Today’s leading organizations are knowledge-creating companies that thrive on continuous innovation. It’s a big competitive edge. New products and services can be knocked off or copied. But, it’s much harder for competitors to duplicate a management system and corporate culture that produces a continuous stream of successful product and service improvements, innovations, adaptations and extensions.
That continuous innovation stream comes from controlled chaos. It’s a tricky process with four main stages:
• Exploration—a broad, open search for strategic partnerships, unresolved problems, latent or unmet needs, new markets and customer segments that potentially fit the organization’s context and focus (vision, values, and purpose), as well as core competencies.
• Experimentation—pilots, clumsy tries, and “mucking around” to test the potential opportunity for viability and to learn what would be needed to make it successful.
• Development—major resources are now committed to fully developing or refining the few new products, services or businesses that are ready to be capitalized on.
• Integration—the new product, service or business enters the organization’s mainstream.
The first two stages are dependent on people or leadership skills. Stages three and four lean heavily on disciplined management systems and processes.
Of course, these four innovation stages aren’t always so neat and orderly. They run in parallel, overlap each other and sometimes clash. For example, stage two often involves field and development people. That means stage three work may already be proceeding while the project is still in stage two. In smaller or centralized companies, the close involvement of field people in stages two and three means many of them are already trained by the time the company is in stage four.
An organization’s emphasis on the unstable, chaotic first two leadership stages—or the last two stable and more controllable management stages—tends to pulse. At some point, there may be many exploration and experimentation activities underway. That entrepreneurial environment is both exciting and unstable. Too much can be dangerous to the health of ongoing business and the people who are trying to hold core operating processes together.