Yesterday we examined the “formal” mechanisms for innovation success, defining an innovation team and process, and developing innovation governance. Today we examine two of the most powerful yet intangible innovation domains: corporate culture and innovation environment. Executives understand the subtle power of corporate culture but must align the culture to innovation needs and opportunities. Further, they must provide clear guidance as to the appropriate physical environments for innovation, and the best internal teams and external partners.
Culture makes or breaks innovation
Corporate culture is often the most powerful barrier to innovation programs. After years of focus on efficiency and right-sizing, most corporate cultures little motivation or incentive to introduce or to consider new ideas. The existing business as usual culture, combined with “not invented here” attitudes and short term perspectives drive behavior that limits innovation to small improvements at best.
Executives, more than anyone else in an organization, have the power to change the corporate culture. If executives delegate innovation activities without simultaneously working to improve the culture, middle managers will use existing tools within existing frameworks in an attempt to develop and commercialize ideas. No wonder so much innovation is barely distinguishable from existing products and services. Few executives understand how much an existing “business as usual” culture hinders innovation. The very behaviours you sought for efficiency and effectiveness now become barriers to innovation success.
Culture change comes from the top
Of course, changing an existing corporate culture is not a simple task. It must start from the top, with a new mission and vision. Executives must explain the realities of the competitive environment and the need for cultural change. Based on that new vision, executives must define a new image of the organization; define new processes, new structures and tools. Further, executives must define new perspectives, new attitudes and new reward structures. Most importantly, people within the organization must understand the need to change the culture, and “what’s in it for me”. A focus on your people, their alignment and engagement, is paramount.
People are rational actors. They work on tasks that align to their evaluations, their job descriptions and their compensation plans, regardless of demands from executives. Existing evaluation, compensation and reward systems reinforce the status quo and resist innovation. Executives who expect innovation from their organizations must change all the factors that would stand in the way of full engagement of employees. Asking for innovation while evaluating and compensating people for status quo results is a Sophie’s choice for employees, and they will inevitably choose to work on existing, familiar products and services over risky innovation activities.
The vital source for establishing the right culture is the CEO
Again referring to the Capgemini study, almost 70% of the respondents felt that CEO’s were the most important “source” for innovation culture. Executives, through communication, through their establishment of metrics, through rewards and recognition programs and through other actions build and support an innovative culture or create barriers for the origination of a culture of innovation.
Setting the Environment to Innovate
Innovation is an activity that spans multiple time frames, business disciplines and corporate silos. Good innovators understand that every corporate boundary – business function, process or product team – is a yawning gap for ideas to overcome. To accelerate ideas to market most effectively, corporate silos must be reduced or eliminated. New innovations face tremendous external hurdles to achieve success externally. Executive teams must reduce internal hurdles and barriers caused by internal silos.
Creating a positive, supportive environment for innovation internally requires senior executives to work to bring disparate internal capabilities together to accelerate decision making. The innovation team will have to work with product teams and enabling or support teams such as legal, regulatory, finance, IT and others in order to develop and commercialize a new product. Each of these teams has its own goals, priorities and responsibilities, and may not be receptive to supporting new ideas. Executives must create an environment where innovation is encouraged, but also accelerated throughout all of the steps necessary for an idea to become a new product or service.
Environments need to be far more open
Beyond internal environments, executives must define interactions with the external environment. Increasingly, “open” innovation is a viable role to gather ideas, develop new concepts or technologies, or “spin out” concepts and technologies to trusted third parties. In the near future, when we talk about innovation we won’t draw distinctions between “open” and “closed” innovation. Many innovation activities will have an open or external component. Since working with partners and customers in this regard is still very new, executives must define the innovation strategy and scope: what “open” or external partners are appropriate and under which conditions. This defines the external environment and reduces barriers and hurdles for innovation.
As innovation teams mature, defining external partners and how and when to work with external partners and customers becomes critical. The external environment is simply another component to a holistic innovation capability, and executives must help define the breadth and scope of a team’s interaction with external partners, customers and channels.
Everyone must feel the environment is engaging
Environment isn’t simply about the reduction of internal silos or the identification of external partners. Innovation is also about working in interesting, creative physical spaces, designed to spark new thinking and drive new ideas. Experience and research demonstrates that new experiences and creative environments provide new perspectives which can lead to new ideas. Creating an interesting, engaging physical environment for innovators is crucial to success. Attempting to generate new concepts in boring cubicles or conference rooms is similar to starting a bonfire with damp wood. Identifying the environmental factors and boundaries that create barriers to innovation, or developing new environments to spark more creativity are both responsibilities of senior executives.
The Executive Innovation Work Mat series
This article is within a series of seven articles that discusses the Executive Innovation Work Mat approach and the seven domains for innovation alignment.
In this set of articles we are discussing specifically each of the seven domains for innovation alignment, our thinking in the rationale and benefits for this combined framework.
Here we looked at the two domains of Culture (domain 5) and the Environment (domain 6) and why these need to be worked through. We have discussed the need for innovation to have Strategic Alignment (domain one) as well as develop the context, the communication techniques and encourage an emerging common language (domain two). That was then followed as we discuss the need for having the appropriate Structure, Processes and Functional design (domain three) and the importance of Governance (domain four).
Our next article we will be discussing the final domain where People align with the motivations and measures (domain 7) for relating to innovation. As a final article we will summarize the benefits of an integrated framework delivered through the Executive work mat and draw some conclusions.
We provided as the introduction within this series “the seven domains for innovation alignment” as the overarching piece in these seven articles, and then we provided the justification in the article “the role senior leaders must fill for innovation success”
We would encourage you to read all seven articles to fully relate to this
The above link contains all seven articles on one page, as listed below:
image credit: paul hobcraft and jeffrey phillips
Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.
Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.