Last week, I talked about innovation, its definition and categories. Before ending, I also mentioned that creating a culture that drives and encourages innovation is a complex task that requires leadership skills, organisational structures as well as reward strategies, which I will delve into now.
Given today’s market expectations, global competitive pressures, and the extent and pace of structural change, innovation is regarded as one of the most important ingredients in today’s economy. The year-to-year viability of a company depends mostly on its ability to innovate. However, we all know that innovation itself as a destination is simply not enough.
Faisal Hoque, the renowned entrepreneur, summed it up nicely: “Sustained innovation is a high-productivity state in which an organisation strives to innovate in all aspects of its business, including management, divisions, operations, customers, and suppliers. ... Above all, sustained innovation is a journey, not a destination. The enterprise doesn’t stop innovating after attaining one goal; it’s engaged in a continual process of reinvention, invention, and discovery.”
The question is, where and how should we begin to incorporate innovation into corporate culture?
Obviously, changing a culture isn’t easy or quick - as the old saying goes, “Rome wasn’t built in a day”. Embedding a culture of innovation is especially difficult if your organisation traditionally perceives risk-aversion, predictability and stability as core values. You might hear some people ask how is it possible to bet on research and development (R&D) without jeopardising your company.
I might not have the best answers for this question, but I know that if innovation is how you ultimately define success, then you probably have no other choice than to start expanding the influence of innovation bit by bit into your corporate culture to make the change more acceptable and fluid.
Now, if you notice closely, there is a hidden agenda in that last paragraph, signifying that for innovation to happen, it must start from the top - with leaders to be exact. Certainly, leaders play a vital role in building a culture of open collaboration around ideation, as well as neutral, consistent rigour around innovation governance and processes. They must provide strong direction and establish an organisational climate that encourages innovation, i.e. to not only support their people but also enable them to work without the fear of failure. Most importantly, by doing so, leaders must be role models themselves by being open-minded and comfortable enough to say “I don’t know”.
At the individual level, creative thinking or innovative thinking must be embedded along with the system to support people when they have innovative ideas. This helps to make the experience of suggesting ideas a good one, even when the ideas may not seem practical at the first glance.
However, it is worth noting that innovative thinking, like critical thinking, does not come naturally to most people. In fact, most people would seek to confirm what they already know; thus, we are cognitively blind to challenging ideas and tend to act on our intuition. The management expert Edward Hess once wrote in an article, “Why is Innovation so Hard?”, that when people are on autopilot mode, we are not critical or innovative thinkers - we are just “confirmation machines”.
Furthermore, for an individual to be innovative, the idea that good performance means avoiding failure and not making mistakes must be abolished, since failure is an inevitable part of an innovation experiment. Instead, you need to always challenge yourself and others by asking if certain models are still valid and beneficial. You need to soak up ideas around you in conversations or observation in order to increase the cumulative effect of innovative thinking every day until it becomes your default mode of thinking.
In fostering innovation, organisational structure is another critical factor. To empower people within an organisation to become innovative, it takes a structure which compels convergence of disciplines, management, and operational units. This is indispensable in order to ensure that no one is missing the opportunity to capitalise on new ideas and possibilities.
Reward strategies as well could greatly encourage innovation if they are included as a part of the overall performance management or evaluation. Let’s picture this: if people are to be evaluated on the time they spend innovating, and that evaluation can eventually lead to an increase in compensation and job advancement, there is no doubt that people will be more likely to spend more time doing innovative work.
At a more advanced level, there should be a designated process of identifying good ideas, starting from listening broadly for ideas from customers as well as front-line staff, to experimenting and implementing the results of the final decision.
Also, there is a need for a formal innovation recognition and control system and a mature innovation development process. Rather than every man for himself, using a framework can increase productivity while transforming your people from mere administrators to genuine innovators.
Innovation must be managed from concept to commercialisation so that good ideas not only get created, but also find their way into the products and services your organisation offers. Although developing a culture conducive to innovation is a challenging task, just as we can break bad habits, we can also cultivate new ones.
In sum, there are three essential factors for generating innovation: a culture that encourages “out of the box” thinking i.e. providing opportunities for people to engage, encouragement to go after such opportunities, and rewards for doing so; the skills to recognise good ideas and develop them quickly; and processes to support identification and implementation.
All in all, I find that the most vital aspect in making innovation happen is creating a culture that sees change as an opportunity, not something to be afraid of. In other words, give your people the ability to fail so that they can experiment and learn from failure. As Samuel Beckett once famously wrote: “Fail, fail again, fail better!”.
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Arinya Talerngsri is Group Managing Director at APMGroup, Thailand’s leading Organisational and People Development Consultancy. For more information, write an e-mail to arinya_t@apm.co.th or visit www.apm.co.th