organising for innovation

Innovation Management

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Organising for Innovation

Source : David Smith, Introduction to Innovation , 2006


3 Aspects of Organisation that affect Innovation

Corporate Culture

Architecture/Structure

Roles


What is Corporate Culture?

“…the way we do things around here”

i.e. shared values, beliefs and attitudes


Innovation culture

Innovation is as much about attitude as it is about

processes and systems.

If firms are to succeed in harnessing the power of

innovation, they will have to work hard to create

innovation cultures.

An innovation culture starts at the top – in the

boardroom and the office of the CEO.

It’s ”top-down,” not ”bottom-up” – but should

certainly reach throughout the firm.

“It’s not my job to innovate; my job is to do what my boss asks me

to do and Innovation is risky; I don’t want to fail!”

Source : H. Patel and S. Wyatt


Innovation culture


Innovation culture

becomes standard practice throughout the

organization.

But education system based more on memorizing

answers than creating solutions; and an Asian

culture that defers to seniority and authority.

Widespread good intentions: Many business leaders

want and plan to move from a command-and-

control corporate culture to one that is less

hierarchical and more innovation-friendly.

Source : H. Patel and S. Wyatt


Innovation culture

That is too rigid, hierarchical, bureaucratic and

risk-averse.

They need to create free and collaborative

environment for experimentation, prototyping and

implementation.

They need to make innovation an expectation from

every employee.

They need to measure and reward innovation

activities that have significant positive impact on

their business.


Begin to build “innovation cultures”

Ensure the leadership ‘walk to talk’.

CEOs must also lead by example in fostering an

open, creative, experimental, collaborative,

mistake-tolerant culture.

Creativity can come from anyone and anywhere

Focus Individuals’ Creativity through Strategic

Platforms.

If not guided by clear strategy and direction, even

the best employees will waste their time and

resources on low–impact, low-value activities.



Use Stretch Targets to Think Outside the Box.

the human spirit, when faced with difficult goals, consistently

rises to the challenge. It is stretch targets that drove NASA to

put a man on the moon.

Korean CEOs at Hyundai, Samsung and LG have set stretch

targets for many of their business units to become Top Three

performers by 2008

Pulling our staffs out of their comfort zones.

Managers should reward individuals who meet them but not

punish those who don’t.



Set Individual and Team Actions To Strategy.

“I always tell my chaps that hard work, team work and

integrity are given. I do not give you any bonus for that. I only

give bonuses for three things: ideas, judgment and leadership.

Ideas, because if you do not come up with anything new, then

you are just keeping things going.

Judgment, because if you come up with all hairy-scary ideas

and waste your time chasing wild geese, then you are not

much good.

Leadership, because without it, your ideas are not going to get

off the ground”.



Celebrate Your Innovations and Innovators.

Rewards : At Motorola, innovators with

more than 10 patents are issued a gold

colored name badge so that all will

recognize their contribution.


Factors that influence Corporate Culture

History

Traditions, customs etc

Size

Small companies more flexible & dynamic

Technology

Rapidly changing technology gives rise to

flexibility and willingness to change

Leadership

Powerful leader stamps his/her „way of

doing things‟ on the organisation


Features of a Culture that supports Innovation

Outward looking and receptive to new ideas,

particularly from outside (Open innovation)

Facilitates communication, especially across the

organisation (walk to talk/informal meeting)

Is open and receptive to new ideas and approaches

(not only boss ideas)

Challenges established ideas and practices – „the

conventional wisdom‟ (Think outside the box)

Accepts and learns from failure (Nonblame culture)

Promotes evaluation and reflection (Reward)


Three-Dimensional Model of The Environment

Stable

Dynamic

Simple Complex

Abundant

Scarce


Start to break culture barriers

Begin to build

innovation culture

Turf Issues

Resistance to Change

Hierarchy

Blaming and Excuses

Lack of : Bias for Action

Trust Openness Teamwork

“Can-do” attitude Customer Focus

Low results

Few out

Many in

Culture barriers


Mechanistic Versus Organic Models

High specialization

Rigid departmentalization

Clear chain of command

Narrow spans of control

Centralization

High formalization

Cross-functional team

Cross hierarchical teams

Free flow of information

Wide span of control

Decentralization

Low formalization


1

Span of control

256

64

16 4

1024

1

512

64 8

4096

4096

Org

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(Highest) Assuming

span of 4

Assuming

span of 8

Operatives = 4096

Managers (1-6) = 1365

Operatives = 4096

Managers (1-4) = 585


Size : Is Bigger better?

Schumperter (1940) -> Bigger is better

Finance R&D project

Spread the fixed costs of R&D

Take on large or risky innovation projects (Boeing

747)

On the other hand

R&D efficiency might decrease (less control and

motivate)

Individual incentive diminish


Structures that support Innovation

Network

e.g. Benetton, Nike

Strategic Alliances

Provide a structure by which organisations can link to external sources of innovation

e.g. small biotech companies and major drug firms

Corporate Venturing

„business within a business‟

Gives benefits of small firm within a large firm


Organisational Roles

Project Leader

Product Champion

Gatekeeper

Godfather


Formal position or designation within the

organisation

Takes responsibility for managing the

project/innovation

Provides leadership

May not be strong on technical side

Mix of talents: communication, motivating,

analytical & organising skills

Project Leader

http://www.sxc.hu/browse.phtml?f=download&id=598959


Product Champion

A person with real commitment to a project

Good at attention to detail

Fights for resources

Prevents staff being poached

Looks after & protects the interests of the

project

May well possess business skills as well as

technical knowledge


Gatekeeper

Acts as guardian of knowledge/expertise

Well informed about what is happening,

especially outside the organisation

Good at passing information to others

Serves as an information resource for

others

Able to unlock (knowledge) resources

Can provide access to other individuals

Can be very effective in denying resources


Godfather

High position in the organisation

No direct connection to project

Provides “protection”

Guides the project through the system

Ensures clearance of appraisal/evaluation

hurdles

Divine intervention when appropriate

organising for innovation

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