How to organise for innovation?

A talk with Johanna Pregmark, researcher at Chalmers University of Technology

We live in uncertain times. Companies need to sharpen all senses to rapidly pick up on what’s happening around us. But even if the current pandemic situation is unique, uncertainty and instability in the market is nothing new.

Johanna Pregmark is a researcher and doctor at Chalmers University of Technology. She has a finger on the pulse of the future and collaborates with both Harvard and Columbia as well as Institute for the Future in Silicon Valley. Her work focuses on how we should think and work in order to meet an uncertain future. Let’s take a few minutes to learn what the research says – what characterises tomorrow’s leaders and how should we organise ourselves for the future?

“The recent rapid advances in technology and changed customer behaviours makes it important for companies to develop their capacity for innovation. Innovation can work like a vaccine against unforeseen events. Leaders need to be perceptive and continually take in other’s perspectives. The idea that a single small group should be able to solve major problems or even point out the right direction is misguided.”

Johanna explains that according to research, we know that smarter thoughts emerge when more people are involved, from different disciplines, with varied backgrounds and experiences. Lacking that, organisations slow down and lose out on job satisfaction.

“Most of all we need to create good conditions for coming up with new ideas and ways of thinking – it takes energy and motivation. Successful companies create this driving force at the same time as they maintain efficiency within the existing business.”

Today, many choose to isolate innovation, either by acquiring another company or by firmly fencing off innovation within a measurable, independent unit.

“There are many good examples of that strategy. The challenge in that case is integration, because you’ve built two different organisations with different business logics, systems and revenue models. They often remain separate, which isn’t necessarily a bad thing.”

Other companies innovate as much as they can within the framework of the existing company.

“The advantage there is having the same people work with the company’s innovative capacity and its efficient core business. They get strong legitimacy, and it doesn’t create a feeling of different agendas. Having a customer base to test on usually leads to faster insights.”

But Johanna also confirms what many of us feel: it’s a challenge to be radical enough – existing processes within the company can grind the strongest ideas to dust. And when there’s no wind in your sails, it’s tempting to abandon new products and services.

According to Johanna, there are four things that increase the likelihood of success:

1.    Set really high goals within a given timeframe.
They must always have an impact on the company's results, only then do we get the desired effect. No doing things by halves, go all in! Concretely this can be something like increasing digital sales by 150% within 3 months. Or producing 100% more in 3 months. That makes us really action-oriented.

2.    Gather a cross-functional team in which all competencies are represented.
In order to increase sales we need to understand the sales process, business model, customer etc. To deliver a full solution to a challenge, and we really have to gather around the challenge and collaborate to solve it.

3.    Get the involvement and support of management.
-    Everyone in a management position should be in on the problem, but at least one person from upper management should also be involved in the work. We want to create the feeling that “this is impossible but we can do it”. Something like being down 0-4 in a football match against Germany but going into the second half and scoring 4 goals. That exact feeling is important.

4.    Structural learning.
Sometimes we fall short of our goals and then we need to learn. Why is there resistance in part of the organisation? Why does the sales department prefer to sell x rather than y? How can and should we change? Which market should we address instead? Or whatever the issue is. We need initiated, interested and active leadership. 

“We need an agile workforce that can take on tasks in a whole new way. Let’s say that we temporarily need a strong sales organisation in Denmark. Then we allocate resources there to form a group focused on the task. To do this with quality, everyone must 100% understand and buy into the company’s purpose and fundamental ideas.”

Johanna Pregmark
Researcher at Chalmers University of Technology

Johanna and her research colleagues believe in smaller, independent teams that are more focused on the task at hand than on the organisational function: “We need an agile workforce that can take on tasks in a whole new way. Let’s say that we temporarily need a strong sales organisation in Denmark. Then we allocate resources there to form a group focused on the task. To do this with quality, everyone must 100% understand and buy into the company’s purpose and fundamental ideas.”

It’s a common view that the future will demand more flexible organisations, and that to manage it companies need to become more purpose driven. It’s no longer enough to bring in more money to the owners. Companies must have a clear and meaningful purpose.

“Marc Boncheck at Singularity University usually challenges us to do the t-shirt trick, which I think is great. Who wants to have your “purpose” on their t-shirt? Thinking of it that way, it’s easier to figure out what your company’s contribution is.”

So, what does it take to run these kinds of purpose-driven organisations? Who are the leaders of tomorrow? “Many believe that to a large extent, tomorrow’s leaders will be people who have learnt how to collaborate without having physically met, or for that matter, people who have been involved in fast-paced changes. Interestingly enough, it’s characteristic of individuals who play a lot of video games. They have learned to react to unforeseen events, to let go of control and to trust their teammates. They are trained in these abilities that many like me believe will be important from now on.”

Four insights from meeting Johanna:

1. Begin with top management and make sure that everyone has agreed. Don’t run initiatives without the full support of the management team. You will end up fighting many unnecessary battles. Be in agreement, don’t cut corners. Make a clear budget that can survive re-prioritisations for the firm.

2. Decide which model you’re using to develop new ideas and innovative services. Within the company, in a separate company or as a distinct business unit? Sort out advantages and disadvantages from the beginning and decide on a model – and then set really high goals that effect your results! No doing things by halves.

3. Be open and transparent. Show where your money and efforts go to. Find a clear and visually strong follow-up. Share the results, people will want to support it. Being transparent builds trust for you and what you’re trying to create.

4. Work out your purpose, which has to be bigger than earning money. Make sure that I as an individual can relate and contribute with my network. And test print it on a T-shirt to see if it feels great. If it does, you have succeeded.