The Edge of the Organization in Turbulent Times

  flap your wings 
  Originally uploaded by hanssolo

Yesterday I was talking about the US recession with my boss, Eugene Lee.  Our best customers are looking at the downturn as an opportunity.  A chance to optimize, innovate, adapt and seize new opportunities.  But this isn't the case for most of corporate America.  Eugene shared an interesting insight about the role of the edge of and organization and how its at risk in turbulent times.

The edge of the organization is the source of innovation and growth.  Its also where an organization can sense and respond to change.  Ironically, during a downturn, organizations often shave the edge of vital people and resources.  And the strains to do more with less hampers communication between the edge and the center, just when the center is making its most vital decisions.

JSB and John Hagel noted the edge is the only source of sustainable innovation, and the edge is becoming the core. On the same day I came across a post by JP Rangaswami, sparked by an article in BusinessWeek that crossed his social news feed.  Here's a big excerpt:

They make a number of points really well, points that I have written about before, but without the crispness and coherence they bring to the table:

• Innovation happens at edges
• Youth shouldn’t be discounted, their demographic group has edges as well, edges where innovation takes place
• We need to build platforms that sustain many open edges in order to foster innovation
• When building the platforms, we need to ensure that the time/money costs of edge innovation are kept low

The “lessons” piece at the end, while succinct, is really worthwhile. Don’t dismiss it lightly just because you may have come across variants before:

• Create more edges
• Provide better ways to connect at the edge
• Demographic edges are fertile grounds for business innovation
• Experiment and iterate rapidly
• Social, technologic[al] and economic are inextricably intertwined

And, of course, the paragraph at the end.

“Social interaction often precedes economic activity.”

Otherwise known as cluetrain. Markets are conversations. Relationship before conversation before transaction.

Just as new solutions are emerging to enable effectiveness for the edge, it may be more critical than ever.

Comments

[Larry Irons]

I tend to think of it like this, dialogue grows relationships, relationships shape conversations, conversations underly agreements, agreements define transactions. In times of fear and retrenchment businesses try to make this process work in reverse order.

[Graham Hill]

Hi Ross

Great post. Thanks for the heads-up to the Two Johns' article in Business Week. No doubt JH will expand upon it soon on his Edge Perspectives blog.

It is interesting to note that much of the current thinking on innovation taking place at the 'edge', whether that is the outward-facing edge of the corporation as in Chesbrough's Open Innovation, or the inward-facing edge of the market as in von Hippel's Lead-User Innovation was described long ago in work on complex adaptive systems.

I remember reading Ralph Stacey's book on 'Complexity and Creativity in Organisations' on holiday on the East German coast in 1996. And subsequently applying some of the principles to UK credit card company Barclaycard's organisational redesign to enable it to gain a step-change in market-facing innovation a few years earlier.

Complexity theory clearly has a lot say about where, how and why innovation occurs at the edge.

Graham Hill
Independent CRM Consultant
Interim CRM Manager