Cultures of Innovation
The 21st century is fast becoming the Age of Innovation. Not only do businesses see innovation as becoming more important, they’re getting more ambitious about the types of innovation they’re pursuing. The problem is, innovation can’t just be mandated from the top. Companies have the difficult task of forming internal cultures of innovation.
A 2005 HRI survey, conducted in partnership with the American Management Association, found that respondents believe that over the next 10 years fostering creativity and innovation will become one of the important competencies for business leaders. Another survey, this one conducted by The Conference Board, indicates that companies want to increase the proportion of their innovations that are “breakthrough” (leading to whole new products) or “disruptive” (creating whole new markets), as opposed to incremental (Troy, 2004).
Such research findings indicate that many business leaders are keenly aware of the competitive challenges facing them. They can see the handwriting on the wall as nations such as China and India educate massive numbers of engineers and technicians. Last year, for example, China graduated 325,000 engineers, five times as many as did the U.S. (Fishman, 2005). The impact on innovation will likely be huge. “My prediction would be that in 20 years’ time, India and China will both be responsible for more patents than the U.S.,” states Bruce Lehman, former commissioner of the U.S. patent office, in The Economist (“Survey,” 2005).
But seeing the handwriting on the wall is one thing; knowing what to do about it is another. Multinationals based in the U.S. and Europe can and will tap into the Asian workforce to help boost their R&D efforts. Yet, this creates its own set of problems. As Chinese and Indian workers gain skills by working for multinationals or via outsourcing arrangements, they become more likely to start their own enterprises that then compete with their original employers or clients.
So, to stay innovative over the long haul and stay ahead of both current and future competitors, today’s leaders must be able to establish cultures of innovation within their businesses. While there are no set formulas, there do seem to be certain common characteristics for cultures of innovation.
First, such cultures support communication and collaboration. If employees can easily communicate across business units, for example, they’re much more likely to develop good ideas. Of course, real help and collaboration are also needed. Writing in Advances in Developing Human Resources, learning and development professional Laird McLean (2005) states, “In organizations where organizational support is minimal, there is unlikely to be a productive exchange of ideas. There may be no mechanism for finding expertise within the organization” (p. 236). Likewise, innovation is hindered if people simply don’t have the time or inclination to aid one another in innovation projects.
In general, teams and work groups are critical to cultures of innovation, though not all work groups are created equal. They’re most likely to be innovative when they’re able to integrate people with diverse perspectives and when they give people the opportunities and time to effectively swap ideas. This may explain why The Conference Board has found that the best way of generating new ideas in corporations is via cross-unit project teams and cross-unit business strategy-setting sessions.
In cultures of innovation, leaders clarify goals but they don’t micromanage. They support, encourage and recognize achievement. They make sure that workers and teams have enough time and money to get the job done, and they provide them with the necessary freedom and autonomy. They understand that creative people value their independence . Innovation-fostering leaders are good at motivating people but realize that intrinsic motivation is more powerful than extrinsic motivation when it comes to creative behavior (McLean, 2005).
Cultures of innovation also value intelligent risk-taking, not just successful outcomes. W.L. Gore & Associates, a company that is known for its innovations, holds celebrations both when a project has succeeded and when the decision has been made to discontinue an initiative (Deutschman, 2004). Cultures of innovation instill a collective pride in people about their abilities to create and innovate.
For some large corporations, alignment becomes a major challenge to creating a culture of innovation. Many have a hard time aligning innovation efforts and ideas across their organizations. Businesses can use various tools and approaches to boost alignment. Procter & Gamble, for example, has an internal Web site called InnovationNet, which links “the global technical community of 18,000 innovators across R&D, engineering, purchasing and patent divisions” (Troy, 2004, p. 19)
Cultures of innovation are not created overnight. They take time and patience and plenty of work, but they’re likely to pay large dividends in the emerging Age of Innovation.
Documents used in the preparation of this TrendWatcher include:
Deutschman, Alan. “The Fabric of Creativity.” Fast Company, December 2004, pp. 54-62.
Fishman, Ted C. “The Chinese Century.” New York Times Upfront. ProQuest. January 10, 2005.
Human Resource Institute. “Leadership Survey Results 2005.” HRI, 2005.
McLean , Laird D. “Organizational Culture’s Influence on Creativity and Innovation: A Review of the Literature and Implications for Human Resource Development.” Advances in Developing Human Resources, May 2005, pp. 226-246.
“Survey: Thinking for Themselves.” The Economist. ProQuest. October 22, 2005.
Troy, Kathryn L. Making Innovation Work: From Strategy to Practice. The Conference Board, 2004.
A 2005 HRI survey, conducted in partnership with the American Management Association, found that respondents believe that over the next 10 years fostering creativity and innovation will become one of the important competencies for business leaders. Another survey, this one conducted by The Conference Board, indicates that companies want to increase the proportion of their innovations that are “breakthrough” (leading to whole new products) or “disruptive” (creating whole new markets), as opposed to incremental (Troy, 2004).
Such research findings indicate that many business leaders are keenly aware of the competitive challenges facing them. They can see the handwriting on the wall as nations such as China and India educate massive numbers of engineers and technicians. Last year, for example, China graduated 325,000 engineers, five times as many as did the U.S. (Fishman, 2005). The impact on innovation will likely be huge. “My prediction would be that in 20 years’ time, India and China will both be responsible for more patents than the U.S.,” states Bruce Lehman, former commissioner of the U.S. patent office, in The Economist (“Survey,” 2005).
But seeing the handwriting on the wall is one thing; knowing what to do about it is another. Multinationals based in the U.S. and Europe can and will tap into the Asian workforce to help boost their R&D efforts. Yet, this creates its own set of problems. As Chinese and Indian workers gain skills by working for multinationals or via outsourcing arrangements, they become more likely to start their own enterprises that then compete with their original employers or clients.
So, to stay innovative over the long haul and stay ahead of both current and future competitors, today’s leaders must be able to establish cultures of innovation within their businesses. While there are no set formulas, there do seem to be certain common characteristics for cultures of innovation.
First, such cultures support communication and collaboration. If employees can easily communicate across business units, for example, they’re much more likely to develop good ideas. Of course, real help and collaboration are also needed. Writing in Advances in Developing Human Resources, learning and development professional Laird McLean (2005) states, “In organizations where organizational support is minimal, there is unlikely to be a productive exchange of ideas. There may be no mechanism for finding expertise within the organization” (p. 236). Likewise, innovation is hindered if people simply don’t have the time or inclination to aid one another in innovation projects.
In general, teams and work groups are critical to cultures of innovation, though not all work groups are created equal. They’re most likely to be innovative when they’re able to integrate people with diverse perspectives and when they give people the opportunities and time to effectively swap ideas. This may explain why The Conference Board has found that the best way of generating new ideas in corporations is via cross-unit project teams and cross-unit business strategy-setting sessions.
In cultures of innovation, leaders clarify goals but they don’t micromanage. They support, encourage and recognize achievement. They make sure that workers and teams have enough time and money to get the job done, and they provide them with the necessary freedom and autonomy. They understand that creative people value their independence . Innovation-fostering leaders are good at motivating people but realize that intrinsic motivation is more powerful than extrinsic motivation when it comes to creative behavior (McLean, 2005).
Cultures of innovation also value intelligent risk-taking, not just successful outcomes. W.L. Gore & Associates, a company that is known for its innovations, holds celebrations both when a project has succeeded and when the decision has been made to discontinue an initiative (Deutschman, 2004). Cultures of innovation instill a collective pride in people about their abilities to create and innovate.
For some large corporations, alignment becomes a major challenge to creating a culture of innovation. Many have a hard time aligning innovation efforts and ideas across their organizations. Businesses can use various tools and approaches to boost alignment. Procter & Gamble, for example, has an internal Web site called InnovationNet, which links “the global technical community of 18,000 innovators across R&D, engineering, purchasing and patent divisions” (Troy, 2004, p. 19)
Cultures of innovation are not created overnight. They take time and patience and plenty of work, but they’re likely to pay large dividends in the emerging Age of Innovation.
Documents used in the preparation of this TrendWatcher include:
Deutschman, Alan. “The Fabric of Creativity.” Fast Company, December 2004, pp. 54-62.
Fishman, Ted C. “The Chinese Century.” New York Times Upfront. ProQuest. January 10, 2005.
Human Resource Institute. “Leadership Survey Results 2005.” HRI, 2005.
McLean , Laird D. “Organizational Culture’s Influence on Creativity and Innovation: A Review of the Literature and Implications for Human Resource Development.” Advances in Developing Human Resources, May 2005, pp. 226-246.
“Survey: Thinking for Themselves.” The Economist. ProQuest. October 22, 2005.
Troy, Kathryn L. Making Innovation Work: From Strategy to Practice. The Conference Board, 2004.