their knowledge and create thus new markets in Russia and Central Europe. Educational institutions that multiply their lecturer´s potential and get ready for excellence investing much less than with an external consulting company. Biotechnology start ups that enlarge widely their research capacities and obtain resources from American universities by collaborative projects … all of them are organizations that earn money or become efficient by transforming themselves into innovative organizations.

Surveys confirm these results: 90% of employes say they are more efficient, 85% say they are more productive, 75% ensure they obtain feasible results in short time, 65% feel more motivated …and 80% doubt on their organization’s ability to turn innovation into reality.

Some readers may argue: “these are data of ValueCreation and you are biased”. All right. What about using IBM data? The 2006 Global CEO Study, shows how the 35% to 40% of the CEOS of the world’s 1.700 leading companies value customers, employees and business partners as the main source for ideas, but only 5% uses them.

In the 2012 Global CEO Study this tendency appears clearly stronger and 63% of global CEOs think that collaborative environments are key for growth. 53% think we should stop looking at others as competitors and seen allied in them. The most interesting thing is that 59% of top performers think this way, while at low performers only 46% of CEOs sustain this point of view.

The conclusion is obvious: besides that a huge income and improvement potential is clearly underused, change has to come from organizations; not the employees. Attention change managers and culture change experts: change yourselves and stop trying change others.

Organizations have to change, not employees
If the conclusion is that obvious, why do not organizations change? There is a fear to lose control when employees acquire autonomy. I have witnessed projects that achieved great savings were treated as isolated experiences that cannot be reproduced. I have heard middle managers complain when confronted with innovation groups “das sind hochwertige Managementaufgaben” (these are highly valuable management tasks). I also heard how after saving 30% of costs of a given cost category thanks to employee contribution, managers said: “I don’t see the contribution to documentation improvement: this is a very theoretical project”.

Team devolping an innovation project

Team devolping an innovation project

It is true that middle managers feel fear. Not because some kind of dishonesty od lack of ability: they have been trained during the past 120 years by universities and management schools to manage resources and people, but not to obtain the best out of them. They are simply not used to it.

An innovative organization needs a strong leadership
Yet a collaborative enterprise or an innovative organization need a strong leadership and a very qualified management. It is about doing more with less, not about flatening hierarchy (a metaphor for middle management layoffs in the 90s) … but different management competencies are needed.

How to multiply results and  become an innovative organization
This will be the content of 2013’s first post. Merry Christmas and a happy new year to all!

Autor: Carlos Bezos Daleske

Siento curiosidad por todo lo relacionado con personas y organizaciones, especialmente en salud. Me gusta trabajar con personas y con su capacidad de innovación y co-creación. www.iexp.es I feel very curious about everything related to people and organizations, especially in healthcare. I enjoy working with people and their ability to innovate and co-create. www.iexp.es

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