The Idea in Brief
Your company is continuously creating new generations of products, services, and business processes. These innovations require seamless collaboration across your firm’s different parts. But in most large corporations, innovation and integration are unnatural acts. Resistance stifles new ideas, and silos block cross-functional cooperation.
Yet as Cash, Earl, and Morison explain, some companies are overcoming these boundaries by establishing two new types of cross-organizational teams.
- Distributed innovation groups (DIGs) foster innovation throughout the company. For example, they deploy intranet-based forums and wikis to scout for promising ideas.
- Enterprise integration groups (EIGs) establish the architecture and management practices essential for business integration. For instance, they identify integration opportunities, channel resources to them, and reconfigure ERP systems to support ever-tighter cross-business collaboration.
To establish each of these groups, select a small number of talented people who combine broad business knowledge, technology expertise, and the social skills needed to build relationships both within and outside your company.
The Idea in Practice
How Distributed Innovation Groups Work
DIGs foster innovation by:
- Scouting for high-potential ideas. Group members take part in brainstorming and problem-solving sessions, identify customer needs that could lead to new offerings or business models, and consider how to use existing technologies in new ways.
- Scanning the environment for emerging technologies and their applications. DIGs research technology trends and monitor early adopters’ experiences for insights into new applications.
- Facilitating online idea marketplaces. They use information dissemination and collaboration technologies, including groupware, social-networking systems, and Web 2.0 tools such as wikis and blogs.
- Advising business units. They counsel unit leaders on how to manage innovation initiative portfolios and how to conduct rapid prototyping.
- Publicizing promising innovations and their progress throughout the enterprise. This sparks creativity by example.
- Serving as a home for developing pilot projects and prototypes. If a business unit comes up with a promising idea but lacks the resources and skills to develop it, the DIG can provide the extra push needed for the idea to gain early traction.
Example:
Royal Dutch/Shell’s “GameChanger” teams provide seed funding for radical or long-term innovations that would otherwise be orphaned. GameChanger coaches organize idea-generation workshops and help idea originators prove the concept (in a lab or in the field). Resulting innovations have included a new biofuel and a process for extracting hard-to-access gas reserves.
How Enterprise Integration Groups Work
EIGs foster business integration by:
- Providing expertise in process management and improvement. Groups oversee activities such as Six Sigma and disseminate best practices across the enterprise.
- Providing staff to major business-integration initiatives. EIGs provide whatever skills may be lacking in terms of process thinking and design, organizational change, job retraining, and new performance metrics.
- Managing enterprise architecture. They configure and manage the evolution of the company’s business processes, information, and technology.
- Anticipating a more integrated future. EIGs help managers envision and prepare for the ramifications of horizontal integration.
Example:
General Electric’s “Corporate Initiatives Group” is responsible for horizontal integration within and across GE’s six major business units. Benefits include reduced cycle time for key business processes. One GE company that provided private-label financing for retailers used to take 63 days from contract signing until a customer was allowed to finance a purchase. With the Group’s help, that time was reduced to one day, speeding revenues to the company. The Group also shares best practices across the corporation, especially those involving accelerating growth, reducing waste, and improving customer-facing processes.
In the continuing quest for business growth, many CEOs are turning to their CIOs and IT organizations because technology is essential to two compelling sources of growth: innovation and integration. Innovation, of course, is doing new things that customers ultimately appreciate and value—not only developing new generations of products, services, channels, and customer experience but also conceiving new business processes and models. Integration is making the multiple units, functions, and sites of large organizations work together to increase capacity, improve performance, lower cost structure, and discover opportunities for improvement that don’t appear until you look across functions.
