Innovation and Product Development
This topic, Innovation and Product Development, describes how advances and improvements occur in Teal organizations.
A New Perspective
One of Orange’s shadows is “innovation gone mad.” With most of our basic needs taken care of, businesses increasingly try to create needs, feeding the illusion that more stuff we don’t really need— more possessions, the latest fashion, a more youthful body— will make us happy and whole. We increasingly come to see that much of this economy based on fabricated needs is unsustainable from a financial and ecological perspective. We have reached a stage where we often pursue growth for growth’s sake, a condition that in medical terminology would simply be called cancer. 
For Teal organizations, the impetus for innovation stems from an organization’s evolutionary purpose. The concept of innovation expands beyond benefit to the organization and is not approached through the traditional lenses of profit and competition. To evaluate if an innovation is worthwhile, Teal uses a wide range of evidence of beauty, creativity and ultimately service to the organization's purpose and therefore to society.
For more on innovation and product development in earlier stage organizations:
Red organizations are opportunistic and adaptive in response to their circumstances, but without organizing specifically for innovation.
Amber organizations value predictable processes. Their sustained existence is tied to the maintenance of proven tools and roles. Innovations are adopted, cautiously, after top-down endorsement.
With Orange, innovation becomes a core practice. It is necessary to stay competitive. At the organization level, there is investment in R&D. Research centers might be established. At the operating level, units are encouraged to be creative in how they achieve their targets. All these activities are subject to review in the regular operating and strategic planning cycles.
Green organizations are values-based. This colors their approach to innovation. It’s not only about making money, but about also serving their greater purpose. This is reflected in product development/selection at, say, a place like Whole Foods. And it encourages service level initiative—as at Southwestern Airlines. Their multi-stakeholder view encourages them to find novel approaches to labor relations, employee empowerment, customer service, shareholder interests, and the communities of which they are a part.
In Teal, the focus is to find better ways to serve the organization's unique sense of evolutionary purpose, rather than out-think the competition. Members are encouraged to “listen” for opportunities, and test these via the advice process. This means ideas must be discussed with knowledgeable colleagues. In this environment, anyone, and everyone, can be an innovator.
Design for Life, Beauty, Benefit
Product innovation in traditional companies is commonly the result of exhaustive analyses of customer segments, buyer behavior and the competition—a very ‘left-brain’ approach.
In Teal, the source of innovation is more ‘right brain’. It is spurred by purpose, and arises from ‘listening’ for what seem to be the right offerings. It attempts to answer these questions:
- “What product would we be really proud of?”
- “What product would fill a genuine need in the world?”'
- “What product or service are we uniquely capable of providing?”'
These reflections are guided by intuition and perceptions of beauty. They can also be supported by structured design practices that are intended to catalyze empathetic thinking. An example is the concept of "design ideation"This is a process where frontline workers spend long periods out in the field, observing how their customers are using their products and services.
Innovation at the frontlines
Any frontline person can act on insights gained from working closely with the customer and therefore having a deep understanding of his or her needs. With Teal self-management, there is nothing to hold back a good idea from being pursued if it has use for customers and if its pursuit adheres to the advice process.
New insights and practices are systematically shared through Teal Organizations, often through an intranet or wiki. Through sense and respond and various practices supporting evolutionary purpose, these successful innovations can potentially be adopted quickly throughout the organization.
Innovation impacts whole organization
Emergent innovation does not just follow organizational purpose but may impact the evolutionary purpose of a Teal organization, shifting its impulse into a new direction and potential.
Frequently Asked Questions
In Teal organizations decision-making is bounded by the advice process. Anybody with strong skills in a particular area can contribute, irrespective of position, and this is certainly true with respect to innovation. However, the Teal paradigm also confers on all decision-makers the obligation to respect the advice process and consult with appropriate individuals within the organization. This does not mean that everyone consulted has to agree with a proposed innovation, only that his or her advice is considered. To the extent that Steve Jobs’ success as an innovator was facilitated by his working in a conventional hierarchical structure and his consequential ability to make decisions unilaterally, this might lessen his effectiveness in a Teal organization. However, at the same time, the collective innovative intelligence of the entire organization is unleashed under Teal, making it not nearly so dependent on the contributions of a single individual.
All three Teal breakthroughs are supported by the practices and principles for Teal innovation and product development.
Self management allows anybody to innovate and develop improvements in products and services with minimal delay. The empathetic understanding that frontline staff have for their customers can be used to act on observed needs.
Wholeness is integrated into the design and product development process through a "whole brain" approach. Teal innovation designs for aspects such as beauty and through intuition as well as more traditional market or customer analysis.
In Teal, innovations are selected first and foremost based on fit with the organization's purpose. Furthermore, innovation plays a key role in the evolution of that purpose.