Article summary with 10 Rules for Managing Global Innovation by Wilson and Doz - 2012

Companies know that in their global operations many new ideas and capabilities for innovation are hidden. However, it is rather difficult to exploit these new ideas and capabilities in global innovation projects, and companies also face several familiar challenges. Whereas challenges are familiar, solutions are not, as one solution might work in one area but not in the other. A part of the challenge of global innovation is how to duplicate the positive aspects of co-location while harnessing the one of a kind benefits of global initiative.

Companies know that in their global operations many new ideas and capabilities for innovation are hidden. However, it is rather difficult to exploit these new ideas and capabilities in global innovation projects, and companies also face several familiar challenges. Whereas challenges are familiar, solutions are not, as one solution might work in one area but not in the other. A part of the challenge of global innovation is how to duplicate the positive aspects of co-location while harnessing the one of a kind benefits of global initiative. The following is a set of guidelines that represent the foundation for successful global innovation projects.

1. Start small

It does not matter if there are very strong technological capabilities or a lot of customer knowledge at a particular site, as employees will struggle to contribute to a global project if they have only had experience in co-located development. This is because employees working in one location develop collective tacit knowledge and shared context, resulting in trust and confidence among co-workers. Projects taking place in multiple locations encounter differences in workplace practices, communication patterns and cultural norms, which might create tension. In order to be effective, dispersed teams need to establish a new set of collaboration competencies and create a collaborative mindset.

2. Provide a stable organizational context

When an organization undergoes major organizational change, the complexity of dispersed innovation escalates. In a climate of organizational uncertainty, project team members may become worried about job security and lose focus. Logically, it is impossible to only undertake global innovation projects when there is organizational stability. Managers should anticipate the side effects of reorganization on global innovation, and focus on creating an atmosphere of stability and boost the employees’ sense of self-worth and loyalty to the firm.

3. Assign oversight and support responsibility with a senior manager

When the knowledge base of a project is fragmented and project teams are scattered over several locations, issues are more likely to arise. It is difficult to handle these issues over a large distance, as disagreements can become personal. Therefore it is wise to create an explicit role for senior executives in projects, as this person can monitor progress and make key decisions to make sure that the project meets the firm’s strategic objectives.

4. Use rigorous project management and seasoned project leaders

A global innovation project needs a strong project management team to drive the project on a daily basis and strong team leaders supported by robust tools and processes. Firms can for example adopt rigorous quality programs to provide formal project management for global projects, or guild a corporate project-management capability. Keep in mind that global innovation projects are so complex that standard tools and procedures don’t always work well.

5. Appoint a lead site

In global innovation projects, one site will have to take the lead, as all sites can’t carry equal weight. This site is responsible for delivering the project on time and on budget.

6. Invest time defining the innovation

One of the benefits of co-location is that continuous learning and adaption can take place, allowing the design of the project or service to improve over the course of the project. In global innovation projects, everything has to be defined beforehand, in order for everyone working on the project to have the same understanding of the goals and their individual contributions to them. There is a positive correlation between investment in defining goals and technical specifications and the successful outcome of projects. Also, a global project cannot be effectively defined without some degree of co-location between the multiple functions and sites involved.

7. Allocate resources on the basis or capability, not availability

Effective staffing of a global project requires a lot of attention as to select and integrate the best possible knowledge and capabilities. A mistake many firms make is that they select teams based on availability opposed to capability. This is conflicting with the main goal of global innovation, which is to gather distinctive and differentiated knowledge and capabilities from around the world to create unique innovations.

8. Build enough knowledge overlap for collaboration

There has to be a certain degree of knowledge overlap between sites, otherwise critical interdependencies between modules may not be apparent until the integration phase, when problems are costly to correct.

9. Limit the number of subcontractors and partners

Managing relationships with external partners takes time and energy, so it makes sense in international projects to limit the additional complexity and management burden by keeping the number of subcontractors or partners to a minimum. Also, the subcontractors and partners have to be chosen wisely.

10. Do not rely solely on technology for innovation

Information and communications technologies have a role to play, but these tools should not be over relied on, as they tend to hide differences between locations, leading to misunderstandings and tension. Communication, especially in global innovation projects, should include face-to-face contact, in order for projects to run smoothly. It is important to keep in mind that one way of communication is not the best, it is the combination of multiple communication devices that will lead to success.