Reid Hoffman recently wrote a thought-provoking article about managing chaos and enabling innovation. He also asked the community to share their thoughts by posing the following question.
How do you manage chaos? Can you think of a time when allowing your team “a dash of insubordination” enabled your company to be more innovative?
Here are my thoughts:
Having built leadership experience in various functions and new ventures at both IBM and Thomson Reuters, I believe that corporations do know that in order for innovation to “bubble up,” employees need to (1) see and feel a culture of innovation, (2) be given flexibility to devote time to think about problems outside of his or her immediate mandate (and not get penalized for it), and (3) receive clear message from senior management and down that innovation is a core part of the company, not a fleeting thing or nice-to-have.
While there are many companies that still need to do better in cultivating a culture to encourage innovation, I believe that given the external market pressure and increasing recognition that technology is changing status quo and existing assumptions, a good number of companies have built or are building an innovation culture that is encouraging more open debates and employee channels to generate ideas and get feedback.
The key challenge is the first question — how does a company manage chaos?
My interpretation of the question — — when employees are given the platform and sometime even the opportunity to get budget to innovate better processes or new products, how does a company create working principles and set of efficient processes to there is a working funnel to manage chaos (innovation ideas) to drive actual business outcome?
I have been on the practitioner and recipient end of this “managing chaos.”
Things that work:
- Have a clear process to employees on how the innovation projects can be moved from groundswell effort to a potentially funded effort that will be actively incubated and protected by the company without dependency to any business unit P&L for funding in the near term?
- Walk the talk by funding some of the innovation projects — — a.k.a. demonstrate in practice that the “chaos” (innovation) funnel is indeed working.
- Keep KPIs similar to how a VC tracks the funnel, yield, and performance. The innovation KPIs, when measured correctly, can be powerful enablers to allow employees to more efficiently and effectively self organize on more promising innovation ideas and projects and to also understand what the innovation journey takes. The message: it’s not solely about coming up with ideas for the sake of coming up cool ideas (most businesses can’t afford that). A business needs good ideas that can be implemented through iterations so at the end they drive some kind of outcome. Train employees to develop a sense of what idea is good vs. bad and what idea is impactful vs. not.
- Build some technology literacy (see my prior posts) through all ranks of management so that when an innovation idea is raised (often with emerging tech as a core part), it is not immediately stifled or ignored because of limited market awareness or technology literacy of a manager.
- Identify employee leaders (not necessarily managers) who can champion best practices around how to think about innovation in different parts of the organization so the management of “chaos” can be scaled and the funnel of innovation ideas is humming. This is less important in companies like Google because from day one this is in the DNA. For traditional corporations, this is important.