Innovation and innovative teams

Jimmie JohanssonRichard Berntsson SvenssonKashif Ahmed Khan

Agenda

Creativity and Innovation The innovators Team structure Managing innovative teams The innovative team environment Rewards and recognition The management team

Creativity and innovation

What is Creativity?New ideas

What does it mean to be Innovative?Transforming ideas into actionContaining processes like: research,

development, manufacturing and marketing

Innovation (1/4)

Industrial innovationPortable radio Boing 727

Risks of failure IBM’s OS/2Technical focus, not marketing needs

Innovation (2/4)

Knut Holt Study 23 organizations were studied

“Four of the firms had made no inquiries to potential users, six had made too few inquiries, two ignored the result, two had misinterpreted

the answers, six were committed to preconceived designs and three failed to

understand the environment to which their products would be subjected.”

Innovation (3/4)

The chase for the first spot Reverse engineering

“There are really two risks in research and development…One is whether the technology will succeed. The other is whether it will satisfy some market requirements. If you hang back and wait, you can be in a position where you can know the answer to both questions, and catching up can take a lot less time than the original effort.” George Mechlin, Vice President for R&D in WestingHouse

Innovation (4/4)

Risks with reverse engineering Fast pace of technology

Is it always good to be first on the market? Maybe when turning directly to users

DVD - BlueRay

Operating systems, network protocols and database systems.

Innovators

InnovatorThe creative person that find solution for a

problem Champion

Can be innovatorFights for the idea to turn into action

SponsorMakes the action happen

Discussion point

Is reverse engineering a good approach to successful innovation or is it more important to be first on the market?

Team structure (1/3)

Concepts of team structure Taylor's method Drucker

Teamwork Commitment

Team creativity A team performs better then the individuals alone Jelled teams increases the chance of success

Team structure (2/3)

Basic structure Official Individual Private

Structural conflicts Interaction between the basic team structures

Group ethics Unwritten team ethic Settle own disputes without outside help

Team structure (3/3)

Group behaviorWork groupProcess groupCombat group

Managing innovative teams (1/4)

Team leader style Top-down or bottom-up? “The manager’s function is not to make people work,

but to make it possible for people to work” Team dynamics

Closed Random Synchronous Open

Managing innovative teams (2/4)

Personal needsLearn members to think by themselves

Political vs. technical solutionsDifference between political and technicalPolitics often used to describe people-related

work Crystallizing the team

Loosely coupled individuals

Managing innovative teams (3/4)

CommunicationCommunication with the manager is important

Open communicationGroup discussion?Concerns management Involve members with right knowledge and

skillsHonestly presented

Managing innovative teams (4/4)

Managing conflicts Avoid early polarization Focus on the issues Do not deal separately

Intergroup conflicts Resolve issues them self Bring parties together Subcommittee Reduce stakes Agreed technical solution

Discussion points

Is group ethic important? Should teams settle their own disputes?

What is the manager’s function?“The manager’s function is not to make

people work, but to make it possible for people to work”

Is the communication with the manger the most important?

Innovative team environment

Office environment How people are organized Size of working group

Problems that can affect innovative environments negative

Actions for establishing or maintaining innovative environments (1/2)

Establish program for further develop promising people

Provide time and resources to good innovators Provide promising innovators and champions

with sponsors Make groups in organizations not resistant and

stagnant to new ideas

Actions for establishing or maintaining innovative environments (2/2)

Monitor outside technical and market development

Provide a good communication program to make sure manager and their workers interact

Provide the professionals with modern tool, space and support

Reward good work

Discussion points

Is a smaller organization more innovative than a larger one?

Is a more open landscape better for creating new ideas and innovations than a room where you can just fit a small group?

Rewards and Recognition (1/1)

Fertile imagination of creative people Inadequate recognition of creative people Pelz & Andrew’s Study

Comparison of people who resigned and stayed in the organization

No talent recognition

Both award and incentive plans can be highly effective based on the needs of the company

Award Programs (1/1)

Few people make difference in the failure and success of a project

Manager’s know these people but rarely appreciate their work

Recognition ProgramsBasic idea is to reward significant

achievements as soon as possible.”Golden Banana” Pin

Recognition Programs (1/1)

Top people’s recognition is essential Aggregate of smaller contributions can

have an enormous impact Minor advance should be encouraged

Letter from the bossPat on the back

Rene McPherson’s observation

IBM Award Plan (1/1)

Formal & Informal Awards Informal Awards

Range from $50 to $ 1500 Can be given at manager’s discretion

Formal Awards Divisional Management grant sums up to $25,000 Corporate Awards range up to $100,000 or more Reserved for unique accomplishments Presented at Annual Gala Recognition Dinner FORTRAN

$250,000 presented to an IBM fellow and eight of his prior associates

Industry Award Plans (1/1)Six Corporate Compensation Awards

Company Award Amount

Annual Savings

Award (%)

United Technologies $2,900 $19,791 14.6

United Technologies 2,500 40,000 6.3

Western Electric 3,910, 26,000 15.0

Schering Corp 1,125 5,000 22.5

Johnson & Johnson 6,798 46,500 15.0

GAF Corporation 3,580 29,000 12.3

Total $20,993 $166,291 12.6

Award Guidelines (1/2)

To qualify for an award, achievement should beClearSignificantWorthyResonably consistent with other awards

Give awards in public with plenty of publicity

Award Guidelines (2/2)

Maxim of Charlie Beacham, Lee Iacocca’s mentor at Ford”If you want to give a man credit, put it in writing. If you want to give him hell, do it on the phone.”

Large Team’s achievements Special Momento Avoid giving cash to large groups

Never give awards before the achievement has actually been accomplished.

Incentive Plans (1/2)

Aimed at more fundamental demands Sustenance Comfort

Incentive systems include some elements of recognition

Common use of various types of Incentive pay systems.

New organizations rely on them to attract and retain technical talent

Incentive Plans (2/2)

Survey of 105 firms of Boston Over 80% of firms in High Technology had bonus pay

plans 33% of the rest opposed it

These plans are widespread and popular among employees.

Limited evidence of support for organizational economic value

Can be used to stimulate peripheral behavior

A Caution On Recognition Programs (1/1) W. Edwards Deming

Famous 14 pointsVarious recognition and reward systems can

be counterproductive Keep focus on the work Use rewards and recognition Make sure they dont become disincentives

The Management Team (1/1)

Top manager and immediate subordinate managers make up the management team

Most important single group in the entire organization

Make key operating decisions, set priorities and determine quality of work as well as working environment.

Contention Management (1/3)

All organizations (medium or large) involves great many conflicts.

Inadequate resources and tight schedules Need of Central Group Paul Lawrence & Jay Lorsch Study

Contention Management style leads to most effective group performance

Contention Management (2/3)

Basic ground rules for contention management are:Awareness of management teamHelding team member responsibleResolution of disagreementPrescence of all concerned partiesMaking sure all issues are explored and

understood

Contention Management (3/3)

Effectiveness of contention managementExposes organizational’s latent conflictsStrengthen’s trust & avoid’s distrustProvides motivationMakes environment more challengingHelps in finding solutions in disagreement

IBM Personal Computer & PC Junior(1/1) Late 1970’s Frank Cary IBM CEO Don Estridge assigned as Project Manager Job well done, IBM became a Hero from Zero Long term disaster

DOS Program and Microsoft Hardware and Intel Chip

PC Junior and contention Management

Business Principles and Strategies (1/1) Every organization develops its own

principles & strategies Keep into consideration the following

guidelinesAssume technology will improve rapidlyDo what is best for customerWatch for fundamental changes

Managing the Contention System (1/1) Guidelines

Put product managers incharge of the product programs

Make the organization as an open houseTop Management should protect

organizaitional’s long term principles, goals and strategies

Management Roles (1/1)

Management team vs technical team Management team consists of

representatives People depend on managers for support Managers must insist on their

departmental interests Experiment in Group Dynamics

Team Co-operation (1/1)

Manager’s face complex array of pressuresDepartmental PressureTop Management Pressure

Need of middle groundDefend group’s interestsNeed of broader consideration

Management Scope & Perspective (1/1) Job descriptions and tables of

organizations Rigid vs Loose definitions First Line Managers and supervisors Technical executives Senior Management

Transparent Management (1/1)

Transparent managers Instruction passing is done without

responsibilityNot a normal management attitudeSenior managers force their subordinates to

behave in this mannerDon’t blame the senior managementDon’t lose respect of people and management

Building the Management Team (1/1) Building ambitious, contentious and

aggressive managers into a team is not easy.

Steps in building management teamRespect views of the team Involve team members in decision makingEncourage team members to work together

Discussion Points

Should there be awards and recognition programs in the company and how do they stimulate the peripheral behavior?

To what degree should the organization publicise the awards and the ceremonies?

To what an extent is the contention management responsible in the success/failure of project and how?