This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/how-to-create-a-culture-that-supports-innovation-1126 DESCRIPTION Innovation is actually easy--when the corporate culture is supporting it. Unfortunately today many companies show "excellent" practise killing the innovative spirit. In this new in-depth article Dirk Loop explores the opportunities every employee--not just executives and innovation managers--has to enhance a culture of innovation. He gives a brief overview on common weaknesses within corporate process frameworks and shows hands-on solutions. ABOUT THE AUTHOR: Having studied national economics, Dirk Loop is also educated in banking, highly trained in effective leadership & communication skills and a PMI-certified Project Manager. He offers fundamental interdisciplinary knowledge, and more than ten years of relevant work experience in various industries and professions ? from corporate controlling to public relations, from IP-management to software development. Loop is a co-founder and director of CIPOC ltd, a consultant firm focused on innovation and quality management for telecommunication, energy and banking.

1. The number one online magazine for innovation management practioners
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How
to create
a culture
that
supports
innovation?
Dirk Loop
Co-Founder & Director of CIPOC Ltd.
by
AIM-article # 005-2011

2. How
4 AIM-article #5-2011 is brought to you by InnovationManagement.se ©Ymer&Partners AB All rights reserved. To order please visit www.imstore.se
leader is today. However, you will still be five years
behind today’s industry leader as well as other com-
petitors. In addition, copying is the antipole of in-
novation and therefore a bad start to become more
innovative.
The following recommendations should neither be
understood as a blue print nor as a strict map to suc-
ceed in innovation. Nevertheless, their consideration
will certainly help to avoid threats and instead help
find opportunities to become more competitive.
HOW TO CREATE A CULTURE THAT
SUPPORTS INNOVATION?
This in-depth article is divided into two parts: The
first part, Top-down steps, gives recommendations
to line managers. In this context a manager is defined
as someone who leads a team, has organizational au-
thority and has access to budget. The second part,
Bottom-up steps, focuses on the individual worker
or project member who has limited formal power,
but some opportunity to change the culture of an
enterprise from the inside.
TRUST YOUR PEOPLE
Innovation requires freedom in many ways: The
freedom to think out of the box, to explore and ex-
periment, to venture – and most importantly to fail.
“If you give people freedom to innovate, (...) then
you must also give them the freedom to fail. Accord-
ing to Deepak Seethi of AT&T, the organization of
tomorrow will demand mistakes and failures. It is
only by trying lots of initiatives that we can improve
our chances that one of them will be a star.” (Sloane,
2006: 95)
Innovation is built on freedom – and freedom is built
on trust. Without trust an enterprise will never be
able to create an innovation culture (Please see fig-
ure 1: Charting a Top-Down approach to leverage
a culture of innovation). But trust, in this concept,
is a two-way street: Bottom-Up, employees need to
trust their management. They need to be sure, that
lateral thinking and opposition is not fundamentally
a bad thing that gets them a pink sheet. They need
to know that management is open-minded and fair.
On the other hand, management has actually to be
open-minded.
What makes things even more complicated is that
leaders witness their employees fail once, or more
than once, but still need to keep up trust and motiva-
tion. Leaders should consider the wise words of J.K.
Rowling, single mother and mega-bestselling author
of the Harry Potter series: “It is impossible to live
without failing at something, unless you live so cau-
tiously that you might as well not have lived at all.”
(Rowling, 2008)
Leaders should do anything to avoid distrust, fear
and pressure. Instead, executives should get to know
their employees better. Not in a classic fraud preven-
tion context (Previous employment, education, cer-
tificates claimed, references to pre-hire drug screen-
ing), but personally. They can do this for example by
walking randomly into their employee’s ofices and
engage in small talk or by spontaneously crashing
into project meetings. If they get to know the person
behind the position beter then building up mutual
trust will be much easier.
DO NOT TRUST YOUR PROCESSES
Tools & processes might be great, but they do not
guarantee innovation, and in some cases they might
Top-Down steps to leverage
a culture of innovation
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3. How
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IMPROVE EVERYTHING…
Thomas Alva Edison is often quoted as saying: “I
readily absorb ideas from every source, frequently
starting where the last person left off.“ In my opin-
ion, this is a key element of innovation. Nothing, at
least no invention, is ever totally new. New knowl-
edge always emerges out of existing knowledge.
This is why people visit schools and universities,
and why nobody should stop listening and learning
even after years of work in the same office at the
same company.
Where do great ideas come from? In 2001 I co-
founded a company, that surveyed and evaluated
hundreds of patents a year. The focus was to show
the economic value of inventions in order to get
a basis for investments. What we have seen over
the years was that the story of the eremite inventor
who comes up with a billion-dollar idea is a myth.
Great discoveries typically emerge from a hive
mind (also see e.g. Kelly, 2010; Johnson, 2010).
And there has been a significant increase in patent
values when underlying inventions were close to
their market needs.
The logic consequence is that the success rate of
innovations will rise when the right people are in-
volved, and listened to. In most cases this will be
customers or co-workers. The ideas of salesmen and
call-centre agents have been especially proven to be
valuable as they get the unfiltered feedback of the
customer experience.
… BUT NOT AT ONCE
From the invention of fire, to steam engines, to nu-
clear energy, people have tried to make their lives
safer, easier or at least more convenient. But it took
one step at a time to get there.
In a big corporate environment changes are often lim-
ited by complexity. Business units for example find
themselves involved in drafting different, sometimes
even opposite requirements, but want, to reach the
same goal. Software application developers are chal-
lenged with bulks of internal and external interfaces
and interdependencies, not to mention running con-
tracts with customers, unions or outsourcing compa-
nies, and statutory regularities and obligations.
Small businesses, especially start-ups, usually do
not have to face such a level of complexity and are
therefore much more flexible. This allows them to
try things more easily, experiment and change entire
business models within a short period, if required.
Assuming that big corporations have major prob-
lems with extensive change, anyone who is willing
to change anything is well advised to concentrate his
other efforts on feasible project sizes within existing
processes. Successful innovators are not high-risk
takers. They choose what they perceive to be moder-
atly difficult challenges. (also see Pellman; 1999: 81)
This is also because ideas projecting too far into the
future are sometimes less valuable. Not only, com-
panies but also people in general, are able absorb
only one small step at a time. For example, Gregor
Mendel formulated his ideas about genetics in 1865.
But it took another 40 years until three later scien-
tists were able to understand his work and to this
day, not all that Mendel had had in mind has been
incorporated. (also see Kelly, 2010)
TRUST YOURSELF
As discussed above, trust is a key element of the cul-
ture of innovation. And this does not exclude the
individual. The best salesmen are those who actu-
Bottom-Up steps to leverage
a culture of innovation
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How
10
Most companies employ a top-down strategy to en-
hance a spirit of innovation. They dedicate some bud-
get to “innovation”, call on someone to be in charge
and acquire some expensive software tool intended to
help them manage innovation projects and ideas. Web-
portals designed, fancy cards and posters printed to in-
cite employees and customers to take part in “idea con-
tests” that are often more lotteries than real contests.
Out of question, there have been efforts like this
shown to be surprisingly helpful. But in most cases,
the results are unused “ghost” intranet websites, dis-
appointed employees and de-motivated people who
are told to be innovation managers but never have
had any organizational authority to actually change
anything. In other words, many companies still see
innovation more or less like a hobby or freestyle ex-
ercise, as something to do for fun, and if the daily
business allows it.
I think that this attitude is a mistake. As Peter
Drucker, the evangelist of Marketing, puts it: “Ev-
ery organization – not just business – needs one core
competence: Innovation.” (Drucker, 1999: 119) This
is why I advocate a different strategic approach to
innovation and a generally different self-image of
innovation managers. The core mission of any in-
novation manager should be the enhancement of a
culture of innovation. Innovation depends on people
and their personal skills, trust, teamwork and com-
mitment. Anybody improving these skills directly
and indirectly helps enhance a culture of innovation.
We at CIPOC do not only work on client projects but
also on projects on our own behalf. We set out without
any processes and simply focused on the execution of
ideas. This was a bad idea still a lot to be desired. So
we took our knowledge and project management skills
and set up sophisticated processes. The result, however,
was to produce a large overhead that actually stopped
the executing efforts. So we choose to balance process-
es on the one hand and execution on the other, instead.
This has proven to be a much better approach.
On a larger scale we have found similar challenges
in many of our customers’ corporate environments:
Good ideas and projects blocked due to organiza-
tional and procedural overhead. Valuable time to
market lost in board meetings and their preparation.
Where this is the case, and where we were able to es-
tablish larger pools of projects that could be bundled
into programs, we succeeded in expanding and re-
defining processes within the program management
offices, e.g. easily re-allocate budgets or human re-
sources between projects. These agile entities with-
in companyies’ strict frameworks have been much
more successful and delivered many more project
rollouts in time, quality and budget.
Concluding remarks
Mistakes we learnt from
Many tasks within an innovation project are not so
innovative, but still have to be done. These especial-
ly, should be managed properly. Classic project man-
agement methods like PMI or SCRUM have shown
to be extremely helpful for managing sub-projects of
innovation topics.
If you are not sure whether you have got what it
takes to transform a company bottom-up, shed a
light on it by using figure 2: Ask a flow-chart.
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