It’s time for us to give up the limits we’ve placed on our organizations, it’s time to let go of our defenses and fears. Time to put on new lenses and explore beyond our known limits. It is time to become full participants in this universe of the emerging order.
Margaret Wheatley: “Chaos and complexity”.
We have come to mistakenly believe that the organizational model founded during the Industrial Age is carved in stone instead of thinking that it is a model that arose out of the necessity of the times, and intended for a more stable environment, which no longer exists. We are living in different times now. The context is dramatically different and changing every day. To remain relevant, have a positive impact and overcome the challenges of the new reality we have to explore the limits of our organizations.
- Where does my organization currently stand in terms of its organizational capability set?
- What capabilities are critical to the sustainable success of the business, taking into account both the strategic context and business requirements?
- How can quarterly results be reconciled with the exploration of new emerging opportunities in the new context?
- What kind of organizational development path is needed to build agile organizations: capable of being predictable and efficient, yet agile and flexible?
- How do we overcome the resistances of the corporate immune system and avoid getting caught up in our past experiences?
Traditional hierarchical organization does not seem to be the right answer. Our proposal, as we have shared in previous reflections, is the Netarchy, a new paradigm that charts a bold new path to building the organizations of the future as innovation ecosystems based on networks of autonomous teams that are customer-centric, driven by business purpose, and coordinated across culture. In the reflection, we will advance on a fundamental characteristic of the Redarchy as an open innovation ecosystem capable of providing focus on the exploration of new opportunities, and making agility a strategic competence.
From Organizations as Machines to Organizations as Ecosystems
In a process of innovation in the organization of the company, anyone, regardless of the position they occupy in the organizational chart, can innovate.
In recent years, the business world has seen the birth of a new generation of agile companies, capable of combining innovation and results. The combination of networked cross-functional teams, agile methodologies, and reliance on frequent customer and market feedback allows organizations to adjust much faster to the challenges of a new economic cycle.
To see an organization as an ecosystem is to realize that ecosystems achieve stability through change, which is a fundamental characteristic of complex living systems. Change and chaos are an essential part of the adaptive cycle, so the organizations of the future need to be more adaptable and team-centric. They will necessarily have to be open platforms designed for speed, agility and adaptability, which will allow them to reconcile operational efficiency with the exploration of the new opportunities offered by the global economy.
These organizational innovation models, called innovation ecosystems, are structured in networked agile teams designed to anticipate changes, adapt to them and provide innovative solutions to emerging customer needs. Innovation teams operate in rapid cycles of exploration and learning as true internal startups guided by a shared purpose to create value for the organization as a whole. His Agile Operating Model has the ability to quickly and efficiently adapt your strategy, structure, processes, people and technology to new opportunities.
All staff are managed by functions and work in teams within autonomous innovation cells, but aligned with the company’s strategic objectives, turning to the parent organization to obtain approval for their initiative and the resources needed to carry it out. The teams, which usually consist of six or seven people with an “initiative owner,” stay together as a dedicated group for the duration of the initiative, to rejoin the parent organization, until they become involved again in another initiative. While these basic structural components are the same across ecosystems, how they are implemented depends on each company’s strategic goals.
Amazon, Google or Apple are an excellent example of the new generation of organizations that operate structurally as innovation ecosystems. Its leaders have been able to exploit mature businesses such as retail and distribution, in which efficiency and incremental improvements are key, and at the same time leverage existing assets and capabilities to explore new domains where flexibility and experimentation are needed.
Innovation Circles
Just as departments and job definitions are the building blocks of hierarchical structure, innovation circles are the building blocks of innovation ecosystems, not individuals, not units, not departments or divisions.
It’s a way of organizing people, with different skill sets and roles, around an organizational challenge or an emerging opportunity. Teams are autonomous from the hierarchy, and very focused on customers and their needs, present or future. Participants have everything they need to achieve their goal within the circle itself, allowing them to work flexibly and as nimbly as possible.
Unlike traditional job descriptions, which limit people’s contribution framework to a few assigned activities, role definitions in innovation circles are dynamic, constantly updated and clarified based on the day-to-day relationship, and the needs of the organizational challenge to be solved.
People select the circles they are interested in based on their capabilities and motivations, they don’t need to wait for a position on the org chart to innovate. The work in each circle is guided by the “owner” of the initiative who helps the team navigate iteratively, creatively, innovatively, and quickly in solving the selected challenges. Governance meetings channel the necessary tensions and changes into the circle without relying on managers to drive that process.
Context and Autonomy
The role of hierarchical leadership is to provide information and context to each circle so that everyone is connected to a common purpose and has the best possible information to make their own decisions. Therefore, the management model in the innovation ecosystem is one of “context and autonomy”, in clear contrast to the traditional model of “command and control” on the hierarchical side.
Control in circles is social, individual and team goals and metrics are shared and visible to the entire team, and accountability becomes more transparent. The sense of responsibility and leadership is personal and the focus is not on control but on training people for collective decision-making and collaborative work.
The circles work within the context that the organization has defined, making use of the resources (time and space) that it has decided to release to explore and develop the future. After finishing work in a circle, teams are redistributed based on the needs of the next initiative, maximizing the use and disposition of resources based on the organization’s real gaps and challenges, away from internal politics or personal interests.
What we’ve learned.
To thrive in a complex and rapidly changing environment, companies must have the
dual ability to be dynamic and stable at the same time
. Dynamic practices allow companies to respond nimbly and quickly to new challenges and opportunities, while stable practices allow us to maintain day-to-day operations and operational results. Agility is not incompatible with stability, quite the opposite. Agility requires stability for most businesses.
Therefore, in the transition of our organization to an innovation ecosystem we must maintain the right balance between innovation and results. Focusing too much on excellence in day-to-day operations can cause an organization to lose long-term vision and risk its future viability, while emphasizing exploration over organizational alignment can lead us to build tomorrow’s business at the cost of today’s. Below, we summarize what we’ve learned over the past ten years, helping companies large and small transform their organizations into innovation ecosystems without impacting their day-to-day operations. I hope these lessons learned will help you build your own path to the future.
- To overcome disruption you need to constantly reinvent yourself. Lead with a purpose of transformation, shared values and culture.
Our job as leaders
is to create the conditions for people to grow and ideas to flourish. - Surround yourself with transformative leaders who want to accelerate change. Leaders with credibility, capable of connecting, persuading and convincing. Inspire them to be brave, let them experiment, fail, learn, and move forward.
- It creates organizations as innovation ecosystems. Adaptable, agile and flexible, capable of combining operational efficiency with the exploration of new opportunities.
- Create a culture of innovation. Culture must be designed and cultivated. If you want to create a culture of innovation, you need to do it intentionally, be a role model, accept mistakes as learning, and recognize innovative behaviors. One An organizational innovation consulting company can help you on this path.
- Make business agility a strategic competency of your organization. Anticipate and take advantage of disruption before your competitors do. It transfers resources, organizational talent, and management focus from the past to the future while maintaining operational results.
- Compete with superior business models, learn from start-ups. Anticipate your customers’ needs, adapt before your competition, and leverage exponential technologies to create a superior business model.
- Make sure innovators can thrive. The problem of innovation is not creativity, lack of ideas or talent, the problem is not facilitating innovation so that innovators have adequate resources to test and validate their ideas.
- Create ambidextrous organizations where the innovation arm has the same power as the existing business. Create an innovation portfolio that includes both exploration and exploitation initiatives.
- Exploration and exploitation are two radically different professions, require a different set of skills and experiences. Develop a ambidextrous company with ambidextrous professionals who are cooperative and seek credibility, contributors to collective innovation and born creators of social capital.
- Use Design Thinking to generate a portfolio of initiatives validated for further scaling. Customer obsession and agility to validate new opportunities are the foundations of growth in any innovation ecosystem.
- Start small and with early victories. Select an organizational prototype to validate that the innovation ecosystem is producing the expected results and replicate it in other parts of your organization.
- Innovation requires its own set of metrics and incentives. In exploration, it’s crucial to gauge whether you’re reducing the risk and uncertainty of new business ideas, before investing at scale, and create validated learning to decide whether we should persevere or pivot.
- Look at failures as opportunities to learn. Keep iterating to discover the collaborative platforms that work best for your organization. Be patient, organizational reinvention takes courage and time to see results.
- It encourages mass collaboration as a model for creating economic and social value. Sharing always creates value and makes the whole more than the parts. Collaboration happens when teams make the network better than any individual team.
- Harness the potential of networks as a driver of innovation creating autonomous, agile and collaborative work environments. Redarchy is the way to build the organizations of the future.
- Reward people for their skills and contribution, not because of their position. Personal development and progression must be a function of personal competencies, including passion, empathy for others, the ability to learn throughout life and an entrepreneurial spirit.
- Develop commercials with insight to be one step ahead of the market. Able to offer their customers different perspectives and offer products and services that we had not even imagined yet.
- Make sure you have enough rebels in your organization. Rebellious people are people of ideas, positive, able to see things not for what they are but for what they can become. They are demanding and creative people, born to rebel. They are essential in innovation teams, without their help significant large-scale innovation is unlikely to emerge.
Where to start?
Building a sustainable innovation ecosystem is not easy, it requires executive commitment and a strong culture of innovation as a starting point. This includes developing the right leadership, organizational design, and developing agile capabilities to explore new ideas, experiment, accept failure, and work with external partners. Innovation allows teams to experiment and improve. Agility as a strategic competency helps teams act quickly and iterate ideas with impact.
Where to start? Depends on. Each company is at a different stage in developing its innovation capacity. The right starting point for your company can be our Workshop Acelera Innovation which focuses on the assessment of their current innovation capacity and on the co-design of a sustainable innovation ecosystem model. Or perhaps, the Workshop Acelera Leadership which focuses on leadership engagement and the development of collaborative, transformative leadership needed to manage the innovation ecosystem. If you have sales teams that need to create sales experiences that bring value and insights to your customers, the Workshop Acelera Sales it’s designed for that. If you need to reconcile operational excellence with the exploration of new opportunities, the Workshop Accelerate Operations would be the best option.
If you’d like to run a Sprint as a collective innovation experience, the Accelerate Sprint It compresses years of learning into just three months, accelerating transformation via integrated agile teams, mass collaboration as a model of value creation, and emphasizing the development of transformed leadership, the adoption of agile methodologies, and the creation of a portfolio of validated innovation initiatives for further scaling.
As you can see, there are different possible starting points, but they will all help you accelerate your growth and create a world-class innovation ecosystem. That’s our mission and lo que hacemos como empresa. ¿Hablamos?
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