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Questions lead to Creativity, Answers lead to Innovations

Key Drivers for Creating the Innovation Culture in the Organization

Authors: Rekha Sastry, R. Sridhar, Mohit Jain, and Abhishek Kumar


Abstract: Culture is deemed to be a crucial basis for innovation in various respects.
Culture shall ensure the transfer of ideas and innovations into products and services.
Establishing and fostering an innovation culture is a subtle mix of encouraging the
right behaviors and giving people the means to take ownership of their innovation
efforts. The aim of this paper is to highlight the most crucial factors namely:
"Strategic alignment and culture that supports innovation".
Keywords: Innovation Strategy, Need Seekers, Market Readers, Technology
Drivers, Innovation Culture
Introduction:
It has long been recognized that innovation is a major force in economic
development. Innovation is usually understood as the introduction of something new
or significantly improved, like products or services or processes. Innovation can be
viewed as a process with two major phases: innovation initiation and innovation
implementation. At the initiation phase, new and useful ideas are generated, which
will be adopted and exploited at the implementation phase.
Culture unifies people's behavior. People's beliefs and behavior can contribute or
block the process of developing and implementing new ideas. We take culture as our
focus and in doing so we argue that culture is an appropriate concept to describe
how innovation is influenced by various human factors.
Success at innovation is not just a blend of hard elements such as the number of
researchers, the amount that they receive in funding, or the number of patents they
receive. Indeed, the study has consistently shown that the absolute amount spent
does not correlate with financial performance at all. Instead, the current study
indicates that the most innovative companies appear to have a secret behavior that
makes them different from their peers: a distinct culture of innovation that ensures
that their chosen innovation strategy is clearly aligned with their overall corporate
strategy. This secret behavior is the glue that guarantees a high degree of
coherence between what they aspire to achieve and how they go about it.

Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products

Questions lead to Creativity, Answers lead to Innovations

Types of Innovation Strategic Profiles:


An organizations innovation strategy is based on its approach to incremental versus
breakthrough innovation and the role that end customers play in defining future
product needs. We can classify the organizations according to three strategic
profiles: Need Seekers, Market Readers, and Technology Drivers.
Need Seekers tend to concentrate on gathering the deepest insights possible into
both the articulated and unarticulated needs and desires of their customers. Then
work to be first to market with the resulting new products and services. They shape
new products and services based on superior end-user understanding. Market
Readers look to meet the needs of their customers, but they typically follow already
established trends in the overall market. They focus largely on creating value
through incremental innovations to their products and being fast followers in the
marketplace. Technology Drivers depend to the greatest extent on their own
technical expertise to develop attractive products and services. They often seek to
solve the unarticulated needs of their customers through leading-edge new
technology.
While companies following any of the three approaches can outperform their peers,
however, Need Seekers have greater alignment between their innovation strategy
and business strategy and much stronger cultural support than the other two profiles.
Such organizations significantly outperform their peers in terms of both profitability
and enterprise value. The key finding is that culture is a key to innovation success,
and its impact on performance is measurable. Companies following a Need Seeker
model depend on three key cultural attributes: passion for the product, strong
identification with the customer, and openness to ideas from all manner of sources.
Need of Innovation Strategy:
A clear, specific innovation strategy - aligned with customer needs - how it intends to
generate new product ideas, develop them, and bring them to market. And its culture
should support its chosen innovation strategy at every stage of its efforts to execute
it. The strategy needs to be clearly articulated, and communicated throughout the
organization, from the top all the way to the product development teams, the
salespeople, and the marketers. The technical community needs to be fully aligned
with top management.

Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products

Questions lead to Creativity, Answers lead to Innovations

Culture Matters:
The particular Innovation strategy a company employs will succeed only if it is
supported by the appropriate cultural attributes. Poor innovation performance is
usually not caused by a lack of ideas or lack of aspirations. What some companies
lack is the structure (Culture) needed to effectively dedicate resources to innovation.
A survey by Booz & Company on Top Innovation goals and Top Cultural Attributes
from 600 Innovation leaders concludes to,

Organizations also has to ensure that the innovation agenda translates into a
tangible action plan, clearly linked to a short, focused list of capabilities that will allow
you to stand out in the marketplace.
Strategies for Creating Innovation culture
There are three strategies to nurture a culture of innovation: Envisioning,
Communicating and Sponsoring.
Envisioning:
It is defining a vision of the ideal future state for an organization that is creative,
unique, compelling and worthwhile. Listen broadly for ideas through vision,
innovation, and external networks. Listen to the customer. Understand who your
actual and potential customers are, what they want, what they will need, and why
those needs have not yet been met. Develop cross functional innovation teams to

Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products

Questions lead to Creativity, Answers lead to Innovations

address the problem. Diversity of professionals staring at the same problem will
spark ideas that are unique.
Communicating:
Formal communications certainly play a key role in driving culture change, fostering
a

culture

of

innovation

means

also

becoming

familiar

to

the

informal

communications. Leaders can begin by first gaining sensitivity to the informal


communications that exist within their organization. To assess the true nature of the
organizational culture it is essential to gain an understanding of the stories,
traditions, symbols and rituals that implicitly direct employees, partners and even
customers. This includes: the way we do things around here, what the company
actually values, and what leadership says vs. what they really mean.
Sponsoring:
Sponsoring means taking a specific, tangible and visible action for innovation culture
change. When leadership visibly sponsors an initiative focused on supporting
innovation sends a strong message. It can establish positive, new stories that create
energy, enthusiasm and optimism throughout the organization. Develop a cohesive
program of innovation metrics, incentives, recognition and rewards to help foster
smart risk-taking and to drive a healthier balance between short and longer term
corporate goals.
Key Drivers to create culture in BEL:
1. Align the Business strategy to become a Need seeker Organization.
2. Define Innovation Strategy which is well aligned with Business strategy.
3. Create an Innovation Factory to support enterprise-wide strategic innovation
headed by CIO (Chief Innovation Officer).
4. Setup a High-level innovation committee to review the innovation program
periodically.
5. Finding Best multi-disciplinary talent across the SBUs to work in the
Innovation Factory.
6. Setup a Central innovation team that scans the trends and feeds the seating
committee with market analysis which shapes the right decisions.
7. 15 percent rule: Technical people spend up to 15 percent of their time on
study and projects of their own choice or initiative.

Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products

Questions lead to Creativity, Answers lead to Innovations

8. 25 percent rule: Each division shall produce 25 percent of annual sales from
new products and services introduced in the previous four years.
9. Offering employees the opportunity to lead and participate in high-profile
innovation initiatives.
10. Making Innovation thinking a natural habit through Collaborative innovation
activities including setting up innovation contests and prizes.
11. Idea Improvement Program: Openness to new ideas from employees,
customers, suppliers, competitors and other industries.
12. Invite current and potential customers every year to see what Innovation
Factory is working on and work directly with some customers on Customer
co-innovation projects
13. Accept that mistakes will be made. Learn from the mistakes quickly and move
on. Failures are part and parcel of what creates new innovation.
14. Collaborative design: Creating an innovation ecosystem by integrating
universities, R&D centers, technological platforms & developer communities
and attract best skills & partnerships from outside.
15. Having the right metrics to measure innovation progress and track ROI.
Conclusion:
Thus by clearly articulating Innovation strategy that is well aligned with Business
strategy, creating and supporting an idea evaluation framework and balancing dayto-day vs. long term goals, continually communicating the need for innovation as a
business focus, incorporating innovation reports into the business review processes
will make our organization to outperform in terms of management of the innovation
process and excel at developing new products that will succeed in the market.
Team Profile:
1.
2.
3.
4.

Rekha Sastry Sr.DGM, Crypto & Datacom, St.No: 208973, BE


R. Sridhar DM, Crypto & Datacom, St.No: 214058, BE
Mohit Jain DM, Crypto & Datacom, St.No: 212859, ME
Abhishek Kumar DM, Central Finance, St.No: 212526, CA

References:
1
2
3

A Bay Area Council Economic Institute and Booz & Company Joint Report on The
Culture of Innovation Mar 2012
Booz & Companys annual study on Why Culture Is Key Strategy + business
magazine Dec 2011,
Creativity And Innovation In Business by Sanjay Dalal, May 2009

Creativity generates Ideas. Ideas generate Innovations. Innovations generate New Products