Creating a culture of innovation

Comments (1) | Read All In 1964, during the heyday of the space age and all its dazzling scientific advances, New York City hosted a World¶s Fair that paid tribute to the innovative spirit of the times. Leading companies such as IBM and General Motors offered exhibitions that promised to show visitors a glimpse of the technological marvels the future held in store. The symbol of that World¶s Fair was the famous unisphere, a dramatic 12-story high globe built to represent the theme of man's achievements on a shrinking globe in an expanding universe. That theme serves remarkably well to capture the state of innovation in today¶s business environment, in which a shrinking globe and an expanding universe of product and services have combined to create an insatiable need for innovative achievements. With its emergence as perhaps the single most critical aspect of business strategy in the 21st century, the risks and rewards surrounding innovation have never been higher. Innovation, of course, has always had the potential to create entire new markets, sometimes virtually overnight. More and more, however, it has also become a central dynamic in existing markets and mature industries, where the ability to introduce significant change has become a sought-after competitive advantage. Once upon a time, innovation was seen as a necessary force at the outset, but of less importance as the company came to dominate its market and to rely on traditional means of growth. No more. Today, companies are relentlessly pursuing innovation. The need for innovation Men¶s and women¶s razors do not spring to mind as inherently sophisticated products. One might even think that they¶re not particularly open to innovation. Yet over the past several years, the market leaders, Schick and Gillette, have one-upped each other with new brands, new products and new go-to-market strategies. Indeed, this seemingly staid category has become a fierce battleground in which innovation is the ultimate competitive advantage. The battle between Schick and Gillette serves as a useful snapshot of the overall drive for innovation. Once upon a time, the concept of innovation might have been reserved for high-tech companies, pharmaceuticals and other traditionally R&D-heavy segments. But now, even a fairly routine product like razors can become the catalyst for intense innovation ± an indication of how vital it has become to companies across all industries. It is not an exaggeration to say that the mandate facing companies in today¶s fast-paced business environment is µinnovate or die¶. The Quest for Innovation, a global study commissioned by the American Management Association and conducted by the Human Resource Institute, found that more than two-thirds of respondents considered innovation either µextremely important¶ or µhighly important¶ in their organizations today. Furthermore, the majority of respondents said

The µone size fits all¶ approach that typified business for decades is obsolete. sometimes even competitors. the Apple iPod. we can surmise that there is a serious shortcoming of competencies related to innovation. has played a huge role. the study found that a customer-centric approach is the most important. for instance. Troublingly. primarily time and money. government agencies and other companies. of course. but just as remarkable has been the flood of quick-thinking entrepreneurs that have taken advantage of the iPod¶s popularity by developing peripheral products ± speakers. the Quest for Innovation study found that most companies judge themselves as only moderately good at innovation. devoting too many resources also can have a negative effect. Teamwork and collaboration make up the second most important factor in driving innovation.) What are the macro trends that have led us into this age of innovation? Technology. The product itself represents a major innovation. Let¶s take a closer look at the top five. etc. The search for innovation also increasingly leads outside of the organization. Particularly effective is the use of teams that incorporate diverse viewpoints and have a crossfunctional structure. . employees with long spans of time in which to deliver results may lose motivation and the necessary sense of urgency. While the study found that insufficient resources are the most common barrier to innovation. (The complete study can be found at www. marketing and other aspects of their go-to-market strategy. Staying ahead of that curve requires perpetual innovation. customer demands have led to innovation¶s current prominence as a strategic necessity. For example. Customers are increasingly demanding customized products and services that meet their specific needs. Of the 14 factors in developing an innovative culture. to discover and bring to market new opportunities.amanet. Going beyond mere customer research. the time is now more like 30 to 40 weeks. Researchers Marvin Cetron and Owen Davies have estimated that where the full cycle ± from idea to invention to introduction to imitation ± once took 30 to 40 years. The dizzying speed of the product design and marketing cycle has been another factor. It has spawned a truly staggering amount of new products and services. innovative companies invite and encourage their customers to become actively involved in product design. Furthermore. it has revolutionized the distribution of recorded music and changed the economic model of the music industry. The culture of innovation All of this begs the question: what are the cultural competencies required for innovation? The Quest for Innovation found that there are 14 critical factors in developing an innovative organization. carrying cases. however. with more and more companies collaborating with academia. Interpreting that finding.that innovation would be µextremely important¶ or µhighly important¶ to their organization in 10 years. Last but not least. Taking third place is an appropriate allocation of resources.

At Starbucks. but successful innovators recognize the value of developing rapid prototypes and sharing those prototypes early and often. In Leading Innovation. . Creating the right climate The competencies that drive innovation don¶t develop overnight. founder and chairman Howard Schultz makes it a point to attend innovation meetings and suggest ideas. and up and down the corporate hierarchy ± and companies should not take a µone size fits all¶ approach to the means of communication. A willingness to experiment. between departments. Some situations may call for faceto-face discussion. This also includes a tolerance for smart risk-taking. and innovative companies recognize that truth. For instance. organizations must actively embrace it ± or even mandate it.000 in funding to quickly prove its worth. Some companies use their intranet as a message board for sharing new ideas. participants learn that there are five core behaviors that make up an innovative climate: y y y y y Leading by example. It¶s not enough to passively accept the possibility of failure. which requires that 30 percent of all innovative projects fail. for instance. Fresh perspectives lead to fresh solutions. Information must flow freely across the entire organization ± within departments. Most people would prefer to keep working on the project until it¶s perfect before revealing it. as does Bank of America. With every opportunity. Jump-starting innovation means finding meaningful ways to hire. Rounding out the top five is the ability to select the right ideas for development. others hold internal µtrade shows¶ that bring people together from different departments and locations and give them a chance to show off their interests and expertise. Encouraging new thinking. but rather are created by specific behaviors. Senior management must play an active role in leading the pursuit of innovation. Overcoming a risk-averse mindset requires welcoming all ideas. which encourages innovation teams to pursue new ideas by creating a business case and applying US$25. quick-turnaround method was designed to generate radical ideas with little risk. Communicating means sharing not only ideas but also the lessons learned from failures and successes. The lack of a method to identify those ideas with the greatest potential holds many companies back from achieving innovation: nearly half of the firms surveyed in the study reported that they ³don¶t have a standard policy for evaluating ideas´. A reluctance to discuss ideas or works-in-progress is anathema to an innovative climate. Energize. there is a chance of failure. too many companies emphasize finding a candidate who fits into their culture to the detriment of hiring someone who can bring new insights to the table. while others are best suited for technology-mediated channels. This low-budget. Sharing.Open communication is the fourth most integral element of an innovative culture. Companies searching for a process to pick winning ideas may want to follow the example of Whirlpool. with a nonjudgmental approach. even the most impractical ones. train and motivate the workforce. a new seminar offered by the American Management Association based on the resources of the innovation experts at FutureThink.

. there are literally thousands of ideas that are considered during the making of a film. Ed previously served as President and Chief Executive Officer of Big Flower Holdings.hrmreport.. dare I say it needs to be managed and consciously nurtured? We¶ve all heard the old Thomas Edison quote about genius being one percent inspiration and 99 percent perspiration. Despite its sometimes elusive nature. They don't get trapped into thinking that an answer is the only answer. this is creative problem solving. As president Ed Catmull explained.. He has held the post since 2001. training is the key. they look at it. (now Vertis. you get ideas. innovation at its heart is as orderly and well-planned as any other business process. All rights reserved. sensible laboratories than madcap creative playpens."Collaboration is critical to the process of generating ideas and solving problems in any organization.. Inc. through its renowned management education seminar programs. At Pixar. Each year. Lynn Jackson Posted: 31 March 2010 @ 03:26 | Updated: 31 March 2010 @ 03:28 In Innovate the Pixar Way.If you think about it. however.' When team members come together to find a solution to a problem. the simple truth is that innovation requires a lot of tedious practice and work. innovation can be cultivated and instilled just as readily as any other competency. and prior to this he spent nearly 30 years McGraw-Hill a publishing and communications company. As unexciting as it sounds. This is not to deny that innovation has a mysterious quality. Inc.). The same ratio applies to innovation. we write.. 'Everyone is trying to solve these problems. and a lot of ideas are thrown out there that don't work.. Yet despite all of its glamour and allure." Disclaimer: All comments posted in a personal capacity In order to post a comment you need to be registered and signed © 2010 GDS Publishing Ltd.Conclusion The popular image of innovation is that of an idea arriving like a bolt of lightning..000 managers and executives in the United States and around the world. that one percent of inspiration represents some pretty potent magic. the world's leading not-for-profit membership-based management development organization. Register | Sign in Read All Comments Source: www.You get in a group of people.and you come back and you make the performance better. Companies that have mastered the spirit of innovation are more likely to resemble quiet.. As with any skill. AMA directly interacts with over 100. they are energized and strive to discover creative options for accomplishing their goals. unexpectedly and with galvanizing force. . Edward T Reilly is the 17th President and Chief Executive Officer of American Management Association (AMA).

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