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Creating a climate of innovation

May 21st, 2015

Innovation needs a supportive climate
Just as you need to have the right conditions in place for plants to grow and blossom into flower, so an organisation needs to ensure the right conditions are in place for innovation to be seeded and successfully grow and deliver business benefit. We all know that for plants to bloom, we need the combination of a nutrient-rich soil, sunshine and water – and of course some ‘green fingers’. The principles are similar in creating the right climate for innovation to bloom within a business: you first need to understand the conditions under which innovation blossoms; then you need to create a ‘business climate’ under which these conditions are maintained. Thanks to academic research and business experience, we know what these conditions are and how to optimise them (see Figure 1).

Innovation climate pictureFigure 1: The innovation climate (Source: Codexx)

Organizational climate, can be defined as ‘the recurring patterns of behaviour, attitudes and feelings that characterize life in the organization’ . This differs from the concept of the organisation’s culture, which tends to be more stable in the longer term. For the purpose of innovation we can consider that culture is one element of the overall climate for innovation within an organization. One could argue that an innovation climate is the key requirement for an innovative organisation, with the other mechanics of innovation building on this. Certainly the quote below from the CEO of Apple would seem to support this view

“A lot of companies have innovation departments, and this is always a sign that something is wrong when you have a VP of innovation or something. You know, put a for-sale sign on the door….. Everybody in our company is responsible to be innovative, whether they’re doing operational work or product work or customer service work.” Tim Cook, CEO Apple.

One could certainly challenge this view given the dominant role that Steve Jobs played in the innovation process within the firm prior to his death. It could certainly be argued that he was indeed the ‘VP of Innovation’ and he managed the process:

“The creative process at Apple is one of constantly preparing someone – be it one’s boss, one’s boss’s boss, or oneself – for a presentation to Jobs. He’s a corporate dictator who makes every critical decision – and oodles of seemingly noncritical calls too, from the design of the shuttle buses that ferry employees to and from San Francisco to what food will be served in the cafeteria.” (Source: ‘How Apple works: Inside the world’s biggest startup’, Fortune, 23-5-2011).

Codexx experience is that by addressing key areas such as leadership, culture and measurement and reward systems, the climate for innovation within an organisation can be changed over time. You can’t change climate at a stroke – but you can change the forces that shape the climate and thus improve the conditions in which innovation can flourish. There are six key elements required in a climate that is supportive of innovation:

  • Questioning culture
  • Problem positive
  • Diversity of thinking
  • Champions valued
  • Recognition given
  • Innovation demanded

Let’s explore each of these areas in more detail – and as a reader consider how well your own business, department or team, matches these practices:

Questioning culture
An innovative organisation is a curious organisation – curious about problems and about different ways of doing things. The culture needs to encourage this behaviour in its people. Being open to questioning and challenge from all levels within the organisation and from outside is a key attribute of an innovative organisation. Breakthrough innovation comes from the challenging of deep-rooted paradigms that exist within a business or market. “To support our focus on innovation, we operate a culture that is open to the challenging of norms,” says Sir David McMurtry, Chairman of Renishaw, a world-leader in the design and manufacture of measurement systems and a multiple award winner of Queens Awards for Export and Innovation.

Achieving this culture requires humbleness rather than arrogance in a firm’s leaders and its employees. Humbleness? This is not a characteristic that is often demanded of managers and employees in a dynamic business. I’m not suggesting that personnel should be submissive and lacking in ‘go’. But I am saying that people need to recognise that they don’t know everything, that their firm’s current ways of doing things may not necessarily be the best and that they themselves can always improve. This is a mindset that allows individuals and the firm as a whole to be receptive to improvement. Being open to challenge and new ideas requires a level of personal confidence that is often missing in organisations.

Problem positive
In an innovative firm, problems are seen as opportunities for improvement as they signal weaknesses in the current ways of working or product offering. Organisations that truly regard problems as an opportunity for learning (rather than an opportunity to blame) will foster a culture that is always seeking to learn and improve. In Continuous Improvement, problems are regarded as ‘gold’ for they offer clear improvement opportunities. A ‘Problem Positive’ organisation will have a robust approach to problem-solving in place, rather than a fire-fighting blame culture. “Fail often to succeed sooner.” is a key maxim of Tom Kelley, the General Manager of IDEO, renowned for its innovative design capabilities and an appropriate one for any company seeking to be innovative.

Diversity of thinking
The enemy of innovation is corporate group think. Alternative viewpoints and experience are critical to enabling a climate for innovation. This is achieved by recruiting and retaining a mix of people with different industry backgrounds, ages, personalities and nationality. Colgate is a good example: “As a company, we celebrate differences, promote an inclusive environment, and value the contributions of all Colgate people…We look to promote an inclusive environment and support the diversity of thinking that results from the differences in experiences, knowledge and background of all Colgate people. Diversity of thinking will help us continue to encourage the creativity and innovation necessary for our Company to maintain a competitive advantage in the global marketplace.” (Source colgate.com) If you are looking for fresh ideas, you need to have a diversity of thinking within your business. If your workforce is too similar, you will likely get ‘groupthink’ and a lack of truly new ideas.

Champions Valued
All organisations have their stories and their heroes. An innovative organisation will have stories about major change and their champions – not all of which was necessarily successful. But the general tenor of such stories will be invariably positive rather than critical. 3M have stories about mavericks that pushed through new ideas despite initial opposition (e.g. Post-It Notes). Those people who champion innovation, whether they are instigators, active participants or arms-length supporters will be valued within an innovative organisation. And since radical new ideas typically come from the ‘mavericks’ within an organisation – the sort of people who can be poor team workers and difficult to manage – an innovative organisation works to keep its mavericks.

Recognition given
Human beings crave approval. This need changes little from when a person was a child to when they become an adult. In a business, salary/bonus is one form of approval – but it is by no means the only one or indeed the most effective one. Approval and recognition from one’s peers is often of higher value to an individual. Providing formal awards and recognition for innovators within the organisation, including financial, non-financial and sabbaticals is an effective way of encouraging innovation activities and rewarding innovation ‘champions’. It also clearly signals the company’s intent to employees.

Innovation Demanded
In some organisations, innovation is not welcome as it is seen as disruptive or ‘taking people away from daily business’. In many organisation it is welcomed if it can be proven to be beneficial and affordable, but in a few organisations, innovation is actively demanded – and not just from its managers but from all its employees. Stories are told about past innovators. These are the people that have high recognition and status within the organisation. This is supported by the use of innovation metrics and innovation criteria in employees’ yearly targets and appraisal reviews. In such an environment, employees will continually keep their eyes open for innovation opportunities as they know that this is valued within the organization and it is a key performance measurement.

Toyota is renowned for its Continuous Improvement expertise, gained over decades of process and cultural change. Much of that change has been driven by operators on the plant floor. The architect of the Toyota Production System (that spawned the Lean improvement philosophy), Taichi Ohno said, “Something is wrong if workers do not look around each day, find things that are tedious or boring, and then rewrite the procedures. Even last month’s manual should be out of date.”

What next?
Establishing a supportive climate for innovation is a key area – innovation improvement programmes which focus on the mechanics of innovation alone are doomed to die, as ultimately are the finest roses planted on concrete… From Codexx experience in working with service and industrial firms since 2002, we have found the following approaches to be powerful in helping to build a supportive culture for innovation:

  • Assess the health of innovation in your organisation, by reviewing key practices and performance and getting the views of your employees, managers and partners. This will identify key strengths (to be enhanced) and weaknesses (to be addressed) in your current innovation system, including your climate. We use our proven Foundations for Innovation (F4i) assessment solution, developed with our academic partners. We have used this approach with businesses in the industrial, legal and insurance sectors in the UK, Europe, USA and China.
  • Train your management team in the key mechanics of an innovation system, their key role and how to establish a supportive climate. Codexx uses a mix of training and interactive ‘Catalyst’ workshops to do this.
  • Put in place some innovation metrics and rewards to stimulate innovation projects within your organisation. This approach is based on the reality that measures and rewards drive management and employee behaviours. One way of doing this is to establish an innovation competition, to help meet key business goals. Another is to make evidence of personal innovation activities an element of performance appraisal (or promotion).
  • Start a project that is innovative in its goals (e.g. step-change improvement or a new product or service area) or in its approach (e.g. cross-functional teaming, collaboration with external partners or clients) and staff it with personnel who can subsequently become broader advocates for innovation in the organisation. Codexx uses its ‘Smarter Working’ re-engineering approach to start such internal re-engineering teams.
  • Use benchmarking and practice sharing to ‘open the eyes’ of your managers and employees to better practices in other organisations and so stimulate new thinking. For more information on this, go here.

Each of these approaches has merits and any one is a good start in improving your existing innovation climate. However, to establish an effective climate for innovation, it has to be built as part of a wider holistic innovation system, encompassing other key elements such as Leadership, Strategy, Process & Controls.

*This article draws upon materials in the book ‘Innovating professional services – transforming value and efficiency’ by Alastair Ross, Director of Codexx, published on the 8th May 2015 by Gower. For more information and online discount click here.

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