Posted by: Chris | 23/09/2009

Global Processes and Innovation

One of the dilemmas I’ve observed  in many companies is the decision to standardize and harmonize internal processes so one implementation fits all, sometimes pushing flexibility and innovation into the back seat. Obviously this is quite a challenge when you need to support different business models (e.g., services vs. products, B2B vs. B2C, …), so you create appropriate processes for each business model your company supports. You roll these out globally in some form of IT solution (ERP, CRM, and all the other three letter acronyms that have been used in our industry) and have your employees work according to these processes.

Source: bioteams.com

Source: bioteams.com

These roll outs are expensive, often require sophisticated change management, and when they are completed they may or may not yield the desired results in quality improvement, increased revenues, reduced expenses, higher client satisfaction and more motivated employees. What they often do is stifle innovation. In many instances doing things differently (e.g., new business processes, new business models) or creating new things (e.g.,  offerings that don’t fit into a given framework) become very difficult. One of the interesting things about start-ups is that a significant part of their first years is spent on figuring out the value proposition and the right business model to be successful. Large enterprises don’t have this luxury as they cannot experiment easily. In particular, when – at great expense – they roll out global processes that they make mandatory for everyone to follow.

I wonder what you think about this vexing issue? Care to share an example?

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Responses

  1. Yes you are right, that the global processes do hamper with innovation and flexibility. But at the same time they are required to maintain a discipline in delivery though it is very monotonous and predictable. Before joining IBM, I used to a well-known Indian IT Firm. There we developed a new delivery model which was quite successful. It was an innovation at first, but later was rolled out as process for similar projects throughout the business unit. So, you need to innovate before making it a global process.

  2. As with any Product Life Cycle, unstructured experimentation (and innovation) is needed in early phases to prove out the product value, marketability and production costs. Once the product matures you need the process discipline to guarantee quality at benchmark costs.

    Incremental improvement is needed to keep the product in demand and in use, but smart managers will pay attention to the portfolio – planning many more new products (flexible, skunk works) as well as planning to sunset the cash cows of today. Remember the classic BCG journey (Question> Star> Cash-Cow > Dog) and adopt DIFFERENT processes for each stage – even different organization structures.

    Innovation cannot be structured!

  3. Your blog is so informative … ..I just bookmarked you….keep up the good work!!!!

  4. I don’t know If I said it already but …I’m so glad I found this site…Keep up the good work I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say GREAT blog. Thanks, 🙂

    A definite great read….

  5. Your site was extremely interesting, especially since I was searching for thoughts on this subject last Thursday.


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