Everyone wants to be innovative; most fail!

Innovation: Corporate culture is not the answer

 

Everyone wants to be innovative. In fact, I can’t remember when any organization last came to IMD and pronounced themselves as being innovation indifferent. Yet, the sad truth is that while everyone dreams of becoming Apple, most linger in the same innovation-lite purgatories that we associate with today’s RIM, Kodak, even Sony, and countless other organizations who, despite their best efforts and historical legacy, are no longer distinguished by the successful commercialization of great ideas. Clearly, such organizations are not the victims of aspirational failure; they all aspire to be innovative! The problem must be somewhere else; perhaps their organizational culture?

A new report on innovation produced by Booz & Company argued that organizational culture is, indeed, the culprit. The report observes that “only about half of all companies say that their corporate culture (the organization’s self-sustaining patterns of behaving, feeling, thinking and believing) obustly supports their innovation strategy. Moreover, about the same proportion say their innovation strategy is inadequately aligned with their overall corporate strategy.”

The report’s observation on the lack of a statistically significant relationship between financial performance and innovation spending serves to further emphasize that innovative success is not a function of spending-might, but rather of the environment in which any such investment takes place.

Wishing for changes in corporate culture is not enough! In fact, a friend of mine, who is quite well-known in innovation circles, has often remarked that “the word culture is an excuse for not thinking!” What we really want to focus in on are the leadership acts and managerial choices that will raise the probability of us actually achieving one or more of these aspirations! Every organizational manager, no matter how modest the organization, can make a difference in how innovative their organization can be.

IMD has come to rely upon a simple, but exceedingly useful framework for thinking about the managerial choices necessary to really build an aspirational culture, that was developed by a former IMD colleague, Jay Galbraith. Galbraith’s “star model” identifies the five “levers” by which managers can move an organization:

  1. the articulation of strategic vision (which should be both precise & liberating)
  2. the talent & skills that are necessary to achieve this vision
  3. the best way to organize our talent & skills to achieve our vision
  4. the processes that we can employ to give our talent a higher probability of success
  5. the values, measures & rewards by which we inspire, evaluate and compensate our talent.

 

Source: IMD / Professor Bill Fischer | IMD.org | 2011