Innovation - Changing the Culture of an Organization - Page 1

Aug 24, 2007

Mateen Greenway

Innovation is a hot topic. Companies are keen to innovate and be seen as innovative, but why should a company innovate? Innovation is not a thing that can be purchased or installed like a computer system. Rather, it is a culture that must be adopted and nurtured, but it also needs to have some aim or purpose for the company concerned.

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In many ways the 1990s and early 2000s can be seen as an era dominated by corporate cost cutting. The mantra was “If it is not broken, then do not fix it”. This approach was a short term view and when properly applied concentrated on reducing waste within an organization.

So, where does IT fit? A perception that IT is a cost-of-doing-business rather than something that contributes to the success of companies suggests there is no clear link between IT and business value. This reflects a number of perceptions and problems affecting businesses.

These pressures contribute to the belief that innovation is an organization’s best opportunity for survival because innovation extracts value from assets old and new while revolutionizing industry, society and business. While these pressures can be viewed as articles of faith, there is evidence that innovative companies (e.g., Yahoo, Amazon, Google, eBay) have been largely successful.

What is Innovation?

Before going any further it is important to define what innovation is. Innovation is not about coming up with clever ideas. Creativity is about coming up with the idea, innovation is about applying the idea to obtain value. To be clear, innovation is the act of changing the established way of doing things, the ability to turn knowledge into value and linking emerging technologies with emerging markets. Innovation is about brining creative ideas to life.

Within an organization it is important to understand where and how to apply innovation to create true value. The first question that should be addressed is, “What do you want to gain from innovation”?

Surprisingly, this identification of a clear goal is often ignored, but without a goal it is impossible to quantify the value realized from innovation. Some innovation goals are for brand and image enhancement, increasing shareholder wealth, increasing return on investment and increasing market share.

While innovation can be targeted, an innovation program should look strategically across all possible solution areas. Any strategy will need to be treated as a journey towards the overall objective. Each step of this journey will involve innovation in some combination of process, product and performance.

This innovation will be by its very nature dynamic because the overall corporate strategy must deal with changing technology, competition, economic condition, demographic and cultural change and meet the often complex requirements of governmental legislation.

How to Innovate?

Having identified where to apply innovation the next question is how to innovate. The first aspect of this is to determine if your company has an innovative culture? To do this, consider how you stack up against the following seven principles of innovation:

  • Do you know what business you are in, and what are you trying to achieve in the future?
  • Do you understand where the value in your company comes from, and can you articulate what you want to achieve through innovation?
  • Can you concentrate on what you want to achieve or will you be distracted by day to day concerns?
  • Can you find a way to complete innovations?
  • Can the participants share the results of their innovation?
  • Can you get innovation accepted in your company or organization?
  • Innovative organizations typically display a tolerance for risk, focus on the future market, are able to ask why something is done in a certain way and figure out a better way to do it and understand that innovation is a culture, not a one-off event.
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