The RocketSpace team was in Austin attending South by Southwest (SXSW) where 85,000 attendees discussed disrupting their markets with implementation of the newest systems and technologies. The sad truth is that there is a 95% chance that each of these corporate innovation initiatives will fail — including yours. Rarely-considered factors such as Conway’s Law and departmental dis-integration play a major role in this failure rate. Each company tries to innovate by leveraging the current organizational structure with its traditional hierarchies, frameworks, and communication networks. This guarantees a very high probability of failure, and here is why.
How Your Organization’s Departmental Silos Block Innovation
Why Innovation Fails
Your new, desired system is likely meant to be highly integrated, and, therefore, bears little resemblance to processes and systems within the organization that are historically dis-integrated. What does this mean?
In order to achieve efficiency, modern companies have organized themselves into specialized departments which tend to operate as silos. Marketing, sales, operations, and accounting all exist in separate departments. If implementing an innovative system happens to require (which it should) input from more than just one department, then communication must be accessible across the entire organization.
Why Committees Fail
The solution sounds easy enough. You form a committee. You get all the key stakeholders together in a room to collaborate and implement solutions. Done. Well, not so fast.
Such an implementation would require different teams from different departments to all truly unite — for the walls between them to be eliminated. However, the very structure of the organization often makes this untenable. Each department is headed by a leadership team that has very specific ideas about how their limited resources should be spent. This creates unique pain points and needs, and, these varying positions often conflict. This ‘dis-integration’ is reflective of stakeholders being locked into their own separate departments within the corporate structure.
These committee scenarios typically consume multiple years and lots of money ending up with a system that is no longer considered innovative, if anything can be created at all. For example, a current RocketSpace manufacturing client wanted to implement an innovative Enterprise Resource Planning (ERP) system, which would save a fortune while positioning them as the most efficient operator in their industry. However, this effort required sales, operations, logistics, accounting, and e-commerce to all collaborate together and contribute resources. In this particular instance, they formed a well-intentioned committee consisting of members from all necessary departments, held many meetings spanning years, and, unfortunately, accomplished nothing. There's a name for this phenomenon, it's called Conway's Law.
Enter Conway’s Law
Conway’s Law states that “Organizations which design systems are constrained to produce designs that are copies of the communication structures of these organizations.” If you want to deploy an innovative system that spans departments, then you will need a collaborative team that spans departments. If these teams instead remain fundamentally separate by the fact of their belonging, foremost, to their business unit, then they will only be able to implement a system that mirrors these organizational divisions — a system that is broken into pieces reflecting the various departmental lines. This often overlooked phenomenon is foundational to corporate innovation. To the extent that an organization is not purely flexible, every company produces systems to reflect its organizational structure. Here’s what we mean:
How to Solve This Problem
Fortunately, there is a practical solution. You may have gathered by now that you need to deploy a system of organizational flexibility. However, do not advocate for a massive corporate restructuring that many believe is necessary. Such restructuring ends up reflecting a similar hierarchical paradigm, and, as such, the departmental silos are not eliminated, but merely shift around. Instead, advocate for the creation of a new leadership position, which may be called the Chief Innovation Officer, Director of Innovation, or Director of Ventures.
There are two rules for the creation of this leadership role:
- Must exist outside the organization as a stand-alone entity
- Must directly report to the CEO and have C-suite support
This leader’s job must only be to coordinate the vetting and integration of innovative systems and products— not to serve in addition to a primary role such as a CTO or CIO. And, she/he/they can come from either inside or outside of the organization. Pulling someone from inside the organization can be ideal as this person understands the existing systems and how to navigate the internal politics. Conversely, someone new to the organization can bring a fresh perspective of how the company’s prevailing problems have been solved elsewhere. Pick the one most appropriate to support an innovative culture.
Accelerate Your Innovation
Let’s take a look back at the manufacturer who wanted to implement a new ERP system. They could enjoy a much higher probability of success by deploying a Director of Innovation who focuses entirely on assembling the right talent and aligning with key stakeholders to create one integrated task force per each unique implementation challenge. This allows delivery of an innovation promise.
The Chief Innovation Officer or Director of Innovation is able to leapfrog the existing departmental silos by assembling unique purpose-built teams that can operate free from the mandates of their respective silos. The silos may remain to do what they do best, to operate their specific corners of the business at scale. Meanwhile, each department may now enjoy the timely emergence of new operational efficiencies proudly brought about by their own team’s contribution to a cross-company collaborative effort.
Is your organization struggling to systematically implement innovation across products, services, and systems?
RocketSpace offers corporates proven methodologies to drive delivery to hit critical growth milestones, and does so in a way that inspires innovation. Connect with our team to learn more.