INSEAD The Business School for the World INSEAD is one of the world's top business schools, with a unique diversity of participants, faculty and staff. It has equal status campuses in France, Singapore and the UAE, an alliance with The Wharton School, USA, thus giving us a presence on four continents. INSEAD is globally recognised for excellence in management education and has inspired generations of transcultural business leaders for more than 50 years. Every year our 137 renowned faculty members from 35 countries teach more than 1,000 degree participants in our MBA, Executive MBA and PhD programmes. In addition, more than 9,500 executives participate in INSEAD’s executive education programmes. We have programmes on entrepreneurship – the entrepreneurship bootcamp is an example, family business – managing succession is an example, and governance, getting ready for private equity investments is an example.

What we will do today: Discuss issues facing family firms as they try to enhance their capability for innovation: Watch a video about design firm IDEO. Discuss the video in terms of the contrast between and old approach and a new approach to central activities of the firm. What does the video suggest about structure and how the firm should be organized? What does the video suggest about how work and people should be controlled? What does the video suggest about the extent to which leadership should emphasize process as opposed to outcomes?

IDEO DESIGNS A CUBICLE IDEO is a superlative exemplar of how to create social knowledge that becomes a competency difficult to imitate. “What we do together” as a capability that can make the family firm more innovative. What are the implications for organizing? What are the implications for controlling? What are the implications for emphasizing process as opposed to outcomes?

ORGANIZING TO ENHANCE INNOVATION The old approach: Expert design to avoid politics. Experts know best. Broad participation too costly. Design focuses on technical features. Up-front goals facilitate design process. A well-designed system implements seamlessly. The new approach: Involve employees to encourage buy-in. Broad participation in design ensures that structure supports tasks. Enablement goals as important as technical. Prototypes tested with real workers in real tasks. System encourages feedback for improvement.

CONTROLLING TO ENHANCE INNOVATION The old approach: Performance standards highlight bad outcomes. Standardization to reduce gaming and monitoring. Employees kept out of the control loop. Instructions should be followed not challenged. The new approach Best practices highlight routes to great performance. Customization highlights training needs and allows flexible improvisation. Mental models of involved employees guide design and control. Systems are best practice templates that need constant improvement.

PROCESSES TO ENHANCE INNOVATION The new approach Skills: focused on know why, problem- solving, broad and deep, training is an investment. Procedures: are enabling disciplines, emphasize 360 degree intelligence. Structure: mutually supportive specializations based on expertise and shared control. Strategy: process ongoing and participative, emphasizes required capabilities and functions. Culture: emphasizes learning, collaborative control: Some trials will be errors. The old approach: Skills: focused on operational know- how, narrow and specialized, training is a cost. Procedures: emphasize top down control even at the cost of constraints. Structure: Fiefdoms, positional authority, and top-down control. Strategy: identifies desired results at business level in top-down process. Culture: emphasized command and control and punishes mistakes.

TAKE AWAY POINTS Enhancing innovation by: By changing the approach to firm structure. By changing the approach to control. By focusing on processes, not just outcomes. Which of these fits your business?

Final thoughts We would be very interested in collaborations: Case studies: Private equity, entrepreneurship, and SMEs. Acquisitions, domestic or global. Succession and innovation at family firms. Research workshop: succession in family firms. Ongoing project: Corporate social responsibility at family firms.