Structural Separation: Why innovation thrives outside the 'mothership'

In the ever-evolving landscape of business and education, innovation is the lifeblood of progress. However, fostering truly disruptive innovation can be a significant challenge, especially within established organizations. This exploration delves into the concept of structural separation and its pivotal role in enabling groundbreaking innovation.  This EdUp Editorial will explain why separating innovative projects from the core organizational structure can be crucial for their success. We'll also explore a fascinating case study: the Church Educational System (CES), examining how its unique structure facilitates efficiency, accessibility, and innovation. Be sure to check out our latest podcast episode, How Religious Mission Drives Innovation (Not Prevents It) - with Elder Gilbert, Commissioner of Education, Church Educational System, where we dive even deeper into this topic with Elder Gilbert himself.

The Power of Separation in Innovation

Why does innovation often struggle within the confines of established organizations? The answer lies in the inherent conflicts that arise between the need for stability and the desire for disruptive change. Established structures, processes, and cultures are designed to maintain the status quo, making it difficult for radical new ideas to flourish. The pursuit of innovation often requires a different set of rules, a willingness to take risks, and a tolerance for failure – all of which can be at odds with the operational norms of a large, established institution.

Structural separation offers a powerful solution to this dilemma. By creating separate units or entities dedicated to innovation, organizations can provide a protected space for experimentation and risk-taking. This separation allows innovators to operate outside the constraints of existing hierarchies, budgets, and performance metrics, fostering a more agile and creative environment.

What is Structural Separation?

Structural separation refers to the organizational design strategy of creating distinct and independent units or entities within a larger organization, specifically for the purpose of pursuing innovative projects or initiatives. This separation can take various forms, ranging from small, dedicated teams to fully autonomous subsidiaries. The key characteristic is that the separated entity operates with a degree of independence from the core organization, allowing it to develop its own culture, processes, and decision-making mechanisms.

The benefits of structural separation are multifaceted. It allows for:

• Reduced bureaucratic overhead: Separated units can operate with fewer layers of management and less red tape, enabling faster decision-making and greater responsiveness to market opportunities.
• Access to specialized resources: Innovation units can be staffed with individuals possessing the specific skills and expertise required for the project at hand, without being constrained by the existing talent pool within the core organization.
• Enhanced risk tolerance: Separated units can be granted a higher degree of risk tolerance, allowing them to pursue projects with uncertain outcomes without jeopardizing the financial stability of the core organization.
• Cultural autonomy: Separated units can cultivate a culture that is conducive to innovation, characterized by experimentation, collaboration, and a willingness to challenge conventional wisdom.

The Research: 900 Firms and Disruptive Innovation

The effectiveness of structural separation is not merely a theoretical concept; it is supported by empirical evidence. Research involving 900 firms has revealed a strong correlation between structural separation and the successful development of disruptive innovations. This research highlights the fact that organizations that isolate their innovation projects from the existing operational structures, are significantly more likely to achieve breakthroughs that reshape industries and create new markets.

This research suggests that while incremental innovation can often be achieved within existing organizational structures, disruptive innovation typically requires a more radical approach. By separating innovation efforts, organizations can break free from the constraints of their established business models, technologies, and customer relationships, allowing them to explore entirely new possibilities.

Why Structural Separation Works

The success of structural separation can be attributed to several key factors:

• Protection from organizational antibodies: Established organizations often possess what can be termed "organizational antibodies" – internal forces that resist change and seek to maintain the status quo. These antibodies can stifle innovation by imposing existing processes, metrics, and cultural norms on new projects. Structural separation shields innovation teams from these antibodies, allowing them to operate in a more supportive and encouraging environment.
• Focus and alignment: By dedicating resources and personnel specifically to innovation, organizations can ensure that these efforts receive the attention and support they deserve. Structural separation helps to create a clear sense of purpose and alignment within the innovation team, fostering a shared commitment to achieving ambitious goals.
• Freedom to experiment: Innovation inherently involves experimentation and risk-taking. Structural separation provides innovation teams with the freedom to experiment with new ideas, technologies, and business models, without fear of reprisal for failure. This freedom is essential for unlocking breakthrough innovations.
• Attracting and retaining talent: Innovation requires a unique set of skills and talents. Structural separation can help organizations attract and retain top talent by offering a more stimulating and challenging work environment. The opportunity to work on cutting-edge projects, with a high degree of autonomy, can be a powerful motivator for talented individuals.

Case Study: The Church Educational System

The Church Educational System (CES) offers a compelling example of how structural separation can facilitate innovation in a large and complex organization. CES is responsible for providing religious and secular education to members of The Church of Jesus Christ of Latter-day Saints worldwide. It oversees a vast network of institutions, including universities, colleges, seminaries, and institutes of religion.

What is particularly interesting about CES is its ability to offer high-quality education at an affordable price. This is achieved through a combination of factors, including:

• A strong commitment to efficiency: CES is constantly seeking ways to streamline its operations and reduce costs, without compromising the quality of education.
• A focus on accessibility: CES is committed to making education accessible to as many people as possible, regardless of their financial circumstances.
• A culture of innovation: CES encourages its employees to experiment with new approaches to teaching and learning, and to share their best practices with others.

How Religious Mission Drives Innovation (Not Prevents It)

One might assume that a religiously affiliated educational system would be inherently conservative and resistant to change. However, CES demonstrates that religious mission can actually be a powerful driver of innovation. The Church's core values of service, compassion, and personal growth inspire CES to constantly seek ways to improve the educational experience for its students. This includes:

• Developing innovative curricula: CES is constantly developing new curricula that are relevant to the needs of its students and the challenges of the modern world.
• Adopting new technologies: CES is an early adopter of new technologies that can enhance teaching and learning, such as online learning platforms and interactive simulations.
• Creating supportive learning environments: CES is committed to creating learning environments that are supportive, inclusive, and conducive to personal growth.

The religious mission of CES provides a clear sense of purpose and direction, guiding its innovation efforts and ensuring that they are aligned with its core values. This mission-driven approach to innovation has been instrumental in the success of CES.

The CES Model: Efficiency and Accessibility

The CES model is characterized by its emphasis on efficiency and accessibility. CES strives to provide high-quality education at a fraction of the cost of many other institutions. This is achieved through:

• Volunteer labor: CES relies heavily on volunteer labor, particularly in its seminaries and institutes of religion. This significantly reduces its operating costs.
• Shared resources: CES shares resources across its various institutions, such as libraries, computer labs, and administrative services. This helps to avoid duplication and maximize efficiency.
• Online learning: CES offers a wide range of online courses and programs, which allows it to reach students who may not be able to attend traditional classes.

The combination of efficiency and accessibility makes CES a unique and valuable resource for members of The Church of Jesus Christ of Latter-day Saints. It demonstrates that it is possible to provide high-quality education at an affordable price, without compromising on quality or innovation.

Key Takeaways: Applying Structural Separation to Your Organization

The lessons learned from the research on structural separation and the case study of CES can be applied to a wide range of organizations, regardless of their size or industry. Here are some key takeaways:

• Identify potential areas for disruptive innovation: The first step is to identify areas within your organization where disruptive innovation is needed or desired. This may involve conducting market research, soliciting input from employees, or analyzing emerging trends.
• Create a separate innovation unit: Once you have identified a target area, create a separate unit or team dedicated to pursuing innovative projects. This unit should be given a high degree of autonomy and the resources it needs to succeed.
• Establish clear goals and metrics: While the innovation unit should be given freedom to experiment, it is important to establish clear goals and metrics to track its progress. These metrics should be aligned with the overall strategic objectives of the organization.
• Foster a culture of experimentation: Encourage the innovation unit to experiment with new ideas, technologies, and business models. Create a safe space where failure is seen as a learning opportunity.
• Integrate successful innovations: Once an innovation has proven successful, integrate it back into the core organization. This may involve transferring the innovation team to a different department, or creating a new business unit to commercialize the innovation.

Embracing Separation for Groundbreaking Innovation

Structural separation is a powerful strategy for fostering disruptive innovation. By creating separate units or entities dedicated to innovation, organizations can break free from the constraints of their established structures, processes, and cultures, allowing them to explore entirely new possibilities. The case study of the Church Educational System provides compelling evidence of the effectiveness of this approach. By embracing separation, organizations can unlock their innovative potential and achieve groundbreaking results. Don't forget to listen to our episode, How Religious Mission Drives Innovation (Not Prevents It) - with Elder Gilbert, Commissioner of Education, Church Educational System, for more in-depth insights on this topic and the inspiring work being done at CES.