Saturday, August 26, 2006

Innovation and Organisational Networks

Typically an organisation chart shows control or seniority, it does not show how the organisation actually works. On a daily basis people communicate with each other, give advice and provide support for each other. These factors are mirrors for the organisational culture that exists and hence a determining factor in the ability of an organisation to innovate. It would therefore be useful to have a measure of the extent of the advice, trust and communications networks.

For a simple case each individual can be given a diagram of their whole organisation or team and asked to draw on the links for each of the three networks mentioned. This could prove cumbersome for larger groups and so it might be sufficient to determine a) the number of colleagues that an individual communicates with regularly and b) the number of other individuals that they have in each of their networks. All 3 types of network have a part to play, however if they are not well aligned or differ significantly from the organisation chart then major problems are likely to exist. Further problems may occur if they are not evenly distributed or there are significant bottlenecks. This data can also be used in other ways e.g. if you are considering using a particular individual as a change agent, make sure that they figure in most peoples’ trust and advice networks!

Communications Network - consider the largest group of people that an individual communicates with on a daily basis. Such communications can be written, verbal or electronic. It is also useful to identify if individuals communicate with people outside of their normal working groups and whether they have any formal responsibility for doing so. A network such as this carries significant amounts of traffic, some of it idle chat. However, it is often the case that random events within this network stimulate significant innovation events.

Trust Network - within any organisation there are networks of people with whom others are willing to share political information, company secrets or provide support in a crisis. A trust network is thus a very important part of an organisation, particularly in the areas of motivation and morale. Problems here are indicative of trouble ahead if it has not already surfaced. Symptoms may occur during times of great change e.g. merger, takeover and redundancy or as a result of years of neglect. In all cases, innovation (which relies on intrinsic motivation) will suffer.

Advice Network - an individual's advice network consists of those whom they give advice to and receive advice from. This is restricted to technical advice or advice on solving problems and is not concerned with personal problems. It is this network that carries the knowledge that is concerned with solving crucial business dilemmas.

Key Innovation Indicators

When you make any changes to your business you will automatically be looking at certain indicators to make sure that any changes have had a beneficial effect (won’t you?). The trouble is that there may very well be a time lag between making the changes and noticing the (hopefully beneficial) effect.

If you have been trying to make your organisation more innovative then you might consider some sort of before and after measurements in the areas described below. Whilst not a definitive list of things to look for, they will help you decide what, if anything, is working.

Team Working – are people working as individuals or as single/multifunction teams? How much autonomy do these teams have and are their opinions and feedback listened to?

Management Style – how much interference is there by managers in every-day working and how prescriptive are they? What actions are taken when problems occur? Do managers take immediate control or do they trust the people working for them to resolve problems?

Desire To Win – is there evidence of this throughout the organisation? Even when there are insufficient resources to carry out a project or implement a plan, is there a 'yes and ..' culture rather than 'yes but...'. Good ideas should be kept for future use, not dismissed out of hand for lack of finances, time etc. Organisations with a desire to win will also appear to be less risk averse.

Knowing How To Win – a desire is one thing but do you know how to win? Organisations that know how to win are likely to have a thorough understanding of their marketplace and all of the factors that affect it such as the economy, legislation and technological breakthroughs. They are willing to exploit such factors and be first movers or early adopters.

Environmental Scanning - to be successful, organisations must be able to scan their environments and be aware of new competition, changes and spot trends and patterns. This information should then be used to determine key success factors within the marketplace and drive the building of strategic capabilities.

External Relationships - in order to maximise potential, it is necessary to nurture external relationships with both customers and suppliers. Is this being carried out regularly and effectively? Do organisations rely on single points of contact or do they interact at multiple levels, cementing ties? How well is information disseminated and vision, branding etc communicated to stakeholders?

Growing The Right Culture - a truly innovative culture relies heavily on intrinsic motivation. Employees need a clear idea of what they are expected to achieve and of the amount of support that they have. Transparency on the part of senior management and 'leading by example' will build trust and encourage buy-in to strategic objectives.

The Right Framework - when stretching individuals we must ensure that the right culture exists (see above). Such a culture includes, but is not necessarily restricted to such things as opportunities to develop skills, freedom to act on own initiative, work environment, acknowledgement of input, learning environment.

Getting The Best From People - when maximising potential it is often necessary to take employees out of their 'comfort zone'. To do this successfully there must be an effective framework for delivering the necessary training and development. Individuals should be encouraged to use their own initiative (subject to any safety or legal constraints), be responsible for their actions and learn from their mistakes. There must also be appropriate reward systems

All of these factors can be measured. Creative Business Solutions achieve this using their Innovation Toolkit. Click on the link or visit for more information.