Disruptive breakfasts

Constraint-driven innovation

Disruptive breakfast: Developing a culture of constraint-driven innovation

How can organisations use constraints as a competitive advantage? This was the topic of conversation when Shape Consulting hosted a disruptive breakfast with Dr. Michael Rosemann.

Pursuit of ambidextrous innovation

exploitation vs. exploration

As Dr. Rosemann shared, leaders are practiced at working within constraints to compete in ever-changing markets. Yet these same skills that help leaders adapt to evolutionary change are often not sufficient in times of dramatic changes we are see in today’s business environment. Success in the current environment requires leaders to go beyond their constraints and practice what is referred to as “ambidextrous innovation”.

Ambidextrous innovation describes the capability of leaders to exploit their current current assets while at the same time exploring new horizons.  This is the same approach taken by Charles Kettering who, as head of research and development at GM in the 1920s, turned the industry upside down with his big idea to paint a car in one hour rather than the 37 days that it was taking at the time. Where most leaders of the time looked for incremental changes, Kettering explored where revolutionary changes could be made. We need to ask ourselves: Are we a 37-to-30-day leader, or are we a 37-day to 1-hour leader?

“The world hates change, yet it is the only thing that has brought us progress.” ~ Kettering

Shifting mindsets towards ambidexterity

To move towards an ambidextrous innovation mindset, leaders are challenged to embrace a culture that balances the natural tension of delivering against “business as usual” with the pursuit of bold new ambitions. This involves shifts in mindsets:

Constraint Innovation

“People see constraints as an excuse for innovation… innovation puts you at a competitive advantage, so why use it as an excuse?”

Capital conversion to exploit constraints

During the breakfast, Dr. Rosemann shared many examples of where these shifts have happened to produce market disruptions. These examples include Massive Open Online Courses that are disrupting education, AirBNB’s impact on the hospitality sector, and LinkedIn’s impact on traditional recruitment. These innovations are made possible by viewing the organisation as a capital conversion system, expanding the view of capital from just physical and financial assets and tapping into the available intellectual and social capital.

Capital value

“When it comes to innovation, consider looking out versus in… Once upon a time, competitive advantage was about the product you offer, then the service you provide. “Community” is your next valuable asset; now it’s who you know and what you know about them. Listen to your customer – what is it they want to experience?”

One example used to stimulate conversation at the tables was a the story about the Litre of Light project:

The story was used to prompt discussion around the tables on how to practically apply the model outlined in Eliyahu M. Goldratt’s book The Goal that helps identify and exploit constraints to achieve success:

  1. Identify a system constraint that prevents the organisation from obtaining more of the goal in a unit of time;
  2. Decide how to exploit the constraint, or get the most out of the constraint;
  3. Subordinate everything else to the decision above;
  4. Elevate the system’s constraint by making other changes to increase capacity of the constraint; and
  5. Repeat for other constraints once the primary limiting constraint is removed.

The path to unconscious competence

Being bound by constraints is the norm. Moving beyond constraints requires leaders who embrace innovation thinking that sees beyond constraints, and the creation of a culture that have such thinking embedded into the mindsets of the people.

The framework outlined at the breakfast provided opportunities to reflect on how leaders can create unconscious competence in their business:

  • Build awareness for current and future constraints;
  • Recognize that constraints have a dual role, i.e. they restrain and they enable;
  • See constraints as a resource in design and search for constraints, if you don’t have them;
  • Relax constraints in current problem and solution spaces; and
  • Develop innovation professionals in the business to drive change leadership

 

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