Culture Clashes in Innovation

“Beware of creating two classes of corporate citizens - those who have all the fun and those who make all the money.”

This warning comes from an article by Rosabeth Moss Kanter in the November 06 issues of Harvard Business Review, and it’s one of the most profound and succinct statements on fostering innovation in an organization that I’ve read in a long time.

As part of a broader discussion on mistakes in skills, organizational structures, and processes, Kanter states:

“Even when a new venture is launched within an existing business, culture clashes become class warfare if there are two classes of corporate citizens - those who have all the fun and those who make all the money. The designated innovators, whether an R&D group or a new venture nit, are identified as creators of the future. They are free of rules or revenue demands and are allowed to play with ideas that don’t yet work. Their colleagues are expected to follow rules, meet demands, and make money while feeling like grinds and sometimes being told they are dinosaurs whose business models will soon be obsolete.”

Sound familiar? Kanter goes on to give a specific example torn from the pages of dot-comness complete with new-hires dressing in stylish duds and getting lavished on with cushy new furniture and a big new kitchen for their 24/7 workstyle. But this could be any number of corporations setting up innovation-tanks, labs, skunk works, and the like.

There are many great points throught the article which make it worth the cost of downloading from hbr.com. The over-riding lesson that comes through is “Everything in moderation”: All of the mistakes that Kanter points out, which she cites as being classic, recurring ones that get rediscovered with each new generation of leadership, are typically caused by going to extremes and not finding balance. Setting up skunk works with no physical, organizational, mission or staff relationship to the broader organization means that lots of great stuff will probably get done in a short amount of time, but translating it into sustainable ideas that can be used by the mothership often fails.

(This is only a problem if the skunk works is in fact intended to feed those ideas back - in many cases a separate business unit is explicitly created to address an emerging disruptive niche that the larger company would struggle to take on effectively. In this situation the co-mingling could be counter-productive.)

Many of Kanter’s recommendations point in the direction of striking a balance between extremes. For example, in the common situation of a company applying its conventional planning metrics and review process to an innovation effort, she advises against this tendancy and counsels patience for deviation from plan, without throwing out the need to do planning entirely and turn innovation into an aimless free-for-all.

Well worth the $6 if you don’t have the issue already.