I interviewed Rod Collins who discussed 'Why Companies Struggle with Innovation and Collaboration'.
It’s great to speak with you again, Rod. We’ve done great interviews in the past, and I’m looking forward today to discuss this new topic about why companies struggle with innovation and collaboration. Can you start by providing a brief background of yourself?
Yes. My name is Rod Collins. I’m the director of innovation with a national management consulting firm in the United States called Optimity Advisors. We work with companies so that they can manage and change as fast as the world around them. I think one of the biggest problems facing companies today is that the world is changing much faster than their organizations, so we work with companies to put in place processes that can help them to work faster and more creatively.
Why do companies struggle with innovation and collaboration?
Well, the main reason is, most companies are not designed for either innovation or collaboration. This is something that is uppermost in CEOs’ minds. As most of our listeners probably realize, IBM, every two years, does a study in which it interviews more than 1,500 CEOs in both the public and the private sectors all over the globe. In their last two studies, two key findings that they found were, in the most previous study, CEOs, more than 75 percent of them identify collaborations a critical core competency. But what is probably most interesting in that study is that more than 50 percent of them were not exactly sure what they were going to do.
In a prior IBM study, when asked what the most important skill they were looking for in executives was, it wasn’t the usual analytical skills or individual intelligence; it was creativity. On some level the CEOs are recognizing the need for innovation and for collaboration, but they’re not sure what to do. I think that’s because, probably, the thing that comes to mind when they think innovation is probably inventions. You look at things like iPhones and iPads, and they probably look and go, “Why can’t we make stuff like that?” When they look at collaboration, they’re probably thinking of coordination or cooperation and wondering, What can I do to get my people to behave more cooperatively? I think the reason they struggle is, they’re focused on the outputs of innovation and collaboration but don’t understand what the essentials elements that create the circumstances for it to happen are. Let’s take innovation first.
Again, I mentioned that when CEOs think about innovation, they’re probably thinking about innovations, but the essential element that makes innovation work is the phenomenon called serendipity. Serendipity is the capacity to connect unusual things. In order for serendipity to happen, you need a free flow of ideas and a free flow of people and a lot of diverse people bumping into each other who usually don’t bump into each other. In traditional companies that’s a problem because as much as we detest silos, they still work in silos. Every day the finance people interact with the finance people, and every day the marketing people interact with the marketing people, so that doesn’t create much opportunity for serendipity. Contrast that with a company like Google. Google is as well-known provides free food on its campuses, and one of the reasons they do that, it’s not primarily as an employee benefit as it creates circumstances for serendipity.
Why is it that some of these companies have Ping-Pong tables and tennis courts and all kinds of recreational things? Because those types of gatherings, if you will, which they see as valuable to work, are also places where serendipity happens. The ability to connect unusual things is the soil in which creativity happens. A little quote on this, Steve Jobs defines creativity as the simple act of “connecting things,” which means any of us can be creative. We don’t have to be songwriters, we don’t have to be artists; we just have to put ourselves in circumstances where we connect things.
Now, let’s shift over to collaboration. Again, I think what CEOs think of when collaboration comes to mind is cooperation, coordination. These are things that when hierarchies work well are in place; however, it’s not enough in a fast-changing world. Jane McGonigal wrote this book called Reality is Broken a few years back. She has the best definition of collaboration I’ve ever encountered. She says in addition to coordination and cooperation, there’s a third element that needs to be present in order for an organization to be collaborative, and that third element is co-creation.
I think Jane would go so far as to say if you don’t have co-creation, you can’t have collaboration. Again, hierarchies are greatly handicapped there because the key C-word in a hierarchy is not co-creation, it’s compliance. It’s “do what you’re told; stick to the policies and procedures, to the way we’ve done things for decades.” Also, in hierarchies it’s the people at the top who decide what to do, and everybody else just needs to follow directions. Well, that’s not a formula for co-creation. Co-creation means that everybody in the organization needs to be involved in what the strategy will be and how we will execute it. That’s a foreign concept to hierarchies.
Again, if you think of a company like Google or a company like Gore and Associates, where there are no bosses or Morningstar, which is a tomato processor in California, there are also no bosses. The only way things get done in these companies is through co-creation. Co-creation is in the fabric of their organization.
When companies co-create you wind up creating the circumstances in which the workers you have are highly engaged. When your voice counts and when you have helped to set the direction and decide how we’re going to do things, that high level of engagement leads, also, to high levels of collaboration.
You combine that, again, with opportunities for serendipity; now you wind up having the resources that allow organizations to change as fast as the world around them. You and I talked about in the last time we got together, the network architecture that is much more conducive to this than the top-down hierarchy, which is why I believe going forward, the typical organization ten years from now will not be a top-down hierarchy; it’ll be peer-to-peer network where serendipity happens, lots of co-creation is how things get done, and these organizations will be much faster than the hierarchies we’ve known over the past couple of decades.
How do you help companies that are struggling with innovation and collaboration?
There are a couple things that need to be done. The first is, we call it resetting the three Ms: resetting the managers, resetting the meetings, and resetting the measures.
With respect to managers, what kills innovation in hierarchies is that too many people have the authority to kill good ideas and keep bad ideas alive. What we do is work with organizations—you don’t have to eliminate the managers, but you do have to eliminate the expanse of their sovereignty.
Managers and networks are coaches, facilitators, and their job is to help groups come to the best solutions that they can based upon their collective intelligence.
The manager’s role shifts from being the one who sets the direction to one helping the organization and its workers to let the best direction emerge from their collective thinking.
The second resetting is resetting the meetings. Meetings need to be places where collective intelligence can be aggregated and can be leveraged.
It means getting everybody together in the same place at the same time and doing it with some frequency so that there is iteration as we are co-creating what we’re doing. An example of a place where this is done very well is in Agile software development, where they work in sprints, where they have, oftentimes, daily standup meetings that are, oftentimes, no longer than 15 to 20 minutes, but everyone working on the project is meeting on a daily basis, checking in on what’s working, what’s not working, and how they can support each other.
It’s very simply that, just getting everybody in the same room at the same time.
The third one has to do with resetting the measures. What’s happening there is, we need to shift from measures where people are accountable just to single supervisors who, oftentimes, are working in cross purposes with other supervisors. You want to set up a discipline of peer accountability.
What drives co-creation is when workers feel that they are all each other’s mutual customers. An example of where that’s done well is, I mentioned Morningstar. Again, this is a company that doesn’t have any supervisors.
The way things get done there is that at the beginning of each year, they craft what are called colleague letters of understanding. The different people who are working together in terms of producing tomato products like they do work out specific metrics where each of them promises to deliver what needs to be delivered, and the others with whom they work, they measure those frequently and they’re held accountable to them and that affects their compensation. That structure of peer accountability works quite well. Morningstar is the world’s largest tomato processor and has been operating in this structure for about 25 years, so it’s a structure that can work. Those are the things that companies can do.
Again, resetting the three Ms: the managers, the meetings, and the measures.
Thanks, Rod. Do you have any final recommendations?
Yes; build a network, not a hierarchy.
Great. Did we cover everything you wanted to discuss?
Yes. Again, keep in mind, if you want innovation and collaboration, then you need to set up your organization so serendipity happens and people are co-creating the work.
Great, thank you.
Thank you, Dustin.
About Rod Collins
Author, Speaker, and Innovation &
Organizational Design Expert