Cross-Silo Exploitation/Exploration

IT-driven hyperconnectivity continues to increase the need for and challenge of creating cross-silo capabilities. James Cash, Michael Earl, and Robert Morrison present an interesting proposal in their November 2008 Harvard Business Review article entitled "Teaming Up to Crack Innovation & Enterprise Integration."

They propose two small/agile enterprise-wide groups engage in cross-silo Exploration and Exploitation; called the Distributed Innovation Group (DIG) and the Enterprise Integration Group (EIG) respectively. Each group is more of a catalyst than a traditional matrix. The authors note that "businesses are better at stifling innovation than capitalizing on it," and "better at optimizing local operations than integrating them for the good of the enterprise and its customers."

Since innovation is distributed across the business, the DIG focuses on "fostering and channeling" cross-silo innovation rather than being responsible for it. And, the EIG prioritizes and provides resources for cross-silo horizontal integration projects.

The DIG:
- "Scouts for new ideas and untapped potential in current technologies"
- "Scans…for emerging technologies"
- "Facilitates participation in idea forums"
- "Acts as a center for innovation expertise"
- "Publicizes [and incubates] promising innovations"

The EIG:
- "Manages the corporate portfolio of integration initiatives"
- "Serves as the corporate center of excellence in process management and improvement"
- "Provides staff to major business integration initiatives"
- "Is responsible for enterprise architecture"
- "Anticipates how operations might work in a more integrated fashion" \

The article also discusses what the groups are not, and explores in some detail what capabilities are needed to form and deploy them. Integration work is discussed in more detail than Innovation…perhaps because it is more amenable to traditional management techniques.

Six sets of skills are identified as central to Integration:
- Familiar with business process design/improvement
- Experience with cross-functional systems implementation
- Competence in architecture analysis
- Expertise in information management
- Experience in program management
- A talent for relationship management

They note that the last skill is rare, but essential to "open people’s eyes to the possibilities and benefits of horizontal integration and to enlist their commitment to making integration happen."
Finally, they note that the DIG and EIG groups are similar:
- "Each is a collection of catalysts"
- "Neither offer direct solutions"
- "Both lead through relationships, communication, and targeted expertise"
- "Networking is an essential activity for both"
- "Both focus on adding customer value"
- "Most members must be trilingual…in the languages of business, IT, and sociability"
- "They must know the organization"

The details proposed in this article seem reasonable and implementable, though I suspect that more innovation may arise from the EIG than the authors seem to anticipate.

My guess is that the most difficult challenge will be getting these groups institutionalized as effectively carrying out their duties. Strong top management support and staffing by top-notch personnel who are already carrying out these functions would seem to be essential if they are to have any chance of success. I suspect many large organizations will find it difficult to pay the opportunity cost required to make these groups successful.