[MUSIC]. So if I, I'm going to show you a picture in a second here then ask you what are the constraints, the structural contrainsts in an organization like this. Does this look like an innovative organization to you? Or not? Most people have sort of this visceral reaction to this kind of thing and say oh my God that looks not. Innovative. And, and we sort of have a sense of that it's not innovative. And so the question is why? Why is an organization like this that's structured this way not innovative? Well this is a university, by the way. university have, have certain job to, around innovation. The job is not to kind of put the radical new ideas, though. so, structure constraints. So, what happens is often that there's something that happens down here. You know, in one little small part of the organization. And how do we move that thing to a different part of the organization? So, for example communication, like how do we communicate ideas across? Also, structure means that there's lots of levels of no. Like no, no, no, no. So many people can say no, but in order for something to go forward Everyone has to say yes. So that's another of those kind of constructural constraints. So what I'm going to do is I'm going to put these structural constraints into this set of three categories and some rough sub-categories, let's call them, about seeking efficiency and control. a lot of what structure is around is around efficiency, around control, as I talked about in the beginning of this, of this set of lectures. Organizational size, we have to have structure in order to grow, in order to have control while we have a large size and there are implications there. And then also, we're going to talk about rewarding survival and in some organizations, what's rewarded is surviving and not taking experiments, not trying things or making the world a better place. It really is just say, okay, did I survive? Have I not made a mistake? So let's go into these in a little bit more detail. Certainly, we need to have, if we have a large organization, we need to have some form of control, some kind of, of structure that helps us do efficiency, that helps us be efficient. We have a lot of people, a lot of resources that those people represent, and they're going every different direction. That's not a very good thing. So we want to have some kind of, of, of control of them. But some of the problems that we have is sometimes we'll separate initiation of a problem from the implementation of that problem. So consider in Xerox park, what was happening? They were generating ideas in California and they were assessing those ideas in New York. That's problematic, right? So there's kind of the control mechanisms for moving information back and forth is really difficult. Organizations are really often large organizations especially, large organizations that have these kinds of structures are really focused on efficiency. There's a lot of people. They have to maintain control and they want to make sure that things don't get out of control. That is to say that they want to make sure that their organization remains predictable and that's what control's about. It's about predictability. And so what is innovation. It is not about being predictable at least not in the early stages when we're trying to understand what are the different possibilities we could use to achieve this particular goal that we're shooting at. Size, we have these big structures which allow us to make organizations bigger but the more people we have you know, for example the more different ways people think. About ten people have ten opinions. They have different divergent goals, different assessments of what's going on. you know, it's really different. Also, the more people I have, the more risk to an organizational resources I have. So let me say that differently. If I'm paying each of these people and they're all going off in different directions, I need to have control so I know I'm using that resource, mainly their time, their brains, effectively. Also I want to really reduce variance, right. So the large organization, I want to be able to have this outcome routine outcomes. And so what I really need to do is to sort of reduce the variance. And I do that through control. I put people into the very specific places to keep that control ahead. And that again reduces variance, that reduces change, which leads us to having less innovation. Now, the thing that happens, communication. So, think about how do we, we move information from one part of the organization to another. Go back to the story of Xerox PARC, the people in California saw the future. They saw something that happened. A lot of what they saw has come true. You know, Steve Jobs, his, his vision was a computer on every desk. And when people heard that, they laughed in his face. They thought that was the most ludicrous thing they heard. A computer on every desk. Now, look where we are now. And so, the people in Xerox Park, they saw that. But somehow, they could not communicate that to the people in New York who said, you know? We're, we're trying to, we're busy trying to protect the copier business. Let's not talk about that right now. And so does communication. How do we move information around? Many large organizations actually make information thinner and thinner and thinner. Maybe you're an organization where you get a report that's a bunch of numbers and if you're managing on numbers it's going to be really hard to see innovation, unless you're doing financial innovation, alright? because you don't have enough details of what's going on and the gory details of those numbers. But the numbers have to be thin, that is they have to be easily understood, easily transported. They have to have a fixed meaning in order for us to maintain control. And so, that's why we end up with these real thin, not rich, real thin communications inside of organizations, large organizations especially, that don't allow innovation to happen. That don't allow the real communication that will let innovation happen. We reward survival, right? So from a structural perspective, we have organizations, we have these things called seniority, we have loyalty. We want people to not make mistakes, and if we start to value that more and more, oh yeah, where's Joe? Well, Joe made a mistake, Joe's gone. Well, that sends a pretty strong message to people inside the organization about what's valued. What, should I change, should I try to change, what's the risk of that? Well, the last person who did that got fired. Okay, well I'm not going to make that change, I'm going to let someone else make that change. And if you have an organization, especially a large organization of people who are all saying I'm not going down that path, I'm not going to make that change, we have that that problem. That problems that problem of structure, or survivalism inside of an organization. You may have problems and this goes to the communication problem. The problem of knowledge generation. If we generate knowledge and information. That is if we take data and turn it into something we know, you know information. And if we separate that from the use of information Through telephone lines, through space, through geography through and lines of hierarchy or authority it becomes really difficult. And so, like I said earlier, separating idea generation from the concept assessment can be really problematic, because people may be using the wrong or the inappropriate assessment tools to measure whether an idea is a good idea or not. And here's a couple things to think about. If we have, there's, you know, people think about like you know, like two kinds of well, they're many kinds of knowledge but let's just for a moment talk about these two kinds. Tacit knowledge, these sort of things that you sort of know how to do like if you hit a tennis ball. You wanted to tell someone but you know you can sort of watching me and get the feel for. Things that we feel for, things that we communicate. Almost more informally or subconsciously or through body language. Then there's explicit things, the explicit things being things that are written down and crisp, directions and things like that. So we can talk about, in this case, showing, which is when we have tacit knowledge and we are trying to show someone else how to do this thing. It's, it's, you know, like hitting a baseball. It's that kind of thing. Yeah. We then could talk about also if we have tacit knowledge and we're tyring to turn it into explicit where we descirbe it. We use analogs. We use metaphors. We use different ways of saying here's what I'm talking about and trying to get the person to see that explicitly. We may have explicity things when we're ttying to get people to understand how to do them almost naturally. So sales training for example, or coaching. These are things that we do where we tell them explicitly put your arms here, hold here. And then by doing it, it becomes automatic, that people understand tacitly what to do. And then we may have explicit information that we turn into explicit information. And this one, in this, where I, where I've indicated the explicit to explicit, the explaining, is, tends to be what organizations do. And that tends to be what's good for hierarchies That's, because of things that can be written down. Things that can be clearly articulated are explainable, right? because I can put it on a report and I can send it to you. I can put in ones and zeros and send it through the internet in different ways. Whereas these other kinds of transfers of knowledge are much more difficult in a large organization, right? Because of people trying to show each other things. That means you have to almost be in the same space. And you can't have lots of large organization with lots of people in the same space, right? It just doesn't work in that way. And so that's one thing we want to think about, about these, these issues of structure, and these issues of structural constraints. And so, the kind of problems, I'm just going to, to reiterate to repeat, structural constraints, organizations use structure to achieve efficiency and control. And by doing that, what we do is we do some, we have some, they have some unfortunate, you know, byproducts, some unfortunate consequences, some unintended consequences. We separate initiation of ideas from implementation, and so there's information that's generated in the front that doesn't make it to the back. We have top-down decision-making. So people at the top of organizations are deciding, should we do this project or that project, without the rich information of being in there, they aren't down there seeing the information. And also, the goal is to maintain control. Maintaining control means not having variable outcomes. Again that says is to not have unpredictable outputs. So if you have an organization and the outputs are very unpredictable, that's not a good thing generally speaking. And so people in the top will control the organization in a way to make sure that those unpredictable outputs don't come. Sometimes even at the cost of innovation. Size, is the next one, talked about organizational size and we said, how having too many people create all these different diversion opinions about where we should go, different goals. Different assessments that people have, more people want to have a, a say, they want to have a vote in the innovation going forward, that's a problem. We may have a larger risk to organizational resources. If I, my organization empl-, employs 100,00 people. There's a lot of risk to making an innovation that doesn't work. And so the size, itself, actually, it creates, a, more risk. That way would makes us more willing to, less willing to entertain, risky ideas. And then also with large size we have to reduce variants. We need people to play certain roles in the organization so we really can find those roles that we can actually keep predictability in the organization. And finally a third one we talked about was, survival. How it is that we tend to reward survival, or we can reward survival in large organizations where it's about loyalty and not necessarily about creating value. Again when we reward people for being loyal to us. That is for not making mistakes, for always sticking with the, the, the we call the party lines. We stick to the way the organization wants to go. And you stay around because of that, then you are rewarding survival. And we remember from the group level restraints we talked about, that this idea of cohesion, people start becoming the same, they start thinking the same, they start looking the same, they start having the same ideas, that will not lead to innovation. Again, that's tied to the idea of making mistakes. Here, the problem of making mistakes may have more to do with organizational policy. Than before at the, at the group level, where we talked about mistakes being an emotional problem. Here, they're a problem of organizational policy. If you make a mistake of this size, you get fired. That's an organizational policy that's not necessarily an emotional one. Okay. So how do we overcome these organizational constraints, or these structural constraints in organizations? You know, if we're going to have large organizations, we're have to have structure. If we're going to have small organizations, we have to have structure. We have to know, we have to coordinate our behaviors, we have to understand how it is we're going to be together. Right? Well, one thing we can do is we can use more fluid structures. network organizations, organizations that, what I would offer is, think about project organizations. So when, when, when, when, when, when Hollywood, when they film a new movie, they pull together a project team. That project team works together on that project, and after the movie is done, do they stay together forever? No. They disband, and they go work on different projects. And that kind of fluidity brings information in as it's stated, you can pull in different kinds of resources when they're needed, you can, So basically you're following a project logic. Some organizations are structured in ways that don't allow that to happen. And so if you have an innovation initiative, give the people a room. Give them a space. Put them there and say "This is your job for this project. In six months, this project will be done and we'll put you on another project." And that's a way to get ahead in innovation. Not to say "Well, you are the finance person, and so you will always do finance." And I'll put you on a project but you still need to do your day job so you can't go to work on that project all the time and, and you know you have deliverables here and you know you have things here. And so what happens is we end up not being able to go help with the project. Our loyalty is split. So using these fluid structures is a way to do that. Want to facilitate mixing What are we learning, how are we learning it. You know, the insights that are made in one part of the organization, how do we share with other parts of the organization. Here I'll take you back to the story of Spin Silver. Remember we were talking about Spin Silver, one of the inventors of the Post-it note? Well, there, in 3M, they had these weekly, and monthly, show and tells where people would bring out their project they had been working on. Now here's what I'm looking at, look, it's this, this adhesive that doesn't stick to anything but itself, isn't this interesting? That kind of sharing actually has value. It's difficult to share over a large geographic distances. And again, go back to the idea I had about the, the knowledge-types, knowledge, tas, tacit knowledge to explicit knowledge, and vice-versa. It also again makes it hard to share insights that we have. But you can do it. All right, you can have weekly get-togethers and show-and-tells. You can tell. People inside the organization what's going on? And, and Facilitate Mixing also mean here sharing strategy. What's going on from a strategy perspective? So that people can understand how they need to behave in their part of the organization that is within the structure to go where they're trying to go as an organization. Now we have innovation outside of the lab. Often in organizations, we have an R& D group. They take care of innovation, we just, we just do finance, or we just do accounting, or we just do marketing here. Go talk to the R&D people. Well, for me, that's problematic because you want innovation throughout the organization. Innovation is such a powerful engine why would you not have everyone in the organization working on it. You know, every janitor, every cook, every single person in the organization should be able to, in their part of the world, make it better. And if you tell them the strategy, like we learned in the last episode, then they can do it in the right way. So don't let people off the hook, the deal is, you are in this organization, you innovate. That's what we're going to do. some organizations I've encouraged people to put a item on the personnel evaluation called innovation. Innovate, you know to what extend has this person innovated this year. Even if you don't define it, people will start thinking about innovation. They'll say, huh if he's going to put a check mark in that box next to where it says innovation I'm going to do something innovative. That will get people actually thinking about innovation even without having to put up there saying this is what we're trying to do. I'm trying to innovate in a specific way, but is that people thinking about it. Just the same where you might have a thing called efficiency shows up on time, works hard, have something called innovates, makes the world a better place in this organization by doing things that are different that we were doing yesterday. Next is about dissent, that cultivating dissent inside organizations may be important. There is this thing called group think and you may have heard of this, but in some organizations that the structurally, when a manager says no to projects, then they're dead and there's no other way to go around. And again, I'll hark back to 3M. And in 3M Spence Silver and Art Fry had to go to the CEO. They had to, sort of, jump a few levels to the CEO to get permission to do another market test. And, so, we need some kind of mechanism for what we call a dissent channel. For someone to say, this decision was made, against this innovation. I'd like to have a different opinion. I'd like to appeal that decision and have someone else look at it. And tell me why this is not a good idea. Sometimes ideas are not good ideas, and sometimes they need to be killed. Now, don't get me wrong. But, at least they should get a fair hearing. And so if they get a fair hearing, and then you still kill them, you know, that's good. They should be killed. But if they get a, if they don't get a fair hearing, then we don't know yet whether that was that million dollar idea or not. Last thing I want to offer is getting teams aligned. Getting the teams in your organization, get them aligned get them innovation focused, get the project structured, get them pushed in that way and use process. Put muscle behind your process. If you have a process for how it is we innovate in this organization and it's. Communicate it to everyone that people know how to do it as part of the organizational policy, you're going to have power. And by keeping those teams aligned in direction with the, with the strategy, it will be a really powerful thing. And think about it this way, we, I could have mentioned this in the strategy portion of it, that if you tell people This is our strategy, this is what we're trying to do. Please go off and think of things that will help us get there. That is a much more profital way then if people are pushing off in different directions in electro-analysis and saying why're you doing that. That's our consumer strategy, Why 're you doing that, that's our consumer strategy. That's that just saying look, this is what we're trying to do. Can you help us get there. If you're really smart and hard working, you probably can help us there in new more effective way. I want to leave you with this idea in the, in this part we're talking about structure innovation in Apple. And so we know that Apple's considered a very, very innovative organization and lot's of people would attribute that to the genius of Steve Jobs at the time. And so, that would be a good question, was it his ideas at the individual level? Was he able to, able to overcome individual constraints? I think a lot of what we might think about as innovation at Apple, actually, the constraints that are overcome are actually organizational constraints. Well, imagine a story that goes something like this inside of Apple, that there's a manager, an innovator, and he says, wow, like we're trying to move this project forward, and I need some help, I need some help from other managers. So I go to another manager, and I say, hey, I need your help, I need about five of your people to use them for a short time, we're trying this thing out, we need this to work. And so in a traditional organization, most organizations, what will happen? No no no, I'm too busy, my people are busy, I got my own projects, you know, sorry I can't help you, maybe someone else can help you. But inside of Apple, I think what would happen would, someone say, yeah, that's all nice, but you know what, Steve wants this done, and he wants it done yesterday. And than what happens? Oh, yeah, I'm available. How many people do you need? And so this kind of removing roadblocks, right, so removing structural constraints, that maybe what Steve Jobs was doing was that. Maybe that's the power of what he did, was helping overcome these structural constraints inside an organization. And since Steve Jobs has died and left Apple. We can see that some of the issues that they're having inside, some of the organizational issues, some of the power problems they're having inside, could be due to the fact that he's not there pushing these roadblocks out of the way. That covers organizational structure constraints. And next, we're going to talk about resource constraints.
