Your organisation vision and mission have been clearly defined. Clear and strong senior management commitment is visible, and reinforced at functional manager level. A clear strategy has been defined, and a new Portfolio Management Office is resourced by qualified and experienced managers. The PMO has the authority to consolidate and analyse the organisation’s projects and programmes (making recommendations to the board) and will direct, monitor and control progress towards achievement of the organisation’s strategic KPI targets.
But where do these projects (and programmes) come from? The ‘top-down’ approach assumes that projects suggest themselves logically, as we break down the strategy into small components. For example, (and rather simplistically) a strategic objective of increasing sales might suggest a strategy of expanding sales into other EU countries. This might suggest projects to localise our product for (for example) the Spanish market, and perhaps to form a joint venture with another company already selling complementary products into that market.
So far, so logical, however, this approach, on its own, fails to identify and leverage the true range of opportunities open to the organisation. Furthermore, where do those ‘brilliant flashes of inspiration’ have a chance to come into being, other than by blind chance?
What kind of project organisation do you have?
The top-down organisation tends to produce enough projects to satisfy the strategic objectives, but no further.
But the second type of organisation has lots of ideas. They are bursting with creativity and can choose the best projects to progress. Then, when things change, they have an overflowing project pipeline ready to pump more ideas into the process.
So how does it do this? Has the organisation simply broken down their strategic objectives into a greater number of categories? The answer to this is no: simply doing it this way just produces a large number of (often unimaginative projects) of a similar size, return, strategic fit, and risk. And where does the left field, blue-sky thinking brilliant project idea come from?
Incidentally this approach is actually risky – porfolios comprised of similar projects that have been approved because they fulfil the same minimal hurdles are not only unbalanced in terms of risk and reward, but also sometimes hide major risks, such as similar small risks within each project that together could be critical.
The ‘Type 2’ organisation takes innovation seriously. And by seriously, this means putting in place systems to actively generate and manage innovation.
We cannot all rely on the ‘Steve Jobs, why-not-swipe-the-screen-on-my-smartphone’ moment, so it’s time to get systematic – one person may not have the ideas, but surely our workforce as a whole can.
Time to Crowdsource!
Exponents of LEAN seek to eliminate sources of waste within their processes (as first defined by Talichi Ohno, creator of the Toyota production system). A number of acronyms are commonly used to categorise this waste, including DOWNTIME*, in which the N stands for Non-Utilised talent. This includes waste through the failure to capitalise on employee knowledge and experience.
Why Should Your Employees Know?
Of course, employees are the closest to the work, but, even if they don’t necessarily see the bigger picture, they certainly see their work from a unique perspective. They may not even know that they know: how many people have wondered to themselves or colleagues, ‘why do we do it this way?’ and just got back the answer ‘because’.
In any case, what should they do with an idea? Even if they communicate it to a boss, the boss may not know what should be done with it, it may require analysis or presentation beyond the knowledge of the employee, there may be no way to group the idea with other ideas or to subject it to relevant review.
Informal Systems Don’t Work Well
Informal systems don’t work well because there are inconsistent results: because of a lack of rigour in scrutiny, there is a danger that the right projects are rejected and the wrong ones authorised. Poor batching means that excessive time is wasted assessing project ideas, plus, projects are not properly grouped and considered for their cumulative effects.
Innovation management doesn’t just happen. You’ve got to drive it. Here’s some ideas how:
Use Software Tools
There are some really excellent software tools available that allow online collaboration in terms of not only submitting ideas, but also contributing to existing ideas and properly analysing the big picture.
Typical features of such software include:
Management Definition and Challenge: You can set topics or ask questions.
Participation: Typical tools of course include idea entry, but also invite lessons learned, customer stories, workplace ideas. These can then be tagged with pre-populated or original tags for easy and automated cross-referencing.
Consolidation: Tags help with consolidation, but now participants can contribute their comments to others’ ideas, and innovation areas start to emerge. The software itself can highlight ‘trending’ topics.
Reporting: in many formats both tabular and visual.
Significantly, well-designed and intuitive interfaces make contribution fun!
Create Excitement for Projects
Employees are motivated to contribute ideas, however they have to know that is possible and how to do it. Successful companies do this well and employees become highly motivated once they understand that the organisation is listening. Important too is that employees understand the system, and know what will happen to their ideas. Some companies have found that incentives work well.
Meanwhile at a very well-known IT company, any employee who has an inventive idea that would be of use to the company (although this could be in any way – even a better hole-punch), can submit this to the IP department and, as authors, receive a royalty on any benefit achieved. The bar is high for IP, but so are the rewards, and employees compete with each other in their inventiveness,
The Lean Enterprise Research Centre identified that in manufacturing 60% of activity does not add or facilitate value to the customer, and is thus waste (and think what the waste must be in projects, given their unique nature). Why not make sure that employee innovation is not wasted within your organisation?
DOWNTIME: Defect, Overproduction, Waiting, Non-utilised talent, Transportation, Inventory, Motion, Extra Processing