Innovation is really all about culture – the organizational culture and the mix of cultures in a diverse workforce. Becoming a truly innovative company means clearing the obstacles to innovation so diverse ideas thrive in a supportive workplace culture.
— By Daniel Perez
Truly innovative companies are companies that have learned how to leverage the talents and creativity of its workforce. It is people who innovate, and numerous studies have proven that organizations with a diverse workforce have the essential ingredient for innovation. The challenge is knowing how to embrace the creativity in a way that produces innovation and then being flexible and agile enough as an organization to make the internal changes needed to capitalize on the innovation. A new idea is not necessarily innovation if it does not require change. The barriers to becoming a truly innovative company are not always obvious. Sometimes it comes down to managers who get caught up in day-to-day priorities and fail to move innovative ideas forward. Other roadblocks include failing to embrace the diverse perspectives in the workforce through inclusion, not giving people opportunities to be creative due to continued bureaucratic control, and management that lacks the perspectives and skills needed to promote innovation. It all adds up to an organization that does not support true innovation because it locks people into current systems and ways of operating.
Robust Innovation Requires a Robust Culture
Innovation is achieved through people which means it is more about talent management than it is with technical control. Even an R&D function can fail when it gets bound up in conventional perspectives, rules, and established controls that discourage employees from being truly innovative. It comes down to leadership, and top leadership is often the first barrier to innovation because it is limited by traditional managerial skills and strategies. Creating an innovative culture requires changing management perspectives on building a successful team approach to innovation.
Despite knowing that siloed organizations are hampered by the silos, they persist. One of the most important steps organizational leaders can take is ensuring different areas work together to generate innovation. This makes innovation the responsibility of everyone in the organization rather than a department like R&D. A specialized department like R&D has a critical role, but also sends a message that the responsibility for innovation lies with one function. Robust innovation depends on innovation being a core value for the organization.
Innovation as a core value must partner with inclusion as a core value also. Organizational leaders need to create an environment where all employees can participate in the innovation process, and this is where many companies struggle. Companies develop standards of behavior with the unintended consequence of discouraging creative perspectives.
Organizational Competencies and Capabilities
Recognizing that organization culture is the foundation of innovation, managers must have the skills to develop the desired culture. People in a diverse workforce should be encouraged to interact with each other. The role of organizational leaders is to help employees capitalize on their skills, unique perspectives and experiences by creating opportunities for networking and relationship building across functions. Businesses stuck in the old mode of operation driven by deadlines and budgets will have trouble promoting creativity because helping people interact is not the focus. Innovation is not limited to the creation of new products or services.
Turning to external resources, like businesses in unrelated industries and academic research institutions, can generate innovations through collaborations and partnerships that benefit all parties involved.
Julia C. Naranjo-Valencia and Gregorio Calderon-Hernández developed a model for an organizational culture for innovation. In doing so, they identified the organizational competencies and capabilities needed to develop a culture of innovation. Organizational competencies required for an innovative culture are teamwork, communication, conflict management, tolerance for error, simplicity and agility, and prioritization. The organizational capabilities are customer and market orientation, relationships, speed, adaptability, ambidexterity, entrepreneurial orientation, and execution. The cultural traits of innovation identified are risk-taking, freedom, mental flexibility, commitment and trust, curiosity, respect, association and acceptance of diversity. Organizations that develop the competencies and capabilities and cultural traits of innovation are in a position to promote innovative behaviors which are idea generation, idea promotion, and development.
Complexity of Innovation
It is easy to see why so many companies struggle to develop a culture of innovation. The traits and capabilities mentioned can drive the metrics needed to measure progress towards developing the desired culture. Metrics are needed to ensure the alignment of employee behaviors with organizational values. Inclusion is not merely developing a workforce that includes representation of multiple backgrounds, races, gender, and so on. An inclusive organization, needed for maximum innovation, is one that values the inclusion of all people in the development of the organization competencies and capabilities needed.
The biggest barrier to innovation is tolerating business as usual. Managers live with budgets, push people to meet deadlines, have an intolerance for failure, and fail to value differences. Overcoming these obstacles must start with the CEO who is most responsible for defining the organization’s culture. Obstacles include a lack of ownership or commitment to innovation by senior leaders, lack of shared vision and purpose in the organization, lack of opportunities to develop new ideas, maintaining a hierarchy that leads to over management, failing to deal with bias leading to exclusion, risk aversion, and fear of criticizing current practices and processes.
It is easy to see that overcoming barriers to innovation is not a matter of changing a policy or directing people to be innovative. It is one of the mistakes leaders make – thinking that a few changes can produce innovation. A survey by Innovation Leader of 270 corporate leaders found the biggest obstacles to innovation are no alignment and politics/turf wars; cultural issues; inability to act on critical developments; lack of budget; and lack of strategy or vision (to name the top five). The enablers of innovation included setting clear expectations that innovation is necessary, building communication between teams and functions, and measuring progress of innovation groups and the supporting functions and business units.
Across the board, there is agreement among researchers and companies successful at innovating that producing innovation is not a one-off event. It is supported by a strong culture of innovation, relationship building among diverse employees, and processes that make innovation a part of daily operations.