Balancing Innovation and Controls

The web is loaded with posts and articles trumpeting the arrival of a new era of corporate innovation.  A combination of social media, flattened organizational structures and increased customer expectations has dramatically reduced innovation cycle times.    This phenomenon appears to be irreversible in the short term, with continued pressure to improve product and service offerings at an increasing cadence.

Emergent order, crowd sourcing and other distributed and participatory organizational concepts can be drivers for rapid improvements.  These new ideas inspire employees by allowing them to be creative, independent contributors.  There is, however a dark side to rapid, distributed and uncontrolled change.  The same bottom-up methods that rapidly generate excellent ideas can lead to service breakdowns and unhappy customers.  The irony of the situation is this:  While customers are hungry for rapid innovation, their tolerance for service issues has decreased as well.  The same customer that wants to see the newest feature richness on an ecommerce site, will be furious if it’s down for 5 minutes.

In examining a number of high profile technology outages a common theme is evident.  Many large scale outages of data centers, networks and ecommerce sites stem from change activity that went awry.  Human beings are overconfident, underestimate complexity and have limitations around memory and attentiveness.  This leads to a high rate of errors around change implementations. This is not a new phenomenon as human error in change activity has plagued enterprise technology teams for decades.  However, the nature of the new world of ecommerce dramatically increases the consequences of these mistakes.  The impacted base of customers is several orders of magnitude beyond traditional legacy enterprise systems.  Additionally, with the widespread use of social media, it’s a given that a firm’s service issues will be broadly publicized.

So how can a firm “drive” at twice the speed limit and stay accident free?  The key, is appreciating the different nature of creative processes and operational processes.  Creative processes are representative of knowledge work.  These processes are typified by the following properties:

  • Unstructured
  • Unknown outcomes
  • Unique scenarios
  • Tacit knowledge
  • Collaborative

Historically, firms were not set up to fully optimize the creative process.  Rigid, top-down control structures and siloed decision processes limited the speed and effectiveness of organizations.  The Enterprise 2.0 methods mentioned above have started to tear down these barriers, resulting in improved creative processes.

Operational processes are typified by a different set of properties:

  • Structured
  • Defined outcome
  • Repeatable
  • Proceduralized
  • Explicit knowledge

Unfortunately, many firms have not put the same energy into the improvement of operational processes.  The pressure to quickly innovate can diminish the perceived value of these processes, labeling them as bureaucratic.

In order to strike the right balance between innovation and controls, firms should continue down the path of Enterprise 2.o for creative processes, while maintaining (or establishing) mature change management programs. The following practices can be a part of any change management program without unduly slowing the innovation cycle:

  • Optimal maintenance window selection
  • Rolling upgrades
  • Tested backout plans
  • Published sequence of events
  • Automated implementation processes
  • Published procedures and checklists
  • Stakeholder notification and approval process

Many organizations and individuals will argue against these practices, saying that they stifle creativity or slow the pace of change.  Let’s reserve “creativity” for the brainstorming and idea development part of the innovation cycle.  That’s where the new world of Enterprise 2.0 can best harness human potential.  Conversely, let’s recognize the inherent human limitations that are exposed when operational processes are managed in an unstructured and ad hoc fashion.  Let’s make certain there is sufficient process maturity to ensure that rapid innovation is implemented in a safe and reliable manner.



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One Response to Balancing Innovation and Controls

  1. Dan Terrasi says:

    well said Dan. I deal with this every day. Getting people to appreciate both sides of the coin is the challenge… Wanting to have their cake and eat it too clearly applies here. The innovators should be allowed to fail without repercussion; adequate investments in the operational processes will support those who innovate without sacrificing quality and stability.

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