Organizing for innovation

Innovation Insights: Lessons Learned from Ten Years of Business Transformation

Organizing4Innovation is celebrating its 10th anniversary this month! What a journey it has been!

In the story below, I will highlight the things I learned about innovation, innovation management, making change happen, and running a business.

Innovation is a Journey

At Children’s National, I had the fortunate opportunity to work with Robert Fellows. Here, I saw firsthand how these very smart and skilled engineers and physicians had many ideas to improve their work and deliver better outcomes. What they missed was a structured approach to working through each of these ideas to make them happen.

This insight propelled me to start Organizing4Innovation.

Working with the Robert Fellows and later with our clients made me realize that innovating is a journey. A transformation journey. I can travel this journey, but for truly successful outcomes, I had to take on the role of a guide. I can see and know what must be done, however, that is not relevant. The project team members must see and understand it themselves. In the early days of Organizing4Innovation, I often felt like a personal trainer. Trying to help each team understand what they needed to do to get fit. Me doing the exercises was of no value to them. They needed to understand what to do, why, and how because in the end, they had to work with the newly developed solutions. My task was to guide them along their journey and to motivate each team to keep moving forward.

Below are journey examples of breakthrough ideas, business model changes, and productivity improvement projects.

Support Breakthrough Ideas

Driving change with the current employees is a really bad idea, especially when it comes to breakthrough types of innovation, according to Clayton Christensen – and many other change gurus. People would be too comfortable with the status quo to change.

While people are often wary of change, in my experience, they are more than willing to change how they do things if they see the benefits. In other words, when it is clear what is in it for them.

The motivation and drive for people to make change happen can be really strong. I have seen it with people driving telemedicine into healthcare, introducing blockchain into government transactions, and many more groundbreaking ideas. So, what made them succeed, where in theory they should fail?

Guiding more than a few on these breakthrough journeys, I would say their vision, their stamina, and their ability to demonstrate consistent albeit small successes during their journey have kept them going.

Where I have had to assist the most, is in helping these innovators understand what the people around them failed to see. When an innovator embarks on a journey to bring a breakthrough idea to practice, they are usually miles ahead in their thinking compared to anyone else in their immediate surroundings. Not necessarily because they are smarter or better, but because they have put so many more hours of thought into the idea, the challenges, and the possibilities.

As such, the task of these project teams is to demonstrate with small experiments and wins that they are onto something and to educate everyone else in the organization. A high tide raises all boats, not just theirs. That is, they need to spearhead the journey and invite everyone else to join them. “Dragging” others along may slow the project down, but it is required for a successful outcome. When done well, their breakthrough journey will become a march. For an example, read the success story of Aaron Martin.

Changes in Business Model

Another category of innovation projects is changes in the business model. Also, these are said to be better executed in skunk works separate from the existing organization.

I can speak from firsthand experience how difficult it is to change business models.

But before sharing my own experiences, let’s give an example of what this entails and why it is so difficult. Client portals – very popular during the pandemic – often started with the idea of giving clients easier access to the organization. Many client portals failed because they were add-ons to the existing communication channels. However, while the client portal may have provided easy access, for most clients, it remained often faster and easier to call the associate and ask them for an answer. Especially when these white-glove services came at no cost to the client. So, unless the business model changed, the clients had few incentives to use the portal.

At Organizing4Innovation, we started as a consultancy working by the hour or for a retainer fee. As a result, we were seen as an innovation consultancy – one of many. I could state we were different – but how? We did not yet have our support software for innovation project teams. Worst, being different does not help drive sales, because confused clients don’t buy.

To pay for the development costs of the software, we accepted work that was perhaps “distracting” but brought in money to keep us afloat. These distractions further confused our clients about the offerings of Organizing4Innovation.

However, when you bring in technology to facilitate service delivery at scale, you are essentially spending money to offer your services at a lower cost. The ultimate goal is scale. Unfortunately, that takes time and won't happen until you have perfected the technology and gotten yourself out of the consultancy mindset. In the meantime, the existing offerings must sustain the business.

Such a mixed model does not make you an interesting partner for an outside investor. In our case, the service component was essential to develop the Steering Wheel – both for the money and to further perfect the solution. However, it made investors question the validity of our future as a technology business. Could this scale? How important was my role in all of this?

One of my mentors once asked me, "Floor, if 1000 clients came your way today, could you serve them?" The obvious answer was “no”. At the time, we were able to serve about 10 clients max.

Serving clients at scale takes other skills. It takes a marketing and sales apparatus to bring in a steady stream of clients. It took us 10 years and a lot of effort to get there. In sum, business model changes are long and arduous journeys.

Improve Efficiency

The bulk of project teams pursue ideas that entail much simpler things. I would say over 50% of the innovation projects we see on our platform are focused on improving the efficiency or productivity of existing offerings, processes, and products.

In this same bucket fall most of the Generative AI projects. While Gen AI has the potential to revolutionize many professional services, at the moment it doesn’t. Take for example Microsoft CoPilot. If you use it to help you draft an email or text, it may save you 5-10 minutes a day. Helpful, but not revolutionary. Yet, CoPilot has the ability to radically change how we work and what we focus on, but only if we enable that to happen.

As an example, during my chemical engineering days, 3D computer models became popular. Yet, instead of changing the design process, the models were asked to adjust to the way of working at that time – rendering 2D paper drawings, so the engineers did not have to change how they went about making, approving, and verifying changes.

To get a novel technology adopted – it needs to blend in with what we are currently doing. However, in the case of Generative AI, you probably won’t see much of a productivity boost as a result. For big gains, you have to turn the question around. What takes up a lot of time, effort, energy, etc., and how could we do that differently – given today’s technologies?

Interestingly, many AI project teams discovered on their journeys, that the existing technologies were not yet ready to help them. Reshuffling people or hiring assistants, was in a few cases a more effective way to deal with the problem at hand. Yet, these teams knew what to look for in terms of technological developments. So even with the new people in place, they are better positioned to take advantage of new technological advancements than if they had not embarked on this journey.

So, even productivity improvement projects are a journey.

Problem or Technology First?

Problem or Technology first seems to many a chicken and egg question. We often get asked, "But how do we know what is possible if we don't start with the technology?".

First, keep your eyes and ears open for new technological developments. Join professional communities, visit conferences, or (in case your budget is limited) sign up for free webinars and relevant LinkedIn groups. However, if you don’t know what you are looking for, this kind of exploration can be a huge energy drain.

Instead, if you start with what you need – what you wish there was a solution for – and then start looking, you are more likely to find what you need in less time.

Innovation Process Management

Lastly, I would like to say a thing or two about innovation management. A topic I have passionately researched for the past 25+ years.

Innovation management is about identifying the best opportunities (idea management) and then using processes and portfolio management to minimize risks and optimize the return.

Working with Jan van den Ende, we noticed how few firms practice innovation management (source). Most firms simply don’t have enough projects to manage innovation, spread risks, and ensure there is a guaranteed ROI over the sum of all activities. To give this some context, Amazon, Google, and other tech giants run this game very well. They are owners of the casino when it comes to dealing and handling risk and reward. Most other companies, however, are visitors of the casino – guaranteed to lose money because the odds are stacked against them.

Support software for innovation project teams

More recently, I have also come to understand that we are managing the wrong things, the promise of ideas and the estimated feasibility, desirability, and viability of the product. While all of these are things you would love to get right, they are opinions and guesses throughout the entire innovation journey. Something you only can know for certain at the end.

Mentoring, guiding, and supporting many innovators provided insights into how the motivation, drive, and quality of the work the team delivers are much better indicators of future success. And not unimportantly, the motivation, learning, and progress of a project team can be measured and managed much more effectively than promises about the future qualities of a product.

The Steering Wheel has been developed with the innovation process management approach in mind.

Grateful

There are so many people who have helped to make the past 10 years possible. My husband Wim is number one. While his career has put many hurdles in my way, it also provided me with unprecedented opportunities. Most grateful, I am for his never wavering support in the execution of my ideas. My kids have been an inspiration too, their smarts, work ethic, dreams, and aspirations, have kept me on my toes!

I should not forget my parents, who enabled me to become the person I am. And the rest of the family, who, albeit far away, are always there for a chat and lots of gezelligheid.

I also have our team, many colleagues, clients, and friends to thank – a list that is too long if I were to name everyone individually. Organizing4Innovation would not have been there without your support, your input, and for helping me to stay sane through many distractions from evenings with friends, tennis, and so much more.

It has been a journey – and the final destination is not yet in sight (which is a good thing!)!

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