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05 March 2008

“Forming an ‘inside-out’ company is the secret to innovation in business”

On the PA Consulting website, I found this very interesting news article dated April 2007.
It is about a research by Dr Carsten Sørensen of the London School of Economics (LSE) and PA Consulting Group (PA). This is the part I must highlight:

“[..] The research found that IT is the enabler for innovation across the whole business. What we are starting to see is the forming of the ‘inside-out’ company, where interactions and relationships with stakeholders actually shape strategy rather than are subject to it. The research concludes that we are approaching a tipping point, where technology will be cheap enough and intuitive enough to make collaboration as valuable a source of innovation to the business as computation has been a source of efficiency. Technology is changing the way we interact and customers (business and consumer) are demanding a richness of dialogue. [..]”

First, I am pleased to see that this confirms what I wrote on the knowledge-driven organization back in 2005, and more recently in Jan 2007.

Then this article does correctly make the link between the need for a change in the organizational culture and the introduction of new technologies facilitating collaboration. It is implied that you need both in order to foster value-generating innovation throughout the organization. I spotted the following culture-related change in the article:

* Organisations that see their customers and their staff as sources of untapped potential and ideas

* unlocking this pool of innovative talent will require collaborative management and not traditional command-and-control-style management

* interactions and relationships with stakeholders actually shape strategy rather than are subject to it

* senior executives are taking a more facilitative than directorial role, acting as a catalyst or ‘lightning conductor’ for innovation wherever it may evolve

* this new outlook on innovation and technology has changed traditional management models towards a new ‘collaborate and control’ model

* You do not have direct command-and-control anymore. You are working far more across virtual teams. Teams that are brought together just for specific projects.

* The trend towards networks and away from hierarchies and the user empowerment that this entails is changing the way we interact. Executives are seeing a similar phenomenon in business, with users across the organisation demanding that businesses are more reactive to their needs and being willing to take responsibility for improving their working environment.

* In order to identify the strategic value of IT it is necessary to employ the technology in developing relationships, listening to customers, and engaging them actively in the production of innovative services

Good stuff! The culture change described here is the kind that would do away with the cultural barriers to knowledge sharing I have been repeatedly writing about (mainly here, here, here and here).

A few more high-profile articles like this one and I might be able to rest my case...

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