Restructure to Optimise Innovation

The need to speed new products (or services) to market is a critical condition for business survival, both in a highly competitive or a market down-turn environment – but for different reasons.

In an upbeat market, the aim is to change the rules of the game to achieve first-mover advantage to capture market share. On the other hand, in a highly competitive downbeat market one is trying to stimulate spending with fresh new ‘must have’ product or service offerings to stave off bankruptcy.

The first condition is somewhat easier to deal with – the level of organizational energy is high, creativity is running rampant, a lot of people are ‘doing their own thing’ toward a common goal and most importantly the cash is flowing – and a few mistakes don’t matter that much.

For the second condition, things are not so easy – cash flow is tight, employees are being laid-off and organisational confidence is flagging! More importantly, the demands to ‘circle the wagons’ and hunker down to survive the storm is paramount.

The latter situation is where HR recruitment and development strategies are exposed to the light of day.

Contemporary recruitment practices concentrate on hiring employees who ‘will fit in here!’; where power and influence are centralised and one is expected to embrace the organisational culture, be a team player, and most importantly ‘toe the party line!

The much-published author Chris Argyris has argued for decades that to be an innovative organisation it is important to place some ‘..square pegs in round holes..’ when recruiting.


There is an inter-relationship between market pressures; intra-firm interdependence of diversely skilled team members (i.e., members with differentiated cognitive schema of the problem area) in innovation teams leads to ‘task complexity’. Task complexity in conjunction with time pressures leads to greater team coordination through mutual adjustment and information flows within the team. This speeds information sharing among team members and reduces time to complete complex tasks found in the innovation process.

Time and money saved!

Whilst organisational social networks may incorporate differentiated mental models of the innovation problem area, they can also incorporate a centralised knowledge base and an integrated mental model of the problem area. Thus, highly diffused modes of employee (referred to as Actor) power and influence in organisations is likely to lead to the creation of diversity in knowledge and opinions.

Power centralisation is the dominance of the opinions of a few over the many, which in turn diminishes the potential for harnessing divergent and creative thinking – the antithesis of innovation. ‘Power centrality’ within the intra-firm manager-employee network is inversely related to innovation!

How does this look graphically?

Figure 1 represents a centralised power and influence organisation with ‘Low’ innovation!
Figure 2 represents a decentralised power and influence organisation with ‘High’ innovation!

My guess? Most organisations’ power and influence condition looks like Figure 1; hence low innovation outcomes!

Didn’t President Obama recently state: America has to innovate itself out of the current economic malaise? What about Europe and…..?

Time to rethink recruitment practices?






















11 thoughts on “Restructure to Optimise Innovation

  • Dan,

    Thanks for the reply

    Comment from: Strategic Outcomes

  • You make some good points Dr Preiss. A slow economy provides the opportunity to rethink and re-plan everything you’ve been doing. In the process you’ll discover a number of things. For one, some of what you’re now doing is a waste of time and should be discarded. Some of what you’re doing now is pretty effective and can be retained with minor changes. But most of all, rethinking the whole process using a blank piece of paper allows fresh thinking to dominate the discussion, rather than relying on a “that’s how we’ve always done it here” attitude. Collectively, starting the rethinking and planning process will profoundly strengthen your competitive position for hiring top talent once the economy recovers.

    Comment from: Dan Tham

  • In order to develop a meaningful recruitment strategy for the future, it is imperative that you fully understand how your current
    process works. The most effective way to achieve this is to conduct a full ‘recruitment process audit’, which should look at every aspect of the recruitment cycle within your business and is designed to highlight both procedural excellence and areas of improvement within the process.

    Comment from: Gabriele Steinhauser

  • Liz,
    Young people not only embrace new technologies more enthusiastically than the not so young, they are also enthusiastic about creativity and new ideas. This may well re-energise the ‘technical’ areas of an ossified organisation. However, I don’t think I would be so enthusiastic about placing an inexperienced as head of the finance department. Youthful enthusiasm focused on specific problem areas (often technical) can generate fresh new (innovative) solutions others may not see due to lack of organisational inertia and org culture constraints. I would suggest creating a ‘Buddy’ mentor system where an experienced ‘Yes but…’ mentor is assigned to the younger employee not to kill innovative ideas, but to ensure the creative focus is on the doable rather than the ‘wow’ idea that is impossible to implement. E.g., Yes, but will that work here? Is it economically viable? Politics, perspective and wisdom are critical aspects in the survival of the organisation. The youthful are often not attuned to these constraints. The engineers in the Apollo organisation were given free reign on technical matters and had a blank cheque to get on with the job. This is not a viable option for the SME or the corporation in a competitive market. Needless to say, we certainly do need fresh new ideas if we are to get out of the after-effects of the GFC.
    Hope this helps, Kenneth

    Comment from: Dr. Kenneth Preiss

  • Dr Preiss, I would like your thoughts on my feelings on recruitment. I think we should encourage more youth into our organisations. Young people don’t have fixed ideas of what’s possible and, more to the point, what’s not. You need an attitude that anything can happen. The engineers who put Apollo on the moon were in their 20s. So were the entrepreneurs who created the dot-com revolution?

    Comment from: Liz Stafford

  • Warren,
    Your favourite mantra is spot on. So, what is the current state of the business game? My take is that considerable effort is being focused on restricting external change rather than enhancing internal change to meet the external.

    Comment from: Dr. Kenneth Preiss

  • One of my favourite mantras that I read somewhere is, ” When the pace of change outside your organization is faster than the pace within, you will be out of business.” And as we all know, today’s pace of change is crazier than ever. A culture of innovation, when done right, can keep you ahead of the pack in a highly evolving marketplace.

    Comment from: Warren Johnson

  • Much has been said about the value of employing like-minded people, such as hiring for attitude and to preserve team culture. But, in doing so, an organisation loses viewpoints, nuances and devil’s advocates, and, therefore, is less able to change, expand, think creatively, innovate and cope with turbulent times. Look at lessons from the recent global financial crisis. At its root was a finance industry culture that was resistant to change and blind to its own folly, in large part thanks to the fact that it attracted a specific type of person.

    Comment from: Linda Young

  • It is now time for re-invention, innovation and a revolution in our strategic thinking. Do not what everyone else is doing but rather, what we can do to set ourselves apart from the market. How else will we become the leaders of our industry within our markets and consequently improve our profitability?

    Comment from: Neil Hall

  • The hiring authority only seems to hire people just like themselves. The “incestuous” hiring practice is not only illegal, but basically dilutes the gene pool where the same old ideas are recycled as new because that is all they know.

    It is extremely important to hire and promote a diverse work force. It is important to find employees that will challenge you and your ideas. If you are in management, you need to find a few people that are nothing like you at all. And if you are an employee, you too need to get into an organization that is diverse in its outlook on hiring. If you do the same thing as you’ve always done, you will only achieve the same result as you’ve always gotten.

    Comment from: Gary Tingay

  • I cannot say I have ever seen such a model before.

    What a pity more organisations are not representative of your Figure 2. Perhaps it is that individuals do not have enough influencing skills.

    Astute people understand that influencing key individuals within their organisation and externally is vital to their business performance. The good news is that influencing skills can be learnt, and that acquiring them gives you a competitive and unique advantage.

    Comment from: Carol Waite

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