In the first part of the discussion on creating the right culture for innovation, I explained why corporate culture have such a significant influence on innovation. The second part will focus on how the organisational culture can be changed to become a more innovative organisation.
Creating the right culture for innovation
Let’s be honest, it is not as if leaders who want their organisations to become more innovative, are unaware of the need to change. Almost every article, course or presentation about innovation covers this topic. Unfortunately, few experts identify the steps to take to change corporate culture. Obviously, changing a culture is not easy, especially when you are asking a culture to accept more failure and more risk. There are no quick fixes for cultural change; it requires leadership, commitment, communication and time.
I have studied many whitepapers and articles on this topic and I have found the approach of Jeffrey Phillips to be the most pragmatic and comprehensive. He identifies five significant factors you can influence to begin to change the corporate culture: Senior Management, Compensation, Communication, Training and Measurements. I will take you through a very condensed version of some of the steps you can take in each area to change the culture to become more innovative.
SENIOR MANAGEMENT: The executive team need to “walk the talk” and show through their actions their commitment to innovation efforts. The action that speaks the loudest here is the sponsoring of new ideas. COMPENSATION: People do what they are compensated and motivated to do. Change the compensation scheme to encourage people to take risks and recognise they won’t be punished for doing so. COMMUNICATION: Beyond the commitment of the leadership team, it’s necessary for that commitment and the expectations of the leadership team to be communicated to everyone in the organisation, consistently and repeatedly. A planned corporate communication program to individuals at all levels, emphasising innovation and its place in the strategic framework of the company is required. TRAINING: Training is a key component of cultural change, since it is unrealistic to expect people to take on new responsibilities and innovate consistently without giving them new tools, methods and processes. Training must focus on new methods and processes for idea generation, new roles and responsibilities for idea capture and evaluation and new attitudes and approaches for innovation. MEASUREMENT: “What gets managed gets measured”, so goals, measurements and metrics are a key part of any innovation initiative. Measurements, goals and metrics are easily tied to strategic goals and to compensation plans, so senior executive commitment, compensation and measurements are mutually reinforcing for the culture. To compensate your people, and manage their activities, you’ll need to know what they plan to do, and have the ability to measure their outcomes. As you begin your innovation initiative, you’ll have to measure throughput – the number of ideas generated, the amount of involvement throughout the organisation and the amount of time it takes to move an idea through your innovation process. Simply establishing these metrics and setting goals will indicate the importance of the process. Over time, as ideas mature into products or services and are released to the market, outcome based metrics can be created to measure the investment in an innovation program against financial returns.
I have now stated the case for treating innovation as a business discipline and also looked at the “soft” issues, albeit the most important and the foundation of innovation success – culture and leadership. Next time I will change to a more pragmatic approach and I will begin to focus on the practicalities of how to make innovation happen in the organisation, starting with a look into the innovation process. I conclude with a quote by Frances Hesselbein: “Culture does not change because we desire to change it. Culture changes when the organisation is transformed; the culture reflects the realities of people working together every day.”