We are in need of a third space to innovate our approach towards innovation.

I recently decided to leave all of my long lasting clients, to free up all of my time and energy and embark on a new journey; establishing a new third way in approaching innovation. Sometimes you have to let go to grow.

Working at Hewlett-Packard, in the early nineties, I remember the internal quarrel between the Unix driven server division and the ‘inferior’ Microsoft Windows PC team. It was a true clash of cultures withín a company. In our case, the battle was even located on one open floorspace. Later I was able to experience the same kind of event once more. My international division director presented that 'portable computers' (later called laptops ;-) were an inferior product over our high quality desktops and thus not something ‘we’ would invest in, nor would our clients. Oops, an expensive mistake we learned a few years later. It became my job to try and grow our 0.6% marketshare against that of Toshiba’s 67% with much of the organisation still believing that the mobile products were 'expensive and lacking'. But that’s what I also loved during my time at corporate HP. It was incredibly resilient in dealing with sudden changes in its environment. In the HP-way, philosophies like agile, lean and TQC etc. were - already back then - in full swing. It was continuously reorganising the way it dealt with reorganisations. I admired especially how they were very able to allow for competing forces to live within one open space, within one (matrix) organization, keeping the company performing well during the turbulent computing revolutions in the roaring nineties. 

THE ORGANIZATION AS A MARKETPLACE OF IDEAS

Many years later I came across another example of an organisation explicitly leveraging both the benefits of ‘planning' as well as ‘diversity'. I was present at a board meeting of Schiphol airport where they explained two very different approaches competing within their own organisation: A logistical team & goal to bring people as fast as possible from car-seat to plane-seat while another division was trying to achieve the exact opposite; the entertainment based unit was trying to stall people as long as possible at the airport with shops and other kind of services. Both these teams had a direct report to the board, similar kind of resources, access etc. Striving for true diversity in goals, not trying to get towards an optimal compromise. Organisations that allow for such an internal competition of beliefs/ approaches ánd are open to different kinds of external cooperation are in fact marketplaces by themselves, instead of an entity that is organising itself around one homogeneous process and thus one belief.

Being in transition often means that two paradigms (the old and the emerging) are fighting for attention and resources.

While in nature competition and diversity are key elements of a species survival, and especially the thriving force behind any working ecosystem, in business most of the lingo is more around efficiency and alignment. This drive towards optimization and control will encourage the tendency to become monolithic. One of a kind. But the customer starts to complaint that this ‘one size fits nobody in the end’. New forces gain power, such as the current technological shift, fading profit margins and increased user participation, forcing companies to be in transition. Being in transition often means that two paradigms (the old and the emerging) are fighting for attention and resources. How can a company deal with these often opposing value-systems? How to make decisions on the allocation of scarce strategic resources like capital, time or talent? These are important questions to address since a transition is not just ‘a moment’ in time but a phase that most often stretches a period of months or even years.

INCREMENTAL AND/OR RADICAL INNOVATION

The problem starts when strategic projects that have a long term value for the company are based on a different ‘model' that might hurt the short term goals of the organization and it’s members. Such projects are extremely hard to launch and grow inside a hostile environment where everything is geared towards sustaining the status-quo. Even when (on paper) these ideas are a necessity for the company’s survival in the future. When a company is based on a real estate model (like retail) how do you allow for a disruptive online model? When a company is based on text culture like newspapers, magazines or even websites, how do you allow for video to take over as prime form? When a company is based on production, how do you allow for your client to become the designer? How do you transit from one culture into another?

Especially with smart technologies we experience that it’s inherent nature is threatening the way we organize, arrange leadership, make decisions, employ, cooperate etc. For example, developing smart solutions often implies working with an agile way of working, killing the traditional way of management and empowering those close to customer-contact. Or another example; how a real-time delivery process is forcing a more open, cooperative culture where decisions are made less by the board but moreover by front-end algorithms.

Those kind of events are turning the company literally upside down. Management teams feel forced to choose a direction, while in fact it’s not a binary go or no-go, but moreover a decision to embark upon a learning journey that might cause creative destruction. Often it’s not the fact having to decide between scenario A or B that is the issue, it’s the fact that it is a dilemma - that one of the scenario’s is open ended, uncertain - that is causing the calculative minds to freeze up. 

SCALING INTRINSIC MOTIVATION?

Innovation managers are therefor frequently complaining that those projects that matter most to the future purpose of the company are least likely to succeed in the corporate environment, while start-ups around the same kind of solutions are seeming to succeed. At least that is what the buzz is telling you. So corporates start copy-pasting the startup memes and installing purple carpets, beanie bags and a pingpong table. They implement scrum sprints, start using visualisers and do stand-up meetings. But the underlying power structure, the value-system that is driving the allocation of strategic resources is not changing at all.

Many well decorated innovation spaces in corporate environments are therefor failing their purpose and are already silently disappearing. Apparently there is something else at play here, a more underlying value that is feeding the intrinsic motivation of ‘startup’ teams to accomplishing a breakthrough and challenging all existing groundrules. Is this an either/or question or would it be possible to find synergies between the luster of the start-up community (often intimate settings) and the resilience of corporate platforms (geared around scale)?

GOING SKUNK.

If one wants to ‘create a breakthrough’ the mantra of these days is to go SKUNK. Like many of you know, going skunk is attributed to a specific Lockheed Martin company unit when, during the Second World War, it had to solve an mission impossible developing an entirely new fighter jet in just a few months. The approach and the end product defied any logic of those days. Lockheed placed this special, secret unit in a circus tent, far away from it’s HQ. The tent was based on an airstrip, and it was almost the opposite of the comfortable co-working spaces of these days. The approach was named after the iconic Skonk factory from the famous Abner cartoons. The fictional factory was that smelly that it was established far away from civilization. The Skunk Works team succeeded. Afterwards, the team came up with a manifesto that served the goal for a project team to establish focus while still being able to challenge any convention and assumption and above all to deliver under ridiculous circumstances. 

IT’S DIFFICULT TO CHANGE (ORGANIZATIONAL) HABITS

The Skunk approach is hailed again with Google X as one of the famous recent examples. Especially since the network driven innovations of this era are also demanding a whole different approach towards innovation itself, such as open, co-creative, multi-stakeholder, trans-sectoral etc. The insight grows that it's impossible to conceive and grow these networked-innovations from within one organization since its approach demands opening up for radically new kinds of cooperation.

The insight grows that it's impossible to conceive and grow these networked-innovations from within one organization since its approach demands opening up for radically new kinds of cooperation.

Companies need to open up the so well deigned boundaries of the organization. They need to seek new (semi)open spaces to cooperate with off-the-beaten track partners, to let their precious talent become fearless explorers outside the company walls and above all to learn to trust and have faith that the core values, culture, knowhow and purpose of the company are strong enough for their teams to ‘play outside’ and still pursue the best interest of the organization. Captivating talent and resources inside can never be the answer for creating a thriveable team and innovative company. But, it’s quite an ask since companies experience these strategic moves to open up as loosing ‘grip’ on the short term, for sake of a better performance on the longer term.

While organizations know that they will be forced to take these new ‘network’ values onboard in the near future, they also like to stall it as long as possible, since the current models are also still kind of working. Isn’t it? Why throw away something that still kind of does the trick, especially if you can’t oversee what the new way of working might bring, including possible unintended consequences?!

THE WAY BACK FROM ISOLATION?

I have been involved with many of these Skunk like projects and conversations. To my experience, the books, anecdotes and even the Skunk manifesto are lacking one important ‘How to’ chapter. In the ‘Going Skunk’ approach, how do we organize The Way Back. When a team delivers the impossible - meaning the project turns into a viable product or service - how does one re-embed that idea back into the existing organisation? When something is developed in a 'home away from home', the not-invented-here syndrome kind of multiplies the already existing hostility to this threatening innovation.

The big advantage of isolating the R&D process of this new development is the focus on a groundbreaking result; a proof of concept, a real new product that actually works and is ready to be launched. So the fact that the product is no longer just an idea on paper and now ‘exists in real life’ trumps the skepticism that kills many moonshot ideas before even getting started, but that doesn’t turn the new service into the new lovechild of the whole organization. That’s why it is often phrased that culture eats strategy for breakfast, organisations do not operate on just ‘logic’ at all.

The Skunk result will be perceived as a hostile take-over and from the top to the bottom of the organization, its well trained immune system will come into play rapidly.

The Skunk result will be perceived as a hostile take-over and from the top to the bottom of the organization, its well trained immune system will come into play rapidly. Should such an internal battle be prevented? How? Or is a battle of ideas and approaches an important necessity for a new culture to emerge and for the new direction to prevail?

HAVE YOU EVER BEEN SKUNKED?

In one of my recent experiences, the manager of a status quo team made an interesting remark: ”I have never been Skunked before”. It sounded almost as if it was some kind of candid camera prank. He felt taken by surprise and so did the rest of his team. I could totally imagine that emotional response. They were indeed left out of the loop. And touched upon the true dilemma: Where in the organisation can you ask the forbidden questions? Those kind of questions that allows you to think about taking a totally different route, to break away from the routine, to maybe quit something you have invested in, something you once believed in?

Where can these disruptive ideas float for a while, out in the open, so people can think yes-and not yes-but..? Where in the organisation can you truly question the origins ánd future of the company? Strangely enough that is often NOT in the Business Planning or Strategy retreat. In those kind of sessions so much is already taken for granted. Often are strategies designed around maintenance and conserving, not about truly adapting to the needs of the ‘new world’ or leapfrogging experienced learnings. Most strategies therefor prevent a radical dialogue and focus on tinkering, on incremental change to optimize the status-quo.

Most strategies are designed around maintenance and conservation, not about truly adapting to the needs of the ‘new world’.

Asking the forbidden questions or raising new moonshot ideas, in a setting where people dare to put their own jobs and thus their personal future at risk, is a mission impossible. Something we cannot blame anybody for, it’s just humanly impossible to leave yourself out of the equation, and rightly so. It is also often extremely hard for the ‘other’ to be that brutal to openly challenge somebody else’s position or even existence.

This ‘velvet gloves’ approach in strategy meetings will be turning the organization into a conservative system. I’m not for some kind of brutal fight at all, but I’m all for taking the time and setting the right stage for frequent open dialogue between all stakeholders of an organization. To explore new alternatives together and to suspend judgments for a while. This requires group dialogue, most likely to be facilitated by independent outsiders.

A STRONG SET OF LOOSELY COUPLED ABILITIES

Being conservative as an organization isn’t a bad thing at all, there are many families dependent on their jobs for example. And people live very well by many forms of a daily routine in their organization. Almost nobody could survive a continuous change of direction, it would consume all our energy purely to adjust, no work would come out of our hands at all. So one doesn’t have to follow every new trend or to adapt to every disruption out there. That is what resilience is all about. To be agile doesn’t mean to go with the wind… it means you would be able to change, but you don’t have to. In fact that means that management teams will have to take a much bigger step towards real leadership to be organize in such a way that an organization could be compared to a strong set of loosely coupled abilities.

The conservative attitude only turns out bad when the conservation of the status quo makes the organization turn inwards only, to stop it from listening and adapting to a changing habitat. This strive for robustness will estrange the corporation from reality and it will enter into a kind of zombie state. Often I compared it to an airplane in mid air; you can turn the engines of and it will keep flying for a while. Management could even look at the meters and point out that it is not costing us any fuel, so we are flying for free. All the business fundamentals seem to show a green dot, while knowing for a fact that we will never ever get to our destination safely.

THREE KINDS OF BEING RIGHT

For me being innovative all starts with accepting diversity, to step away from sheer control, when curiosity is encouraged for real, when people are open to change and thus show a willingness to learn. Such a posture demands from any team to acknowledge that any process and direction is only provisional. That allows everybody to have a dual stand; to defend and even tinker the agreed upon mainstream process and meanwhile in a more reflective mode also to be able to take a far more critical stand as well.

A recent HBR article1 states a similar kind of challenge: 'It is the job of the CEO to have the company stay on track and/or to guide the company onto another track to prevail in near future'. But how does a CEO provoke the kind of data and information from within the organisation that is often tainted to justify the current route? How to obtain the unpleasant ideas and data challenging the groundrules of the business as usual?! In that article HBR claims that a CEO only can do so by not continuously presenting and telling the ‘strategy’ and ‘stories’ of the company but by becoming a true leader in asking the right generative questions! And that touches upon the heart of this challenge: How to create enough trust and engagement with each other and with the intents of the project that critical questions are allowed for, or even better, are welcomed.

It is the fine line between just asking ‘Are we doing things right?’ and ‘Are we doing the things right?’. The going back and forth between those two positions always leads up to a third question: ‘Who in the organisation determines what is right?’. 

IN NEED OF A NEW KIND OF THIRD WAY INNOVATION SPACE

In a recent dialogue, a Dutch CEO commented to me that he tried to solve this by introducing new talent into these innovation teams, but that it would take no more than 2-3 months before the newbies would have copied all behavior and even worse, all beliefs of the traditional team members.

We are in need of a new kind of surroundings, a kind of third space where the setting allows ánd challenges different cultures to mingle and mesh, to balance out progressive and conservative forces to attune the ideas and teams in a kind of modern agora.

So one of the key design questions going forward is how to bridge the gap between the rogue lab that is going skunk, with the operation that has to maintain the status quo. Both approaches need a natural habitat where they can grow and evolve. But they also kind of need each other in a more symbiotic relation, while they might have become very different beasts at the same time. Bringing the two ‘beasts’ together cannot happen in either of their own natural surroundings. They will both need a new communal space. So neither just a start-up space or skunk location nor an incubator at corporate headquarters is the final answer. We are in need of a new kind of surroundings, a kind of third space arena where the setting allows ánd challenges different cultures to mingle and mesh, to balance out progressive and conservative forces to attune the ideas and teams in a kind of modern agora.

SETTING EACH OTHER UP FOR SUCCESS

The answer might well be that the old and the new proof to be incompatible. Then one knows that the only viable alternative is to spin-out into another venture. But the open confrontation of the conservative ánd progressive beliefs within the organisation, in one contained space, over a period of time, will train both cultures for a future about to happen anyhow and that is a pure gain for everybody and everything.

1 https://hbr.org/2017/03/bursting-the-ceo-bubble?utm_content=bufferc0bc1&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer