A proven systems approach to driving innovation and strategy in complex technical organizations
The call for corporate innovation is often celebrated in theory, but innovation is rarely achieved at scale within established technical organizations. Developing the Innovative Technical Organization: How to Implement a Systems Approach to Strategy addresses this challenge by exploring how the Johns Hopkins University Applied Physics Laboratory (APL) successfully elevated its impact through a rigorously designed and executed strategy system.
The authors, all current or former senior leaders at APL, detail APL’s decade-long journey of strategy development and implementation, from articulating a long-range vision to building a sustainable annual cycle that ensures accountability, alignment, and full enterprise engagement. Rich with practical lessons, cultural insights, and stories of both setbacks and successes, this work goes beyond case anecdotes to present a comprehensive methodology. Written as a strategy guidebook, it will enable readers to adapt this systems approach to their own organizations, ensuring that innovation is not the exception but the expectation.
Applicable to technical organizations across the for-profit, nonprofit, and government sectors, this essential guide to embedding innovation into strategy and sustaining impact in the face of evolving challenges introduces:
- A full-cycle system linking vision, strategy articulation, decision-making, innovation, and accountability processes.
- Methods to align resources with strategic priorities to maximize organizational agility.
- Cultural and communications lessons learned in engaging middle management and staff in innovation initiatives.
- Detailed examples of innovation experiments and their influence on organizational transformation.
- Strategy-driven, innovative results attributed to implementing this systems approach at APL.
Developing the Innovative Technical Organization is a must-read for executives, senior managers, and decision-makers in technical organizations, particularly those seeking to scale innovation and implement strategy in complex environments. It is recommended for graduate-level courses in engineering management, business strategy, and organizational leadership, and is also a valuable reference for consultants and policymakers.
Table of Contents:
About the Authors xiii
Foreword xvii
A Note from the Series Editor
Acknowledgments xxi
1 Introduction 1
References 6
2 The Strategic Innovation Imperative 7
2.1 What Is Innovation? 7
2.2 Why Innovate? 8
2.2.1 Innovation Is Profitable 9
2.2.2 Your National Security Depends on It 10
2.2.3 Your Board of Directors Will Expect It 11
2.2.4 Your Organization Cannot Rest on the Occasional Innovation 12
2.3 What Is the Innovation Imperative for Your Organization? 13
References 17
3 The Integrated Strategy System 21
3.1 Classic Long-Range Vision Framework 23
3.1.1 Core Purpose 24
3.1.2 Core Values 25
3.1.3 Big Hairy Audacious Goal 26
3.1.4 Vivid Description of the Envisioned Future 27
3.2 One-Page Strategy Articulation: The VSE 27
3.3 Alignment of Resources to Strategic Priorities 29
3.4 Regular Accountability Reviews 30
3.5 Continuous Decision-Making Process 31
3.6 Inspiring the Entire Organization to Innovate 32
3.7 Looking Ahead 35
References 37
4 Implementing the System’s Annual Cycle: Phase 1 39
4.1 Background 40
4.2 Adopting a Discipline for Decision-Making: The Strategic Decision Agenda 43
4.3 Crafting Strategy on One Page: The VSE 46
4.3.1 Methodology 46
4.3.2 Implementation Considerations 48
4.3.3 Internal Impact and Selected Results of the First VSE 50
4.3.4 Evolution of the VSE 53
4.4 Adding the “Bite”: Alignment of Resources with Strategy 54
4.5 Ensuring Strategic Accountability: Regular Portfolio Reviews 56
4.6 Inspiring Innovation: Initial Efforts 57
4.6.1 Ignition Grants 58
4.6.2 Central Spark 59
4.6.3 APL Achievement Awards 59
4.6.4 Monetary Awards 61
4.6.5 Review 61
4.7 Summary: The Complete Annual Strategy Cycle 62
References 65
5 Annual Strategy Cycle Planning Guide 67
5.1 Why a Planning Guide? 67
5.2 Establishing the Annual Priorities 68
5.3 Allocating Financial Resources 72
5.3.1 Baseline Allocations 73
5.3.2 Reserve Allocations 74
5.3.3 Budget Request Process 76
5.4 Reviews 77
5.4.1 Software and IT Systems 77
5.4.2 Facility Construction and Renovation 78
5.4.3 Discussions and Deliberations 78
5.5 Outcomes 79
5.6 Summary 82
5.7 Sample Annual Planning Memo 83
5.7.1 General Resource Allocation Approach for FY 24 84
5.7.2 Above-Baseline IIP Requests for Mission Areas and Departments 87
5.7.3 IIP Request Submission Guidance and Format 88
5.7.4 Requests for Reserves Post-Award 89
5.7.5 Changes in Customer Funding 89
Reference 90
6 Building the Long-Range Vision to Anchor the System: Phase 2 91
6.1 The Perfect Storm Motivates the Long-Term Strategy 91
6.2 Core Purpose 96
6.3 Core Values 96
6.4 BHAG and Defining Innovations 98
6.5 Vivid Description of the Envisioned Future 102
6.6 Summary: The Complete System 106
References 108
7 Innovating Innovation – “Keep What Works” 109
7.1 Permission 111
7.1.1 Rules 111
7.1.2 Open Discourse 112
7.1.3 Opportunities to Explore Bold, High-Risk Concepts 113
7.1.4 Extension to All Activities 116
7.1.5 Potential Metrics to Assess Permission 117
7.1.6 Review 118
7.2 Proximity 120
7.2.1 Proximity to Other Staff Members Within the Organization 121
7.2.2 Proximity to the Organization’s Peer Community 123
7.2.3 Proximity to the National and Global Innovation Ecosystem 124
7.2.4 Proximity and Access to Emerging S&T Developments 125
7.2.5 Potential Metrics to Assess Proximity 127
7.2.6 Review 128
7.3 Privacy 129
7.3.1 Physical Workspaces 129
7.3.2 Work Arrangements 130
7.3.3 Flexibility 131
7.3.4 Concept Provenance 131
7.3.5 Potential Metrics to Assess Privacy 131
7.3.6 Review 133
7.4 Perspective 134
7.4.1 Divergent Thought Education and Tools 134
7.4.2 Rotational Programs and Shadowing 135
7.4.3 Cross-Disciplinary Teaming 136
7.4.4 Potential Metrics to Assess Perspective 137
7.4.5 Review 137
7.5 Performance 138
7.5.1 Skunkworks’ Role in Innovation Performance 139
7.5.2 Virtual Skunkworks – Promoting Privacy and Permission While Maintaining Performance Engines 140
7.5.3 Innovation Transition from an R&D Organization to an Engineering Manufacturing Company 141
7.5.4 Potential Metrics to Assess Performance 142
7.5.5 Review 142
7.6 Summary 144
7.6.1 Tracking the Innovation Pipeline Using Metrics 145
7.6.2 Overarching Insights 147
References 148
8 Engaging Middle Management 153
8.1 The Critical Role of Middle Managers 153
8.2 That’s a Nice VSE, But What About Me? 155
8.3 But We’re Already Too Busy! 158
8.4 What About My Day Job? 162
8.5 Experimentation Is the Key 163
8.5.1 Purposeful Communications 164
8.5.2 Incentivizing Ideas 165
8.6 Augmenting the Workforce 166
8.6.1 Increasing the Proportion of Doctoral-Level Researchers 167
8.6.2 Early-Career Rotational Program 169
8.7 Summary: Key Takeaways 171
References 171
9 Communicating the Strategy 173
9.1 Communications’ Central Role in Effective Strategy Execution 173
9.2 Essential Communications Elements and Capabilities for Strategic Change 176
9.2.1 The Information Source 176
9.2.2 The Message 177
9.2.3 The Medium 179
9.2.4 The Channel 180
9.2.5 The Audience 181
9.2.6 Feedback 182
9.3 The Importance of Aligning Communications Efforts 183
9.4 Strategy Communications in Action 186
9.4.1 Direct Customer Communications 186
9.4.2 Informational Materials 187
9.4.3 Strategy-Related Events 187
9.4.4 A Slogan 188
9.4.5 Annual Report 188
9.4.6 Products that Highlight the Organization’s Legacy 189
9.4.7 Experiential Graphics 189
9.4.8 Newsletters 190
9.4.9 Public-Facing Website 191
9.4.10 Other Digital Media 192
9.4.11 Social Media 192
9.4.12 Products and Tools to Empower Staff Members as Strategy Ambassadors 193
9.5 Metrics and Indicators to Evaluate Effectiveness of Communicating the Strategy 194
9.5.1 Staff Participation in Strategy-Related Events 194
9.5.2 Overall Staff Connection to Mission and Strategy 195
9.5.3 Effectiveness of Internal Communication Channels 195
9.5.4 Leadership Engagement 196
9.5.5 External Website Activity 197
9.5.6 Publications Engagement 198
9.5.7 Social Media Activity 198
9.5.8 News Media Engagement 199
9.5.9 Other Qualitative Indicators 199
9.6 Summary 200
References 201
10 Strategy-Driven Results 203
10.1 Innovating Through the COVID Crucible 205
10.2 Strategy-Driven Transformative Innovations 209
10.2.1 National Coronavirus Resource Center 209
10.2.2 Dragonfly NASA Mission 210
10.2.3 Positioning, Navigation, and Timing 212
10.2.4 Secure Communications in a Cyberattack 213
10.2.5 Food from Air 213
10.2.6 Support to Forward-Deployed Naval Defenses 214
10.2.7 The Rise and Evolution of AI-Piloted Aviation 215
10.2.8 Parker Solar Probe Touches the Sun 216
10.3 New Defining Innovations 217
10.3.1 BMD from the Sea 218
10.3.2 Planetary Defense 219
10.4 Formal External Recognition 219
10.5 Engaging Within the Global Innovation Ecosystem 221
References 223
11 Lessons Learned and Retrospective 225
11.1 Lessons Learned 225
11.2 Retrospective and a Challenge 238
References 239
Appendix A The Federally Funded Research and Development Sector 241
References 248
Appendix B APL’s Innovation Imperative and Strategy Journey 249
B. 1 Foundation of Critical Contributions to Critical Challenges 249
B. 2 The First Five Decades: World War II Through the Cold War 251
B. 3 The First Disruptive Decade: The Post–Cold War “Peace Dividend” 252
B. 4 The Second Disruptive Decade: New Strategies for New Adversaries 255
B. 5 Preparing for the Storm 256
References 257
Index 259
About the Author :
RONALD R. LUMAN, DSc, is a Senior Adviser, former Chief of Staff, and former Assistant Director for Strategy at APL.
TIMOTHY J. GALPIN, PhD, is the former Chief Strategy Officer and Assistant Director for Programs at APL.
JERRY A. KRILL, PhD, is APL’s Assistant Director for Science and Technology and Chief Technology Officer.
ERIK W. JOHNSON, MBA, is APL’s Chief of Staff and former Managing Executive of its Force Projection Sector.
ANN E. KEDIA, MS, is the Chief Communications Officer at APL and former Vice President at T. Rowe Price.
BRIANA D. VECCHIO-PAGÁN, PhD, is Program Manager for Innovation and Collaboration at APL.
With a foreword by Admiral James Stavridis, USN (RET)
