The trick is knowing how to tap into them. One answer: innovation communities.
Let’s take the mystery out of innovation and its inspirations.
Most great ideas for enhancing corporate growth and profits aren’t discovered in the lab late at night, or in the isolation of the executive suite. They come from the people who daily fight the company’s battles, who serve the customers, explore new markets and fend off the competition.
In other words, the employees.
Companies that have successfully made innovation part of their regular continuing strategy did so by harnessing the creative energies and the insights of their employees across functions and ranks. That’s easy to say. But how, exactly, did they do it? One powerful answer, we found, is in what we like to call innovation communities.
Questions to Ask Yourself
1. Does your company leave innovation to an R&D team without input from groups that work directly with customers?
2. Are your best managers and staff increasingly restless and cynical because they aren’t being given the opportunity to shape your company’s future?
3. If you asked 10 employees what they thought management considered to be fruitful areas for innovation, would you get 10 different answers?
4. When you talk of employee-generated innovation with your management team, do they act dismissively?
5. Does your management team think it’s too costly and disruptive to hold regular cross-function innovation discussions?
If you answered yes to any of these questions, your company probably needs to rethink how it inspires innovative ideas. Regularly hosting what we call innovation communities can save companies money while enhancing future leadership, growth and profits.
Every company does it a little differently, but innovation communities typically grow from a seed planted by senior management—a desire for a new product, market or business process. A forum of employees then work together to make desire a reality.
Innovation communities tackle projects too big, too risky and too expensive to be pursued by individual operating units. They can be created with little additional cost, because no consultants are needed. After all, those in the midst of the fray already know most of the details relevant to the project.
A lot of senior managers think the opposite: that the people around them don’t understand what’s needed or are incapable of seeing the big picture. This is why some call in consultants. But we say this often shows a signal lack of strategic courage and resolve. We say trust your own people.
Innovation communities are a way of giving new shape and purpose to knowledge that your employees already possess. The detailed discussions that take place, led by senior managers, often represent a company’s most productive and economical engine for increased profits.
Here, then, are seven key characteristics that we have identified as being part of successful innovation communities.
CREATE THE SPACE TO INNOVATE. Line managers and employees occupied with operational issues normally don’t have the time to sit around and discuss ideas that lead to cross-organizational innovation. Innovation communities create a space in which employees from across the organization can exchange ideas.
At first, participants typically meet face to face at a central location, often company headquarters, then shift to virtual meetings for follow-up sessions. The most important thing is blocking out time free of daily responsibilities to devote to discussion and creative thinking.
Innovations in management theory & business strategy – a collaboration with The Wall Street Journal
Senior management sets the agenda. A clear statement of purpose and themes for discussion are set forth. Participants are free to discuss ideas without concerns about hierarchy and quarterly financial results.
Each year at food retailer Supervalu Inc., 35 to 40 mid- and director-level managers break up into four teams to discuss strategic issues suggested by executives in the different business units. The managers discuss issues outside their own areas of expertise and work on their leadership development at the same time. Over periods of five to six months, they hold electronic meetings at least weekly and meet in person at least five to six times, all while continuing to perform their regular duties.
Japanese pharmaceutical maker Eisai Co. has convened more than 400 innovation communities since 2005 to focus on health-care-related issues such as examining possible new structures and sizes of medicines—for instance, a medication now on the market in Japan in a jelly-like substance that Alzheimer’s patients can swallow easily—and devising social programs for the families of Alzheimer’s victims. Every Eisai employee world-wide participates in at least one such project, and spends time with patients as well. The company thinks connecting in person with patients is crucial because it helps employees see and understand issues that the patients think are important, and so enhances the employees’ ability to see beyond pure data.
GET A BROAD VARIETY OF VIEWPOINTS. It’s essential to involve people from different functions, locations and ranks, not only for their unique perspectives, but also to ensure buy-in throughout the company afterward. Innovation communities focus on creating enthusiasm as well as new products. At Honda Motor Co., innovation groups in the U.S. draw members from sales, engineering and development, and from different business units across North America. Some companies, like General Electric Co., involve consumers and business clients in new-product discussions as well.
Sometimes groups seek out certain kinds of participants. Best Buy Co., for example, assembled mostly women employees, from store cashiers to corporate executives, to discuss how to make its stores more attractive to female consumers. The inspiration: Best Buy considered women a seriously underserved market segment with high growth potential. Store data also revealed that women customers tended to return less merchandise than men did, and so generated more profits.
CREATE A CONVERSATION BETWEEN SENIOR MANAGEMENT AND PARTICIPANTS. By definition, innovation communities can’t work in isolation: To create sustainable cross-organizational innovation, it’s important that ideas flow to senior managers. If they don’t, innovations will tend to have limited, local effects that don’t benefit the organization as a whole.
Further reading from MIT Sloan Management Review
* Six Myths About Informal Networks—and How To Overcome Them
Rob Cross, Nitin Nohria and Andrew Parker
Informal groups of employees do much vital work.
* Four Keys to Managing Emergence
Ann Majchrzak, Dave Logan, Ron McCurdy and Mathias Kirchmer
Encouraging spurts of participatory innovation.
* An Inside View of IBM’s ‘Innovation Jam’
Osvald M. Bjelland and Robert Chapman Wood
What happened when IBM brought 150,000 employees and stakeholders together.
Discussions about innovation should be open but guided conversations between senior managers and lower-ranking participants. Everyone has to be on the same page, especially when it comes to understanding the competitive environment and how to respond.