A few years ago, I was at an offsite session focusing on corporate innovation run by Gary Hamel. He was focused at the time on the theme of the “corporate revolutionary”.  During the day, he made the point that a typical company is really good at making money through just one thing, one “trick” – and that through its lifetime all the investments made by management are focused on enhancing that single valuable trick and building protective barriers around it, and also refining the operations and infrastructure that enable the trick to happen (there are few that go beyond the first “trick” and those are companies that make history…twice over or more. The usual example given here is 3M).

The company makes money and claims “excellence in execution” along with the secret sauce for the trick itself. Until another company comes along with a better trick, or with a gamechanger that renders the trick redundant for core customers.

The real challenge is always the same – how does a company drive enough innovative thinking within the organization, to help fuel the discovery, design and development of the next new trick that’s going to generate revenues tomorrow, while making investments to sustain today’s operations. Its a difficult balance to achieve, but here are some ideas that have come up over the years:

1. Collaborate with leading companies in other industries – cross-fertilization of ideas and pooling of R&D investments is always a good bet (e.g. P&G and BASF)
2.   Locate a couple of offices with Engineering, Product Management and Operations in cities/ towns that have major research universities (e.g. Apple, Google and Nokia, with somewhat contrasting approaches by RIM and Microsoft)
3. Allow for “experiments on own time” (e.g. Google’s engineers are free to choose projects for a certain amount of time every month)

I’m sure there are other ideas (any suggestions based on your experience?). These will have varying degrees of relevance depending on the situation, of course. But now, consider the implications of these for operations and investment in transforming/ re-building and developing new capabilities required to enable the new “trick”:

1. Prioritize design and development of operating processes and systems to enable teams to work across organizations (refer Open Innovation, Chesebrough). This would include a structured, transparent, traceable approach to data sharing, information exchange, collaboration and more. This would include capabilities for “slicing & dicing” and “sanitizing/ redacting” corporate data as needed for safe collaboration
2. Build an organization model that allows for globally dispersed operations with distributed “centers of gravity” at locations other than corporate headquarters. Create decentralized operations to help prevent folks  falling into a “mothership mindset”
3. Develop a management model (including project-based working, time allocations, tracking & reporting, performance management and more) and supporting technologies for harnessing individual ideas and initiatives – i.e. the “intra-preneurial” mindset

These can be extremely challenging, requiring orchestration across structure, policies & processes in parallel with enabling technologies in new areas – much more so than any project focused on enhancing existing operations. In subsequent posts, we’ll look at how these can be addressed successfully, lessons learned and most importantly…how investments can be leveraged across current and future sources of revenue and growth.