How to Accelerate and Sustain Business Innovation? #22 #cong17

By Bernard Chanliau

Only 3% of StartUps go on to Scale-Up (EU Start-up and Scale-up Initiative) - How to accelerate and sustain business innovation?

I have the privilege of working with some of the most innovative SMEs in Europe funded by the European Commission through the Executive Agency for Small and Medium-sized Enterprises (EASME) in their H2020 programme, the EU Framework Programme for Research and Innovation. 

My speciality expertise is OD (Organisational Development) coaching inclusive of 121 leadership developmental coaching as a Professional Certified Coach (PCC) accredited by the International Coaching Federation (ICF) as I'm not a consultant, trainer or mentor, although these change management learning channels can overlap to a certain extent pending client projects. 

OD Coaching aims to mobilise the tangible and intangible resources of the SME to ensure the efficiency and performance of the company organisation. 

I help companies innovate through conversational leadership using teams as a learning vehicle channel. My Organisational Coaching sweet-spot is the upscaling-expansion life-cycle stages of SMEs, where they need to upgrade their own internal operating systems and raise their level of leadership consciousness.

This means I work from the inside-out - focusing on the Senior Management Team (SMT) alignment of purpose (Why are we doing what we’re doing?) - Vision (How will we recognize the final destination?) – Mission (What are we about?) – Growth strategy (How will we get there?) and the required leadership micro-skills to execute (Management/ organizational capabilities - What structure is best or What do we need to get there?...etc.). with the main coaching outcomes aimed at bringing their innovation to investment readiness and maturity for market take-up.

As mentioned previously within my core competency sweet-spot, most of my SME clients are scaling up and growing internationally – this is a critical phase as I’m not working within the seed phase or early stages of funding in innovation. Companies that reach this stage have usually figured out their innovative product solutions, their markets and know about its potential and the growth they need to reach this potential. 

A Scale-Up is a company who has an average annualized return of at least 20% in the past 3 years with at least 10 employees in the beginning of the period (OECD, 2007) and can be identified as being in the "growth phase" life-cycle in the Millers and Friesen (1984) life cycle theorem, or the "Direction phase" in the Greiner growth curve. 

I’m attracted to this vertical market because of the passion, fire, enterprising culture of my clients and more importantly because they represent the future of industries and job creation in Europe. A lower Start-Up failure rate could have profound economic consequences. 

Innovative, chaotic, enterprising Entrepreneurship and managing a Scale-Up in order to optimise revenue growth are not separate because entrepreneurism is management. There are several dimensions to the idea of scaling such as growing your revenue and customer base and of course if you don’t get this right, then nothing else matters. But very few businesses can succeed on those innovating fronts without also scaling the organization.

So how can the Senior Management Team (SMT) keep Entrepreneurialism (i.e. innovation) and Management Disciplines adopted within their growth phase? 

Research and my lived experience of coaching EASME H2020 Phase 2 Scale-Ups across Europe shows the biggest barrier to innovation is the suppressive effect of culture and leadership. 

In every Phase 2 engagements it’s clear that the means to address key strategic challenges, mainly scaling the HPSU, already exist within the organisation. However invariably there are factors which get in the way – such as next round of funding or hiring functional experts but the main one I found is the ‘professionalising of the organisation’ – the upgrade of its operating system led by the Senior Management Team (SMT).  Many of these issues are solvable but not by individuals on their own.

Bernard Chanliau #22 Culture SME2

It’s widely accepted that the biggest barrier to innovation in companies is the suppressive effect of culture and leadership but by taking a more strategic approach to coaching and mentoring, it’s much more likely that they will address these difficult challenges. 

For example, the majority of the Senior Management Teams I coach see themselves as a – pseudo or potential team on the Katzenbach team performance curve (see Phase 2 client examples from pic).  Katzenbach and Smith define a Real Team as “a small group of people with complementary skills who are committed to a common purpose, performance goals and approach for which they are mutually accountable”.

Bernard Chanliau #22 Overall clients Katz

A Pseudo Team doesn’t want to take the risk of committing to a common purpose and the mutual accountability that this entails and a Potential Team are working towards a higher level of performance and must agree on mutual accountability.

One of the most distinguished thinkers and academics in the area of organizational culture is Edgar Henry Schein, a professor at MIT. He is generally credited with creating the term corporate culture. “Changing a culture is a matter of leadership, and the most effective and efficient architect of the culture is the most senior leader of the organization, typically the CEO. Schein argues that leadership is the creation, management and, at times, the destruction and reconstruction of culture. In fact, he says that the “only thing of importance that leaders do is to create and manage culture.”

Only 3% of start-ups go on to scale-up and the most impactful way to coach a HPSU is through actively surfacing the conversations about what is happening in the SMT in order to get collective buy in.  Their reactions and resistances to this, and to naming or seeing the unspoken, will inform much about their readiness to scale.  The other aspect is to coach each leaders on their leadership skills such as influence, resilience and strength to lead others into and through this extreme disequilibrium – first they, themselves have to be fit for the journey.

Deep change that generates ongoing adaptiveness is a phenomenon with exterior and interior dimensions and by working from the inside-out as oppose to the common outside-in approach I listen for a lack of alignment between purpose-vision-mission and strategy – the process of leadership (interior culture of SMT).

This miss-alignment will usually highlight gaps between structure and processes within the collective and by identifying these gaps early on; it helps me to adjust the learning outcomes of the coaching process by taking steps to codify and reinforce organisational culture and leadership. 

CongRegation © Eoin Kennedy 2017 eoin at congregation dot ie