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Unlocking Potential
The ability of any organisation to achieve its full potential is determined by its effectiveness
in all the areas of management that comprise the Management Staircase. These can be grouped into
two categories: Operational Management and Strategic Development.
Many companies tend to focus primarily on Operational Management and develop a high level of
expertise in this area. The urgent demands of ongoing operational activities make it difficult
to give adequate (if any) attention to Strategic Development. As a result, a high level of
skill in strategic thinking and innovation is not built and there is a feeling of discomfort that
inhibits the company from moving into this unfamiliar territory. This is referred to as the
Strategic Barrier, and explains why many companies fail to come anywhere near to realising their
full potential.
The results achieved by Jack Welch at GE are testimony to the positive impact to be gained from
innovation.
(See: CONTROL YOUR DESTINY OR SOMEONE ELSE WILL, by Noel M Tichy and Stratford Sherman.)
Dr William E Coyne, Senior Vice President, Research and Development at 3M, expressed his company's
commitment to innovation in this way: "Innovation may be an important element of other corporate
strategies; but for us, at 3M, innovation essentially is our strategy."
The company allows all technical personnel to spend up to 15% of their working time on projects of
their own choosing, without requiring any approval, and sets a goal of achieving 30% of their
total sales from products launched during the most recent 4 years.
(See INNOVATION, edited by Rosabeth Moss Kanter, John Kao and Fred Wiersema for more details, and
also for some other interesting case studies on companies committed to innovation.)
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Innovation Drivers
The drivers influencing innovation capacity can be grouped under 10 headings, as illustrated in
the following diagram and described below.
A. Commitment
The extent to which the company seeks to find really new opportunities or solutions, and to which
it maintains this commitment even under pressure to achieve short-term results.
B. Leadership
The extent to which top management creates and maintains an environment that encourages and
supports innovation, sets stretching goals that can only be achieved through innovation and acts as
role model for innovative behaviour.
C. Strategy
The extent to which the company's strategy is understood, differs from those of its competitors
and is open to the development of unconventional opportunities that lie outside its currently
defined scope of business.
D. Core processes
The extent to which the company's financial and other core systems are designed to support and
encourage, rather than hinder, the development of unconventional new ideas.
E. Structure
The extent to which the company has achieved and actively promotes inter-departmental
co-operation and exchange of ideas.
F. Resources
The extent to which financial resources and talented people are made available for the development
and implementation of risky new ideas.
G. Attitudes
The extent to which the prevailing attitudes encourage and support sensible risk-taking,
and the willingness to consider new ideas from any source, even if they appear at first to
be strange and impractical.
H. Innovation skills
The extent to which staff have the skills to successfully generate, develop and implement new ideas.
I. Measurement
The extent to which the company measures its effectiveness at innovation and recognises and rewards
achievements in this area.
J. Innovation process
The extent to which the company has effective processes in place for maintaining a constant
"funnel" of new ideas in various stages of development, from conception through to implementation.
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Mini Audit of Innovation Capacity
While most companies recognise the need for innovation, few believe they are really good at it.
You may find it useful to tentatively rate your company's innovation capability by completing the
following questionnaire.
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Rate your company on each of the following: |
Rating (0 - 5) |
| 1. |
Maintains a good balance of focus between operating and strategic management |
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| 2. |
Respects sensible risk-taking and has a high tolerance for "responsible" failure |
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| 3. |
Encourages and supports new ideas from any source, both internal and external |
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| 4. |
Recognises and rewards innovation in all aspects of the business |
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| 5. |
Has quantitative measures for evaluating its innovation performance |
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| 6. |
Has a culture that truly promotes innovation at all levels and across all functions |
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| 7. |
Has broad-based skills in innovation and creative problem solving |
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| 8. |
Regularly implements new ideas that significantly impact on the business/industry |
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Overall Rating (out of 40) |
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Examples Illustrating the Importance of Vision and Leadership
The following are a few well known examples of revolutionary innovations resulting from someone
having a vision of a future that is different to the present.
Does your company have a challenging vision of what it wants to achieve and of the type of business
it wishes to create? This may not be as stretching as some of the examples mentioned below, but
having a dream of creating something different s well as the leadership and perseverance to
follow it through to successful implementation are essential elements of successful innovation.
Example 1
Just over a hundred years ago two men dreamt of building a heavier than air flying machine -
in the minds of some respected people at that time, an "impossible dream"!
The foresight, efforts, perseverance and ingenuity of the Wright brothers, in the face of
significant obstacles, bore its reward when they achieved their first flight at Kitty Hawk.
Today we take for granted international travel in huge jet aircraft and highly sophisticated
military aircraft that fly at multiples of the speed of sound.
Example 2
A young lady once had a dream that she expressed to her father: she wished she didn't have to
wait for her photographs to be developed. Her father was Dr Edwin Land, who was prompted by this
wish to develop the Polaroid camera. He was one of the most celebrated innovators in American
business for years, even though his ingenuity has since been overshadowed by a later invention -
the digital camera.
Example 3
When Jack Welch took over the helm at GE, he was heard to say "I want a revolution".
This was in reference to an organisation that was ranked as the best managed company in the
Fortune 500 at the time! With his goal in mind, he brought about changes at GE that led to
staggering improvements in performance.
(See: CONTROL YOUR DESTINY OR SOMEONE ELSE WILL, by Noel M Tichy and Stratford Sherman.)
Example 4
Closer to home, while flying in a helicopter over the then undeveloped Pilansberg area,
Sol Kerzner had a vision of a grand entertainment complex to be established there.
The rest is history!
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Transformation of GE by Jack Welch
A detailed description is provided by Noel M Tichy and Stratford Sherman in their book CONTROL YOUR DESTINY OR SOMEONE ELSE WILL
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