The Hindu Business Line : The Rashomon Effect

Just as reality is interpreted differently, innovation has several facets. So much so that managers risk getting focused on only one element - the one that they are familiar with.

Innovation involves an element of risk, but if there's no support, expect your managers to go down the safe road.

It's a $3-billion conglomerate with a global footprint, intent on revitalising its innovation strategy. The energetic CEO talks to me about his plans for an innovation department, using dramatic hand waves to paint the big picture. "I don't want a bureaucracy pottering around with small incremental stuff," he says. His plot: to find the "best brains around, toss them together to form an innovation team, let them be — no structure, no direction." He believes that motivated people will bring in energy and momentum to a moribund department, and "things will happen". "I don't want stacks of reports, I want big stuff, products that can alter the top line, quick growth, big stuff," he repeats, snapping his fingers for effect. It sounds heady and exciting. It's easy to get a sense of what he wants to achieve, but not exactly how the innovation boffins are going to deliver. To understand that, I decide to go around a few of the other departments.

I toddle next door, to the head of human resources. Here, a considerably muted response greets me. The HR Head listens to my reiteration of the CEO's vision and nods. How does he see this self-evolving department organising itself, I ask. His answer - an enigmatic shrug. Then he gets up to the whiteboard and sketches out the organisation chart as it existed a few months before. Boxes appear all over the whiteboard with arrows and dotted lines joining them in a complex network of relationships and responsibilities. Next, he picks up a red marker and begins drawing bold X marks, illustrating the swathe of actions that accompanied a restructuring programme. He stands back and looks at the final picture. Then he draws a fresh box and puts a big question mark in it and turns to look at me. "Where are we going to place this department, that is one of the questions we are still to answer."

My next interview is with the Head of Marketing. His take on the whole new innovation department is breathtakingly simple: "We don't need a division like this. What's the point of having a department that looks at insights and trends and ideation? That's our job. And anyway, they don't have the budget to test and research. We do. We should just outsource this function."

My diagnostic then takes me through the labyrinthine maze of the R&D department and of the strategy team. The scientists, pleased to find someone from the innovation department actually wanting to elicit their views, want urgent help in mapping competitor R&D competencies. The strategy team confesses that in the absence of a broad direction they have been occupied in providing business intelligence rather than on looking for new business insights meant to unearth "the next big thing". The impact of the restructuring has taken its toll - so many middle managers have been made redundant that almost all the tacit knowledge in the department has been wiped out. The morale is palpably poor, and the search is clearly on for "safe" jobs, those that will survive the next looming round of restructuring. Four months later I find that my predictions of further employee turnover have come true, creating even more lacunae across managerial layers.

Clearly, the CEO's dramatic new vision has yet to percolate to the lower levels of the pyramid. Yes, some snazzy Powerpoint presentations have been made, but there has been no communication that really mattered. What is the role of each supporting department, will the innovation department (as the "new kid on the block") be the first to go in a future restructuring, will people be rewarded rather than penalised for making a risky career move - none of these questions have been addressed.

In the absence of these answers, the different elements of R&D, competitive knowledge, organisational structure, marketing-innovation relationships are far from creating a cohesive, aligned roadmap. Instead, they are pulling away, motivated by the different concerns of key managers, propelled by a dichotomy between the overarching organisational agenda and the narrower departmental vision.

One clear takeaway from my research into innovation, including both extensive literature survey and talking to scores of managers, is that the management of innovation suffers from the Rashomon Effect. In Akira Kurosawa's film Rashomon, observers of an event give substantially different but equally plausible accounts of it, illustrating how perspective distorts reality. In much the same way, the concept of innovation appears to have so many facets that players risk getting focused on only one element - the one that they are familiar with.

And then there is the question of risk-taking. How can managers be expected to "free-float", "without a structure", when the implicit message from the restructuring is that personal survival depends on finding a "safe" department.

All in all, if the big idea is to go anywhere, it needs to be communicated to the team explicitly, and in a manner that is consistent with the message implicit in the organisation's actions. Each department needs to understand its role in making the big picture happen. And, managers need to be reassured that when the organisation is asking them to take risks, it will stand behind them if they fail.

(Radhika Chadha is a consultant in strategy and innovation. Karate-gy is the proprietary name of the strategic exercises conducted by Paradigm Management Knowhow Ltd.)