Creating Capacity for Innovation

Large organizations have a challenge that start-ups don’t have. They have unintended complexity, duplication, old processes, and work that exists simply because it has always been done that way. Most executives of large organizations know they need to embrace Digital Transformation, but they don’t know where to begin. They have operational commitments and responsibilities to stakeholders or shareholders, and no excess operational expense to invest in innovation.

Jeffrey Immelt wrote a phenomenal article “How I Remade GE”.  It is a story of his role in transforming GE from a large traditional corporation to a large digital corporation. In his article, he shares his role in determining which lines of business they would exit to make room in their operating budget for investment in transformation. After reading this article, one might suggest that you have to be the CEO to make such radical decisions, but I disagree. Every team in every company must make these decisions to make room for investment in innovation and transformation.

But how do you do that?

My team has been going through a transformation over the last two years, narrowing our focus and making room for innovation within our main objectives. Over that time, we’ve discovered four ways to create what is becoming known as the capacity for innovation.

1. Projects and initiatives that aren’t directly contributing to your team’s main purpose or goals.

This is the main premise that Mr. Immelt mentioned in his article. Find effort and work that is not driving your main goal that you could shed without causing major disruptions in the business. Start by creating a list of all of the projects and processes your team runs. You might be thinking that everything on that list is vitally important. Truly challenge each one. If you’re in HR, is there a program you’re running that just isn’t getting the result you’ve desired and there would be relatively little backlash if it went away? If you’re in IT, are there applications that you could retire that are offering value to only a few individuals and they could really do without them? Every team has these things they can shed, even if it is only for a period of time to give you some additional capacity for innovation. Be as ruthless as possible in cutting. Worst case scenario, you can always pick it back up.

2. Duplicative work

Large organizations are notorious for duplicating efforts. There are a few reasons. The most common is that the organization is simply so large, that you’re unaware that you’re doing the same thing as another group. After you created your list of projects and processes in step one, deliberately seek other groups that are doing similar things on your list. If you work together, could the other team incorporate any variations that exist in your project? Can you provide them value in return for taking on your work? We found several processes in which we were duplicating the efforts of other teams. Some short-term efforts allowed us to educate other teams on our unique organization and those teams were able to carry the full project. Just because we are subject matter experts in our organization doesn’t mean we have to take over and duplicate efforts. Spend the time to educate others and allow them to run those projects and processes. When you have greater capacity to innovate, the return will be far higher.

Some teams struggle with letting go of their work. Why should we stop the duplication? Why don’t they stop the duplication? Really think about the work. Is it driving so much value toward your team’s objectives that it supersedes any new value you can bring to your organization?

One more thing on duplicative work. Once you have created the capacity for innovation, and you begin innovating, if your innovation duplicates another effort in your company, you have failed. That is not innovation, that is waste.

3. Making up for the perceived or real deficiencies of other teams

How many projects or processes are you running because you don’t see another team doing what you need from them? I see this frequently in organizations. One team wants something from another team but isn’t getting exactly what they want, so they duplicate efforts. This one is one of the hardest to deal with because we struggling to have the difficult conversations with other teams and other leaders. Your choices are very simple here. You can have a conversation with the leaders of the other team and try to work out your differences, escalating as needed, you can make the deliberate choice that filling this void (perceived or real) is more valuable than innovating, or you can simply set it aside and live with what you’re getting from another team and focus on innovation. My personal preference is to have the tough conversations to solve the root cause of the issue, and move on with real innovation.

4. Automation

Once you have rid yourself of some projects, you have made some capacity for innovation. Now look at the rest of your processes that you deem critical to the success of your team’s goals. How many of your processes can be easily described with a flow-chart or a step-by-step explanation? These are prime choices for automation. Use some of that capacity for innovation that you developed and begin automating these processes. Absolutely every organization can automate many of their processes. Worried that you won’t know that they were done correctly? Create automated testing/verification. Be aggressive in your attempts to automate processes. Once you’ve done that, you’ll regain the initial capacity for innovation that you created in the first three steps, and significant additional capacity for investment in truly transformational innovation.

Creating the capacity for innovation in any organization isn’t just the job of the CEO. It’s the role of every manager and every leader within that organization to shed work that isn’t driving toward the objectives of the team and bring innovation to your own portion of the company.

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