When looking at performance we need to consider the role of innovation and complexity in business.
Innovation is no longer solely focused in traditional products and services, but in business processes, business models and management models. Innovation in these areas are far more sustainable and competitive that innovation in products and services. With product development cycles down to mere months, there is little left in ‘first mover advantage’. Innovation comes from both within and beyond the corporate walls, and in many cases is redefining how we get work done. We have to ask ourselves is the ‘enterprise’ as we know it a sustainable model. In most instances, in spite of companies hanging onto this outdated model, work is being done through networks of experts beyond the corporate walls. Yet sadly, too many IT policies prevent effective collaboration in a timely and open manner. Innovation networks can follow various models – but largely fall into two broad groups:
- Transactional Networks – where a solution brief is distributed to a wide group, often anonymously to garner support to solve a problem or bring an idea into reality
- Relationship Networks – that are based on more formal, trusted alliances between sometime competing businesses to create an outcome used by both parties to advantage.
The open world, fast communications and volatile market all serve to add significant complexity to business – so we need to find simple and effective models and processes to accommodate these within our operational frameworks.
A common error when attempting to deal with complexity is trying to measure everything. Most managers are presented with too much information on a daily basis. In some instances, managers themselves create this overload by insisting on having a view of performance across every aspect of their business unit. In doing so, they not only create additional work for themselves, but also additional work and complexity for the people who must provide this information. Managers today need to accept a balance of trust and risk. Trust in their business data and their reports to do the work they require, and risk in letting them get on with it without micromanagement. When business teams have a clear view of how the work they do links directly to corporate objectives, workflow becomes much more aligned, and measures simplified down to 3-4 key goals and metrics. Using a hierarchy or metrics from strategic to operational means that each person in the chain can focus on become more efficient in the performance in just a few key result areas. Once trust builds, collaboration becomes more intrinsic, innovation occurs more organically, performance becomes more possible and measurement and management become simpler. Everyone wins!