BLOG

Growing Innovation

Janka Krings-Klebe

0

Abstract of my speech on business ecosystems and innovation superclusters at the Global Peter Drucker Forum GPDF in Vienna 2019

Unlike classic collaboration setups, open business ecosystems are not limited in their possibilities. Participating companies can combine their capabilities more quickly in order to jointly exploit new opportunities. Flexibility and speed in cross-company collaboration is what distinguishes ecosystems from other business setups. Innovation superclusters are a special kind of ecosystem, with one additional distinctive feature: They make it simple to quickly grow innovations to profitable size. Innovators in superclusters can easily partner with corporations in joint businesses. The corporations add the punch to quickly grow innovative ideas into profitable operations. They have the resources, the business capabilities, the customer base and the market access that innovators lack at the beginning.

That is the theory. In practice, corporations struggle in adapting to the speed and flexibility required in ecosystems. Their management practices and governance principles are not adequate for joint businesses. These practices are road blocks to quickly connect with promising partners and to set up joint business operations.

Companies like Haier and Amazon show the way to remove these barriers: Corporations have to internally transform their operations into a highly dynamic ecosystem, and learn to manage and govern them according to principles of adaptivity, customer needs and value add. This step is essential to develop management and governance practices that are required in highly dynamic business environments, such as innovation superclusters. Then, and not sooner, corporations can participate and profit in innovation superclusters, quickly bringing in their corporate power to grow promising innovation into big business.

Video to be published soon.

Related article:
Global Peter Drucker Forum Blog: Embracing uncertainty

previous arrow
next arrow
previous arrownext arrow
Slider

Blog image: pixabay.com

Back to Day One

Janka Krings-Klebe

0

After one year of exciting and challenging work, Laurence is happy: He just got praise from a customer who his company was unable to acquire for years. Now Laurence feels like he is back in the early days of the company, where flexibility was the norm. A time when it was not bogged down by processes and bureaucracy that slowly engulfed the company since then, while driving flexibility, innovation and customer-orientation out. For years, his company had been getting stuck in dangerous routines, disconnecting it from market needs. Laurence and others felt that this puts the company’s future at risk. It had to acquire new fields of business, with customers that were different. Business in general was becoming more and more volatile, with increasing competition on international level. The company had to change, but previous attempts all had failed. Laurence had feared that the company was unable to change its ways, making it impossible for Laurence to win new customers. What changed in the company, that made this last attempt successful?

This time, the company focused on the customer experience. All operations had to contribute to this effort. The company started with reorganizing the front-end to get closer to the customers. Therefore, a new organizational structure called “Product teams” was built. These teams were equipped with profit and loss responsibility to enable fast decisions on customer needs. Earlier, due to unclear and complicated decision paths, customers often had to wait. At this point, Laurence turned from a engineer into an entrepreneur. As a member of a product team, Laurence had full authority to act on business opportunities and customer requirements. When a new business opportunity came along, Laurence and his team could now turn this opportunity into a successful business. Therefore, the team had to redesign the value-stream, using as much synergies and strengths inside their company, for example using local presence and global distribution.

Inevitably, these changes to the established processes required many changes in the back-end. Front-end teams and back-end-teams had to develop new collaboration routines. The changes cascaded back into a wide range of cross functional departments. This was the make-or-break point for the product teams. Would the company’s legacy business system insist on established processes and force the product teams back into old behavior? Fortunately, the leadership team supported the new setup. Processes were adapted to the needs of the product teams. Over time, many processes between front-end and back-end were examined and changed, tearing down silos and bringing back the flexibility from the company’s early days. For Laurence, this opened the path to success.

As advisors, we observed and coached leaders in this industrial case study. The case demonstrates how to bring a company back to what Jeff Bezos calls Day 1: Clearly focus on seamless collaboration in value streams to achieve business value for the customer. Remove everything that stands in the way of this strategy. It will be necessary to tear down walls, barriers to change, and comfort zones, adjust behavioral norms, and cope with all kinds of open and hidden resistance. Top leadership needs to provide air cover to bring along the required changes into the back-end. Only top leadership is powerful enough to protect and guide those who implement the necessary changes. Guiding these efforts requires top leadership to make the needs of the customer-facing front-end a priority in their own daily routines. Are leaders in your business ready?

 

How to do this? We explore breakthrough concepts for this challenge in our book
FUTURE LEGENDS – Business in Hyper-Dynamic Markets.

 

 

 

Blog image: pixabay.com