Many executives are frustrated by a lack of clear return on their innovation investment. Even when they get great ideas, they run into organizational bottlenecks that make it tough to select and scale the most promising ones. Companies tend to keep searching for their next great innovation idea instead of tackling these gnarly problems that keep those ideas from being implemented.
Consider a recent experience at Citi. The global financial firm conceived a highly disruptive new business model for a core banking franchise. This new model blended new technology, user-centric design principles, and process innovation to strengthen the bond between banker and client.
But the new business model ran the risk of running into several of the bank’s bottlenecks—including obtaining funding, deploying the technology, training the troops, and pushing through regulatory approval.
To be successful, the innovation leaders at the bank organized the effort differently. One of the senior leaders at the business unit was anointed “Chief Bottleneck Buster.” The new “Bottleneck Buster” enlisted a few critical leaders who owned responsibility for potential bottlenecks, using a five-step process:
Focus on doing less, initially:
The team relieved pressure on the constrained system by attempting to force less through it in the near-term. As painful as it might be to drop ideas, the top ten list really should only have ten things on it.
Hunt for the narrowest bottlenecks:
To solve the scaling problem, the Buster searched for the worst bottlenecks in the process. In this case, the team identified IT and regulatory compliance.
Make early tradeoffs:
The innovation team was pushed to develop one small portion of the technology, rather than attempting to build the entire system initially. This accelerated the development of something ‘tangible’ that could be showcased. The resource load on the IT organization was greatly reduced at a critical time.
Measure bottleneck utilization:
Once identified, the team began measuring and monitoring the ongoing utilization of each bottleneck area to better understand which bottlenecks were long-standing and what circumstances might trigger over-utilization.
Build a network of external helpers:
The team brought on third-parties to help to identify where the ‘pinch points’ were and the importance of investing in building future internal capacity. Having relationships with outside IT, Legal, product developing and/or testing partners who are familiar with your process and approach to innovation is critical.
The bottleneck problem is a perennial one. In the classic business book The Goal, author Eliyahu Goldratt tells the story of a slow-of-foot Boy Scout named Herbie to teach the theory of constraints: the concept that bottlenecks in a process are what determine the overall throughput of a system. No matter how fast the other boy scouts walked, it was Herbie’s pace that determined how many miles the troop would cover in a day.
Executives committed to innovating must look for ‘Herbie’ in their production process and innovation pipelines. The problem of Herbie reinforces the central leadership challenge innovation creates in any organization. Unless senior leaders take deliberate actions, Herbie will continue to choke returns from innovation. New innovations will always find themselves stuck in the queue behind the needs of the core business. To break this cycle, enlightened leaders must implement new methods for breaking those logjams.