Who Has Innovative Ideas? Employees.

Here is an excerpt from an article written by JC Spender and Bruce Strong for EXECUTIVE ADVISER: Innovations in management theory & business strategy – a collaboration of MIT Sloan Management Review with The Wall Street Journal. To read the complete article and check out other resources, please click here.

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Who Has Innovative Ideas? Employees.

The trick is knowing how to tap into them. One answer: innovation communities.

LET’S TAKE the mystery out of innovation and its inspirations.
 
Most great ideas for enhancing corporate growth and profits aren’t discovered in the lab late at night, or in the isolation of the executive suite. They come from the people who daily fight the company’s battles, who serve the customers, explore new markets and fend off the competition.
 
In other words, the employees.
 
Companies that have successfully made innovation part of their regular continuing strategy did so by harnessing the creative energies and the insights of their employees across functions and ranks. That’s easy to say. But how, exactly, did they do it? One powerful answer, we found, is in what we like to call innovation communities.

QUESTIONS TO ASK YOURSELF

1. Does your company leave innovation to an R&D team without input from groups that work directly with customers?

2. Are your best managers and staff increasingly restless and cynical because they aren’t being given the opportunity to shape your company’s future?

3. If you asked 10 employees what they thought management considered to be fruitful areas for innovation, would you get 10 different answers?

4. When you talk of employee-generated innovation with your management team, do they act dismissively?

5. Does your management team think it’s too costly and disruptive to hold regular cross-function innovation discussions?

If you answered yes to any of these questions, your company probably needs to rethink how it inspires innovative ideas. Regularly hosting what we call innovation communities can save companies money while enhancing future leadership, growth and profits.

Every company does it a little differently, but innovation communities typically grow from a seed planted by senior management—a desire for a new product, market or business process. A forum of employees then work together to make desire a reality.
 
Innovation communities tackle projects too big, too risky and too expensive to be pursued by individual operating units. They can be created with little additional cost, because no consultants are needed. After all, those in the midst of the fray already know most of the details relevant to the project.
 
A lot of senior managers think the opposite: that the people around them don’t understand what’s needed or are incapable of seeing the big picture. This is why some call in consultants. But we say this often shows a signal lack of strategic courage and resolve. We say trust your own people.
 
Innovation communities are a way of giving new shape and purpose to knowledge that your employees already possess. The detailed discussions that take place, led by senior managers, often represent a company’s most productive and economical engine for increased profits.
 
Here, then, are seven key characteristics that we have identified as being part of successful innovation communities.

[Here's the first of the seven.]

CREATE THE SPACE TO INNOVATE. Line managers and employees occupied with operational issues normally don’t have the time to sit around and discuss ideas that lead to cross-organizational innovation. Innovation communities create a space in which employees from across the organization can exchange ideas.

At first, participants typically meet face to face at a central location, often company headquarters, then shift to virtual meetings for follow-up sessions. The most important thing is blocking out time free of daily responsibilities to devote to discussion and creative thinking.

Senior management sets the agenda. A clear statement of purpose and themes for discussion are set forth. Participants are free to discuss ideas without concerns about hierarchy and quarterly financial results.

Each year at food retailer Supervalu Inc., 35 to 40 mid- and director-level managers break up into four teams to discuss strategic issues suggested by executives in the different business units. The managers discuss issues outside their own areas of expertise and work on their leadership development at the same time. Over periods of five to six months, they hold electronic meetings at least weekly and meet in person at least five to six times, all while continuing to perform their regular duties.

Japanese pharmaceutical maker Eisai Co. has convened more than 400 innovation communities since 2005 to focus on health-care-related issues such as examining possible new structures and sizes of medicines—for instance, a medication now on the market in Japan in a jelly-like substance that Alzheimer’s patients can swallow easily—and devising social programs for the families of Alzheimer’s victims. Every Eisai employee world-wide participates in at least one such project, and spends time with patients as well. The company thinks connecting in person with patients is crucial because it helps employees see and understand issues that the patients think are important, and so enhances the employees’ ability to see beyond pure data.

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To read the complete article and check out other resources, please click here.

JC Spender’s career has included engineering work for Britain’s first nuclear submarines and stints in investment banking in London and several start-ups in Silicon Valley. He has published widely and is a visiting professor at six universities, including ESADE in Spain. Bruce Strong is a co-founder of Context Integration, an information-technology consulting firm, and a founding partner at CBridge Partners, a Cambridge, Mass., management-consulting firm for professional services, financial, energy, and international development.

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