Tuesday, November 18, 2008

ScienceDaily: Corporate culture is most important factor in driving innovation

Some recent research into what makes innovation happen inside companies:
Corporate Culture Is Most Important Factor In Driving Innovation: "Looking at data from 759 firms across 17 countries the researchers found that location is not the determining factor in the degree to which any given firm is innovative; but rather, the innovative firms themselves share key internal cultural traits. Innovation appears to be a function of the degree to which a company fosters a supportive internal structure headed by product champions and bolstered by incentives and the extent to which that organization is able to change quickly"
The concept of a strong product champion is a recurring theme in successful product development organizations, large and small. It's even more critical in lean startups when they need to manage growth.

I believe it's important that product teams be cross-functional, no matter what other job function the product champion does. At IMVU, we called this person a Producer (revealing our games background); in Scrum, they are called the Product Owner. At Toyota, they are called Chief Engineer:
Toyota realizes that the Chief Engineer job is probably the most important one in the company because the Chief Engineer listens to the customer and then determines what the functions need to do to address the customer’s desires. Thus the power of the Chief Engineer is very large even though he (and they are all men so far) has no direct reports other than a secretary and a few assistants who are themselves being trained to be chief engineers.

The job of the Chief Engineer is to determine the needs of the product and then to negotiate with the heads of body engineering, drive train engineering, manufacturing engineering, production, purchasing, etc., about what their function needs to do to fully support the product. Once an agreement is reached, the Chief Engineer continually watches to make sure that the functions are following through. In the event there is an irreconcilable difference between Chief Engineer and function head, the issue can be elevated to a very high level, but apparently this doesn’t happen.

Great companies build highly adaptable teams, empower leaders to run them, and have high standard of accountability. I will share some further thoughts on how to build strong cross-functional teams in part three of The four kinds of work, and how to get them done.

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