Recently I spoke with a group of executives from a $3 billion division of a large industrial company. They were faced with a mandate from the chief executive to expand the firm’s service revenue from 20 percent to 33 percent. That’s almost $400 million in new revenue, yet when I asked how many people were on the team, the leader replied meekly: “Two.”
This isn’t good enough — and yet it’s a systemic problem for those looking to implement innovation initiatives, particularly within large organizations. The fact is, the days when innovation was focused primarily on technological breakthroughs and new product development are gone. Fast-paced environmental shifts require constant change in systems, people, and processes. Organizational flexibility and agility are now critical capabilities for any corporation trying to lead. So any executive looking to innovate needs to invest significantly in a way to support the change needed to make that revenue become a reality.
Here are a couple of examples of different ways companies have done just that.
Kaiser’s O-Gap
Heather Wilson, vice-president for innovation and information strategy at Kaiser Permanente, conceived and implemented a unique new stage for service innovation at the company’s Garfield Innovation Center in San Leandro, Calif. Recently, she explained to me that when a promising innovation project is about 50 percent complete, she brings together representatives from information technology, patient services, and facilities management to assess how to scale it across the company’s vast system.
By evaluating the “O-Gap” — that is, the space between pilot and operations — this group takes into consideration everything from process realignment to environmental modifications, as well as the training requirements needed to foster wide adoption of the change. “We introduced the O-Gap concept in 2009,” she told me. “Now everyone knows what this stage entails, and it is a permanent part of our…