Temat: Innovation Updade - Innovation Briefing: Innovation...

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This month’s briefing takes a look at the key issue of building a supportive culture for innovation:



Innovation Briefing: Innovation Culture



It has been recognised for many years that culture is one aspect of an organisation’s essential make-up that can be changed to bring about improved performance. This has been the case since the 1960s when management thinkers looked at what made companies, and some countries, unique and led to them having competitive advantage. Since then many books have been written on the topic and the word ‘culture’ has been appended to many aspects of business life – quality culture, sales culture, customer service culture – with a view to understanding what organisational elements can be combined to produce the specific desired culture. This, of course, has particular significance for the topic of innovation because the reason for the success of many leading innovators is indeed their ability to develop and sustain an innovation culture. In this briefing we start by looking at a general definition of culture; we then bring this to life with some case study examples; before going on to consider what are the essential characteristics of an innovation culture, and discussing how a new innovation culture can be introduced.



Cultural Confusion

Culture is one of those things that is talked about a lot as a key contributor to successful innovation, but what it is and how to get it and sustain it remains elusive and confusing for many. Many companies are said to have an ‘innovation culture’ but this is often a reflection of other elements of that company’s profile such as branding, advertising, leadership etc. And indeed all of these things do have a role to play in culture overall. Perhaps it is therefore sensible to start with a look at culture in general. A commonly accepted view of culture is : ‘a combination of the way that individuals behave and interact in an organizational unit such that a common set of ground rules have become established’. In terms of a general definition and model of culture, one we find very useful is Johnson and Scholes' Cultural Web. This explores culture across six elements: stories about the company internally and externally; rituals and routines that signify acceptable behaviour; symbols that represent the company; organisational structure both formal and informal; control systems used by the company; and the power structures within the company.



We find the mix of recognised characteristics (such as organization structure) with more ethereal characteristics (such as rituals and stories) is a very useful way to break down the notion of culture in a meaningful, tangible way. This model demonstrates that culture is not just one thing but a multitude of contributory factors that come together to give a view of ‘the way things are done around here’



With this in mind and the recognition that culture, however we characterise it, is something that people attach importance to, what exactly is the impact of a strong, defined culture particularly with regard to innovation?

Perhaps the best way to explore this is with a few examples that highlight different company’s experiences with the interplay between the company culture and innovation.



Case Studies

A good starting point for a discussion on culture is simply to look at companies that are perceived as having a strong culture which has led to success, with those where the impact of cultural changes has been less impressive. We look at contrasting companies in the complimentary and increasingly overlapping areas of Mobile Devices and Computer Hardware.

Nokia is a company with an enviable track record of innovation and growth – it dominates the mobile phone market providing a mix of technologically advanced and consumer intuitive products. This growth is directly attributable to the cycle of innovative products it has brought onto the market, not even pausing in its investment and development during the last economic downturn. Nokia describe their culture as networked, decentralised and empowered. They also characterise the need for a platform rather than product perspective, as well as having a picture of the future, “Nokia World Map”, and a supporting structure to nurture new ideas. Besides the obvious market share growth, the strong innovation culture has built up a reinforcing loop; able to reduce employee turnover through an attractive culture which in turn improves customer satisfaction, reinforces the culture and attracts more high quality talent. Nokia is able to attract some of the best talent in the telecommunications industry – these talented people are attracted by the popular Nokia culture, known to be innovative and challenging to its employees and pushing them to perform at higher levels.



Apple is another company that has a very distinctive approach coupled with a strong innovation profile. The perceived view is that Jobs has created an iconic culture characterised by its intense work ethic and casual dress sense, which is undoudtedly true. However for many the one element of the innovation culture that Apple embodies is its passionate product focus where user-centred design is critical. This element is strengthened by the re-inforcing nature of the brand building and advertising to the extent that Apple has been able to position itself very differently to Microsoft and other competitor brands.



Equally interesting are those companies that have slipped from the top of the pile in order to understand to what extent the decline of the culture played an important part in this. One good example is what happened to Hewlett Packard. HP had been Silicon Valley’s innovation reference until Carly Fiorina took the company in a different direction, dismantling a lot of the culture as she went about driving the bottom line through a strong sales push and focus on costs. The pre-existing culture was characterised by low hierarchy and formality, an appreciation of innovation and experimentation and a high level of enthusiasm and energy from the employees. The shift in focus left the organisation demoralised and drew the sting from their innovation leaving a distinct slump in their pipeline. The extent to which it destabilised the business is evident as today HP are revitalising the brand with a refocused message and an attempt to invigorate the innovation side of the business through some targeted acquisitions of small, dynamic companies.



Motorola has also had some great successes, such as the Razr, but it has recently fallen on hard times. It has worked through a succession of CEOs and each has been confronted with the same challenges of a deeply embedded culture. Zander (the previous CEO) talked of a culture that was "deeply inward looking and bureaucratic", whilst others talked of the culture of ‘warring tribes’ in the organisation. People recognise three key stumbling blocks - the bureaucratic and lengthy decision cycles, the degree of internecine conflict between different teams (as opposed to a healthy competitiveness) and a strong engineering culture (responsible for the successes) that can lose touch with the market and the customer. The impact of these three drags on the culture has reduced levels of motivation and seen the exit of talent at all levels of the organisation. In such a fast paced industry as mobile telephony, losing touch and losing talent has quickly pushed Motorola into a downward spiral. Their recent history compares unfavorably with Nokia's, and puts in opposition the decentralised, customer focused and collectively challenging environment of Nokia with the bureaucratic, inwardly looking and conflict culture of Motorola.



Characteristics of an Innovation Culture

In these various stories of innovation success and failure, culture is certainly attributed a central role by the winners and losers alike. The notion of culture as a vital ingredient is therefore well documented, but how can we analyse in more detail the aspects of an organisation’s culture, is it innovative or not? For simplicity we have broken down what we believe chracterises innovation culture into seven main themes, which give enough breadth to be inclusive and enough focus to be useable.



1. Innovation ambition and management commitment - the organisation has, and is able to express, a clarity of the role of innovation, and senior management can demonstrate in word and deed an active role in setting out and living the ambition.

2. Simple and easily understood innovation process – insight and longer term foresight combine to deliver ideas into a simple innovation pipeline which is well understood and visible to the organisation

3. Capability development - innovation skills are enhanced through hiring, training, exposure to other cultures and as well as through doing the day job

4. Support mechanisms – mechanisms and resources facilitate the overall flow of innovation within the organization, ranging from data mining or product testing technologies to access to external collaboration or the existence of internal innovation champions

5. Motivation and empowerment - employees, and more particularly the innovation/ development teams, are personally engaged in the innovation process via access to time, resources, rewards.

6. Experimentation and risk taking - the organisation creates the space for ideas to fail, but also ensures that there are tight feedback loops that build on the learning and re-inject it back into the pipeline/process, and so create a culture of trust.

7. Customer insight – there is an ability to understand and anticipate customer needs and experience in the shorter and longer term. This encompasses both an understanding of the micro experiences of the individual customer as well as understanding the broader context within which the customer will be making their choices.



How to make changes?

So how to proceed? The obvious next step is to use a breakdown of innovation culture to carry out some form of analysis, identify the desired culture and hence the gap, and then draft an action plan to address the gaps against an agreed timeline. Sounds simple! And in some ways this traditional approach is very simple, but in other ways not. Our experience suggests that whilst a taxonomy is useful to give you something to talk around, following the 5 step guideline or 8 step checklist can be too simple and prescriptive in nature. Simple models run into difficulties because culture is a function of the unique history and context of the company. However for many organizations such approaches do provide a level of focus and clarity that is required to move forward with changing the innovation culture of the organization.



The first part of this approach, measuring the current state, can take many forms but is usually a combination of focus interviews with key stakeholders within the organization as well as a review of existing data. This leads quickly to an understanding of the existing culture of the organization



The second part in some ways is more difficult as organisations needs to get a clear sense of where they want to be against the chosen criteria. It is not given that a company should try to achieve a top score against all the criteria or indeed any. The choice of where the organisation should reside is dependent on existing culture, industry context and the extent of stretch appropriate to these.



In a sense however this is all the easy parts: the third phase, actually putting in place “the innovative culture” you require is a complex and demanding process. Here the challenges of understanding the organisation as a whole, rather than micromanaging its parts, is important. Ultimately the organisation needs to operate on a variety of surrogate indicators as to whether the roots of a changed culture are emerging. Using the Cultural Web as a reference point, many of the early indicators will be in the informal discussions, the stories and emerging changes in behaviours. It is a difficult cycle to follow through - the culture the organisation felt comfortable with is being dissolved, and there is only an aspiration and a hope that the changed culture will bring about the results.



Conclusion

Everyone knows the story of Apple, when it lost its innovative profile through the 90's, only to be revived by the belief of the Apple community and the belief of Steve Jobs to make it so. Perhaps more prosaically companies like DSM have also collectively come to a conviction of a need to change direction and have taken the major investments and divestments and time to orchestrate an organisation wide change in the way the company operates. Others like LEGO followed a much more iterative approach, faced with a crisis they tried a few things with some local expectations of change and found they were onto something much bigger and have built the rest of the business model and culture on the back of those first steps.



Our experience in supporting companies through these sorts of shifts in culture, which are, after all, deep seated and challenging, is that in many ways it is easier to keep the organisation in a constant flux of challenge and change. Whilst this means the organisation as a whole rarely settles in a single pattern, pools can enjoy longer periods of stability, and the organisation as a whole is never too settled in its ways of working to drift into complacency and home spun truths about the durability of its model. The only durable characteristic of an innovative culture is its ability to challenge itself and reconfigure.



To discuss this briefing please contact: tobias.rooney@innovaro.com





Innovation Feedback: What you think

If you would like to provide feedback on any of the issues included above or have any comments or questions around the broader innovation agenda, please e-mail us on update@innovaro.com

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Innovaro is part of UTEK Corp – the fast-growing open innovation company that is creating the premier mix of global innovation services from strategic consulting and technology transfer to patent search and external technology sourcing. For more information on UTEK: http://utekcorp.comAleksandra Kalinowska edytował(a) ten post dnia 02.09.08 o godzinie 08:45