I often speak to business audiences about Innovation—the collaboration necessary, general cultural differences that can influence the process and the importance that organizational culture has on creating an environment that supports innovation. After these presentation keynotes, I often get a few people who approach me with their stories about innovation in their organizations. They tell me how great the information was and wished they could apply it into their own organizations, but they know that it would never be supported.
It seems that while individuals are given the necessary time in their jobs to generate ideas, they are not given the time that is really required to explore them through a proper process for innovation. This therefore makes it difficult, if not impossible, for true innovation to happen.
Now I realize that those who asked me the question may not necessarily be in positions to change their organization’s cultures but maybe they could start to create change within their own spheres of influence, such as a department, plant, location, store, etc. Sometimes we need to think on a smaller scale and then demonstrate to the organization the value of what we are doing. Demonstrated success will help greatly to sell the idea.
In my consulting practice, implementing innovative cultures and processes into organizations I have found that executives often ask themselves, “Why aren’t we better at innovation?” There are lots of examples out there and lots of advice. But in reality innovation challenges differ from one organization to another. Just as each innovation is unique, so is an organization’s culture. The process of innovation that works in one place will not necessarily work in another. We must consider the culture.
“Leading companies for innovation make innovation a formal agenda item at regular leadership meetings. That signals to employees the value management attaches to innovation” (The McKinsey Quarterly, 2008)
Here’s a question for you to consider: How many of you, who are in a management position, have seen innovation as an agenda item at your management meetings? How many have seen management updates on the implementation of innovation strategies?
Organizations that have not historically celebrated creativity usually do not have a vibrant, creative environment. Alternatively, organizations where the most talked about stories revolve around creativity; inspire others to follow suit, building a culture of innovation. What this tells us is that innovation, although evident when implemented, is not seen as a key driver/strategy for most organizations. Why not? Simply put, it is because they just don’t have a culture to support it.
The IBM Global CEO study in 2004 cited an “unsupportive culture” as the number one obstacle to innovation. Organizations that have a culture which supports innovation are often customer focussed, value-driven and strategic. They ensure that their operating strategies are developed through interactions with their employees, customers, partners, vendors, suppliers and consultants. They review market trends and identify, through benchmarking, what is required to out-perform their competition.
Such organizations further demonstrate their commitment to innovation when they build innovation into performance management. They measure management’s performance on the basis of their ability to create new value-added products, services and ideas. As well, they assess the extent to which managers undertake this jointly with staff, rather than independent of their staff, because this demonstrates a clearer understanding of the use of an innovation process versus simply the result of management directive.
Managers can demonstrate this in their regular department meetings by focussing on the exploration of new ideas. They can train employees in the innovation process. They can allow time for employees to explore their ideas. They apply an aggressive effort to build new opportunities based on the development of new services and products.
Peter Linneman, Wharton finance professor and founding chairman of Wharton’s real estate department, had a more real world perspective. He says that there is no magic “Aha!” moment in most innovation. According to Linneman, “It’s just all hard work—showing up every day in the morning, studying plans, walking around seeing what other people are doing. If you wait for ‘eureka’, you are never going to have innovation.”
Toyota’s ability to implement over 2,500 ideas every day has everything to do with their history, foundation, guiding principles and practice. This has shaped their culture. Their three guiding principles that drive innovation are:
1. The Art of Ingenuity
The individual must be both an artist and a scientist. They must continually ask the question: “Is there a better way?” They must fully use their expertise and pursue every possible way to innovate and perfect, challenge opposition tactfully, do not accept the status quo and to use organizational efficiencies to drive new ideas and methods.
2. The (relentless) Pursuit of Perfection
The organization rigorously searches for an optimal solution – one that yields low-cost, low-risk, high-impact breakthrough. Innovation happens at Toyota through a systematic pursuit of perfection at every level, every department, in everything Toyota does. As Jim Collins said in his acclaimed bestselling book, “Built to Last,” it takes many small steps to make enduring impact.
3. The Rhythm of Fit
Innovation has to fit the innovator, the times and the larger system. It must be a change that fits in the current time and environment.
Toyota, seen as a long time organization of innovation, will forego today’s profits in order to dominate the market-place tomorrow. For example, they developed the Prius in anticipation of rising energy prices long before any other auto maker. As a result, Toyota has seized the market for energy-efficient vehicles and continues to be the leader in this area. Only now are other auto makers beginning to catch up.
Google is another organization that applies innovation successfully. Google ensures their culture of Innovation remains strong by giving their engineers time to invent and explore their ideas. They aren’t afraid to take calculated risks and have developed a very flat organizational structure to foster innovation. All employees have easy access to face-time with senior management to present their ideas. Google’s engineering staffs is encouraged to spend 20% of their time working on projects they feel passionate about. That philosophy is credited with generating such services as “Google News,” “Google Suggest,” “adSense for Content” (online ads triggered by the content on the page) and “Orkut,” a powerful social-networking site. We can all learn from Google that if you give your employees more time to think and explore you’ll get better ideas.
A strong, committed leader will create an environment that supports innovation and drives it forward. They will accept risk. A risk-aversive corporate culture is seen in many research studies as the number one killer of innovation. Short-term goals, particularly quarterly numbers, create an environment where the longer-term actions necessary to drive innovation are quashed. Employees tend to avoid innovations that require longer-term thinking; rather, they develop innovations around ideas that help to meet the shorter term results management is seeking.
This constant examination of quarter by quarter results versus longer-term planning creates a culture that is not supportive of innovation. Daniel Muzyka, Professor of Entrepreneurship and Dean of the Sauder School of Business at the University of British Columbia, explains that it is very difficult for management today to build successful innovation processes in organizations due to constant short-term, bottom-line oriented pressures on management, combined with the decreasing lifespan of executive teams. These factors diminishes the focus on the long-term innovation process for creation of new leading edge products and services and increases the focus on sustaining existing products and services. That’s a dangerous move in volatile markets.
To move outside of this realm, organizations need to evaluate the extent to which adding new products and services are included in the measurement of management’s performance. As well, they must take a look at how much time in management meetings is spent on innovation and forward planning versus reviewing business results. Are staff members given work time and resources to generate ideas and experiment? Are they allowed to, explore their ideas and make presentations to management? Or is this done on an ad hoc, more haphazard basis?
Helping your organization to achieve more innovations, to create the culture to support innovative thinking and to adopt a process for innovations is a major undertaking. It can seem daunting to know where to begin. However, the most important first step is just that – to take that first step. Start by examining the current culture and determining what change may be necessary to foster and support innovative thinking in your organization. Then try to engage all the generations in your organization or department to develop an innovation process that will work for you. Pilot it and allow it to prove successful, and then share it with the rest of the organization. It is a large and exciting change process. Even a small initiative can help to demonstrate the possibilities of a more robust effort.
You have to want to make a difference. Lead your organization through this journey. I have led others through this journey and you can too!