This chapter will examine synergy in innovation network teams and explore methods that can enhance corporate value and growth. An innovation network team is a cross-functional group that is tasked to create innovations. An innovation network team may be comprised of members from different departments or organizations. An example of an innovation network team in an organization is a new product team. An example of an inter-organizational innovation network team is an industry coalition. Research on innovation explores the role of networks of diverse individuals and organizations (Fischer, 2006). The strong desire for established and start-up organizations to stay ahead of their competition demands that solutions are found to quickly solve complex problems. This implies that team members with appropriate and diverse skill sets interact to create synergy based not only on business practices, but also on a mutual desire to solve problems. In order to understand the implications of creating teams with positive synergy, it is useful to examine some historical foundations of synergy. This backdrop will set the basis for a discussion on how the culture of a company can provide innovation leadership and design innovation network teams that promote, fuel, and foster creativity.

As discussed earlier in the book, diverse people who bring differing mindsets to a group should be carefully managed so they can cooperatively build solutions in an environment of trust. Individually, one person who does not match the energy, purpose, desire, and passion of the group can be a detriment. Similarly, one member of the team cannot be a predictor of positive outcomes. It is the combined mix of the right individuals where synergy is formed that can result in innovative solutions to challenging problems. Innovation leaders need to understand the psychological aspects of synergy for team composition and to more fully understand their role.

Description

To understand synergy, it may be useful to begin with a definition. Synergy originated from the Greek word ‘sunergos’ meaning ‘working together.’ One way of understanding synergy is to consider the composition of water. Water, or H₂O, is composed of the merger of oxygen and hydrogen. Each element is independent of the another, but when correctly combined atomically, a new substance is formed. The human body provides a good example to understanding synergy. To know how a particular bodily function works, it is necessary to study individual systems and subsystems.

Synergy in the workplace is a complex concept that goes beyond placing random individuals in teams and assigning them a task to complete. Innovation leaders should carefully understand the capabilities of individuals and what they can contribute. If a goal is to climb over a ten-foot high wall, one person alone may not be able to achieve the task. But, two well-coordinated individuals can accomplish the task by one person standing on the shoulders of the other. The key is that they need to work together, be motivated to climb to the top of the wall, and be physically capable. In business, firms merge to create opportunity and increased value that one company alone could not achieve. But, not all attempts to create synergy are successful and can actually detract from a set of goals. For example, if a global organization wishes to merge or develop synergy with a foreign entity and does not consider its culture, the result could be wasted time, energy, and money. Forced intervention by company executives who choose to dominate another company or culture will not ensure synergy. Synergy, therefore, must be carefully managed.

When exploring synergy, innovation, and innovation leadership, it is essential for one to be comfortable in acknowledging what one does not know. Once this becomes internalized and accepted, new learning can be realized and innovations can be developed in innovation network teams. It is important for an innovation leader to ask challenging questions without fear of judgement. In corporate environments, emphasis is commonly placed on individual problem-solving. Synergy in a corporate structure acknowledges what people know and do not know and how they work together to fill in the knowledge gaps in a cooperative, supportive way. If synergy is encouraged, everyone is acknowledged for having worth and every employee can contribute fearlessly. Respect for the individual using a philosophy of personalism is paramount.

Research foundations

Research and literature about synergy and its connection to innovation network teams has origins in sociology, management theory, organizational behavior, psychology, group and intergroup relations, network theory and modeling, and entrepreneurship and intrapreneurship. Early references to synergy, however, are related to religion. As time progressed, literature on synergy was developed in the field of social psychology by the likes of Mazel (1896). His thesis was that society was not developed by the elite members solely, but also by the masses collectively working together to build social systems that benefited everyone. Ward (1918) spoke of social synergy as a struggle between two social political movements that, when combined over time, formed a constructive social order. Synergy also has roots in systems theory as related to biology, physiology, and medicine particularly with regard to how drugs interact with each other. In Dunglison’s (1853) book Medical Lexicon, the connectedness between different organs and living systems is made clear. Synergy in nature, as in an innovative corporate environment, relies on individual elements, or people, working cooperatively in an effort to achieve effects that are not otherwise possible (Corning, 2003). Also in nature, the idea of symbiosis is relevant where there is a biological linkage between two different species each depending on one another, creating a system of mutual dependency (de Bary, 1887).

One of the earliest references in the United States of applying the principles of synergy comes from Benjamin Franklin. In Franklin’s (1793) autobiography, The Private Life of the late Benjamin Franklin, he described founding a group of individuals collectively known as Junto in 1727. Junto, loosely translated, means to join. Harnessing his natural desire for building up his own personal social capital, Franklin populated Junto with people of varying backgrounds and professions for the purpose of learning and improving themselves. The meetings were reported to be positive and cordial and centered on questions that Franklin developed. Present-day Junto organizations exist such as The Junto Institute for Entrepreneurial Leadership in Chicago or CoIN, a web social entity that promotes open collaboration within and outside organizations. These, along with industry coalitions, professional organizations, and cross-functional teams are great examples of innovation network teams. Today, globalization coupled with multiple forms of communication has provided a way for teams to rapidly organize in a seemingly organic way, as in biology, for the purpose of inventing solutions free from the interference of traditional managers.

Considerable literature exists on synergy that relates to psychology and personality theory. To develop synergy, one should focus on achieving a goal with a team altruistically. In our highly competitive, well educated, and fast-paced society, it is common to find employees with aggressive ambition working to move up the corporate ladder by harming people who get in their way. To have synergy, individuals should possess a calling where one believes that what they do for work contributes to a higher good (Wrzesniewski, 2003). This notion has a basis in Goldstein’s (1939) work on self-actualized behavior that states that an individual should strive to be the best they can be. Building on Goldstein’s (1939) work, Maslow (1943) developed the hierarchy of needs and in doing so described synergy as that which is beneficial for an individual is beneficial for everyone. From this position, Maslow (1943) moved self-actualization into the realm of team decision-making and business synergy.

Innovation leaders should reflect on work as a source of becoming self-actualized. Demonstrating personality traits such as calmness, confidence, and competency can be motivating to team members. Likewise, research has indicated that extrinsic rewards are not always the best source of workplace motivation. Instead, intrinsic rewards, such as making a difference based on the meaningfulness of what one accomplishes, can carry more weight (Ariely, 2008). Likewise, workplace compensation is often based upon responsibility, so those focusing on intrinsic rewards such as professional development to gain more workplace responsibility may achieve additional extrinsic rewards in the long-term with high performance and opportunity for promotion. People want to contribute, and in doing so, gain personal satisfaction that they can contribute to the common good. Work can be a virtue in itself.

An innovation leader is outgoing, social, and looks to the positive attributes of people while challenging himself or herself to become self-actualized. These behavioral traits set up an environment for learning and problem solving using a non-intervening management approach as defined by Maslow (1943). Synergy, therefore, begins with freeing up restraints about how one may be judged, and working to demonstrate a mutual respect for team members and the talents they possess for solving problems in a cooperative and humanistic setting. Once the stage is set for collective performance, the challenge of achieving positive synergy is well worth the effort. Studies in self-actualization of small business owners who are merchandising-oriented (Lessner, 1974) have been found to be more actualized than craft-oriented entrepreneurs. The networking activities involved in sales professions are social and therefore connecting. Likewise, the role of striving for self-actualization results in a content and productive worker that utilizes all aspects of their capabilities in a positive environment (Shostrom, 1987). Difficulties can arise, however, when attempting to correlate self-actualized workers and organizational performance (Dorer, 2006). Innovation leaders should understand the composition of personalities in an innovation network team. Likewise, team members should learn about themselves. Helping people become their honest self in the workplace by establishing a new working environment centered on effective communication can help to develop the synergy of the innovation network team.

Personality tests such as Meyers-Briggs Type Indicator (MBTI) or other similar tests can be useful tools to help team members understand each other’s personalities. The MBTI examines self-understanding and how to understand others based on archetypes developed by Jung (1971) using personality traits such as sensation, intuition, feeling, and thinking. The MBTI should be administered by a trained professional. However, there are many other similar tests that can be freely used based on Jung’s (1971) work for self-assessment. Although any personality assessment test can be criticized for producing results that may not be accurate or relevant, they can be helpful as a point of discussion on the synergy of a team. Thus, synergy is about learning characteristics of people that may not be self-evident.

Synergy between organizations is an outgrowth of well-defined intra-organizational structures. As businesses strive to improve their supply chain, culture, technology, and people must connect in a synchronized way to deliver on commitments. Effort needs to be placed on best practices to keep products flowing. Because businesses are typically organized into functional units, the units must communicate and coordinate efforts. Best practices centered around adaptation, effort incentives, and information can achieve harmony and a degree of synergy (Dessein, 2010). Companies in the process of a merger or acquisition experience more synergy than a single company that is merely growing larger. In order for corporate synergy to work well, careful consideration should be given to whether or not customers can or will continue to do business with the new entity. Likewise, financial conditions should be considered. However, it is the personal interactions that business leaders have with their business partners that can indicate if a merger or acquisition will be successful.

Application and implication strategies

Developing synergy in a team that is driven by the differences of its members (Covey, 2004) can be challenging in an established company in contrast to a start-up where familiarity among team members may have developed organically. Regardless of how or where the team assembled, the reality is that for innovation to occur, it is important for innovation leaders to understand the synergy of their innovation network team. When leading creative people, three elements should be considered: head, heart, and hand. Head is what people know. Do those being considered for team membership have knowledge that is appropriate for and complimentary to their fellow team members? Heart is the passion and spirit one should possess to be energized about the task at hand and the ability to persist in light of setbacks. Hand means to be personally and positively motivated and committed to do what needs to be done. The concepts of head, heart, and hand should be part of the team’s long-term strategy. Teams are effective when the members are skilled and emotionally invested.

In the context of organizational behavior and corporate strategy, it is essential for a company and, more specifically, the innovation leader to create a culture of openness, support, and positive communication. Innovation leaders and team members need to be open to possibilities from diverse group members and strive to attract and retain individuals using talent management strategies. Activities that bring employees together help to create and maintain team synergy. Innovation leaders should demonstrate caring behaviors toward their employees and suggest team building activities to build synergy. Group picnics or other kinds of outings help bring employees closer. At Optima Group USA located on the North Shore of Chicago, senior management purchased scooters so employees can travel from the company to scenic Lake Michigan. At Optima, employees are part of the decision-making process. The more successful the team becomes, the more successful individual team members are (Archer, 2006).

One of the most influential and powerful notions that an organization can develop in its employees is a belief in and the ownership of the mission, values, culture, and goals. Understanding and freely agreeing with a company’s value proposition is also important. This means that a company’s product or service should create value for the customer. It gives the customer a reason for purchasing the product or service because the organization is delivering the specific benefits the customer is seeking. Thus, customer satisfaction is the source of sustainable value creation. From a marketing and sales perspective, the emphasis is less on the Old Four Ps: Product, Price, Promotion, and Placement, where the focus was on market dominance. Today, the emphasis is instead on the New Four Ps: Purpose, People, Personal, and Perception, where the key question is, does your product offering matter? If employees care and genuinely believe in the value of their work and fully embrace why they are doing it, others will believe so too and buy into the company’s culture and what they are offering. One example of this is the rise of the iPhone. Early adopters continue to stand in line for hours to be among the first to own the latest phone even though other companies have developed similar technologies and products.

There are many similarities between the synergies that are supported within individual corporate teams and intra-organizational units. Considering intra-organizational synergy, there are practical guidelines summarized by Hansen (2009).

The focus of each guideline remains the same: listen and strive to satisfy customer wants and needs by knowing what they wish to buy and use technology to target them. Finally, it is also critical to become familiar with Efficient Consumer Response (ECR) as a way of working in harmony with suppliers.

Discussion

Everyone has value. The key for developing synergy in an innovation network team is shifting management thinking from command and control to coordinate and cultivate. In this environment, individuals are more empowered and less encumbered by the presence of varying management levels and bureaucracy. Another benefit of this management approach is improved communication between employees and other group members. A flat organizational structure can contribute to some confusion due to the lack of a controlling hierarchical structure, but these issues are mitigated by placing importance on the work environment, culture, and mission of a company. Flat organizational structures are often evident in universities, internet-based firms, and even Lockheed Martin’s Skunkworks. Often, flat organizational structures allow for stronger mentoring relationships among employees and encourage higher performance because this type of environment encourages self-starters to thrive. However, larger organizations typically do have hierarchical structures that often inhibit the free flow of information. In such an organizational structure, administrators usually confine their interactions to other administrators rarely taking into consideration what line employees think. In such a system, vital links can be missed creating a disassociation from the customer that can have negative effects on corporate profit.

Organizations with flat hierarchies have a shorter chain of command, are more cost effective, promote faster decision-making, invite synergy, but are typically smaller in size. Companies that are organized in small teams with strong synergy have a better chance to be in touch with customers and therefore, remain responsive to their needs. The prerequisites for developing group synergy in a flat organization include: interacting, appreciative understanding, integrating, and implementing (Conner, 2011). This approach also casts a favorable light on external partners and investors who learn that the objectives of a firm are larger than any one person. In a horizontal or flat organization, the notion of ambition is viewed differently than in a hierarchical organization. Likewise, managing growth within a flat organization can be a challenge. The challenges of maintaining the core principals and energy of a start-up require effort, but can be maintained through communication and transparency and having employees fully invested in the company.

Summary

Sourcing from biology, psychology, and organizational management, the notion of synergy has permeated start-ups and larger companies alike. With more companies looking for innovation leaders to support growth in small to medium-sized enterprises, there has been a rise in the number of entrepreneurial programs offered by US colleges and universities. Companies are learning that returning to basics where the customer is central to sustained growth is simply good for business. If corporations pay close attention to issues of employee retention, they may notice that oftentimes key people leave a firm because they want more autonomy and in doing so go on to develop competitive businesses. Many companies have spent considerable sums to acquire a firm that they could have started with their own employees. The challenge for existing companies is to look to their culture to see if they are standing still or moving ahead. Do they have the capacity for change? The speed that business must adapt and the speed with which customers purchase product, particularly via the internet, is astounding. Developing a plan to incorporate synergy into a firm can serve to build a corporate community that is responsive, interconnected, humane, and sustainable.

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