Established organisations excel in steady-state, predictable, homeostatic environments when both problems and solutions are predominantly known. In these instances, we rely heavily on proven processes, procedures and protocols to be as efficient and profitable as possible. However, today’s business environment is far from steady and predictable.
Because established organisations are built for reliable execution, it is difficult for such organisations to recalibrate and navigate a disruptive business world, organisational habits and mindsets are hard to change.
A sudden realization that they need to become more innovative, established organisations often try to force the thinking of the exploitative, steady mode into the territory of the explorative, uncertain one. Our guest on this week’s Innovation Show is Vaughn Tan, author of “The Uncertainty Mindset”. Vaughn draws a parallel between this tension of opposites in the corporate environment and the frontiers of high-end cuisine. Once an industry that prioritized consistency and reliability, it turned into one where constant change was a competitive necessity. For high-end restaurants to become efficient and consistent at producing innovative dishes, they had traditionally depended, like legacy organisations, on extensive documentation, intense specialization, and clear hierarchies. As high-end restaurants began to focus on pushing more innovation onto their menus more frequently, they found that they could only do this by re-designing the traditional organizational structure, their old structure could not provide the necessary (ahem) ingredients for success.
Think of your favourite dish in your favourite restaurant. Now, think of the remarkable consistency that is needed to reproduce that same dish every time you desire it. Consistency is essential for a restaurant to retain repeat custom; efficiency is essential for it to survive. Now think of the turbulence caused by the pandemic, the Suez canal blockages and a plethora of other factors in a VUCA environment. Now think of the mindset of the chef who replicates that same dish day in, day out. This is the epitome of pristine execution. This is what companies who have a steady business model and consistent products do best – and so they should. The longer they do this, the more stable their mindset.
Now, If you were to suddenly ask the same culinary team who consistently deliver sumptuous, well-received and award-winning dishes to experiment with new, unknown and unproven dishes, you will likely meet significant resistance. Just like we experience in “the corporate kitchen”, the creation and exploration of new dishes (products or services) are best handled by people who are open to creating new things and open to accepting the inevitable failure that this entails. While replication is pristine execution, invention is error-ridden exploration and these two different sets of tasks draw on fundamentally different skills and inclinations.
Just as innovation-focused restaurants have realised it is better to structure reinvention in a different way to repetition, established companies must empower different teams to manage and conduct reinvention efforts within their organisations. Once they have stumbled upon a successful product, then they can transfer it to an execution team to perfect, refine and replicate. These are different modes of being, thinking and measuring.
To maximise profits, established restaurants (like established organisations) rely on a rigidly structured division of labour. Service kitchen staff are divided into specialized stations. A station can be responsible for completing dishes, components of dishes, some dishes, and some components, or coordinating the work of the different stations. Consequently, cooks working at each station cook the same things and use the same equipment every day, over and over again, and become efficient at doing those things quickly and correctly.
The contrast between such a rigidly organized kitchen with many cooks and a home kitchen run by a lone cook is mammoth. Think about your own home cooking attempts, where you carry out every step of your recipe.
“Companies need to figure out how to execute and innovate in parallel.” — Steve Blank (Innovation Show Episode 194)
In a similar vein, organisations are structured for similar efficiencies, because doing so maximises profits, minimises mistakes and ensures efficiency. However, this same team does not have the same mindset or skillset as one who is designing something new. While they are efficient within their swimlanes, a home cook swims in the entire pool (much like an entrepreneur in a startup). Their oversight gives them opportunities to see the bigger picture and to connect dots.
Just as the world of culinary R&D has realised the need for diverse skillsets for this duality of repeat and reinvent, corporate kitchens are waking up to a similar need for the duality of exploitation and exploration.
THANKS FOR READING
For a fascinating exploration and more parallels and about how to organize for innovation and practical insights for businesses trying to become innovative and adaptable have a listen to the author of, “The Uncertainty Mindset: Innovation Insights from the Frontiers of Food”, Vaughn Tan.
More about Vaughn here: