Resources
Creating a Culture of Innovation in Tough Times: How to Make the Most of What You’ve Got
By David Gebler, President, Skout Group LLC
Innovation is the lifeblood of any organization. And, regardless of the challenges, every business must always be on the look-out for how to do things better and to deliver more value to its customers.
But today’s milieu of mounting fear, overextended employees and reduced budgets is hardly a dream environment for innovation to flourish. So how do businesses prepare for recovery and better days ahead when, increasingly, corporate shrinkage seems to be the name of the game?
Creating an innovative culture will foster higher levels of trust and openness, generating the new ideas that are the keys to your company’s future. The good news: Chances are the culture of innovation your company needs can be developed with your existing staff and resources.
Innovation for Tomorrow
Experts are quick to remind us that organizations have to create an environment that fosters ongoing improvement. But chasing after “innovation” as a vague aspiration rarely has the desired effect. To work, innovation must be integrated into the way a firm does business -- just like implementing lean manufacturing processes or incorporating quality enhancing measures .
Because innovation is a creative process – and ultimately can generate new value -- it demands a culture that supports both open communication and the ability to learn from mistakes – and make change. David Kester of the UK Design Council says that businesses need to create this culture of openness, where raising problems -– and suggesting innovative solutions -- isn’t frowned upon. Innovation demands collaboration, which requires the trust that ideas will be heard and not prematurely dismissed.
Innovation also requires what management experts call an “outside-in” orientation. People within the organization have to be able to see the organization from the customer’s perspective. What are trends in the market? What are new opportunities that may even be outside the purview of the organization’s current capabilities?
This “outside-in” approach is contrasted with an “inside-out” orientation, which builds on what the organization currently does, and how it can be done better. While “inside-out” is important for incremental and adaptive change, it typically will not help a business identify new opportunities and markets. “Outside- the box” thinking requires looking at the situation from a new perspective. This is challenging when “innovation” is weighed down by too many real-world requirements. A mandate to “come up with new ideas that work within the current way we do things” may be an impossible contradiction.
Whether the organization is taking an inside-out or an outside-in approach, successful innovation depends upon developing controls and processes that support the creative process. When done right, innovation as a strategy, should not require a capital investment. But in the current business environment, it can be difficult for leadership to sell innovation as a priority to their team, especially if they’re worried about both their jobs and the organization’s survival.
But the truth is this: Creating an environment where innovation flourishes could be the critical step to keeping the enterprise afloat during this economic storm.
Creating a Culture of Innovation
It would seem that the hardest part of building an innovative organization would be securing senior leadership commitment to making innovation a strategic priority. It’s not. The biggest obstacle to effective innovation can be traced to the steps after leadership makes the commitment to innovation.
Innovation doesn’t happen in a vacuum. Companies that have built reputations for innovative thinking, products and services are those that integrate innovation into their business’ core practices and processes as well as their corporate culture.
Our client experiences show three fundamental challenges to building a culture of innovation:
- The right people: An organization must first determine the types of skills and teams that are needed to maintain a culture of innovation. In today’s environment, bringing new people on board may be difficult, so the organization has to be able to identify innovators from within existing staff.
- The balance: What kind of innovation does the company need? Innovative new products and outside-the-box thinking or innovative ways to bring existing services to market faster, better, and cheaper? How do people and teams need to work together to support outside-in market intelligence while also creating inside-out processes to support the creative process?
- Overcoming resistance: Even in the best of times, people resist change, especially to new ways of thinking and working. In today’s environment, leaders must also overcome a climate of fear where employees are hesitant to take any risks that they fear may jeopardize their jobs.
1. The Right People
What kinds of people are needed for innovation? The proverbial “outside-the box thinkers” are critical, but a group made up of only visionary high-concept thinkers cannot support an ongoing culture of innovation. To create an innovation-friendly culture, a company needs a range and balance of people who are driven and motivated by different factors.
Before we can determine the mix of motivations and drives within a company’s workforce required to foster a culture of innovation, we need a vocabulary that describes each of these necessary attributes. One of the tools we at Skout Group use to measure what motivates behavior and decision-making inside organizations is Management Drives®. Originating in The Netherlands, this methodology identifies what motivates each person’s behavior and objectively maps how we react to challenges and opportunities. These drives reflect the spectrum of strengths needed to create a balanced and fully functional culture – the kind of mix necessary to create and sustain innovation. We use color labels to describe these drives so we don’t have to narrow our terms by defining drives as values, attributes, characteristics, etc. Relating to various drives is analogous to Justice Potter Stewart’s famous definition of pornography, “I know it when I see it.”
Who do you need in your innovation team?
Traditionally, the innovation sparkplug is an individual or a team with a drive to analyze, explore and understand, independent and creative traits which we’ll label “Yellow.”
But left alone, Yellow can be too abstract and theoretical. Therefore, your innovation team also needs someone with a focus on results and the need for progress. We’ll label this entrepreneurial drive “Orange.”
An innovation team also requires someone with a drive to inclusion who ensures that everyone is heard and respected and that the group functions in a healthy way. We’ll label this relationship-oriented drive “Green.”
How will the innovation team be able to create processes to move the idea from concept to development to reality? Who will make sure that the team sticks to its commitments and meets its schedule? That requires someone with the process-oriented drive we’ll label “Blue.”
And how will the team keep up a productive pace and not get bogged down or distracted along the way? For that function, it will need someone with the action-oriented drive labeled “Red.”
Does the innovation team appear to lack a sense of identity? For linking the ideas being developed to the organization’s mission and purpose, the team needs someone with the tradition-oriented drive labeled “Purple.”
Of course, we all have multiple motivations, but most people and teams have one or two dominant drives that guide and motivate their behavior. A major challenge for any leader is managing the conflict that the mix of different drives can give rise to. Yellow’s freedom of ideas, for instance, can clash with Blue’s need for structure and Purple’s sense of tradition. Therefore the team must be able to identify which drives are needed for the task at hand and then develop strategies for the members of that team to work together.
2. The Balance
What is the right balance of drives needed to sustain a culture of innovation? There is no one formula.
Finding this balance requires weighing two variables: the needs of the market and the current culture within the organization.
In some situations the organization feels blocked from further growth in its existing market. It can no longer compete using its current set of offerings. Its success may be dependent on what experts call “disruptive innovation,” coming up with a game-changer like Google, the iPod or the Wii. In this case, the organization needs to ensure that its creative Yellows have the freedom needed to explore and cultivate new ideas.
In other less drastic circumstances, the organization needs to improve its market focus, heightening its internal sensitivity to market forces. In these organizations, goal-oriented Orange needs the encouragement to generate a greater receptivity to market influences.
In other organizations, the innovation challenge is not focused on creating new products and services, but in developing better ways to serve existing markets, by delivering products and services ”faster, better, and cheaper.” These skills reside in Blue’s ability to create better processes and Green’s ability to bring the right people on board to get the job done.
After identifying what is needed, the organization will want to take a hard look at its current human resources. What often comes as a surprise is that most organizations already have the resources needed to create a successful innovative culture already in place. However the project teams may not have the right mix of members to support the work that needs doing. In today’s environment, it’s never been more important for leadership to take a fresh inventory of their people’s skills and motivations to build the right teams needed for true innovation to flourish.
Some organizations are already hard-wired for innovative thinking.
Team 1, with its strong creative Yellow and goal-oriented Orange drives, can easily articulate a clear vision, and can bring “outside-the-box” thinking to the table in a way that can be translated into action.
For innovation to break new ground, leadership should give this team the freedom to explore and experiment since nothing can kill creative freedom faster than a culture that does not welcome open communication and risk-taking in the pursuit of new ideas.
For other organizations the innovative need is more for adaptive change. Team 2 is well positioned to lead that effort.
Note that this team is heavily weighted to process-oriented Blue and team-building Green, “inside-out” thinkers who can improve existing processes. This team has a commitment to what currently works and will strive to improve it, but won’t necessarily have the market sense (Orange) or the conceptual freedom (Yellow) to develop something creative from scratch.
Only when leadership understands the kind of innovation it needs and the range of people resources it has to meet those needs can it create the right balance.
The next step: Putting the wheels in motion.
3. Overcoming Resistance
The natural resistance of employees to change is no different with regard to innovation than with any other initiative. Human nature dictates that, despite what may be good for the organization, we filter new circumstances by first asking ourselves what does it mean to us personally. It’s a fear of change that’s only exacerbated by today’s anemic job market.
What those of us in Skout Group have seen in our work with global organizations to reduce culture risks is that employees and managers alike crave a sense of commitment, context and pride in their work. And, for the most part, people are willing to work hard and even sacrifice for the good of the whole if they feel that their contributions are valued, or at least acknowledged.
This sense of commitment holds true for innovation as well. Employees need to feel informed -- and not surprised -- by sudden changes, and they need to know exactly what is expected of them. In fact, innovative companies demand a level of openness that may not be found in other types of organizations.
Our experience in helping organizations create healthy and productive cultures has revealed some interesting insights regarding the nature of innovation itself. Successfully innovative firms tend to have a number of core values in common:
Trust. In innovative companies, making mistakes is recognized as part of the creative process. Especially in these times, in order for employees and teams to be willing to explore new areas, they must trust that they will not suffer consequences for failure.
Open Communication. Employees need to feel comfortable raising new ideas, even small ones. In many organizations good ideas are squelched because of fear of retribution or humiliation if they stick their neck out.
To overcome resistance to innovation, leadership must address issues of open communication and trust head on. Leaders must also lay out a vision of what this new environment of innovation will look like, and address the questions that will likely to be on employee’s:
- What was wrong with how we innovated in the past?
- What will be the changes in processes, systems and procedures that I will need to know about?
- What role will I play in the process?
Conclusion
In many ways, innovation is no different than any other corporate initiative. Team members expect their leaders to know what the company to survive –- and thrive. Moreover, employees will be motivated to do their best work if they see that their leaders have laid out a plan they understand and feel they can succeed at. Therefore, leadership must do the legwork of determining what skills and drives are needed and where those resources currently reside within the organization. By having the vision and commitment needed to accomplish these changes, and by being clear and open about what they expect, these leaders will have set their company well on its way to an innovative future.
As president of Skout Group LLC, David Gebler works with senior leadership teams to accurately measure what motivates and drives behavior in organizations, using those results to improve their performance. He can be reached at .
