Strengthening Your Growth Factory
Just a few weeks ago Harvard Business Review and McKinsey & Co. opened the first leg of their 2012/13 M-Prize challenge: "Innovating Innovation." The M-Prize's overall goal is to "surface the world's most progressive management practices and most provocative management ideas" and connect and celebrate individuals reinventing management. This particular challenge — where I'm serving as a judge — seeks "real-world case studies and bold ideas that demonstrate how every element of a company's management model can be retooled to make it innovation-friendly."
The themes of the challenge overlap significantly with an e-book that I wrote with my colleague David Duncan called Building a Growth Factory. The book's central theme is that companies can improve their ability to create growth through innovation by developing four key management systems (click here for more details): a growth blueprint; production systems that translate ideas into booming growth businesses; governance and controls that track and allocate resources; and appropriate leadership, talent and culture.
Given the overlaps, Dave and I wanted to highlight four areas where we would be excited to see fresh thinking and case studies — exactly the sort of thing the M-Prize was designed to encourage.
- Portfolio management. The concept of portfolio management is not new, but only a small handful of companies have developed sophisticated yet usable systems to manage their innovation portfolio. How do you design, assess, and manage an innovation portfolio on an ongoing basis? What are the best means to measure the potential of ideas with high degrees of uncertainty?
- Parallel disciplines. Making a growth factory function requires that an organization manage the creative tension between minimizing mistakes in current operations and encouraging experiments in innovation efforts. Some of our colleagues call this a "capabilities exchange" between the old and the new (they'll have more to say in a forthcoming HBR article). What other mechanisms make parallel disciplines real?
- Identifying and nurturing talent. Recent research supports the belief that innovation is a skill that can be mastered and managed. How do you systematically identify the people in your organization that already have required skills, while developing them in others?
- Rewards and incentives. Leaders nod their heads when we describe the need to re-think rewards. Given innovation's inherent uncertainty, rewards need to focus as much on the behaviors individuals follow as on the outcomes they achieve. They need to be long-term focused, and avoid unnecessarily punishing prudent risk taking. That all sounds good, but how can a large organization manage such a system at scale?
Approaching innovation-driven growth systematically is no easy task. While we believe that the framework we propose in Building a Growth Factory is an important step forward, there still are a number of unanswered questions. We look forward to seeing inspiring ideas and case studies from the world's innovation talent.