The innovation log jam

Searches for ways to innovate often need to begin with looking at the self imposed limitations of internal corporate cultural conventions
Written by Oliver Marks, Contributor

'Innovation' is currently a wildly popular, multi faceted word in business circles. Seeking out new ideas that can be quickly brought to market for profit is as old as commerce, and the realities of our borderless, globalized world requires constant vigilance to stay ahead of competitors (or to 'disrupt' them, to wheel out another overused cliche).

'When Will This Low-Innovation Internet Era End?' by Justin Fox in Wired is an article I've returned to a lot this year and has a direct bearing on the current enterprise technology industry, which some would argue (including indirectly Cisco CEO John Chambers) at the top end is going the way of the Detroit car industry in the '70's.   

'At some point we really do have to get beyond the organizational, and the digital, to the real' writes Justin, who posits the idea that since the internet true innovation - real, tangible advances such as the seminal creation of the transistor - have been replaced by cautious insurance against failure. 

Historically, digital tools for business organization had a minor worker revolution five or six years ago with the advent of the read/write Web 2.0 and smartphone and cellular service advances, resulting in individuals innovatively sourcing agile digital productivity tools to get their work done outside the limitations of their IT provisioned enterprise software. The comparatively small number of people who actually took these 'outside the box' steps to get work done in innovative new ways ran large risks of corporate sanction and worse to get their job done. Ironically observation of the few created a large online chattering class discussing possibilities, new technologies and ideas composed of people with little or no skin in the game of actual 'real' product creating innovation - except for a few developers of digital productivity tools they hoped 'real' users would adopt.

'The 15 years since the internet became a major part of our lives has been marked here in the U.S. — birthplace of the internet — by mostly disappointing economic growth' writes Justin. The internet has had a huge impact on pushing down the cost (in some cases to zero) of just about anything you can imagine, and due to the removal of any barriers to online publishing has also created what I've been calling 'information deflation'. 

There are lots of huge benefits to our ever more connected digital world, with ease of discovery of rich, contextually linked information at the top of the list. The challenge for those seeking to innovate is primarily overcoming the inertia of the old world, and the negative aspects of the modern, and that can be much harder and more political than it appears at a high level. Doable, but requiring more clear, contextual thinking and less application of other people's third hand ideas  - the Chinese Whispers aspect of Information Deflation…
A balanced scorecard approach to strategic management coupled with business transformation initiatives  is widely taught in business schools and used within most of the manufacturing companies I've been involved with, along with the S.M.A.R.T. philosophy for Human Capital' (i.e. people) to get the actual work processes done.

Like documents, mail and filing these ways of working still have their place in the digital era but all too often are now a huge bottleneck because of the greatly increased clock speed and information complexity of modern business. Nevertheless, the approach remains a bedrock of current education and business execution.

Quoting 'The Balanced Scorecard Institute' website
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

A common criticism of the layers of management inside companies who police adherence to scorecard metrics and employee S.M.A.R.T. goals by those doing the actual work is that the managers are mere shovel leaners and box tickers, watching as others succeed or fail doing the 'real' work. Pay incentives are often tied to score card goals despite the Kaplan/Norton system not having been conceived or designed for this.

I'm sure someone out there is writing or has written a book on the Social Balanced Scorecard, weaving in all the familiar attributes of social networks for the enterprise: getting to the 'real' of actually doing it rather than talking about it is the key, as advocated by Justin Fox.

The core culture of a business is a pretty fascinating entity. Industrial psychologists know you can eliminate virtually the entire workforce of a firm, and when you restock with new hires the same cultural strengths and weaknesses of the earlier incarnation will reappear. Driving innovation within the constraints of a balanced scorecard process driven culture is possible but may be outside the comfort zone of many.

SAP and Oracle have HANA ('High Performance Analytic application') and Exalytics respectively as data crunching engines which will populate dashboards of key metrics, to speak the language of the balanced scorecard. These immensely powerful and fast in-memory tools will speed up the creation and analysis of business intelligence data, but the familiar uses of the information by end user businesses are likely to remain the same, crimping the value of investing in these new technologies.
Lang Davidson and the two Johns Seely Brown and Hagel documented with their  2009, 2010 and 2011 'Big Shift' reports how ROA (Return on Assets) performance continues its long-term decline due to deteriorating firm performance despite increased productivity by the workforce.  Everyone knows the problems that need to be solved - greater innovation equals profits - but conservative cultures understandably are reluctant to break the moulds that shaped them. 

Applying a superficial layer of 'social' is all the rage as a feature of countless enterprise applications this year, rolling up the hard work and  innovation of pure play vendors and more importantly the people who have used those products successfully. Politically, applying these tools on top of an existing culture of score cards and S.M.A.R.T. goals can have unintended consequences. For those talented at networking and with sharp elbows, internal corporate social networks can be a giant social climbing frame to climb. Similarly for those talented at finding parades to get in front of  to acquire the kudos for other people's efforts, access to everyone's activities is a Godsend. 

Peter Druckers sensible, pragmatic statements "It's easier for companies to come up with new ideas than let go of old ones" and "The purpose of a business is to create a customer" have never been more important, but too many pay lip service to new technology tools while relying on their old familiar ways of doing things as reality.

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