2nd Dimension: POP-K

POP K - Different organs, the same goal

In the first dimension - Strategy -, we talked about aligning the brain and the heart. Now, it’s time to make sure that each organ, each system in the body is working properly and contributing so the body can reach its goal. 

Picture this scenario: The management team has asked you to scout outside your organization for innovation initiatives and projects that can help accelerate the rhythm of transformation. Market and customer demands are so intense that this collaboration is needed. You find a unique startup: since their foundation 2 years ago they’ve developed a solution and tested it with great success. They’re ready to work with organizations such as yours. Everyone is excited about the possibilities and agree to begin work as soon as possible. The required processes to draft a contract and an agreement are set in motion. At some point the procurement manager asks the startup for a 5 year financial history. Having existed for only 2 years, this history doesn’t exist. The process comes to a halt and a heated discussion begins. On one hand there’s the urgency to implement this innovation, on the other procurement procedures are clearly set to avoid fraud or failure. What do you do?

There are many examples of misalignments like the one in the story. “Local regulations don’t allow what you try to do”, “It’s not in my top 10 priorities, come back next year”, “All developments of this kind are to be developed internally”. All these cases have in common that each team is trying to comply with what is required from them, but unfortunately priorities from different teams within the same organization clash. 

In my own experience, the heat generated from these frictions can erode efficiencies within the organization, slow down success rate, burn-out teams, degrade external reputation and ultimately is behind a great number of failures in collaboration. Many good startups had died waiting for the bureaucracy to move forward, for someone to solve situations like these.

A critical success factor is to take enough time to look within the organization and untangle blocking knots, and all in all make sure that everything is prepared to process the collaborations that are activated in the innovation process. 

This is how the second dimension comes to our attention. POP K is a memorable mnemonic device gathering four concepts, that ordered from general to specific are: Organizational Structure, Processes, Procedures and KPIs. 

• Organizational Structure: It is the way or method by which organizational activities are divided, organized and coordinated (1). It directly determines how collaboration flows within and outside the organization. Reporting lines, decision making and budget allocation determine which initiatives will prosper. All organizations are in continuous change in different degrees of impact, and of course collaboration efforts are affected by these changes. That’s why there’s the continuous need to validate if the structure is set to deliver the strategic objectives.

• Processes: To be understood as a set of activities and tasks that, once completed, will accomplish an organizational goal, processes frequently lay across organizational units. Inputs are transformed into outputs by applying work and effort. Organizations need to be ready to adapt or create processes that maximize the possibilities of success.

• Procedures: Procedures are the detailed steps to perform activities within a process. And as “devil is in the detail”, sometimes are the corners when the troubles hide. Procedures need to be analysed and actively shaped to build towards the organizational goals. 

• KPIs (Key Performance Indicators): Are the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most (2). Some say that it was the Renaissance astronomer Rhaticus who suggested that ”if you can measure something, then you have some control over it.". But I always end up adapting an old saying in spanish to say “tell me how you’re being measured, and I’ll tell you how you’ll behave”

The Mystery of the disconnected organization

In order to generate the best conditions for collaboration, we need to try to solve the mystery of the disconnected organization and to dedicate quality time to analyse the organization. This process requires to make an effort to give the “outsider look” to the dynamics of the organization, and in an empathy exercise, step into the shoes of the others to learn about their motivations and circumstances. This broader approach will give us the insights needed to knit a solid fabric of collaboration.  

The “Areas Involved in the OI Process” Canvas

To facilitate this task, I’ve created a simple tool that guides the user in a relation analysis of the teams involved in the innovation processes. Following the inspiration thread from the OI Strategy Canvas, I’ve named it the “Areas Involved in the OI Process” Canvas. 

It’s an Open Innovation management tool that allows to analyze, discuss and understand the internal organization and interactions between the teams, and challenge and propose improvements to the organizational dynamics.

Created in 2019, this is the second updated version of the canvas. You can download the format here:

*Creative Commons Licence: Open Innovation Strategy Canvas by Marisol Menendez is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Based on a work at marisolmenendez.com. Permissions beyond the scope of this license may be available at marisolmenendez.com

I usually facilitate sessions with the teams in charge of the collaboration initiatives to analyze with detail the network of internal collaboration. Dedicating time to carefully understand each team, discuss the processes involved and the influence of each person behind. Here we talk about the areas currently involved and those who should be involved in the future. Identifying sponsors, enthusiasts, and even stoppers. Carefully moderated the discussion can be refreshing and informative, giving the right elements for constructive proposals. Each participant gets a copy of the canvas (either digitally or printed ideally in A3 format). 

Bear in mind that this aims to be an agile exercise, not intending to be exhaustive in the information gathering for each department. Focused on understanding the dynamics, teams and collaboration patterns.

Header: General information

At the top of the canvas there’s a space for the name of the company, name of the participant, job title and date. Company is important if the session is with more than one company, or department if you’re sharing with different departments. The date is important because you can repeat this exercise in the future and compare. The organizational dynamics are not static, they change through time and are affected by the people who are involved. It’s interesting to compare evolution through time and verify the impact of changes and improvements.

Area box

This is the core of the exercise, and one of the parts I enjoy the most. Begin by listing all areas or departments that interact in the innovation process. Write down their names in the “Area name” space. And for each of them fill out the box with the following information:

• Connection Level (1 Bad - 5 Perfect): Rate the connection level between your team and the area in the box. A basic rating from 1, indicating complete disconnection, to 5, indicating complete integration. This rating is discretional and exclusively based on your own perception. In further discussion the group will identify the least and most connected in order to identify on one hand the focal points of action, and on the other the enthusiasts that will help to build the results. Within the enthusiasts we can also identify the “emotional sponsors”, in other words, those who will go above and beyond to support the innovation processes. In early stages of the collaboration processes, if emotional sponsors disappear the innovation process might stop, or slow down.

• Goal: Write down the area’s goal, preferably in relation to the innovation processes. This part of the analysis can also try to answer the questions: “what do they need” and “what they can give” to spot limitations and leverage points. 

• Now vs. Future: For the next three variables, indicate what’s the present situation and what would be the ideal for the future. It will be easy to identify the action areas by looking where there’s a difference between the now and the future.

  • Critical: Does this area do a critical part of the work in collaboration projects? Can their work, decisions or activities potentially stop or block the projects by direct action or the lack of it? There are even cases where some areas are part of the critical path and there’s no real need for it. Is there an “idle-need-for-stamp” syndrome? In this case the marks would be “Critical now” but “not critical” in the future.

  • Connected: Is this area connected to the innovation area or process? Is the connection official and well established? Is it at all levels?

  • Interest: This variable intends to describe the enthusiasm or willingness to be part of the process. To identify sceptics and supporters. And in this case specially would be useful to look from the organizational perspective, but also, the individual perspective. Personal inclination is a powerful driving force for collaboration.

Insight Questions

Here are some final reflections in order to set the grounds for discussion. All of these questions should be answered from the perspective of the interconnection between the different areas and departments:

• Level of connectedness: What would be a global rating of the level of connectedness? 1 means that the organization works in silos and 5 that there’s total fluidity in the collaboration.

• Satisfaction with Results: Notwithstanding the answer of the previous question, answer what’s the level of satisfaction with the results so far. It can happen for example, that an organization is siloed, and happy with the results, but they know they need a change.

• Need for a change: You might be a seasoned professional in Open Innovation and be completely satisfied, or maybe it’s time for a change. Rate your perception.

Overall view and discussion

At the end, the canvas might look something like the illustration below. Even if there’s always the possibility to use more than one page to analyse more than 12 areas, it’s recommended to focus on the top priorities and do not dilute the discussion. This is of special importance in complex organizations where it’s not easy to get to know all areas. Begin with the high priority interactions, and other analysis might follow in separate sessions.

When the canvas is finished, compare one area to the other. Identify the top connections and the main challenges. Discuss with others and contrast opinions. Interesting learnings and conclusions might arise from comparing results. 

As stated before, this is only the first part of the discussion. What would follow with the main conclusions is to set action points that leverage on the sponsors, and to further investigate solutions to the challenging collaboration points.

The mystery of the opposed KPIs

Once having the collaboration map in mind, it’s time to analyse the drivers that are behind the collaboration dynamics. These drivers are clearly represented by the KPIs. “Tell me how you’re being measured and I’ll tell you how you behave”. This phrase comes to mind in many situations while structuring innovation in collaboration. 

On one occasion I came upon a situation where the Department X was having problems implementing an innovation project. While trying to understand what was happening it turned out to be that one of the teams of Department Y in the same business unit was being affected. Department Y received a bonus award for the amount of solutions to problematic situations with customers. Because of the innovation implemented by Department X, there would be a drastic reduction in problems, and consequently, of the bonus for Department Y. Of course the innovation project would increase customer loyalty and diminish attrition, and therefore the business unit income - and ultimately the company’s bottom line - would increase, but the reality was that the bonus of team Y would be affected and that affected their interest to the extent of asking for the project to stop. By transforming or complementing the KPI used for the bonus calculation, and including customer satisfaction and growth, all teams can be aligned and finally rowing in the same direction. 

But how to identify conflicts between KPIs? Let’s begin with a broad analysis.

The “KPI Mapping” Canvas

As you might’ve anticipated, I present you with another canvas. I call it the “KPI Mapping” Canvas. It’s an Open Innovation management tool that allows you to analyse, discuss and understand the KPIs at different levels, time frames and to identify gaps and action points.

Created in 2019, this is the second updated version of the canvas. You can download the format here

*Creative Commons Licence: OThe “KPI Mapping” Canvas by Marisol Menendez is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Based on a work at marisolmenendez.com. Permissions beyond the scope of this license may be available at marisolmenendez.com.

Not all KPIs act at the same level

One of the challenges while implementing an Open Innovation process is to keep steady support from management and teams involved in the long-term. Also, it might be challenging to engage teams to collaborate if there’s not a direct affection for their committed results. 

In all sessions I’ve facilitated when we talk about KPIs and begin with the brainstorming, the first KPIs to appear are the money-related ones. The tricky part about using only financial indicators, is that money is a short term reality, and while the projects are “in the oven” they’re not producing immediate economic results. Moreover, when we’re talking about innovation, there’s uncertainty attached to these projects. And finally, even if the final objective of the innovation efforts might be for the organization to survive and generate benefits, other factors affect the future quality of the organization such as learnings, skills, culture, customer loyalty.

So, I propose to make an active exercise to bring to the attention of everyone involved with other important KPIs. Not only from the Innovation projects, but from the organization itself and the teams involved. Because not all KPIs act at the same level.

• Financial Indicators: Beginning with someone everyone understands, here are included all indicators related to investment and return from that investment. KPIs such as Profit and Loss contribution, financial return over investment, percentage of budget allocated, etc.

• Customer Engagement: Those related to the capacity to retain and acquire customers. Might be a measure of the customer centricity of the company. Here there are KPIs such as NPS, customer satisfaction, loyalty, attrition, etc.

• Innovation activity: Related to the business and innovation projects per se. We can include KPIs such as project performance, time-to-pilot, time-to-market, portfolio diversification, etc.

• Influence and Network: KPIs related to the generated impact (inside and outside the organization) and the connectedness, such as: brand positioning, partners network, time-to-partnership, social impact, etc.

• Organizational Culture: To measure impact in the culture of the members of the organization and those connected to it. These are critical and frequently overlooked indicators. Examples can be measures of learning, improvement of inefficiencies, happiness, team attraction (or the negative side from it, the turnover).

Contribution to the future from today 

Another challenge while implementing an Open Innovation process is to show how the innovation projects are shaping the future. For example, to create one successful disruptive product in two years, we would need to experiment with several pilots, and for that, we would need a bigger number of ideas. This funnel also applies to other objectives as learning or even customer engagement. That’s why The “KPI Mapping” Canvas has three temporal dimensions: short term, mid-term, and long term. The exercise is to show how the evolution of KPIs and how in the short term other KPIs might be building the KPIs of the future.

Strategy, Innovation, and Organization

Finally, another aid to identify the KPIs involved. Think of those KPIs who are closer to the strategy and thus will be a good tool to show the storytelling of the objective contribution and alignment. Identify those indicators related to the innovation activity and their evolution towards the consolidation of these innovations into business-as-usual. And finally, consider those KPIs contributing to the growth and evolution of the organization.

Filling The “KPI Mapping” Canvas

My advice is to give each participant one set of colored sticky notes, each color representing a KPI type. First, write down all KPIs you can think of and then try to set them in the right place of the canvas. Then take a look at the canvas and think of the gaps: is there too much of one color? Is a time horizon emptier than others? And is any of the 3 horizontal variables unbalanced? It doesn’t mean that everything should be full of notes, but question yourself if this is how it’s supposed to be, or if it points out towards a line of action.

Here you can find an example of how a fulfilled canvas might look like.

Happy body, happy mind

As you can see, this chapter talks about different dynamics to understand how an organization is integrated and aligned. It’s about doing introspection, and understating if what we’re doing, how we’re behaving, and how we’re organized is helping to achieve our goals as an organization.

Someone once told me that this is as if you’d wish to be a marathon runner, and you never train, nor have a healthy lifestyle. 

Misalignment brings tension, anxiety, and suffering. And it echoes around the organization, with unsuspected effects. Conversely, alignment brings efficiency, satisfaction, and better results. The key to these exercises is to look at the others in our organization and look at the world from their point of view. In this way, we will understand better behaviours and limitations, and have more tools to propose alternatives that will resonate with other teams and engage them.

I like to think of this as an integrity exercise. The word integrity evolved from the Latin adjective integer, meaning whole or complete. In this context, integrity might be the inner organizational sense of "wholeness", of consistency. And as Marie Kondo says, “this will spark joy”. (3)