One part creativity plus one part implementation is the equation for workplace innovation, with customers firmly in the center of that equation, according to findings from a new AchieveGlobal study, Leading Innovation: Insights from the Real World.
The findings, released Aug. 20, 2009, are from more than 40 personal interviews with senior leaders and managers across the globe, with each respondent representing “an organization with a proven track record for innovation success,” according to researchers Craig Perrin and Chris Blauth.
Innovation is a hot topic—the Society for Human Resource Management issued a Workplace Visions report on it in the first quarter of 2009 and a Research Quarterly report in the third quarter of 2009; The Conference Board issued its own report in May 2009; Deloitte announced its sponsorship in March 2009 of the nonprofit, nongovernment Institute for Large Scale Innovation; and it’s been the subject of numerous books and magazine covers, including the September 2009 issue of HR Magazine.
The leaders Perrin and Blauth spoke to defined innovation in two broad terms—the Thomas Edison-like breakthroughs, and the advances, incremental improvements and different applications to something that already exists.
“People tend to believe the term innovation always means ‘value innovation,’” or creating a new value and process, “but pursuing nothing but value innovation would not help achieve sustainable profit and growth,” according to an unidentified manager from Toshiba whom the researchers quote in the study.
“Much of our business success,” the manager said, “depends upon whether we can improve our existing products.”
Organizations need a balance of the big or ‘disruptive’ innovation and incremental innovation, said Judy Estrin, author of Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy (McGraw-Hill, 2008).
While mainstream businesses tend to be good at incremental innovation, the type of innovation that will drive growth needs a different kind of leadership, “a leadership that is more nurturing,” she told SHRM Online.
“The only way to do that is by having small groups who are chartered or released from the restrictions from the day-to-day [work]. This has to come from the top, to have a commitment to innovation and a culture where ideas can come from anyplace in the organization.”
Although organizations might agree that innovation is important to gain a competitive edge, they run into the top challenges of time, existing organizational structure, funding and insufficient support from senior leaders, the AchieveGlobal study found.
“There is a tension between the requirement of fulfilling the existing product, the needs of existing customers, hitting monthly targets, hitting budgets—it is a challenge to make sure that innovation is not something that isn’t sort of … well, ‘if we’ve got time left on Friday afternoon’,” an unidentified executive at Informa told researchers.
Then there are the bureaucratic hurdles.
“If we didn’t have to navigate all of the layers of management and departments within an organization and could do things more nimbly, boy, watch out,” says an unidentified Huntington executive in the report.
When it comes to fostering innovation, there are five factors that seem to play the biggest role, according to the report:
- Making innovation a strategic priority.
- Demonstrating commitment from the organization’s leaders, including encouraging experimentation.
- Creating a culture that supports innovation, including encouraging people to think in terms of why, why not and what if.
- Aligning an organization’s systems and processes.
- Collaborating broadly, from informal networks to officially sanctioned teams.
Leaders must be cognizant that innovations that alter products and services “can cause ripple-effect changes inside organizations as expectations, job roles and responsibilities shift. These changes need to happen fast, requiring team and individual agility,” Perrin and Blauth note in their report.
“For some organizations, innovation will require deeper change—a changed mindset, a rebalancing of priorities, a shift in leadership style, and perhaps, even organizational structure,” they add.
“Innovation can only flourish in a fear-free zone” that has a culture that promotes customer focus and advocacy, constructive questioning and curiosity, and individual initiative, according to the report.
“Experimentation must be encouraged as a primary means for learning and advancing ideas to the next level,” they write.
Leaders need to realize that “a culture of innovation cannot be turned on and off,” Estrin said.
“Even if you have to scale down some things during the [economic] downturn or invest less in some areas … [continue] your commitment to innovation and our investment at whatever level you can. Innovation is critical, because it’s innovation that is going to get us out of the hole that we’re in.”
Innovation doesn’t happen by accident, although about 31 percent of 450 business professionals polled say that’s how it happens at their company, according to a survey conducted July 9, 2009, during a Deloitte webcast.
Among its other findings:
- 40.5 percent said innovation is handled project to project.
- 26.7 percent said innovation is a mandate at their organization.
- 12 percent said the word “innovation” is not applicable to their company’s structure.
- 26.7 percent said innovation is defined clearly in their organization.
- 6.5 percent said innovation in their company is funded as a separate entity.
- 62.6 percent say innovation is funded in a project budget.
“Companies need to build innovation into their DNA instead of relying on chance,” said Mark White, principal at Deloitte Consulting LLP, in a news release.
Executives can spur innovation by creating platforms, practices and funding pathways to support disruptive innovation; linking the work of innovation to strategy processes within the firm that illuminate future trends and latent customer needs; and developing and communicating a clear organizational narrative of what innovation looks like, its business purpose and how it relates to the organization’s vision, said John Kao, chairman and founder of the Institute for Large Scale Innovation and a senior advisor on innovation to Deloitte. He made his recommendations in a Deloitte news release.
As the Toshiba manager noted in the AchieveGlobal report, “Innovation needs care and feeding.”
Kathy Gurchiek is associate editor for HR News.