Partnerships Spur Innovation Capacity: Secondary Operating Systems as Innovation Catalyst
Most organizations are not designed to be innovative. Compounding this, over time a natural tendency of institutions is to become more siloed and insulated from outside pressures, stimuli and disruptions. This socialization process mitigates against flourishing innovation capabilities. Good ideas, says Steven Johnson in his book Where Good Ideas Come From, “want to connect, fuse, recombine…to reinvent themselves by crossing conceptual borders... When one looks at innovation in nature and in culture, environments that build walls around good ideas tend to be less innovative in the long run than more open-ended environments.”
In other words, we need porous organizations. “Organizations with porous boundaries,” explains the nonprofit consultancy Bridgespan, “have leaders and structures that encourage the free flow of ideas and information within the organization and between their organizations and the outside world. They actively fight against the intellectual insularity that often develops within teams, silos, and organizations.” The pace of change in the 21st century is making unrelenting demands on organizations to be able to change and adapt. If a leader is interested in introducing more innovative mindsets, approaches and change-producing processes, what are strategies he or she can pursue?
One option is to establish a “secondary operating system,” a strategy developed by Harvard’s John Kotter. While all organizations have a primordial focus on their primary goals and role, they can find a way to create a secondary, or dual, operating system that allows them to pursue new ideas in a context relieved of the pressures of the primary operating system.
“The solution,” writes John Kotter in Harvard Business Review, “is a second operating system, devoted to the design and implementation of strategy, that uses an agile, network-like structure and a very different set of processes. The new operating system continually assesses the business, the industry, and the organization, and reacts with greater agility, speed, and creativity than the existing one. It complements rather than overburdens the traditional hierarchy, thus freeing the latter to do what it’s optimized to do.”
Kotter has developed a set of principles to empower a secondary operating system approach including: creating urgency around a big opportunity, establishing a volunteer team of passionate people capable of overcoming institutional barriers by tapping into many change agents, giving them real permission to innovate and lead, identifying and re-moving barriers to change, and ensuring the organization sustains two systems maintaining a dynamic flow of information and activity between them.
Stephen Huddart, President and CEO of the McConnell Foundation, developed a variant of Kotter’s secondary operating system. As he explained at the 2017 SIX Funders’ Node, he used McConnell’s active participation in the Social Innovation Generation (SiG) partnership (2007-2017) as the foundation’s complementary system and source of new ideas. SiG’s partners (which besides McConnell included a university, an innovation convergence hub, and an innovative nonprofit) explored and experimented in depth with many new ideas including: social finance and mission-related investing, social innovation labs, social innovation education and acceleration programming. Through its involvement in these SiG activities, McConnell was exposed to many new ideas and connected with practitioners leading proven innovations. SiG became a gateway through which new ideas and new relationships enriched and empowered internal McConnell changemakers and shifted culture.
In turn this led to new experiments being pursued directly by the foundation’s staff. They covered grantmaking, capacity building, program research and program prototyping. SiG became a type of on-demand resource that provided not just a wealth of ideas but more direct access to personal advice and coaching for McConnell initiatives and change processes.
The result? Today McConnell is recognized as one of Canada’s leading practitioners of social innovation through grantmaking, capacity building, policy advocacy, multi-stakeholder initiatives (on topics as diverse as climate change, mental health, food security, etc), and open-sourcing its experiences, new policies and procedures with its peers.
“The inevitable failures of single operating systems hurt us now, they are going to kill us in the future. The 21st century will force us all to evolve toward a fundamentally new form of organization…”
says John Kotter. Secondary operating systems are a valuable means for social purpose organizations – as well as businesses – to make these transitions.