Here's How The 100 Most Innovative Companies Adapt And Respond To Change
Organizations and their leaders often encourage teams to explore new ideas in order to innovate, be creative, and to be able to adapt to an increasingly changing business environment. Especially in the progressive organizations we study, we see that there is a constant need for adapting and responding to change. To do this successfully teams need the right mindset, the right working environment and the right tools. A new study sheds an interesting light on what makes organizations able to successfully adapt and respond to change.
A study of the 100 most innovative companies
A few months ago, when IDEO in the harbor of San Francisco. It's here that we learned about their famous human-centered design thinking methodology to design products, services and organizational cultures.
Recently the design firm took a deep dive into their own archives, studied over 100 highly innovative organizations, and identified their common characteristics. According to IDEO there are six elements that distinguish organizations that are successfully able to adapt and respond to change. These six elements have a lot in common when it comes to the Bucket List visits to highly progressive organizations.
What follows is a breakdown of the six factors IDEO found:
A clear, inspiring reason for the company to exist - beyond just making money.
It might not come much as a surprise but a crisp and clear organizational purpose boost the level of innovation. An organizational north star guides teams in their innovation projects and provides them with a stable long term goal to work towards. One important note: leaders should consistently communicate it and it is important that they walk the talk. If that's all in place, IDEO's study shows that new projects and solutions succeed 20% more often.
Learn from the best: American clothing company Patagonia
Trying out new ideas, and making evidence-based decisions about how to move forward.
Forget about your traditional approach to product development (3 options, analyze them, pick 1) and don't buy too much into the lean startup approach (guess, pilot, pivot). Instead, start to experiment with at least 5 different solutions to your problems. Because IDEO's study revealed that from the moment teams start to focus on 5 or more product ideas, they have a 50% more chance to launch a product successfully!
Learn from the best: Swedish music streaming service Spotify
Providing a clear path to create change in all corners of the company by reducing unnecessary constraints.
To increase innovation, encourage employees to break rules and let them be themselves. Constantly remind teams to challenge the status-quo so they are able to explore and discover new ideas. For this to happen provide employees with increased levels of freedom by identifying and removing the barriers and constraints that are frustrating their way of working. IDEO claims that teams that enjoy high levels of autonomy, and are comfortable with challenging the status-quo, have a 16% reduced rate of product launch failures.
Learn from the best: Dutch municipality Hollands Kroon
4. Looking Out
Looking beyond the company's walls to understand customers, technologies, and cultural shifts.
Innovation is most effective once employees are aware of what is happening outside the corporate boundaries. Free them and let them explore insights and inspiration that boost their creativity and curiosity. For effective innovation, employees need to know who their clients and customers are, and what they desire from them. They need to know what happens in their market, and which trends can help them on their road to success.
Learn from the best: French automotive supplier FAVI
Working together across business functions to approach opportunities and challenges from all angles.
Facilitate your teams with the opportunity to work more decentralized and distributed. Let employees decide for themselves where to work, how to work, when to work, and with whom to work. It will force individuals and teams to be more focused on collaboration and on sharing information effectively. IDEO's study indicates that of the most innovative companies 41% of the employees work remotely. Even more convincing: teams that embrace remote workers celebrate 22% more success in their initiatives.
Learn from the best: Belgian Department of Social Security
Elegantly bridging vision and execution.
Traditional top-down leadership doesn't fit the innovation model (anymore). Employees need to understand how things are being decided, because just executing designated tasks doesn't motivate them. In the most innovative organizations employees themselves decide in what way they achieve their results. The leadership doesn't give them orders but supports them in getting their job done. It's a far more effective leadership style. IDEO's data shows that leaders who help their employees to reach their full potential are 17% more effective.
Learn from the best: American food business group Zingerman's
The power to adapt and respond
This six factors uncovered by IDEO distinguish the world's most innovative organizations. Many organizations are currently on a search to become more agile (whatever that may mean to them) and we see these findings as excellent focus points for organizations to actually become more responsive to change. Instead of settling for a one-size-fits-all-solution that won't get you anywhere, try to use this inspiration to find your own way towards a better and more responsive organization!
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In early 2018 I took on a new challenge. After two years in the popular management world I decided to take a leap into academic life. I started a part-time PhD program in Business at the VU University Amsterdam. Since then I have researched how large organizations (with thousands of employees) can scale and organize without the need for middle management. It’s time to share what we’ve learned.