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CEO Study Reveals Outperformers’ Innovation Factor

A Picture of Karin Nauth Shelley
July 12, 2012 | Topic: Agile   Customer Engagement   Empowerment  
CEO Study Reveals Outperformers’ Innovation Factor

A 2012 IBM study of 1700 CEOs, representing 64 countries and 18 industries, noted that companies who outperform their industry peers were 30% more likely to identify “openness” as an important organizational value. Though interesting, this finding isn’t surprising. A firm’s capacity for openness does have profound potential to fuel growth overall, and innovation, in particular. It is an active ingredient for R&D organizations seeking to leverage technology to create breakthrough products. But how does openness translate into innovation success?

  • Mental Model – Organizations are composed of people, each contributing his/her unique point of view. Openness requires a certain type of mindset – an individual who views an existing structure, use case, or process and imagines the fuller potential, seeing beyond current state to the “what if” state. For R&D organizations, this is make or break mindset. Success hinges on recruiting the right people (employees or partners) with the right mental models.
  • Collaboration DNA – Innovation also relies on the recognition that collaboration is crucial for success. At its core, collaboration is about openness, an ability to share and embrace ideas and contributions of others. Your success as a R&D leader or project team leader is not only reliant on recruiting individuals and partners with the right mindset, but ensuring that there is an environment that fosters true collaboration. Agile software development and Scrum methodology, in particular, relies on frequent and active collaboration. Whether within a company’s own R&D group or alongside a software development partner, innovation success can only be achieved with engineers who practice openness within the day to day objectives. At Belatrix, we practice Agile QA. Because testing occurs in step with the agile development process, test engineers need to share feedback and ideas throughout the process vs. simply operating in isolation. This ability to be open and participative results in shortens product cycles and ensures better alignment towards the shared product development goal. However, this requires investment in the specific profile of engineer as well as providing a collaborative Scrum environment in which to operate.
  • Organizational Empowerment – The degree to which an organizational culture practices openness is a crucial element of innovation. Firms with command and control structures generally impede innovation, or at least don’t realize the full potential of their innovation efforts. For unfettered innovation to occur, management needs to empower their employees to question and experiment on ideas. At Belatrix, our organizational culture seeks to encourage each employee to ask questions, reframe use cases if necessary and generally experiment. Approaching projects from a empowered standpoint ensures that engineers have the creative bandwidth to see all angles and ultimately deliver the best possible software.
  • Engagement Parameters – In working with partners, it’s crucial to see the wider implications of what that relationship might yield. In some instances, firms that have not worked prior with partners, may only see narrow potential benefits of the partnership, for example cost or access to more talent. While all of these benefits are valuable, approaching the outsourcing partnership with openness can reveal other attributes. For example, one of Belatrix’s client companies regularly schedules an innovation week. We, as their partner, are invited to participate in their defined ideation process, contributing valuable ideas with revenue contribution potentials. Openness in see the broader merits of partnership is just one of the ways in which firms can achieve a greater innovation ROI.

The IBM research report sums it up well. “Outperformers are embracing new models of working that tap into the collective intelligence of an organization and its networks to devise new ideas and solutions for increased profitability and growth.” Today’s innovation imperative requires a more holistic approach to innovation. That innovation approach involves leveraging the insights and ideas of not only of your own R&D division but also tapping into a wider partner innovation ecosystem. It involves having the entire workforce of that organization take a stand for innovating and improving that companies ideas and overall approach. It’s about working with extended team to tap into that expertise.

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