The pandemic has brought many companies to the bottom, but what has it brought?
The pandemic posed a strong challenge to companies’ ability to innovate. We can understand it as a fundamental impulse from the outside or as an energy that focused on their innovative thinking. If they wanted to succeed, they had to dramatically speed up the customization of their products, their distribution channels, or their entire business models. They had to kick the innovation part of their organization. I consider it crucial that the pandemic has created fundamental innovation pressure, set a new standard for the speed of innovation.
So why were some companies unable to respond to the pandemic as successfully as part of their competition, were they not innovative?
If companies were betting on what they had managed to build before the pandemic, in what they were already good, or even unique in the market, it could happen that the impulse from the outside to start innovation completely missed them. They saw the pandemic as a temporary change of state and believed that they would be able to return to its original quality and strength. They relied on their “run the business”, that is, on what they had already built successfully. In fact, they resisted new impulses from outside, rather than using the energy to their advantage, to start their innovation potential. But it’s not just a question of the past. If they don’t realize it quickly, the train will continue to run, a pandemic, a non-pandemic.
According to you, the pandemic provided a kind of external energy, which helped companies accelerate the pace of innovation. But what happens when the pandemic is over?
I think that many companies that have jumped on the pandemic speed standard of bringing innovations will want to maintain this speed. Research shows that the key is to be a fast innovator, because if it’s not you, someone else will overtake you. The crucial question that companies must ask themselves is: How can we ignite our innovative energy from the inside as strongly as covid has done from the outside so far?
And what should they do specifically?
Every company has the “run the business”, ie a stable part of the team, and the “change the business” or innovation part. Typically, each part travels at a slightly different speed and has a different focus. “Run the business” is about optimization, prioritization, scale, efficiency, the present. “Change the business” is about speed, innovation, complexity and the future. Previously, the difference in speeds was not so dramatic, but with the pandemic, the pressure on the innovation team increased dramatically. The speed of the innovation team had to increase so rapidly that it is no longer possible to match the speeds of both parts of the team.
Am I to understand that each company basically contains two smaller companies, but they go at different speeds?
Yes, that is the key to success. Every company that wants to succeed in the future must create the conditions for it to be able to drive at both speeds at the same time and for the innovation team, whose task is to prepare the company for the future, to maintain its high speed without destroying a stable part of the business. . I believe that this will be the end of one common speed that has worked in companies so far. The moment these two speeds have to come together, it slows down companies. Therefore, they must maintain both speeds. And depending on how fast companies get on this system, it will be seen whether the “train” will pass them or whether it will be enough to jump on it.
After all, can’t the high speed of an innovation team be at the expense of quality?
When we talk about the end of one speed, we have to start working with the fact that quality also means something different in each work team. If you start mixing it with each other, even if you want to prioritize innovation, it won’t work.
The idea that a company should operate at two different speeds simultaneously is certainly inspiring, but how to put it into practice?
You are right that the way we have worked so far will not be very valid in the new reality of two-speed teams. We can be inspired, for example, by the automotive industry and a technical component called a differential. This is a device that allows each wheel to move at a different speed on one axle. For example, in corners where the outer wheel has to follow a much longer distance and rotate faster than the inner wheel.
So who should be the corporate differential and what exactly should they do?
We often come across the answer that companies have had such a differential for a long time, it is a project manager or a person who leads multidisciplinary teams. The problem, however, is that it either sits in a specific part of the company, leads innovation projects in “change the business”, or coordinates optimization projects in “run the business”, or sits between departments and harmonizes them at one speed. The role of the differential is basically to protect both teams from frustration at the speed of “the others”. So that they do not tell each other that they are slowed down, and others do not return it to them, that there is chaos in innovation and too many hares are chasing at once.
Are there differences between “change the business” and “run the business” teams in which one is so-called more expensive?
Certainly not, or certainly not in the future. It is extremely important to realize that both teams are equally relevant. We know companies where they clearly favor “change the business”, they shoot ten balls at the target, but before they wait, how many of them hit the target, and then they start working with them, they shoot another ten balls right after that. In such companies, strong leaders in the “run the business” could balance gold.
So there are no pay gaps?
No. It is really important to realize that companies need the long-term success of both teams, so it cannot be said that one of them is better. It follows that even in terms of salary, these teams should not be different. Until now, companies have not named it separately and have not been able to work with it. Now it’s not about raising one and humiliating the other. It is essential to be able to work with the fact that each team needs a different approach. Each team experiences different frustrations, as we have said, and the goal of the differential, or a person who will be able to connect the two teams, should be to reduce these frustrations.
Top managers have an influence on both parts of a company’s business, should they be the differentials?
I do not think so. Today, each of the top managers “sits” either in “change the business”, where they build a strong vision and pull the company forward, or in “run the business”, where they develop operations or back offices. If they try to be differentials, it may well be that they stop doing what their greatest value is. Their key task is to find a person who is fully focused on bridging both speeds, creating the conditions that will best suit both parts of the business, and transferring projects and key information between them.
Do you see from practice that such a role would work in some companies?
Frankly, we don’t see yet. But we are experimenting with several of our partners to establish and integrate the role of a differential. And it is clear to us that the character and profile of this place will evolve and that we will look for its optimal shape. What will not change, and I firmly believe, is the fact that in the future, those companies in the market will have a better chance of succeeding, allowing innovation teams in ‘change the business’ to run faster than teams in ‘run the business’. Maintaining both different speeds will help generate internal energy instead of the energy from the outside that disappears with the end of the pandemic.
Source: E15.cz by www.e15.cz.
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