Smart organisations scale learning

by | Apr 13, 2013

Traditionally, companies have churned out goods at increasingly greater numbers to decrease costs and boost profits. As larger staff numbers are required, rigid chains of command and processes have been shortcuts to managing the workforce.

Not surprisingly, these methods have not been conducive to innovation.

Institutional innovation: Creating smarter organisations to scale learning is a recent article from the Deloitte University Press that looks at how entire organisations need to re-think the way they do things to meet modern economic and social demands.

The past four decades have seen new digital worlds emerge and economic regulatory frameworks loosened across the world. Rigid companies that found success in earlier, more stable times have struggled in the business world today. When innovation takes place, it is focused on products and services, but what if this attention was turned to a deeper change within the organisation?

Institutional innovation embraces “scalable learning”, where smarter organisations grow and develop in a world of exponential change. Creation and innovation is encouraged that helps interactions and relationships both within and outside an organisation. The open flow of communication increases the cross-pollination of ideas and boost adaptability.

Travel at WikiSpeed

The Progressive Insurance Automotive X Prize is an open competition for 100 mpg cars that can be driven legally on public roads. In 2008, a startup called WikiSpeed entered the contest. The one man band began blogging about his journey, and soon accumulated 44 volunteers across 10 countries. Although WikiSpeed didn’t win, the group came in an admirable 10th spot, especially when one considers the $300,000 budget, beating many other entrants that had spent millions on their designs.

WikiSpeed caught the attention of several Fortune 500 companies as the startups had received big bang for its buck: a huge return from relatively little capital. The WikiSpeed vehicle was an open source project which boosted learning and performance by harnessing new technology in a conventional product.

A new way of thinking for organisations

A considerable amount of attention solely on product innovation can end up in landfill thanks to product life cycles that become shorter all the time. Focusing on institutional innovation is a more sustainable method as it brings together capital, talent and information in new and more efficient ways.

Key technologies, such as computing, storage and bandwidth, are getting better and more efficienct at a rapid pace. What would happen if schools, businesses and governments changed at the same speed?

The increasing rate of change

Today, competitive advantage is not measured in stocks of knowledge, but how a company can tap into flows of information for the most recent knowledge and drive adaptability.

The gap between institutional forms and modern social and economic needs can be felt in the financial performance of companies. Over the past 40 years, the return on assets for all public companies has fallen by 75 per cent. The average lifespan for a company on the S&P 500 list is less than 15 years. In the 1930s, it was 80 years.

Shifting thought in institutions

Institutional innovation requires a re-think in the physical, virtual and management systems in organisations.

External relationships need to be re-assessed with three important aspects in mind:

Scaling transactions – Short-term partnerships. Competitions can draw insights and knowledge from a large number of people.

Scaling relationships – Building long-term partnerships.

Scaling learning – As the first two are harnessed, a longer-term opportunity to reconfigure systems that can greatly assist learning.

The article has many other interesting case studies. Read it here.

Jeffrey Tobias

About Jeffrey Tobias

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well-known startups.

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Managing Director, The Strategy Group

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.

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