Technology and Organizations

Background: Co-Innovation as a Form of Open Innovation

On October 27th, I have the pleasure of being the keynote speaker for North Carolina State University's Center for Innovation Management Studies Conference: Open Innovation - Revisited. They invited me to provide a bit of background in their blog series on the material I'll be covering. Here is a lightly edited version of that post: Co-Innovation as a Form of Open Innovation.

My basic premise is that 20th-century organizational boundaries and practices may be holding back our ability to innovate. The idea of open innovation is very 21st-century in that there is a definitional acknowledgment that innovations flow in and out of formal organizational boundaries. This likely makes great sense to anyone reading this post.

Benefits and Burdens of Open Innovation

Mark Spry, CEO of Pulse Mining Systems, a very 21st-century enterprise resource planning technology company (I've mentioned Pulse Mining Systems in an earlier post) has helped me understand their open innovation practices. A key to the company’s success is the foundational focus on co-innovation with its customers and partners. This is one type of open innovation and is very successful in Pulse's context.

However, in other contexts, we can see examples of tensions between the old and the new. Think about the challenges Uber, Lyft and even UpWork (merger of Elance and oDesk) face when it comes to organizational boundaries, like who is and who is not an employee. In that context it is the people doing the work who are flowing in and out of formal organizational boundaries. As long as benefits are tied to employment status — something that goes back to colonial times in the US — there will be friction in those flows.

What Pulse Mining Systems has done so well is to manage the people, the roles, and the technology (both the tools and the product), such that there is benefit to all parties for working together. Using the terms from my book, The Plugged-In Manager, they are mixing (negotiating) across the various boundaries and putting a priority on sharing/demonstrating to others the benefits of the co-innovation approach. Allow me to share a bit of the background here.


As Hank Chesbrough, one of the foundational authors in the open innovation area, has noted that there is some confusion in our broad use of open innovation and related terms like, “open collaborative innovation.” Given my own expertise is in the application of open innovation rather than its theoretical foundations, I’ll stick with a recent definition offered by Chesbrough and his (and my!) colleague Marcel Bogers:

Open Innovation

Open innovation is defined as, “a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non-pecuniary mechanisms in line with the organization’s business model. These flows of knowledge may involve knowledge inflows to the focal organization (leveraging external knowledge sources through internal processes), knowledge outflows from a focal organization (leveraging internal knowledge through external commercialization processes) or both (coupling external knowledge sources and commercialization activities)….” (Chesbrough & Bogers, 2014). These knowledge flows are the building blocks and processes of innovation.

Just as a reminder, I offer Chesbrough and Bogers’ Figure 5 to highlight the particular focus of this post:



Co-innovation, or “coupled open innovation” in Chesbrough and Bogers’ terms, “involves two (or more) partners that purposively manage mutual knowledge flows across their organizational boundaries through joint invention and commercialization activities.”

Pulse Mining System engineers do not sit behind closed doors and design new enterprise software tools for their customers. Instead, they co-innovate with their key customers and vendors to build the tools that the customers need most and in a form that will be immediately valuable.

In the particular example Mark Spry shared with me, customer Centennial Coal and vendor Birst (a business intelligence and analytics company) played major roles. Centennial shared their needs. Pulse opened their already broad platform of software to components created by Birst. The new product was then offered to all customers with feature updates made possible much faster than they would have been if each of the groups had to work independently.

Lead by Letting Go

In prior posts, I’ve written about how we can lead by letting go (of old school management techniques), but that creates an image of chaos for some. Instead of chaos, imagine a structured handoff of responsibility. We are unlikely expert in all the areas where we need expertise. Co-innovation is a solution. Pulse has found like-minded partners in their customers and vendors (SAP has done the same with its co-innovation labs.) Each seems to have developed simple rules to handoff pieces of the innovation process to partners with appropriate skills.

Mark Spry offers that we, “can’t underestimate the power of shifting mindsets… to get that buy in and bring that data to life. Co-creation gets some of that end-user buy in from the beginning.”

In the keynote presentation at the CIMS Conference: Open Innovation – Revisited, I will suggest that many organizations need to let go of 20th-century boundaries and processes if they want to get full value from open innovation. Certainly we need to hold tight to our performance standards, relationships, education and the laws of the organization’s ‘physics,’ whatever those might be. However, think of these as the scaffolds that then let us open up organizational boundaries for co-innovation.

Shall we do a little co-innovation here? Do you have an example to share here and/or at CIMS Open Innovation — Revisited?


Mapping Organizational Design: Part Two

star framework drawingIn our last post we described how the star framework is used in a graduate organizational analysis and design course. Again, Shandon Fernandes, a prior student, joins me to show how the framework is used in practice.

Star Framework Basics

  • People – Psych 101 material. How do people behave? (Whether or not they are in an organizational setting.) People generally like rewards and don’t like punishments. Different generations may have different preferences.
  • Process – This dimension allows for an evaluation of organizational policies. Hiring, performance, pay, training, any policy or procedure, big or small.
  • Technology – Technology forms a crucial and inevitable part of the star framework. Technology has not only transformed the nature of work, but offers organizations an effective tool to evaluate and transform operations. Technology ranges from the kind of office furniture you have, to electronic communication, to robots and artificial intelligence.
  • Structure – Structure lays out the location of decision-making and authority. This is where team-based strategies and org charts are considered.
  • Context -- Context is the linking point to many other MBA courses. Is this an international business or a local one? Is the market trending up or down?

Shandon's Example

I recently paid a visit to a large Federal government organization, herein referred to as FGO, for a routine task. On the surface of it, the staff were very customer focused, very helpful, pleasant, and made us feel welcome. That said, I was there long enough to see some STAR dynamics play out in ways that suggest opportunities for improvement. It’s hard to know the specific strategic goals the organization has, but customer service, efficiency, and effectiveness are likely candidates.
As is very usual with these type of organizations, large lines are typical. Security is always a priority (context) and people are carefully checked. The security officers are the first point of contact (process). The FGO has one line given their single security scanning device (technology). When people with appointments show up they are allowed to cut in front of the others (process). This had significant impact on my satisfaction as six time people moved into the line ahead of me. I recalled the better flow at the California Department of Motor Vehicles where appointments have a separate line (context - customers’ expectations given their past experiences). 
But to continue with the specific case. An elderly woman was in line with her walker (people and technology dimensions linked). She had to empty her walker’s basket of about 20 different recyclable bags as each needed to be scanned separately (technology). In addition, she required a special escort (process) up to the relevant floor as she had no identification, which she said she had forgotten (people). When finally reached the service counter, she was told that no service could be provided given she didn’t have her identification (process).

Crafting a Solution

Terri adds: A Fishbone Analysis could be helpful at this point, but for a light-weight analysis, I  generally just ask participants for the biggest or fastest lever -- where is there the most or quickest opportunity to make a pilot improvement? For long range planning, we would try several different lead levers. We could also do the analysis from the perspective of a variety of different stakeholders.
Back to Shandon: The woman could have been turned away before getting in the line for security screening. This would have saved her time, the time of the other people in line, and the time taken at each of the different steps. Ideally, there would be a way to signal that she needed her identification before she left home, but that is a longer discussion.
Through its design, the star framework reminds us to “never change just one thing.” A process change where security officers would check for identification before asking a customer to join the line would require increased customer engagement from the security officers. Since security officers are from a private security firm (structure), we would need to assess the legal ramifications (context) of them turning away a customer who requires service from the FGO. Given the increased customer service interaction, we would also need to see about additional selection or training requirements for the security officers (process). There could also be context issues if the security officers are unionized.  We might need to move the security station and change signage (technology).

Tools in Your Kit

Terri: For many of us, a visual representation of the options is a help. Using a template like the one shown here, we can keep track of the main change (when identification is checked in this example) and the supporting adjustments. The 0 to 10 rating is a simple signal of the power or severity of the issue. Higher scoring items might receive the greatest attention as the change is considered.

The template might also trigger ideas around possible tradeoffs. (For example, the possibility of hiring a valet to check identification and help people manage the overall visit - perhaps a smaller hit to the budget if the task is moved to the security officers.)

To take the next step, I suggest thinking of the change process as a negotiation with all the related stakeholder analysis, issue identification, and creativity around finding valuable solutions. I cover the approach in Chapter 4 of my book, The Plugged-In Manager: Get in Tune with Your People, Technology, and Organization to Thrive. You can also see a short discussion of negotiated change in this post from a while back.

End of Part Two, But The Start of A Discussion...

Tackle your next organizational decision using the star framework. Where did come up against uncertainty? Were you able to see how the different dimensions could be thought of as the issues of a negotiation -- even if you were negotiating with yourself?


In Part One, Terri and MBA student Shandon Fernandes describe the basic structures of the STAR model and its foundations in Jay Galbraith’s work (Galbraith Star Model), Nadler and Tushman’s “Mapping organizational Terrain” and the “open systems model.”

Shandon Fernandes is pursuing an MBA at Santa Clara University and is specializing in Leading Innovative Organizations. A Political Science graduate, Shandon has always had an interest in the structure and functioning of government organizations. She has previously served as a Research Officer for a Diplomatic Mission in Mumbai. 

Mapping Organizational Design: Part One

When I first starting teaching the MBA course, “Organizational Analysis and Design,” I went in search of a tool to offer the students as they learn to describe organizations and think about organizational redesign. I’ve generally had the students read some version of Jay Galbraith’s work (Galbraith Star Model) and pieces of Nadler and Tushman’s “Mapping organizational Terrain.” One of the first things we do is look at the two models and think about how they fit in the students’ organizations. Quickly it’s clear that these models were written when technology was considered more like plumbing and less like a strategic opportunity for organizational design (or possible ways to augment or fully-substitute for human work).

Adding Technology to Traditional Organizational Design Frameworks

Organization design’s goal is to support the strategy of the organization. Give me a strategy and we can work out a design. Galbraith and Nadler and Tushman are foundations, but we need something that matches modern organizations, while is still basic enough to have top of mind for evaluating or creating thoughtful proposals, making sure you don’t let a particular dimension get dropped from discussion, or getting your thoughts together for an unexpected job interview.

My students and I end up drawing this image almost every class session. For shorter courses, like my sessions in the 21st Century Management program, I give them a stack of templates. At some point I break out one of my Skwish toys to demonstrate interconnections across different organizational design dimensions.

I’m now going to turn this post over to past student, Shandon Fernandes, for the real story:

From a Student’s Perspective

On the first day of class, Terri divided us into groups and sent us to nearby restaurants. The goal was to come back with an assessment of the organization -- without doing any interviews. 
Our six member team was assigned to a nearby Starbucks. When we arrived at the store, we started to think about organization from the point of view of the business owners and made customer service and satisfaction a primary focus. 
This assumption, that the most important thing for a business entity is the end result of what your customers get, led us to make shallow and casual observations, like how the two baristas rotated between counter and coffee making. We assumed this was to the benefit of the customers. At no point did we stop to think about the corporation’s policies and how other organizational dimensions could be interacting with each other. In retrospect, our observations were missing vital elements and the connected nature of the various dimensions of the star framework Terri would help us develop when we got back to class.

Star Framework Dimensions

  • People – Psych 101 material. How do people behave (whether or not they are in an organizational setting)? People generally like rewards and don’t like punishments. Different generations may have different preferences.
  • Process – This dimension allows for an evaluation of organizational policies. Hiring, performance, pay, training, any policy or procedure, big or small.
  • Technology – Technology forms a crucial and inevitable part of the STAR Model. Technology has not only transformed the nature of and specializations of jobs but offers organizations an effective tool to evaluate and transform their operations when used appropriately. Ranges from the kind of office furniture you have to electronic communication to robots and artificial intelligence.
  • Structure – Structure lays out the location of decision-making and authority. This is where team-based strategies and org charts are considered.
  • Context -- Context is the linking point to many other MBA courses. Is this an international business or a local one? Is the market trending up or down? 
Soon after that field trip experience we had our first Harvard case analysis. Many found it difficult to put the complexities of the case in perspective. Terri then reminded use to use the star framework as a tool to sort things out. This approach proved useful as we were better able to understand the underlying design of the organization based on the five star dimensions. 

Don’t Change Everything All At Once

Terri adds: You also want to avoid trying to change everything all at once, either when playing with a Skwish or implementing all encompassing enterprise software -- I use FoxMeyer’s failure an example.

End of Part One

In Part Two, Shandon applies the star framework to a recent customer experience. Terri and Shandon work out some possible improvements and demonstrate using the template.

Shandon Fernandes is a currently pursuing an MBA at Santa Clara University and is specializing in Leading Innovative Organizations. A Political Science graduate, Shandon has always had an interest in the structure and functioning of government organizations. She has previously served as a Research Officer for a Diplomatic Mission in Mumbai.

Diversity, Transparency, and Accountability

In my last post, I focused on the value of transparency for getting work done. Transparency can also have a broader effect. In a recent peer-reviewed study in the journal Organization Science, Emilio J. Castilla looked at merit-based rewards for almost 9,000 employees before and after changes related to transparency were implemented. Before accountability and transparency tactics were put in place, women and underrepresented groups had lower pay unexplained by differences in performance or position. After transparency and accountability practices were implemented, the gap went away. My take, supported by over 30 years of research in my field, is that given information, managers do the right thing. Without information, bias can creep in.

Diversity Context

This is timely, important research and especially interesting from my Silicon Valley location. The graph below shows 2014 data from the top tech companies. To their credit, they share this data voluntarily and it has focused attention on the problems for women and underrepresented groups. Apple recently reported their 2015 data, though with little change showing up yet. Slack, Pinterest, and Airbnb are all working with Paradigm, a startup focused on helping change these numbers. 


Graph from VentureBeat

I’m very interested in the internal accountability and transparency in these companies. Google has been in the spotlight around a spreadsheet Erica Baker, then a Google employee, created for Googlers to share information about their pay. The data raised questions about pay equality. She received great support from her peers, but not always from management. In later reports, Google told reporters that “employees are welcome to share information about salary if they choose.” What if such a spreadsheet were part of standard practice? Gender wage gaps are smaller in government and union settings where there is pay transparency as a matter of course.

It’s wonderful that these companies are sharing and taking action. (I’d also like to see data on age diversity - Microsoft provides theirs here, but guessing results look different in some of the other firms.) Internal, at least, accountability and transparency may be directions for them to consider. We can all take part by supporting young people interested in STEM fields and the organizations that give them solid backgrounds. 

Tools to Support Transparency and Accountability

Technology may also play a role. Transparency and accountability are areas where technology can help us do the right thing. Technology supported task feedback helps us do work “right” and better. Process and outcome transparency (at the heart of the Castilla study) help us stay on the right side of just behavior. As internet enabled sensors, ubiquitous video, and internet-enabled work become the status quo, it’s easier to “work out loud” without extra effort and to hear the work of others as part of the ambient environment. Transparency doesn’t have to be hard and it can provide great value even as it supports our values.

More on Castilla’s Research

Castilla opens with a detailed review of accountability and transparency research. Building on Tetlock’s research in the 80s, Castilla describes accountable situations as those where you will have to justify your decisions and actions. Accountability provides motivation to make more analytical/careful decisions. As shown in some of Castilla’s earlier work, this can reduce bias in organizations. Transparency is about relevant, accessible, and accurate information. He splits both accountability and transparency into process and outcome categories -- which for those of you keeping score -- also ties the work nicely into research on how just people feel an organization is.


Transparency and the Future of Work

Window of transparency

Transparency is at the heart of modern work and organizations. Tom Malone, in his book, The Future of Work, talks of a shift to more decentralized organizations where there is “participation of people in making the decisions that matter to them” [emphasis in the original]. People can’t make decisions if they don’t have information.

Warren Bennis, in Transparency: How Leaders Create A Culture of Candor, highlights the monetary value of transparency, "[a]gain and again, studies show that companies that rate high in transparency tend to outperform more opaque ones." He cites a 2005 study finding that a group of 27 U.S. companies noted as "most transparent" beat the S&P 500 by 11.3 percent.

Lead By Letting Go: Transparency

I’ve had the chance to talk with a variety of executives about the value of transparency. These conversations, combined with results from peer-reviewed research, prompt me to place transparency at the heart of how you lead by letting go. It’s not that transparency is an absolute positive, but rather that managing transparency is a key skill in our future of work. (Below, I’ve provided links to three articles if you want to follow the recent research on these issues.)

Avinoam Nowogrodski, CEO and founder of Clarizen, the online collaboration and project management company, provides thoughtful advice as well as a tool to support transparency. Over a coffee on the San Francisco waterfront, he and I talked about the challenges of modern work. We are often physically separated from our teammates and the pace of our work seems to be increasing. I’ll add that, though not really a change, it surprises many that the U.S. median tenure with a company is just 4.6 years. We don’t have a lot of face-to-face opportunity to learn from our colleagues.

Technology Can Help

These dynamics are enabled in part by by technology tools. Brynjolfsson and McAfee, in their book, The Second Machine Age, describe the good and the bad of our changing work environment. They suggest that we learn to “race with machines,” rather than against them.

One way the machines can help us is by providing greater transparency around our work. Rather than proactively reporting on our work, the machines can automatically share as we get on with the tasks at hand. Teams do better to the extent that their members know who knows what, who needs what information, and how to coordinate. If we have tools and the will to apply the knowledge gained via the tools, team performance can be supported by technology. In the past, when it was more typical to work in the same room with our teammates, transparency was supported by the technology of the furniture layout. Today, our electronic tools can provide some similar access to knowing who knows, and needs to know, what.

It’s a classic example where the outcome is the result of the human, technical, and organizational dimensions of the work. Transparency has value, if we pay attention to what we see and don’t make the process of providing transparency onerous.

Guiding Principles

Nowogrodski suggests four principles which span the human, technical, and organizational dimensions of work, as well as crossing individual, team, and organizational levels of action:

  • Democratic information sharing
  • Evolution into a transparent enterprise
  • Aligned input and impact
  • Organic innovation

It’s not transparency for transparency's sake, but rather for impact and innovation. In an article for, he offers:

[L]eaders within enterprises that exercise transparency do not feel the need to “force feed” transparency to employees. This is because transparency is embedded within the fabric of their culture.They own it. As such, they unleash transparency from within to qualitatively and quantitatively improve employee engagement, workflow management, communication and collaboration, customer support and development, program and project governance, and more.

Take Action -- At the System Level -- Then Let Go

Performance is a combination of motivation, opportunity, and ability. Transparency can help motivation by letting people understand the connection between their actions and their outcomes. Transparency can help opportunity by signaling about the work that needs to be done (I’m looking forward to posting about a recent interview with RallyTeam founder, Dan Ellis, on a related topic). Transparency can help ability as people get feedback closer to their own actions. Build organizational systems that enable transparency, then let people get on with their work. Lead by letting go.

Deep Dives into the Academic Work on Transparency Process and Outcomes

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