The Most Important Feature Lacking in ERP Systems Is the Kill Switch. If You Want Innovation to Happen Fast, Look for That Switch.

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Innovation happening in different sectors, such as advanced technology, government, social enterprise, multi-national corporations and non-profits is exciting.


As we explore different organizational designs that best support innovation, we are always missing an important ingredient for success, the human factor and the system constrains. Ideas are easy and in many ways a commodity.

Ideas are cheap and the whole concept of a creative director is such a thing of the 80’s; who is not creative? Who can afford not to be creative these days? All design grads tell me they have lots of ideas and want to work for Idea Couture, I tell them we have too many already and ideas are in oversupply. Let’s talk what else you can bring to the table. It is usually followed by 10 minutes of silence.

As we look at innovation from coming up with new ideas to making them work, we have to be equally interested in the human factor and organizational design and structure charged with making ideas actionable. Our current organizational design and management systems were not designed to support innovation. Actually they are designed to work against innovation. Almost most components of our management systems are designed to improve predictability. In an idea world, we know what we want to be; we know how much it costs to build, and how much it costs to sell and how many we can sell. Then we align that with our resource allocation system. In an idea world we can predict our top line as well as bottom line and ideally over a period of 5 years.

We know all these are bullshits. We all buy into that and B-schools and capital markets all use the same bullshits. So these bullshits are fully institutionalized in our system and everyone ended up playing the system at whatever costs. As increasing regulations, management systems, business processes and efficiency initiatives become less flexible, new organized spaces need to be created in order to facilitate product, service, and experience innovation on a global scale.

Any corporation can drastically benefit from a 24-hour open innovation network and the process of innovation can also benefit from this open ideation network – essentially, it would allow for innovation beyond product development functions. It is the new open enterprise. And it is time to press the kill button on your ERP and start thinking what an open enterprise will look like. Think about it, for many innovations, be in product or service, opportunities span industries and business units, things can become complicated.

Even the line between product innovation / development and corporate entrepreneurship will blur and the mission extends beyond conceptualization and prototyping of a product, to new business design and business model. You might be interested to read the piece I wrote for PDMA on product development which was published yesterday. I talked about the number of ways companies can organize around innovation and to what extent each model opens up outside the enterprise. Each model has its own merits and pitfalls and there is no one size fits all. It explains why some companies innovate more successfully than others? Please share your thoughts.

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