Institutional Innovation and Podular Design


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Podulation -- From Dave Gray's Connected Company

Podular Design — From Dave Gray’s Connected Company

In Social is the plural of personal JP Rangaswami contends that institutional innovation is required to achieve the potential that social software offers organizations in general, and for-profit companies in particular. JP’s voice is one of several important contributions to current thinking about innovation. For another example consider the Aspen Institute’s Communications and Society Program. It produced a series of roundtables with the Deloitte Center for the Edge over the past few years. Until the 2011 session the focus was largely on talent development. However, in the most recent session, Institutional Innovation: Oxymoron or Imperative?, the focus was on institutional innovation. It is an interesting change in terminology largely because much of the attention in the learning and development world today is on talent management along with employee engagement as cutting edge concerns. However, as Richard Adler the Rapporteur for the Aspen sessions, explains,

If institutions developed in and optimized for the previous generation of infrastructure are no longer working, then where innovation is most urgently needed is not in product development but in the design of institutions themselves.

Let me just say, I don’t challenge the idea that product innovation cycles are shorter due to globalization, nor that product innovation cycles are important to companies today. The whole focus of customer experience management emphasizes learning from customers while they learn from you, whether through ethnographic research , traditional surveys, or social media analytics, but always with the intent to better fit product/service experiences with the customer’s needs.

My point is that the most important innovation challenges are now in fact institutional in nature. Many companies employ senior executives and managers who use social networks in their personal lives but are either reluctant or stymied about how to integrate similar patterns of communication into their work. This point is reinforced by the recent finding of Stanford University and the Conference Board from a survey of 180 senior executives and corporate directors of North American public and private companies. The lead researcher concluded that, “We know that executives and board members are using social media. However, familiarity with social media is just not translating into systemic use at their companies.”

We continue to see organizational ambivalence over how social relationships contribute to business outcomes. For instance, a recent IBM study reported that only 22% of CIOs surveyed think managers are prepared to incorporate social media into their work. Managers generally fail to acknowledge that social networks contribute to business outcomes and that enabling human connections between stakeholders (employees, business partners, customers) adds value to the company when employees share a substantive understanding of the business purposes served by the enterprise’s organization. How to facilitate that substantive understanding is the biggest question facing anyone considering collaboration and innovation in today’s companies.

As my recent post, Revisiting the Great Innovation Debate contended, it is essential for people working in distant places, whether down the block, across the state, or on the other side of the world, to have a sense of a shared office to develop adaptive capabilities. Indeed, recent research on distributed work by Hinds and Cramton contends that knowing who one is collaborating with is a crucial part of the know how, the practical, institutional knowledge, that enables the adaptive capability organizations widely recognize they need to innovate, as well as deal with exceptions to process through informal and social learning.

The point isn’t totally new, nor is it passe’. As many social software vendors acknowledge, it is important to integrate collaboration tools into the flow of work for them to succeed as useful tools. However, as a previous post noted, Social Software, Community, and Organization, that doesn’t mean the social communication afforded by particular tools is more effective if it supports only formal workplace, i.e. functional, goals. Social software must afford the capability for those using it to develop shared experiences of one another as people, not just corporate role players.

I think that Dave Gray’s recent book The Connected Company offers a useful approach to understanding how human connections in business today require organizations to develop the adaptive capabilities that underpin institutional innovation. Dave’s analysis draws especially from the thinking of John Hagel and John Seely Brown’s work at the Deloitte Center for the Edge. However, I think Dave’s ability to visualize and explain the workings of innovation adds significantly to the framework offered in Hagel and Seeley Brown’s The Big Shift.

I plan to offer several more posts over the next few months that discuss key concepts, e.g. pods and podular design, from Dave’s book and the challenges it describes. I make no claim to represent Dave’s thought. Only to offer a few insights into how the interactions of people in the network connections afforded by specific institutions contribute to collaboration and improved business outcomes. The visualization above is the closest I’ve seen in Dave’s depictions of how companies change from divided organization to connected organization, as pods replace traditional teams to drive the business. The next few posts I plan will attempt to communicate why Dave’s thinking in The Connected Company is a significant contribution to the ongoing dialogue about collaboration, innovation, and business organization. For now I’ll leave with this insight from Dave regarding the importance of understanding what we take for granted when we think about organizational design.

There are things that seem “obvious” about organization design that are in fact not so obvious at all. Some things that we take for granted as fundamental are in fact only optional. …We divide the buisness –and the labor– in order to do work more efficiently. We put the sotware developers together so they can focus on software; we put the salespeople together so they can focus on selling and learn from each other; and so on. Sounds obvious, yes? And its very efficient. But as we move into a world where efficiency leads to commoditization, and where value will increasingly be driven by innovation, efficiency is no longer the overarching goal.

My next few posts focus on the concept of podular design and why companies attempting to do it need to engage their stakeholders in institutional work. I use the concept of institutional work here, following the research of Tom Lawrence and others, to refer to “the practices of individual and collective actors aimed at creating, maintaining, and disrupting institutions.”

Republished with author's permission from original post.

Larry Irons
Larry Irons, PhD, is the Principal of Customer Clues. Customer Clues provides consulting services to design manageable product and service experiences across your marketing, learning, and organizational performance initiatives.


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