26 Feb

The debate over Brexit – does distance matter?

Europe for blog

The debate concerning Brexit, whether Britain should leave the EU, has well and truly begun. The Financial Times has published a short debate over the issue, between the Labour politican Peter Mandelson and Conservative MEP Daniel Hannan. During the debate, Daniel Hannan, arguing for Brexit, says that geographical proximity has never mattered less. There is, therefore, no reason why Britain should prioritise trading with those closest i.e. Europe; instead Britain should focus on trading with the rest of the world. With open global markets, rapid transportation and high speed communications, geography simply doesn’t matter that much anymore.

It might be true that geographical proximity has never mattered less but it is not the case that geographical proximity is unimportant. A recent study on ‘The Impact of Venture Capital Monitoring‘ shows just this. The authors show that venture capitalists’ “on-site involvement with their portfolio companies leads to an increase in both innovation and the likelihood of a successful exit”. Specifically, direct flights increase the interaction that venture capitalists have with their portfolio companies and management, helping them to better understand the companies’ activities.

So regular face to face communication between venture capitalists and their portfolio companies led to increased innovation. In an earlier blog we focused on cluster initiatives to show the link between face to face communication and innovation. The important point there, as in the case of the venture capitalists, is that the innovation is a result of the greater communication possible in face to face encounters.

The fact that direct flights increase interaction is clearly because of the reduced time it takes. It is also the case that the closer two countries are, the shorter the flight between the two. Therefore, geographical proximity is not irrelevant.

While open global markets, rapid transportation and high speed communications mean that it is easy to do business with anyone in the world, it is not true that physical distance is irrelevant or unimportant. Distance is still important because face to face communication is so important. Physical encounters lead to greater connectedness; high levels of directness lead to good quality communication. Whatever one’s views about Brexit, physical proximity still matters, because physical proximity affects relational proximity.

Joshua Hemmings works for the Relational Thinking Network in marketing and communications.

Image: Blank_map_of_Europe_(polar_stereographic_projection)
_cropped.svg: Ssolbergjderivative work: Dbachmann (talk) – Blank_map_of_Europe_(polar_stereographic_projection)
_cropped.svg, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=14871393

21 Nov

Relational strength feeds innovation and implementation

Heads

LIVERPOOL/CAMBRIDGE – Many organisations struggle with innovation. This article argues that taking a relational perspective can be very strategic in encouraging  and disseminating innovation.

Many organisations want to encourage innovation but not at the expense of maintaining high quality standards and consistency. Paradoxically, policies to reward innovation sit alongside processes which stifle it. Where such tight organisations excel at transmitting standards and ideas rapidly, they often struggle in being flexible enough to explore new ideas. Selection and dissemination of ideas is centralised, innovation relegated to a central function such as Research and Development and additional resource then spent keeping the central function connected to the frontline of the business.

Once innovation is created in a tight organisation, transfer and implementation of the knowledge tends to come through changing policies and processes. Employees at the frontline then have to find a way to make it work in their own context, perhaps recognising flaws or even identifying enhancements in the process. With the tide of innovation flowing outwards, such feedback (in a large organisation) rarely makes it back to the innovation department intact. Subjective interpretation along the way can adjust the insight as it is transmitted, changing both its meaning and its power (think summary evaluation results translated into a board paper minute and passed on). This is especially accentuated in an international context with added ingredients of language, culture and history.

At the other extreme, organisations may naturally innovate, but have such a loose structure that developments aren’t recognised broadly enough or replicated. Individuals and small teams experiment on the frontline, addressing their own problems, ignorant as to whether a solution already exists or what benefit their approach might hold for others. These looser organisations struggle to recognise new ideas or to identify their application elsewhere. Introduction of best practice and successful translation of innovation into other contexts is challenging. In an international context, head office may be unaware of the extent to which regional teams are conforming to standards. Periodic field trips by senior team members give the impression of organisational identity without addressing the underlying disconnection.

Taking a Relational Perspective

Relational Proximity® provides a framework for recognising and managing real world relationships. Within its five domains of Power, Information, Communication, Purpose and Story are many nuanced features, but even at the highest level, the framework has much to say about the role of relationships in encouraging and disseminating innovation.

Relational Proximity® suggests that not only are most relationships more effective if they are close but also that the distance can be managed and adjusted over time. A relationally fluent organisation is able to responsively adjust the proximity of different relationships over time. It can intentionally flex each of the domains within both direct and indirect relationships. Here, we illustrate the point with two of the available domains:

Information – central to the relevant people becoming aware of the relevant issues and being enabled to bring change. Data driven Knowledge Management solutions, however sophisticated, cannot replace the contextual knowledge required to draw together appropriate people, processes and ideas in new and relevant ways. The value of direct engagement together is far greater than documented information. Is your organisation able to recognise and draw together the relevant people sufficiently that they become aware of each other’s challenges, roles, skills and motivations? Is the relationship close enough that the challenges matter to the people who could help innovate or who have already solved the problem?

Power – an important dynamic that can encourage or hinder the flow of ideas and solutions. Influence is different from responsibility. Fluidity in influence does not mean that the standard accountability structures are removed but rather that there is the ability to properly listen and engage with what is happening up and down and across the organisation. By allowing and encouraging a back and forth flow of influence, power is effectively managed and harnessed to allow maximum innovation. Does your organisation skew what can be heard through its reporting lines? Can influence truly flow through those reporting lines? Can the lines of influence cross reporting lines or are there mechanisms militating against cross structural influence? What are the consequences of doing things differently or even wrong? Do people truly succeed if they help others succeed?

Taking it Further

If you have read to this point, then you are probably in a situation where you long to see more innovation in your organisation. Reading more about Relational Proximity® may help a little, but our view is that you need to get closer to people who can help your organisation transform its relational culture. Our experienced team use tools, workshops and coaching to get the relevant people closer and to teach parts of an organisation how to be relationally fluent. Innovation and freer dissemination of great ideas are just two of the potential outcomes. We believe that you will find our approach refreshing.

This article comes from Renuma, one of the members of the Relational Thinking network. For more information: Info@RenumaConsulting.com