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From disruption to smart progress

  • Bennet van Well
  • Zeljko Branovic
  • Monday, 2. May 2022
From disruption to smart progress
© Engin Akyurt

Innovation, disruption, and digitalization are on today’s agenda. What are the implications? Here are three reasons why organizations keep failing at them. Plus two suggestions on how to move forward anyway – and an optimistic outlook.

Anyone who currently spends a lot of time in companies cannot shake the feeling that our corporate landscape is striving to become a weird XXL copy of Silicon Valley. Everywhere there is disruption and innovation, ambitious design thinking and digitalization projects are being launched, and anyone who does not take an agile approach to the whole thing is old news anyway. In the best-case scenario, every gatekeeper and plant manager should have already come up with a few radically new business models daily before their breakfast break.

Organizations are good at routines, not innovations

It is exhilarating to see all this. And it is, in many cases, predictably doomed to failure. Worse, the categorical imperative of everyone-must-innovate-but-now is likely to permanently frustrate individual actors as well as entire organizations.

A major reason for this lies in the logic of organizations. They are designed to stabilize decisions, work through routines, and roll out established processes over and over again. Dynamism and disruption contradict their model for success. This makes established companies all the more concerned about being left behind by a world perceived as dynamic. The result: vehement calls to the workforce to get their act together now and innovate permanently.

The innovation imperative goes to the wrong addresses

But employees are literally overwhelmed by such demands. A plant manager, for example, is measured primarily by how smoothly her work processes run, whether she has maintenance costs and production routines under control. Shouting “Just try it out!” to her is like asking a top chef to spontaneously set up a fast-food company because burgers are in demand on the market at the moment. However, people in organizations are usually very skilled at recognizing such unspecific demands as actionist and letting them drip away. Because they know from experience: Tomorrow, somebody will come with yet another idea on how to innovate.

The effort is huge – the results are not

It is hard to imagine the sums that are currently being invested in digitization and agility projects that will sooner or later die the silent death of change projects. Along the way, the state of mind fluctuates between panic (“We have to do something!”) and resignation (“Nothing will change anyway …”). In the end, the opportunities of digitization go unused, considerable project budgets are burned, and employees are frustrated.

How can this dilemma be resolved? We believe that a sense of proportion is more important today than ever before: looking at where the organization, its players and their rationalities can really make a difference – and where it makes sense for them to do so. In concrete terms, the task of a plant manager could be, for example, to see how maintenance costs and downtime can be reduced through digital machine monitoring. This may sound less disruptive than fancy digital business models, but it has the advantage of being sensible, feasible and actually adding value. But that is only if you are willing to provide the budget for such a boring and ultimately costly idea.

True outside-the-box approaches should be conducted independently of hierarchies and routines.

For true outside-the-box approaches, other ways and means are needed. For example, you can create fab labs and other “hobby cellars” within the organization itself, where rapid prototyping experiments can be conducted independently of hierarchies and routines. Another – and widely used – option is to set up associated startups. As agile dinghies, they can try out new solutions independently of the mother ship without being paralyzed by the cumbersome processes of the parent organization. If such a prototype or a dinghy goes down unsuccessfully, the collateral damage for the parent organization is manageable. The exciting question, however, is what happens if they are successful: Large tankers, after all, have high sides over which dinghies are difficult to hoist back on board. In most cases, the established crews on board are also quite skilled at fending off newcomers, who are feared to take away resources.

Power makes ideas successful

So, if you want to integrate new business models, products, or solutions into the standard organization, you have to create clever docking points. And that means organizational tailoring. For example, it is a question of seemingly minor details such as the incentive model for sales: Is it worthwhile for sales staff to offer new products that require explanation in addition to established, long-running products? Or do the innovations simply have no demand because it is not worthwhile for sales staff to market them?

Many promising ideas dry up in a similar way in the long corridors of the organization. That is the bad news. The good news is that there is no shortage of ideas in any company we know. But you have to give them the right space, resources and power.

Bennet van Well

Dr. Bennet van Well

is a partner at Metaplan and advises management teams on strategy and organizational processes.

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Zeljko Branovic

Dr. Zeljko Branovic

is a senior consultant at Metaplan, accompanies Metaplan clients in digital transformation processes and advises on agile leadership, strategy, and organizational development.

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