How Can a Manager Foster Innovation?
The systems model (inputs → transformation process → outputs) can help us understand how organizations become more innovative.42 If an organization wants innovative products and work methods (outputs), it has to take its inputs and transform them into those outputs. Those inputs include creative people and groups within the organization. But as we said earlier, having creative people isn’t enough. The transformation process requires having the right environment to turn those inputs into innovative products or work methods. This “right” environment—that is, an environment that stimulates innovation—includes three variables: the organization’s structure, culture, and human resource practices. (See Exhibit 6–5.)
Exhibit 6–5
Innovation Variables
How do Structural Variables Affect Innovation?
Research into the effect of structural variables on innovation shows five things.43
An organic-type structure positively influences innovation. Because this structure is highly adaptive and flexible, it facilitates the collaboration and sharing of ideas that are critical to innovation. (We’ll look in more detail at organic organizations as a form of organizational structure in Chapter 8.)
The availability of plentiful resources provides a key building block for innovation. With an abundance of resources, managers can afford to purchase innovations, can afford the cost of instituting innovations, and can absorb failures.
Frequent communication between organizational units helps break down barriers to innovation.44 Cross-functional teams, task forces, and other such organizational designs facilitate interaction across departmental lines and are widely used in innovative organizations.
Extreme time pressures on creative activities are minimized despite the demands of white-water-rapids-type environments. Although time pressures may spur people to work harder and may make them feel more creative, studies show that it actually causes them to be less creative.45
When an organization’s structure explicitly supports creativity, employees’ creative performance can be enhanced. Beneficial kinds of support include encouragement, open communication, readiness to listen, and useful feedback.46
How Does an Organization’s Culture Affect Innovation?
Innovative organizations tend to have similar cultures.47 They encourage experimentation; reward both successes and failures; and celebrate mistakes. An innovative organization is likely to have the following characteristics.
Accepts ambiguity. Too much emphasis on objectivity and specificity constrains creativity.
Tolerates the impractical. Individuals who offer impractical, even foolish, answers to what-if questions are not stifled. What at first seems impractical might lead to innovative solutions.
Keeps external controls minimal. Rules, regulations, policies, and similar organizational controls are kept to a minimum.
Tolerates risk. Employees are encouraged to experiment without fear of consequences should they fail. Mistakes are treated as learning opportunities.
Tolerates conflict. Diversity of opinions is encouraged. Harmony and agreement between individuals or units are not assumed to be evidence of high performance.
Focuses on ends rather than means. Goals are made clear, and individuals are encouraged to consider alternative routes toward meeting the goals. Focusing on ends suggests that there might be several right answers to any given problem.
Uses an open-system focus. Managers closely monitor the environment and respond to changes as they occur. For example, at Starbucks, product development depends on “inspiration field trips to view customers and trends.” When Michelle Gass (now Kohl’s Corporation’s chief merchandise and customer officer) was in charge of Starbucks marketing, she had her team travel to several trendy global cities to visit local Starbucks and other dining establishments to “get a better sense of local cultures, behaviors, and fashions.”48 Her rationale? Seeing and experiencing firsthand different ideas and different ways to think about things can be so much more valuable than reading about them.
Provides positive feedback. Managers provide positive feedback, encouragement, and support so employees feel that their creative ideas receive attention. For instance, Mike Lazaridis, co-founder of BlackBerry maker Research in Motion, said “I think we have a culture of innovation here, and [engineers] have absolute access to me. I live a life that tries to promote innovation.”49
What Human Resource Variables Affect Innovation?
In this category, we find that innovative organizations (1) actively promote the training and development of their members so their knowledge remains current, (2) offer their employees high job security to reduce the fear of getting fired for making mistakes, and (3) encourage individuals to become idea champions, actively and enthusiastically supporting new ideas, building support, overcoming resistance, and ensuring that innovations are implemented. Research finds that idea champions have common personality characteristics: extremely high self-confidence, persistence, energy, and a tendency toward risk taking. They also display characteristics associated with dynamic leadership. They inspire and energize others with their vision of the potential of an innovation and through their strong personal conviction in their mission. They’re also good at gaining the commitment of others to support their mission. In addition, idea champions have jobs that provide considerable decision-making discretion. This autonomy helps them introduce and implement innovations in organizations.50
Airbnb co-founders Brian Chesky and Joe Gebbia applied design thinking that focused on travelers’ interests, behaviors, needs, and wants in creating an innovative approach to lodging. Their online marketplace connects people wanting to rent their home with people looking for a place to stay. Chesky is shown here visiting the owner of a bed and breakfast in Cape Town, South Africa.