Innovation? Careful or You’ll Grow out of it

It is all about innovation, right? Innovative technology, systems, practices and so on. Whenever we think of innovation, we think of something new, fresh and exciting. Therefore, its perfectly logical and unsurprising that it is regularly associated with start-ups, new emerging markets or new products for example. The challenge for companies and organisations is how to maintain their appetite for innovation and not grow out of it. Lets not fool ourselves into thinking that its easy. You are a successful company that has built its reputation on innovation. Financially things are going well and customers/users are happy. Now here is the fundamental dilemma. How can you manage on the one hand the need for stability and continuation of what is currently successful profitable formula while simultaneously recognising that your competitors are learning from you and are working away quietly (or perhaps not so quietly) in innovative ways that will ultimately lead your service or product to be left behind?

For the purpose of this blog, lets pause a moment because the term ‘innovation’ is used so broadly lets define it as ‘the intentional introduction within a role, group, or organisation of ideas, processes, products or procedures, designed and intended to enhance the individual, organisation or wider society’. It entails quite a lot when we think about it like that.

The formal and informal culture of your company has a significant influence on the degree to which creativity and innovation are stimulated. It can encourage or indeed impede healthy and vibrant communication, diversity of views, the questioning of old practices, experimentation and proactivity that can promote innovation and the level of creativity and change. Innovation comes through people so diversity is likely to become a central focus for company cultures, particularly in the global context and for those that place an emphasis on the importance of innovation

Similarly, innovative companies have been found to have a bias to action i.e. not complacent; a commitment for close proximity to the customer and are outward looking, constantly monitoring the external environment e.g. competitors, financial market, regulations, political landscape, etc. In terms of autonomy, truly innovative companies embrace devolved power sharing and recognise that productivity is achieved through people. The management teams within innovative organisations lead by example and remain close to their teams. They focus upon employees strengths and consistently approach their work with a curiosity as to how best those strengths can be harnessed as effectively as possible. Company structures and systems are kept as lean and as simple as possible to assist with speedy decision making. Core company issues may indeed be centralised but where possible there should be a decentralisation of actions and day to day operations. Objectives may be provided but employees and teams should be given the freedom and scope to find their own solutions.

Visible aspects of culture that may assist or inhibit innovation are job descriptions, access to information and resources, opportunities for communication and information sharing, involvement in decision making and connections both across the organisation and with external stakeholders. In order for innovation to occur action also requires both resources and support from gatekeepers and sponsors. Investment in on-going learning is a must and seen as valued by employees. Such measures assist in providing a culture where it is possible to turn creative ideas into innovative processes, products and services.

For those in leadership positions in innovative companies or indeed those companies that aspire to be innovative it is worth considering the following. For start-ups the culture is formed primarily by what the founding leaders do and pay attention to but this needs to be kept under constant review as the company begins to grow up. How best to protect those original fundamentals that drove the initial success but so too remain relevant in an ever evolving and fast paced market? Beyond the initial beginnings of the company, the leaders play in integral role in shaping the culture. What leaders chose to measure or indeed chose not measure can greatly influence whether innovation is encouraged or discouraged. As such, careful consideration is required in order to decide on the motives for selection. The use of both extrinsic rewards e.g. additional income, promotion or intrinsic rewards such as personal pride or acknowledgement can be hugely effective in modifying employee behaviour.

In order to ensure a successful reward process the following should be considered. Verbal rewards tend to lead to greater task interest and performance. Rewards given for creativity usually encourage generalised creativity in other tasks. Any company reward system should recognise the importance of cooperation and the differences in individual performance.   Finally, it is always worth considering the involvement and participation of all employees when designing the actual reward system itself.

These support mechanisms are crucial. For example, personnel should be rewarded for risk taking and generating ideas in a blame free culture and mistakes handled sensitively by leaders and viewed as learning opportunities. Open communication and a tolerance for conflict should be encouraged by leaders and the ability for all employees to become involved in the decision-making process welcomed.

The careful recruitment of personnel is important targeting individuals with personality traits such as intelligence, inquisitiveness and energy. Far easier to then assimilate such personalities into an already innovative culture than to have to spend six months retraining them. Innovation doesn’t only come from formal role responsibilities and instead is often developed informally by employees apart from their regular job activities.  The challenge here for companies is create a culture where these employees have the confidence to share such ideas and know that they will be valued.

In two other ways leaders may influence innovative practices. This may be through structural interventions. For example, the size or makeup of the teams that they form and through process interventions. For example, how communication and skills are shared through cross team exchanges.  Our role as leaders is to encourage creativity by using simple but effective tools such as brainstorming, lateral thinking and nominal group technique all of which assist in generating ideas and in problem solving. So too, must we as leaders develop a climate of trust as it is within such an environment that creativity and open communication is most likely fostered. The lowest level of communication is that of low trust where individuals are defensive and cautious. Where this arises it will only inhibit innovation.

Other measures that encouraging flexibility and creativity include a conscious effort not to allow staff roles to be too narrow. The facilitation of both individual and team learning e.g. learning new processes by visiting external companies. Assisting employees in improving their own mental models through for example educating employees about complex systems or assisting them in understanding both successes and failures. On occasion when objectives are not met, rather than there being criticism and disappointment they should be viewed as learning opportunities and there should be a tolerance of risk for without it, there will never be any true learning and development. Goals when set should be innovative and as was mentioned previously innovative thinking and behaviour appreciated and rewarded. Remember that ultimately, organisational culture is transmitted through a process of socialisation and as such all leaders can influence the manner in which this takes place through their daily interactions with employees.

It is also worth bearing in mind that before any attempt is made to alter the existing culture, one must thoroughly understand it. Leaders should reach consensus on the current culture, on the desired future, what change will and will not mean, identify illustrative examples, develop an action plan and then an implementation plan. This is a complex process that needs to be considered and inclusive. Finally, it may be more appropriate to strengthen or balance an organisation’s culture rather than change it completely.