blog_iStock_000017819095_SMALL

The Innovation Blog

The Silos Effect

Posted by Creative Realities on Feb 1, 2011 10:59:00 AM

 Over the last 22 years we have worked with hundreds of clients in over 35 different industries. This is important to establish because we know the following topic is a factor in any industry.

We kick off new client relationships with an assessment of their capacity for innovation, by asking a cross-section of functional and hierarchical stakeholders to, “Please describe how innovation happens around here.”  

One of the first words we always hear (it has never failed…ever) is “silos!” One prospective client recently muttered “fortresses.”


Business silos are exactly the same as agricultural silos; they are meant to safely hold something and make it tough to get at what’s inside. Silos may be beneficial to protect wheat from rain & snow but they are the biggest structural barriers to innovation that companies have to contend with; and the bigger the company the worse the impact of their silos. Silos create an environment where every company's divisions, business units, brands, functions, autonomous regions and levels resist sharing andcollaborating for anything other than their own special interests.

Ironically, one of the most effective ways to address the negative impact of silos is embedded in a company’s innovation practices, usually the biggest, most constant stimulator of change. And the only ones who can inspire people to break down silos and collaborate with each other is their executive leadership. Innovation is the Trojan Horse for breaking down silos. But it only works if the leaders do what they’re supposed to do.

Remember this! Companies don’t change because they want to. They change because they are forced to by competition, by advances in science and technology, and by other market dynamics they can’t control (if we could control them then we wouldn’t have to change). When change is being forced upon the enterprise, and they can’t do things the way they’ve always done them, then they are willing to give and accept help.

But it doesn’t work unless everyone understands why change/innovation must happen and why they need to work together in new & different ways toward a common goal. And only the top of an organization can make that happen.

Here are the first two critical steps in breaking down silos. We have identified Innovation’s 9 Critical Success Factors. Two of the most critical are:

o  A Compelling Case for Innovation

o  A Fully Aligned Strategic Innovation Agenda

Let’s start with the Compelling Case for Innovation. Who said this and when? Please guess before reading on:

 “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success nor dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarm-ness arising partly from fear of their adversaries, who have the laws in their favor, and partly from the incredulity of mankind, who does not truly believe in anything new until they have had experience of it.”

Notice how so much of what resists change is embedded in the culture, in protecting what is rather than getting excited about what could be. The quote was from Niccolo Machiavelli in 1513. And not much has changed in 500 years! Only by inspiring a culture with a compelling case for why the organization needs to change in order to insure the health and growth of the enterprise…and job security (what’s in it for me?) will anyone be willing to play with newness.

So what does a compelling case for innovation have to do with silos? It’s the first step in breaking them down. It wheels the Trojan Horse through the impenetrable walls of “how we do things around here.”

The second critical success factor is A Fully Aligned Strategic Innovation Agenda. Now that management has everyone’s attention, and has sounded the call to innovation, what must happen next? My partner Jay Terwilliger’s favorite quote when it comes to innovation strategy is from the Cheshire Cat to Alice in Wonderland, “If you don’t know where you’re going any road will take you there.” Most senior managements fear that giving strategic guidance to their organizations will stifle their creativity and their willingness to “think outside the box.” In the immortal words of Colonel Sherman Potter, “Horse Hockey!”

An innovation agenda is the second step in breaking down silos, because the organization realizes that it must work together to succeed at something. That’s why President Kennedy’s challenge to NASA was so brilliant: “By the end of the decade we will put a man on the moon and safely return him to earth.” One of the most powerful ways to break down silos is to inspire the organization with an innovation agenda that demands it. The people in NASA had no choice; they had to collaborate every day in order to do something no one had ever done before. The silos came tumbling down.

 

By Mark H. Sebell, Founder and CEO, Creative Realities @MarkHSebell

Silos Blog
(01/30/11)

Over the last 22 years we have worked with hundreds of clients in over 35 different industries. This is important to establish because we know the following topic is a factor in any industry.

We kick off new client relationships with an assessment of their capacity for innovation, by asking a cross-section of functional and hierarchical stakeholders to, “Please describe how innovation happens around here.”  

One of the first words we always hear (it has never failed…ever) is “silos!” One prospective client recently muttered “fortresses.”

Business silos are exactly the same as agricultural silos; they are meant to safely hold something and make it tough to get at what’s inside. Silos may be beneficial to protect wheat from rain & snow but they are the biggest structural barriers to innovation that companies have to contend with; and the bigger the company the worse the impact of their silos. Silos create an environment where every company's divisions, business units, brands, functions, autonomous regions and levels resist sharing and collaborating for anything other than their own special interests.

Ironically, one of the most effective ways to address the negative impact of silos is embedded in a company’s innovation practices, usually the biggest, most constant stimulator of change. And the only ones who can inspire people to break down silos and collaborate with each other is their executive leadership. Innovation is the Trojan Horse for breaking down silos. But it only works if the leaders do what they’re supposed to do.

Remember this! Companies don’t change because they want to. They change because they are forced to by competition, by advances in science and technology, and by other market dynamics they can’t control (if we could control them then we wouldn’t have to change). When change is being forced upon the enterprise, and they can’t do things the way they’ve always done them, then they are willing to give and accept help.

But it doesn’t work unless everyone understands why change/innovation must happen and why they need to work together in new & different ways toward a common goal. And only the top of an organization can make that happen.

Here are the first two critical steps in breaking down silos. We have identified Innovation’s 9 Critical Success Factors. Two of the most critical are:

o  A Compelling Case for Innovation

o  A Fully Aligned Strategic Innovation Agenda

Let’s start with the Compelling Case for Innovation. Who said this and when? Please guess before reading on:

 “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success nor dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarm-ness arising partly from fear of their adversaries, who have the laws in their favor, and partly from the incredulity of mankind, who does not truly believe in anything new until they have had experience of it.”

Notice how so much of what resists change is embedded in the culture, in protecting what is rather than getting excited about what could be. The quote was from Niccolo Machiavelli in 1513. And not much has changed in 500 years! Only by inspiring a culture with a compelling case for why the organization needs to change in order to insure the health and growth of the enterprise…and job security (what’s in it for me?) will anyone be willing to play with newness.

So what does a compelling case for innovation have to do with silos? It’s the first step in breaking them down. It wheels the Trojan Horse through the impenetrable walls of “how we do things around here.”

The second critical success factor is A Fully Aligned Strategic Innovation Agenda. Now that management has everyone’s attention, and has sounded the call to innovation, what must happen next? My partner Jay Terwilliger’s favorite quote when it comes to innovation strategy is from the Cheshire Cat to Alice in Wonderland, “If you don’t know where you’re going any road will take you there.” Most senior managements fear that giving strategic guidance to their organizations will stifle their creativity and their willingness to “think outside the box.” In the immortal words of Colonel Sherman Potter, “Horse Hockey!”

An innovation agenda is the second step in breaking down silos, because the organization realizes that it must work together to succeed at something. That’s why President Kennedy’s challenge to NASA was so brilliant: “By the end of the decade we will put a man on the moon and safely return him to earth.” One of the most powerful ways to break down silos is to inspire the organization with an innovation agenda that demands it. The people in NASA had no choice; they had to collaborate every day in order to do something no one had ever done before. The silos came tumbling down.

Topics: critical ideation skills, creative thinking, Creating an Innovation Team, Innovation, Collaboration, Cross Functional Teams, Pursuit of Ideas

Incremental vs. Game-Changing Innovation

Posted by David Culton on Nov 7, 2010 2:56:00 PM

This past week I got sucked into what I thought was a pretty weak online debate. The question posed was, "Is Incremental innovation the enemy of Breakthrough Innovation?"

As expected almost everyone said "yes," (and some quite emphatically). This was pretty discouraging, because if managed properly Incremental is Breakthrough's best friend. Apparently this is a somewhat counter-intuitive position, because I got hosed by the responses of others. This usually means I'm onto something.

Here's why Incremental is Breakthrough's (we like to say Game-Changing's) best friend:

  1. First of all, you can't run a company without being good at incrementalism. It keeps you in the game. And if done propoerly it provides short-term (and I stress "short-term") competitive advantage. Or, for those who want to only be fast-followers (a very legitimate innovation strategy), then you must have a well-oiled Incremental process for playing catch-up. One could argue that Fast-Follower is where the money is made.
  2. Incremental is relatively low-risk (a statement I often get challenged on). The strategy is clear, the cost of failure is pretty low, and the rewards contribute to the short-term (there's that term again) bottom line. Incremental failures don't threaten the survival of the enterprise. This means that a strong, successful Incremental engine should throw off some funds for taking higher-risk bets, most of which will fail. Incremental not only keeps a company in the here & now game, it also keeps the company in the longer-term breakthrough game, if it chooses to play there.

So, what's the debate about? Incremental is the enemy of breakthrough when a company invests all of it's innovation budget and bandwidth on it, which is a very easy thing to do. Incremental is more comfortable. The funding and resourcing of it can be pushed down to the operating divisions/SBUs, where decision-making can be consensus-based. But the decision to pursue, fund, resource, and provide air cover for going after the game-changers requires a whole different model, and it starts at the top, which is another reason why companies stay within their Incremental comfort zones.

The problem arises when an organization that claims it wants to be a game-changer becomes totally consumed by its pursuit of incrementalism, with 100% of it's budget and resources focused only there.

Truly innovative companies must take a portfolio mentality for their Strategic Innovation Agendas. Depending on the nature of the industry/industries being served, they should be apportioning anywhere from 1/4 to 1/3 of their innovation capacity on the game-changers.

In Built to Last, Jim Collins & Jerry Porras talk about "The Genius of the AND versus The Tyranny of the OR." Healthy innovators are always pursuing both. It's absurd to think otherwise.

Topics: Innovation, Innovation, innovation consulting, breakthrough innovation, Championed Teamwork, leadership, leadership, strategic innovation, strategy, growth, Strategic Goals, criteria for innovation, decision-making, breakthrough, new product development, Essentials for Innovation, Risk, Management

The Humorous Bazooka

Posted by David Culton on Oct 13, 2010 1:27:00 AM

Hu-mor-ous ba-zoo-ka (hew’mer-us be-zoo’ka), n. 1. a funny, witty comment that, intentionally or unintentionally, shoots down another person’s idea.  2. innovation killer
 
Think back to the last brainstorming session in which you participated, where the goal was to come up with innovative ideas for your business.  How many creative ideas were put forth for the group’s consideration?  How many of those really new ones survives the barrage of negativity and doubt that usually greets new concepts?  And, of the ideas that did survive, how many have been implemented for are still moving in that direction?  Very likely, few made it into development and fewer still—if any—actually are on their way to market.  You’ve got the creativity part down; you just haven’t learned how to be innovative!
 
If your company is typical, I’ll wager that plenty of good ideas surfaces during the brainstorming but few, if any, of the truly breakthrough ones made it out of the room alive.  Most of the truly new ideas were probably shot down with a barrage of humorous bazookas—the act of shooting down another’s idea with a witty barb.
 
This tendency to lob verbal grenades at new ideas has been and still remains so pervasive that I coined the term The Bazooka Syndrome in 1982, when I first began my career as a creative problem-solving facilitator.  Every time I have described this behavior to a new group of people, it has hit a responsive chord.  Everyone instantly identifies with The Bazooka Syndrome because we have all been hit by these verbal missiles.  And most people will also admit, with shamed faces, that they have been guilty of using bazookas on the ideas of others (colleagues, spouses, kids, family, and friends).
 
The Bazooka Syndrome captures what we unintentionally, but instinctively, do to new ideas.  We make fun of them.  We point out every single problem.  We end up annihilating them.  We point out every single problem.  We end up annihilating them, all in the spirit of constructive flaw-finding and, allegedly, idea improvement.
 
For creative people who are good at generating fresh ideas, being hit by a bazooka blast is enormously discouraging.  Frustration abounds in organizations that are skilled at dreaming up new ideas yet ineffective at protecting them from the bazooka wielders that exist everywhere.
 
It’s very discouraging to watch competitors successfully launch innovations based on ideas you tossed around but failed to pursue because you were gunned down by a bazooka.  Are the phrases “Gee, we thought of that months (or years!) ago” and “we tried that but couldn’t make it work” commonly heard within the walls of your organization?  If so, your company is undoubtedly populated by bazooka experts and, as a result, is short on innovation.

Mark Sebell

Topics: Innovation, creative problem solving, humorous bazooka