INSIGHT

Small Innovations for a Big Organization

Create an organizational culture that supports innovation and provides tools for creative collaboration. Photo credit: ADB.
Create an organizational culture that supports innovation and provides tools for creative collaboration. Photo credit: ADB.

How can a big organization set itself up on a journey to become stronger, better, and faster through small innovations?

Introduction

Small business process innovations can enable a big organization to become better and faster. Identifying and investing in the right opportunities can lead to improvements in business processes that can drive the momentum for the success of large-scale initiatives. The right kind of systems enabled by technology can support how knowledge is leveraged by an organization for creating a business advantage.

Analysis

3M is a name that we are all familiar with; it’s a brand built on an intense innovation culture, which has produced over 55,000 products. It releases 25 new products per week and has over 3,700 global patents—that is exceptional if not mind-boggling. It has over 90,000 employees and 200 manufacturing plants and posted a revenue of $31.66 billion in 2018.  Harvey Wade calls it an “engine of innovation” and rightly so.

The word “innovation” brings to mind big names like Amazon, Google, Facebook, Alibaba, Microsoft, IBM, and Apple, that are dizzyingly shaping the world by changing how information is shared, how people communicate, and how concepts like the internet of things and artificial intelligence will change the man-machine relationship. Microsoft and Apple are global number one and three in terms of market capitalization, while Apple tops these tech companies in revenue.

Almost all of these big companies started with ideas that attempted to solve small problems. For example, Google was an experiment by two grad students to understand how one web page links to another. Uber and Airbnb wanted to improve customer experience through process disruption, scaling up investments and revenue inflows followed success. 3M is keenly focused on trying to understand the problems that their customers are experiencing and allows 15% of employees’ time to focus on work that they feel passionate about.

In general, big organizations tend to rely on proven methods, tested products, traditional cultures or legacy business models, rather than encouraging small innovations. But big opportunities, more often than not, appear as small rather than groundbreaking ideas. These need to be recognized and captured. Large organizations with well-ingrained cultures and conventional ways of working could start by encouraging the tabling of ideas as an everyday activity. Expeditious testing of ideas and crafting a communication mechanism to support this could help develop an organizational innovation pipeline.

In a big organization, therefore, an inspiring idea would always come from employees who are trying to solve an everyday work problem—either a business process or an issue on the client-side, e.g., a snag in project implementation.  Small measurable improvements in the business processes can lead to a change in culture that can spawn the undertaking of larger initiatives and their eventual success.  This also augers well for employee engagement and ownership of the organization’s journey into the future.

Some of the things that a big organization needs to do to move the innovation agenda forward are:

Initiate a baseline discussion on the organizational course and culture.

What kind of innovation does the organization stand to benefit from within the context of the nature of its business? Incremental, routine, or transformational? It would have to be an imaginative exercise keeping in view what and how much has changed in the business environment. The degree of alignment needed for the uptake of initiatives on innovation will be better understood from a cultural standpoint, as the maxim goes “culture eats strategy for breakfast.” Who will own the innovation strategy within the organization is a key question.

Take a fresh perspective on the way the organization is “organized.”

Assess the potential to discover new ways of working, improving it or adopting best practices. Is the organization configured optimally for the flow of information between units? Is collaboration facilitated by the business processes? How much of that is efficiently enabled by technology? How much of the decision making is data/evidence-driven? How updated is the technology infrastructure? Can the product delivery and client engagement be made more efficient? Is client feedback a norm and how is it used? What kind of data does the organization generate from its operations? Undertaking a baseline digital capability/resilience assessment of the digital assets, together with a business process review will be helpful.

Create an improved understanding of the organization’s products.

Employees across the organization should be given a clearer understanding of the products and business processes that are employed to sell them. Connecting the individual to the organization supports inspiration, which in turn leverages the potential for value creation.

Source the right team and expeditiously process ideas.

Set up a “chartered” ideas processing lab within the organization, accelerate sourcing of ideas, and demonstration of pilot successes. The quest to investing in ideas that have no immediate return would have to survive existing structures and processes. lab will shake up and shape up ideas through “beauty contests” and rigorous testing and identify concepts that may have the biggest impact.  Ideas proven in terms of evidence that clearly depict a business advantage will always find implementation support. The approval processes used will be the guide to eventually championing bigger initiatives.

Tap outside sources of insights.

Periodically engaging thought leaders from other organizations, corporate sector, universities, start-ups, or think tanks in an appropriate, collaborative innovation session or simply speaking to a targeted internal audience would be augmentative. Innovation is about creating functioning platforms.

Progressively enable the larger internal environment to support innovation.

It is said that “business culture is the typical Achilles heel of organizational innovation.” Ideas would flounder in any organization—that is a given, but achieving a healthy information flow within will go a long way in enabling the sharing of ideas, know-how, and critical tacit knowledge.   It would be instructive to find out how many best practices have filtered across functions and geographic units in the last few years or if they have been adequately codified. Ultimately ideas will have to be turned into mainstreamed innovations. Start from the inside out with the ideas processing lab.

Enhance the user experience of internal customers.

Incremental innovations in business processes can set the stage for bigger innovations. The ideas processing lab should start the ball rolling by setting up a process for sourcing of ideas and approval of pilots.

Recognize fresh ideas and people with divergent views. 

Recognition is the best reward for a new idea. Most innovators that are recognized today were not gunning for financial rewards; eventual success, though, can be rewarded by appropriate incentives. There can also be roadshows of successful pilots to encourage employees and create a buzz. Wins need to be internally (and externally) publicized and celebrated; this would motivate others to start contributing ideas.

Set up a data analytics technology platform.

The processing of ideas will generate data that will need to be processed for analytics and evidence for future investments.  Looking to the immediate future, data management and analytics can be a central specialized unit/function that draws upon different sources of data, assures machine readability, generates insights through data analytics and assures real-time access to all internal stakeholders in the most relevant and convenient form. This outfit can be a vital aid in supporting business process improvements, incremental innovations, and maybe new knowledge creation.

Establish an “internal” venture capital fund. 

The fund can seek to finance testing, piloting of ideas, and business mainstreaming of successes. The fund can leverage multiple sources and can also be made sustainable by monetizing efficiency gains and internal charging of cost centers.

Support the innovation agenda with strategic communication.

Innovations taking place within the organization and communications about them have a“contagious” effect. They encourage more flow of ideas and more staff engagement and development of communities of practice (COPs).

Craft an innovation strategy that is unique to the organization.

The very approach and method an organization adopts for itself will have to be innovative in that it will be unique in how it aligns to the business strategy. An innovation strategy can start in an ecosystem that already has a defined set of independent processes and structures that will face a degree of change progressively and eventually as ideas take the shape of processes, pilots, and projects in not just core operations but also support functions.

Small business process innovations underpinned by the right technology systems can help a big organization to become better and faster.  Enabling tools for creative collaboration, data-run business intelligence, and creating efficient communication loops within the organization can yield competitive advantages, bigger impact, and evolution.  Silos are the nemesis of innovation and technology systems are the best bet to cut through that, especially for large geographically dispersed organizations.

Resources

A. Isomäki. 2018.  Why Do Large Organizations With Creative People Fail in Innovation? Viima Solutions Oy. 12 July.

G. P. Pisano. 2015, You Need an Innovation Strategy. Harvard Business Review. June issue.

H. Wade. 2017. Five Innovation Lessons from 3M. Innovation Excellence.

Knowledge@Wharton. 2019. How Big Companies Can Innovate Like Small Startups. Podcast interview with Harvard’s Gary Pisano.

K. Mehta. 2019. For Big Innovation, Think Small. Forbes. 21 February.

R. Kneece, 2014. When It Comes to Innovation, Small Ideas Can Mean Big Wins. Wired.

S. Kaplan. 2012. 4 Innovation Strategies From Big Companies That Act Like Startups. Fast Company. 10 October.

Ask the Experts

  • Nasruminallah Mian
    Senior Programs Officer, Pakistan Resident Mission, Asian Development Bank

    Nasruminallah looks after country operations programming at the Pakistan Resident Mission. He is also the focal for Central Asia Regional Economic Cooperation and ICT. He has a diverse career portfolio in the public and the private sector. He has a management degree from Australian National University and a master’s degree in Chemistry and bachelor’s in Law from Pakistan. He is interested in data analytics, business process improvement through application of technology, e-government, and women entrepreneurship.

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  • Asian Development Bank (ADB)

    The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

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   Last updated: August 2019



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The views expressed on this website are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.




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