Big companies are good at innovating within silos, but woefully bad at combining creative energies across divisions to build new businesses. The problem, we believe, is structural: Business-unit boundaries exist precisely because they create efficient structures for executing strategy. But silo focus and ruthless efficiency come at the cost of cross-divisional collaboration, so some innovation opportunities are either poorly executed or not seen at all. The solution, we think, lies not in reorganization but in informal communication through the social networks that exist throughout the company. These networks must be shaped and cultivated to efficiently find and exploit innovations.
Authors: Adam M. Kleinbaum, Michael L. Tushman
Source: Harvard Business Review
Subjects: Innovation, Management, Organizational Behavior