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Editor’s Note: If you are interested in becoming an expert on Innovation Management, take a look at Flevy’s Innovation Management Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can stay ahead of the curve. Full details here.
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Humans inherently connect to each other in an indigenous context, generate knowledge, and develop a product to be disseminated by way of commerce. Traditionally, Global Innovation practice has seen assembling of people with vital capabilities and essential knowledge via co-location.
Co-location is the gathering of Innovation specialists into a handful of Innovation centers, domestically and in prime markets. The innovative products and/or services created by them are then dispersed to markets throughout the globe.
However, as the array of knowledge required for Global Innovation becomes extensive and diverse, co-location has become inadequate. Today’s dynamic and shrinking world necessitates taking an expanded approach to Innovation Management.
Most of the organizations have not been able to sufficiently internationalize their Innovation Strategies to make use of the multifaceted knowledge scattered world-wide; knowledge necessary for present-day products and services.
Cause of failure is the generally accepted but perceived trade-offs listed below. The challenge is to surmount these trade-offs, which research has shown is possible.
- Approval vs. Disapproval
- Autonomy vs. Control
- Capability vs. Motivation
- Attraction vs. Interest
- Achievement vs. Potential
Most companies leverage their international networks just to engage in mundane tasks, and are unable to make use of opportunities for Global Innovation to gain Competitive Advantage.
Let us go into some detail of these tradeoffs.
Approval vs. Disapproval
When pitched generally, the idea of taking Innovation to the global level is agreed to by everyone across the organization. When the task is directed towards a specific entity or specifics of it are assigned, Disapproval ensues.
Autonomy vs. Control
This is the trade-off between granting local autonomy vs. losing centralized control over the Innovation process. Reason for such interpretation is the inability to consider knowledge and power separately.
Capability vs. Motivation
A singularity exists where companies with elevated Innovation Capability exhaust their enthusiasm for Global Innovation.
Attraction vs. Interest
Taking Innovation to the global scale often necessitates partnerships. Such partnerships typically present the predicament that the more desirable the probable partner appears, the less those feelings are reciprocated.
Achievement vs. Potential
There is a trade-off between the over-emphasis on historical achievements vs. the potential for future achievements, as over-reliance on what has worked in the past will hinder Creativity required for a new environment.
Effective Global Innovation of products and services has the hallmark of unrestricted reciprocity of unstated knowledge between people scattered around the world. Such an evolution can be achieved by optimizing 3 diverse aspects of Innovation, generally simultaneously.
The 3-prong approach to Global Innovation Strategy that overcomes the Global Innovation trade-off of Knowledge Complexity vs. Global Dispersion comprises of:
- Compact & Agile Innovation Footprint
- Capabilities & Structures for Communication
- Internal & External Collaboration
Universal principles of Global Innovation Strategy keep evolving for making each of these attributes work, based on the experience of numerous entities.
Let us delve a little deeper into the 3 principles.
Compact & Agile Innovation Footprint
This relates to the quantity of tangible sites in an Innovation network. Only that number of physical sites should be included in an Innovation network which are able to add exclusive and discerned knowledge.
Capabilities & Structures for Communication
This aspect has to do with overcoming the challenge of distance, time, and culture when taking Innovation to the global level.
Communication is a momentous challenge when there is distance, time, and culture difference. Developing a culture of open knowledge-sharing is vital for taking Innovation to a global scale.
Internal & External Collaboration
This aspect looks at collaboration protocols for co-located sites versus globally dispersed collaboration.
Interested in learning more about Global Innovation Strategy? You can download an editable PowerPoint on Global Innovation Strategy here on the Flevy documents marketplace.
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To be competitive and sustain growth, we need to constantly develop new products, services, processes, technologies, and business models. In other words, we need to constantly innovate.
Ironically, the more we grow, the harder it becomes to innovate. Large organizations tend to be far better executors than they are innovators. To effectively manage the Innovation process, we need to master both the art and science of Innovation. Only then can we leverage Innovation as a Competitive Advantage, instead of viewing Innovation as a potential disruptive threat.
Learn about our Innovation Management Best Practice Frameworks here.
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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:
“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”
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“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”
– Roderick Cameron, Founding Partner at SGFE Ltd
Most people believe that the value and impact of the C-level leadership originates from the number of meetings conducted, having the ability to plan for long term, and make key strategic decisions collectively. However, in reality, the C-level seldom works in unanimity to make collective decisions. They often have animosities with each other and lack collaboration and mutual trust.
The real impact and success of the top team emanates from the informal and social networks of its members, their resolve to capitalize on those connections for strategic decision making, and their competency to perform well in subgroups created to solve pressing concerns.
Effective C-level leadership is conscious of the value of their informal / social networks and their ability to deal with serious issues. They organize themselves in a way to work as the nucleus of the organization, which gives them the leverage to promptly act on adversities or opportunities.
Leadership’s Social Network Analysis
C-level’s informal social network enables an organization to draw combined capabilities—in-house as well as the extended network. Top leadership needs to evaluate the strengths of their social network by mapping their informal associations. This can be done by conducting surveys, analyzing meetings, phone calls, and emails.
The social network analysis reveals that 90% actionable information comes from this informal leadership network rather than through internal reports and datasets. These linkages aren’t distributed evenly; some members may be highly networked commanding a major chunk of two-way interactions across the organization whereas others may have a smaller network and lesser influence accordingly. The analysis also suggests that poor leadership connections lead to failed decisions—whereas enriched networks cause advancement in Innovation and Organizational Efficiency.
To design—or redesign—an effective Leadership Operating Model, organizations need to incorporate 3 key principles in their operations:
- Leverage Focused Subgroups
- Improve Networking Effectiveness
- Manage Conflicts at the Constituent Level
These 3 principles aren’t simple to implement. It warrants evolving the very nature of how the senior leadership team functions and design a more poised and assimilated Operating Model.
Let’s discuss these principles in detail.
Leverage Focused Subgroups
Senior leadership’s performance cannot be judged solely by its ability to revamp the enterprise’s organogram. Effective top leadership demands from the team a capability to form peer-to-peer, top-down, and bottom-up relationships; and work in discrete yet linked groups, each of which is focused on solving a unique problem or tapping an opportunity.
Depending upon the circumstances, leaders should adopt any of these modes when dealing with networks. Focused subgroups work best in 3 discrete modes:
- Discussion Groups – These groups focus on information flow, comparing notes, and updating each other on progress. The mode does not cater strategic decisions or active leadership.
- Single Leader Units – In this mode, every executive of the group has clear responsibilities and is accountable to one boss who has the authority over the others to enable speed and efficiency.
- Real Teams – This subgroup includes executives possessing similar capabilities, who are committed under an accommodating leader to achieve shared objectives.
Networking Effectiveness
It is culturally acceptable at many organizations to utilize time on trivial matters—e.g. unnecessary e-mailing, lengthy approval cycles, long-drawn-out meetings, or to schedule events. These matters cannot be eliminated altogether however, meticulously planned informal networking between the top team enhances efficiency of leaders to a great extent.
Each member of the C-level should connect the right people together, lead and support subgroups, and maintain associations. Gaps in informal communication between leaders damage the implementation of organizational strategic plans. Interaction between top executives is often limited to participation in senior level meetings for information sharing purposes only, lacking collaboration to pursue shared objectives. To make matters worse, they spend too little a time with their direct reports, employees, or customers. This detachment creates widespread unease and skepticism.
Interested in learning more about the 3 key principles necessary to design a Leadership Operating Model? You can download an editable PowerPoint on 3 principles key to design a Leadership Operating Model here on the Flevy documents marketplace.
Do You Find Value in This Framework?
You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:
“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”
– Bill Branson, Founder at Strategic Business Architects
“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”
– David Coloma, Consulting Area Manager at Cynertia Consulting
“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”
– Roderick Cameron, Founding Partner at SGFE Ltd
Mergers and Acquisitions (M&A) are unique and complex endeavors. These initiatives demand tailored solutions keeping in view the varying environments, ways of doing business, culture of the two combining organizations, and internal and external forces influencing the deal.
These transactions necessitate making 8 important decisions based on thorough deliberation and analysis of all relevant factors well before the integration process. These fundamental decisions and relevant factors form the 8 decision levers of Post-merger Integration (PMI). These 8 decision levers of PMI are essential for devising an optimal integration approach and, subsequently, the success of an M&A initiative:
- Form of Synergy to Be Created: Cost-cutting versus growth
- Required Pace of Integration: Quick versus steady
- Degree of Integration: Extensive versus partial
- Nature of Integration: Buyout versus a merger
- Commencement of Integration: Urgent or delayed
- Integration Project Team Organization: Clean or shared
- Decision Making Style: Implicit and prompt versus lengthy and analysis based
- Transaction Change Management: Tacit versus one that requires comprehensive actions
These decision considerations facilitate Post-merger Integration across all industries and organizations of various sizes. Let’s discuss the first 3 decision levers in detail now.
Lever 1 – Form of synergy to be created
The foremost element of a PMI is deciding on the type of synergy to be achieved through integration. The question is to either focus on achieving cost reduction or growth synergies. If cost cutting is the objective of an M&A then the leadership of the combined organization needs to outline potential costing saving opportunities across the board. This should be followed by robust communication strategy to convey the implications of the M&A program. However, if the management’s objective is to unlock growth synergies from the acquisition, then the integration is to be treated as a strategic endeavor—e.g., understanding the customer needs, evaluating market potential, generating innovative business ideas, and developing execution plans.
Lever 2 – Required pace of integration
The 2nd lever demands from the senior leadership to determine the pace most appropriate for the integration of their newly combined enterprise—i.e., to choose between a fast track and a steadier integration approach. A majority of executives believe that PMI should be executed as quickly as possible, so that upon completion of the initiative they could divert their center of attention back to business operations. This approach, however, involves decisions that aren’t backed by detailed analysis of facts and data, and is likely to face increased risks and uncertainties. On the other hand, a slower pace of integration is beneficial in case of a friendly takeover or expansion in a new domain. A steadier pace of integration works well to reduce any apprehensions, cynicism, bottlenecks, and risks due to oversight.
Lever 3 – Degree of Integration
PMI necessitates gauging the appropriate degree of integration beneficial for the organization—i.e., choosing between extensive across the board versus partial integration. An absolute focus on cost synergies warrants an extensive degree of integration across all departments and geographies. This puts extra pressure on teams in terms of work and risks dwindling enterprise focus on the customer. Committing more resources and setting the priorities right aids in offsetting the risks associated with an extensive degree of integration. A partial integration, on the other hand, is simpler, less controversial, and predominantly warrants consolidation of sales or alignment of mission-critical processes. This typically works well in takeovers requiring new products acquisition or addition of new customer segments.
Interested in learning more about the other 5 decision levers of PMI? You can download an editable PowerPoint on Post-merger Integration (PMI): 8 Levers here on the Flevy documents marketplace.
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