The Ideal "Sponge" Organization
Miguel Ángel Rodríguez, Franc Ponti, Silvia Ayuso

The ideal enterprise is a "sponge" organization that is both porous and adaptable. It seeks differences and promotes collaboration, beauty and happiness. It's the popular metaphor of the organization as a living organism.

Nowadays, many companies striving for sustainability have developed new and effective communication channels with their stakeholders and, at the same time, successful innovation strategies. However, stakeholder engagement and innovation tend to be managed as parallel but not interconnected processes. The link between the two is often informal and tacit.

The paper "The 'Sponge' Organization: A Creativity-Based Reflection on the Innovative and Sustainable Firm" aims to gain a deeper understanding of how companies' relationship with the environment can be used to create sustainable innovation. The authors, IESE general management lecturer Miguel Ángel Rodríguez, EADA people management lecturer Franc Ponti, and Silvia Ayuso, a post-doctoral research fellow at IESE, explain their creative research method and present the result of their experiment: a description of the ideal "sponge" organization.

To begin, the authors gathered a group of managers from outstanding Spanish companies in the field of innovation and corporate sustainability. Grupo Eroski, Iberdrola, Mutua Universal, Siemens España and Unión Fenosa each assigned one or two executives to the project. The authors then initiated a four-month long project to stimulate the executives' imaginations. Their goal was to generate creative ideas on how companies can integrate stakeholder insights into the process of organizational innovation.

The participants used the "Wishing Diamonds Technique." They started by envisioning the utopian situation of an ideal enterprise, and they ended up developing concrete and realistic recommendations.

Three creative sessions took place. The first used the "IDEART" creative methodology, which entails creating ideas around a particular creative focus, using visual stimuli in the form of selected paintings (in this case, Hieronymus Bosch, Rousseau and Kandinsky). The second creative session involved role-playing; participants acted out roles in order to generate ideas from other people's viewpoint. The third creative session centered on consensus-building about the enterprise model.

The participants collectively agreed that the ideal firm is a "sponge" that absorbs all relevant information and transforms it to secure its own survival and continuity. Unlike the prevailing view of the enterprise as separate from the social and natural environment, this view of the firm as a living system stresses the fact that the firm depends on the surrounding environment for sustenance. This symbiotic vision is a basic idea of the sustainable enterprise and illustrates very well the relationship a firm should have with its social and natural environment.

According to the participants, the relationship should be porous, in continuous exchange. It should be distributed by interacting constantly and it should be adaptable by adjusting to changing circumstances. In order the meet the requirements of the environment and to survive - especially if the environment is uncertain and turbulent - organizations need to be innovative by seeking difference.

The authors take this definition of the ideal "sponge" organization and translate it into a series of values and principals to guide companies in practice. They can be grouped into three interrelated dimensions: relationship with the environment, innovation and organizational principles.

In addition, write the authors, "We found four key elements of the "sponge" organization: management, people, structure and systems." Management is fundamental for implementing the values of the "sponge" organization. Diversity of the management team is desirable, as it ensures different perspectives and skill for leading the company. Since organizations achieve their objectives through people, the "sponge" organization should favor and promote certain attributes among its member. As for structure, hierarchy is necessary, but the organizational pyramid should contain as few levels as possible to favor direct communication. With regard to systems, both formal and informal systems should be consistent with the "sponge" organization's values and principles.

http://insight.iese.edu/doc.asp?id=549&ar=9
Above all, "sponge" companies are open. They are receptive to strengthening their knowledge base in order to discover and deliver novel ways of creating value and renewing themselves.