Week 30, 2023—Issue #266
Innovation Blindspots, Gritty Agility, and Federated Ecosystems
Successful organizations do three things: they create value for customers, they fulfill their people, and they produce above-average returns.
Here are three ideas to help you do the same:
#valuecreation
Innovation Blindspots
Ford’s cautionary tale about software
Innovation managers are meant to operate across multiple domains or time horizons simultaneously. They must exploit and explore in the short, medium, and long term. Managing the transitions from exploration to exploitation can be especially challenging. Take, for instance, this insight from Ford CEO Jim Farley. For years, Ford and other legacy automakers regarded software as peripheral. While emergent EV makers built robust in-house teams, Ford and its counterparts opted to outsource. The end result? A complex web of vendor relationships is likely to hamper Ford’s innovation capabilities for years to come. Farley remarks, “[Our] software is written by 150 different companies, and they all don’t communicate!” It’s a salient reminder of how quickly things change when we’re not paying attention.
#personalfulfillment
Gritty Agility
Stick with “Why”, and experiment with “How”
Which is superior: grit or agility? We celebrate entrepreneurs for sticking to their plans in the face of adversity. Yet, we also adopt methodologies like Lean Startup that advocate timely pivots. These concepts appear contradictory; we can’t both adhere to our ideas and alter them… can we? Well, actually, we can’t. However, that doesn’t mean grit and agility are mutually exclusive; it’s all in how we utilize them. Grit should be celebrated when tied to our mission and values — the driving forces behind our actions. Agility, conversely, should be valued when determining how that mission will be achieved; the strategies and tactics we employ. In essence: we should stay committed to our chosen destination but be flexible about the means to reach it.
#organizationaleffectiveness
Federated Ecosystems
Balance between hierarchy and flatness
In “Essays on Beta,” author Niels Pflaeging writes, “Two sets of beliefs tend to be constantly repeated in our field: On one hand, there’s the tale of heroic leaders and their followers, combined with calls for hierarchical control. On the other hand, there’s the story of the coming end of hierarchy and the future elimination of power within organizations. Both sides are wrong.” Indeed they are! Neither perspective offers a comprehensive solution to the challenges of complexity and change. Instead, we require a third alternative: a federated ecosystem. In such a setup, numerous autonomous entities collaborate within a broader interconnected network, unified by shared principles or governance. These ecosystems, resembling cities but not traditional organizations, become more effective as they grow.
That’s all for this week.
Until next time: Make it matter.
How can we build better organizations? That’s the question I’ve been trying to answer for the past 10 years. Each week, I share some of what I’ve learned in a weekly newsletter called WorkMatters. Back-issues are published to Medium after three months. Subscription is free. This article was originally published on Friday, July 28, 2023.
