Categories
Leadership Organizational Design and Development revised Technology and innovation management

If the culture cannot change then the business cannot change

Originally published in August 2015, revised in January 2018

I received many comments and tweets about the previous post. Thank you for ideas and comments

Some agreed that innovation is the result of culture. Some said that culture is not only created by management, but also by staff. For instance, the admin pool in a traditional engineering company can be very innovative (and creative) even if the rest of the business is stuck in the 1980s.

Somebody told me that creating an innovative culture is in itself a chicken-egg (low equilibrium) situation, because for a leader to create (or enable) an innovative culture takes innovation in itself. You can see where this is going.

Then I discovered a recent cartoon in my inbox by Hugh Macleod of Gapingvoid fame. This cartoon says it all.

An organization that cannot change its culture (due to too rigid systems, due to lack of management capability, due to its people) has become trapped in time. While some organizations may exist like this due to sheer momentum, due to protection (by law), by continuous funding, or for whatever reason, will struggle to adapt to external change. These organizations are not resilient and they are at the mercy of external supporters (a.k.a clients, benefactors, funders or shareholders).

I was also asked how some organizations can still innovative despite a poor innovation culture. Again, it is of course possible to replace a machine, or for a few people in an organization to design something brilliant, or for a new process to emerge. Of course it is possible. But it takes much more energy, determination of a few, and some really tenacity to be innovative in an un-innovative (what is the right word here?) culture.

I am sure more comments will come.

Cheers, Shawn

I appreciated the comments received by e-mail, but wonder why people are not posting comments to this article? Is the WordPress registration process to difficult? Please let me know. And keep those comments coming!

Categories
Innovation Organizational Design and Development revised Technology and innovation management

Innovation as cultural as opposed to innovation as a technique or function

Originally published in August 2015, revised in January 2018

Reflecting on the correspondence I have received after my previous post and recent training sessions with manufacturers, I have come to realise that people are looking for tools and tricks to encourage innovation in their workplaces. Sometimes it is actually not even about innovation, but about making up for poor past decisions, such as not investing in technology or market development when they should have. Others think of innovation as a function or as a management tool that can be standardised into a job description or an area of responsibility. While this is possible in some contexts, I don’t find this approach to innovation of much use in the smaller and medium-sized manufacturing firms and the research/technology institution space in which I am working.

For me, innovation is firstly a value, a perspective of how organisations should be. When management says, “We are an innovative organisation “or” We want an innovative culture “or” Our reputation is that we are innovative”, then we can move to tools, portfolios, tricks and tweaks (those things that people in innovation functions must attend to). Many textbooks, articles and blog sites on innovation and technology management are then useful. Actually the challenge is to decide which of the bucket loads of advice to use, and consultants such as I typically help organisations to choose a few tools and provide guidance on how to use them fully and consistently. I would dare to say that it is relatively easy to help companies that are already innovative to become more innovative.

 

What really intrigues me is those organisations that do not think of themselves as being innovative, or that are from industries considered to be traditional and not innovative. Perhaps they used to be innovative, or perhaps they are innovative in some areas but not in others. Perhaps they had one or two tricks in the past that have now become irrelevant. These could be extremely competent organisations, such as a university department, a manufacturer of highly specialised industrial equipment or an organisation that simply designs and manufacturers exactly what its customers order. Even if the outputs of these organisations can be described as ‘innovative’, they do not necessarily have innovative cultures that are constantly creating novel ideas, processes and markets. In my experience these organisations have brilliant technical people, but management is often not able to harness the genius, experience or creativity of its people. The main reason for this is not a lack of technique, tools or tricks, but the lack of an innovative culture, leading to a lack of innovative purpose.

These organisations are trapped. They are equipped for the past, and they are paralysed by all the choices they have to make for the future. For management, it feels as though everything it has in place is inadequate and needs equal attention, ranging from attracting staff with better or different qualifications to finding new markets, developing new technological capability, sorting out cash flow and capital expenditure, and addressing succession planning.

Improving the innovation culture of an organisation is a complex issue. It is not about tasks, functions or tools, but about changing relations between people within and beyond the boundaries of the organisation. Innovation in these organisations is a sideshow, a project, whereas it really needs to be central to the business strategy, a different way of looking at the world.

When working with organisations that must improve their innovative culture, interventions like motivational speeches and optimistic visions of the future are not useful and could in fact deepen the crises facing management. Nurturing a culture of innovation goes far beyond establishing or refining innovation management functions. It is a strategic issue that is initiated by top management, but that will soon spill over into every area of the organisation, hence it cannot be driven by a management function called ‘innovation’.

Improving the innovation culture process starts with connecting management back with its people. It starts in the present, the now, not with future scenarios, not with using innovation techniques and better analytical tools, and in most cases not with some or other management fad. It goes beyond trying to improve products, processes or business areas, beyond gaps in management’s capability. It must look at the relations between people, between what people know and can do now (or knew and could do in the recent past), and the potential people see to make small improvements. It is essentially about many dialogues happening throughout and even beyond the organisation. After cultivating dialogue, management needs to empower the organisation’s people to allocate resources to activities that strengthen the learning culture, that turn even small improvement projects into processes that broaden thinking, deepen learning and motivate people to think beyond just their specific tasks.

When management has the courage to decide to improve its culture of innovation it starts a process that cannot be described as incremental improvement, as that sounds too directed. It is rather like a deepening, or an awakening, where employees are inspired to contribute, and management is more aware of what it can do to enable its employees to become more innovative on all fronts. Of course, management faces the risk that outdated management approaches that do not seek to empower employees to be creative will be exposed, and some tough decisions will have to be made.

To nurture an innovative culture requires innovation in itself. It requires management at different levels to rethink its roles from being directive to being enabling, from being top down to being more engaged with its teams.

Categories
Innovation Organizational Design and Development revised Technology and innovation management

Instigating innovation: Where to start

Originally published in 2015, revised in February 2018

I am currently focused on strengthening the manufacturing sector. I am speaking more and more at meetings and events, in boardrooms and to post-graduate students about innovation. In this increasingly engineering-minded world people frequently ask me for tips on how to get innovation going.

Some of the ideas people put forward are:

“How about an idea box?”
“How about canvassing ideas for a new product design from our customers?”
“How about rewarding our engineers with a profit share if they design a new product?”

However, the truth is that many manufacturing enterprises, especially the smaller ones, are too narrowly sliced into specific functions. They are mimicking large organisations and by doing so are giving up any flexibility and resilience that they might have had. Designers design, manufacturers manufacture and salesmen sell. This functional division of their hierarchy makes information flows about potential improvements, new market opportunities and some old tricks that could become useful again very difficult. The cost of coordination in these enterprises is very high. In these silo-based organisations the cost of finding information, new signals and new ideas from outside the organisations is extremely high, and in general they struggle to learn. Why I mention them is that innovation is something that most organisations are already doing, they just do not recognise it as such. Innovation is lost within functions, or is overlooked because a project is focusing on addressing some or other need. Every improvement project could also be used to change or improve the culture of innovation, to deepen the use of knowledge and to increase capabilities and options for an uncertain future.

A second problem is that most smaller manufacturers are mainly focused on product innovation. Which does not mean being focused on knocking the socks off their customers with frequent improvements or brilliant designs. Unfortunately, many of the more traditional manufacturers are focused on how to reduce the price or how to sort out quality issues. This is actually a kind of process improvement, but a very narrow one. The limitation of this incremental approach is that you can at best only grow and develop as fast as your customers can articulate what they want. Competitors or substitutes can also upset market relations by coming up with novel solutions that an incremental approach struggles to generate.

A third problem is that innovation is only carried out when customers demand it. It is passive. It functions in bursts to get things right, and then it settles into a problem-solving mode until the next customer makes some unreasonable demands. One should be grateful when clients give you a piece of their mind, but this is still far too passive to my way of thinking.

What many manufacturers lack, especially those in the more traditional sectors such as metals and engineering, is a focused effort by top management to build a culture of innovation that is actively trying to find product, process and business model improvements. The effort must be focused internally in order to constantly rethink the business and its core processes, and at the same time it must be focused externally on what customers and competitors are doing. The really good companies are also looking beyond current markets and competitors at new technologies and how they might shape the future.

Thus far I have addressed the business perspective. However, research organisations, technology transfer centres and industry support centres can also become trapped in a low-innovation culture.

I am currently working with a few industry groups and research and technology centres to find out how these organisations can move beyond the “catching up” and responding to change modes towards anticipating what will come next. This sounds perfectly simple, but by merely mobilising more and more people in the organization to search for what’s next has already yielded amazing results in a short time. Perhaps I am being over-optimistic, but I can already sense the innovation culture change in these organisations as more and more people become involved in searching for possibilities.

Here’s an apt quote attributed to William Gibson: “The future is already here – it’s just not evenly distributed”.

The first kind of search is to get more people involved in searching for what is already present within the organisation, but is not recognised or is not being used to transform the organisation. The second kind of search is to go beyond the organisation in related and unrelated markets and technologies. Take trends such as the global shift to automation, or the new developments in artificial intelligence and play with these within your organisation. Wonder out loud with your people about what this might mean for the organisation, for clients, for suppliers. How might these technologies or trends influence their investment decisions, their viability or their business models? Use these vague concepts to rethink the organisation, its networks, its technologies and systems.

That is what I call instigating innovation, when the dialogue led by the leadership mobilises more and more people within and outside the organisations to start thinking creatively, connectedly and in new ways about the future and the present. Lay a strong foundation for innovation by getting more people to think, imagine, connect ideas and improve.

Categories
Organizational Design and Development Process and Change Facilitation Promoting Innovation Systems Technology and innovation management

New series: Instigating Innovation

I have been developing a new capacity building method and training approach that brings together my work in innovation systems promotion  and my work on improving technology and innovation management. I call it “Instigating Innovation”.

I chose “instigating” because it has a more positive ring to it than provocation or incitement. While it is a noun with mainly a positive tone, it is a bit more aggressive than support, enable or encourage or even stimulating. I have been referred to in my past as an instigator of change so I thought this was a good idea.

Why was this effort firstly necessary and secondary so rewarding?

My work on innovation systems is mainly aimed at assisting meso-organizations such as technology transfer centres, research centres and universities to be more responsive to the needs of the private sector. While it only takes a few interviews by a senior decision maker from one of these institutions to a few leading enterprises to get the organization to improve its offering to the private sector, it does not solve the problem that these institutions often needs a continuous process of innovation itself. So while they can respond to the needs of the enterprises (for instance by launching a new service, or making a key technology available, etc), they often are not able to innovate constantly in order to anticipate what they private sector might need in the future.

With my other hat on, working in the private sector to improve the management of technology and innovation is focused on helping individual and on rare occasions, groups or networks of enterprises to formalize or improve their management of innovation. Here my challenge is that most enterprises innovate by accident, or have elements of an innovation management approach in place without knowing it. But it is not systematic nor is it consistent.

So both supporting institutions and enterprises lack some very basic frameworks to focus their existing development and learning processes to ensure not only short term results (new products & services, process improvements, cost reduction, etc) but to also ensure longer term success (playing in the right markets, selecting the right technologies, investing in the right kind of knowledge, partnering with the right people, etc). Furthermore, most enterprises and supporting institutions have something else in common: they often face resource constraints with the most versatile of their staff being involved in problem solving and not thinking about the future and what may be possible sometime down the line.

I set aside most of March and had great fun reading through my collection of articles, books, reports of past missions, and speaking to entrepreneurs and development practitioners I trust. Based on this investigation I decided on the following criteria for instruments to include in the Instigating Innovation module:

  1. Each instrument or concept must be relevant to both enterprises and meso-level organizations05 building innovative capacity small
  2. Each instrument must provide a very simple framework that can be illustrated on a flipchart
  3. The simple framework must be usable as a workshop format that allows people to reorganize or explore their current and future practices
  4. The frameworks must be scalable, both in depth (allowing pointers for a deep dive into an issue) and in width (useable for a product, issue, portfolio or the strategy of the organization as a whole).
  5. Lastly, I did not want to be the consultant with a project, I want to be the facilitator that enables change and that builds long term sustainability into the organizations that I work with.

This was a very rewarding exercise. Not only do I love reading about innovation, change and technology, I love finding better ways to explain these concepts. It was also great to find a way to connect my work on innovation systems, which often seems abstract, with the tough decisions that the enterprises that I work with must confront and address. I tend to work in the more technical domains dominated by academics, engineers, scientists and manufacturers, so finding a simple yet convincing way to add value to what these clever people do was important.

I will in the next few posts reveal a little bit more of the tools I selected and how it can be used.

Thank you for the EDA team in Bosnia and Herzegovina who motivated me to turn this idea into a capacity building format and who agreed that I try “Instigating Innovation” on their team during my visit to Banja Luka in May 2015!

Instigating Innovation in Banja Luka with the team from EDA
Instigating Innovation in Banja Luka with the team from EDA