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Last week I got an email from a friend that his firm was going through an innovation crisis. He said managers at the firm are ‘execution driven’ and are not interested in discussing about innovation. The managers believe execution alone is sufficient to keep their business going as they are experts at it. Innovation is a subject they avoid religiously because they don’t consider themselves a company like Apple. In my reply I pointed out that innovation and execution are not mutually exclusive.
Why do established firms lose their innovation DNA? I’ll cover why in this post, and what to do about it in a forthcoming one. There are three reasons I can think of – 1) Retrograde amnesia 2) Poor hiring decisions 3) Organizational culture gone wrong
1) Retrograde amnesia: When the collective consciousness of the firm (memories of the managers, employees) doesn’t remember the reason why the firm became successful in the first place, and attributes the success of the firm to execution only, forgetting the innovation which started it all, the diagnosis for managers at the firm is simple – retrograde amnesia.
2) Poor hiring decisions by executives and middle managers: The second reason for losing the innovation DNA is making poor hiring decisions. Executives hire advisory firms that produce strategies focused on improving the performance of existing businesses. Very few managers hire outside firms to bring fresh ideas for fostering innovation. Part of the reason why executives at these ‘execution driven’ firms hire these like minded advisory firms is because the executive compensation metrics are tied to short term performance of their business units i.e. there is no ‘innovation bonus’ in their pay check. At the middle manager level, it is even worse. Very few managers hire employees for independent thinking or bringing innovation on board. The managers simply want more of themselves – employees that can do what they are told, no questions asked.
3) Organizational culture: The third and probably the most important reason for losing innovation is organizational culture gone wrong. Organizational culture is the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. When does organization culture go wrong in the context of innovation? When ideas to chart new course or direction, questions and challenges to status quo are eschewed and experiments are discouraged, but compliance to managerial diktat and an obsessive drive to execution are valued and rewarded, you can safely say organizational culture has gone wrong.
So, that’s it – forget your true source of success, hire the wrong people at the top and in the middle, and practice a culture of obsession for execution with no room for freedom of the mind and spirit, you are well on your way to losing the innovation DNA.
How do managers in your organization view innovation with respect to execution?
– Prabhakar
Tweet this: @PGopalan: Innovation and execution are not mutually exclusive http://wp.me/pXBON-2D1 #prodmgt #career