7 strategies for sustained innovation
The need for constant reinvention is a given in today’s business environment. And while a revolutionary product or concept can catapult an organization ahead of its competitors, in these fast-paced times, that advantage is often short-lived.
While major product or service advancements make news, it is the constant incremental innovations employees make every day that give an organization the sustained growth it needs.
Sustained innovation comes from developing a collective sense of purpose; to unleash the creativity of people throughout your organization and to teach them how to recognize unconventional opportunities.
As innovative ideas emerge, a clear sense of mission enables front-line employees to act on new ideas that advance your company’s purpose.
Start at the top
Leaders create the psychological environment that fosters sustained innovation at all levels. The challenge is that as an organization grows, management structures and bureaucracies, designed to channel growth, tend to create barriers to small-scale improvements.
While there are exceptions, in larger organizations, employees tend to feel alienated from the innovation function and are less likely to take independent action or offer groundbreaking ideas.
The commitment to setting the right psychological conditions for innovation must start at the top. This means that, as a leader, you must consider your own assumptions about innovation and your role in creating and changing your organization’s culture.
You must appreciate the value of both incremental and significant innovations, understand the psychology of innovation, and take the lead in promoting an innovative culture. Otherwise it just won’t happen.
While your organization’s innovative capacity depends on multiple factors, there are several steps you can take to create the psychological conditions that are conducive to inventive thinking, regardless of your industry or the size of your organization.
Establish a clear sense of direction
Changing your culture means changing your mind, and that takes time. But as with any initiative, a clear sense of purpose helps speed up the journey.
Your organization’s mission helps organize and direct the creativity of your people. What is the purpose of constant innovation in your company? Is it about adding customer value to existing products and services … to speed up delivery … to increase on-time arrivals?
Having a clearly articulated message allows everyone to focus on innovation where it can deliver the most value. Innovation, as defined by Peter Drucker, means creating a new dimension of performance. A sense of mission clarifies the direction of performance and helps determine what new ideas to focus on.
Open communication between management and employees sets the stage for an atmosphere of trust. But if you want to establish a new, more trusting culture, you can’t wait for employees to take the first step.
Company leadership initiates the open communication process by sharing information with employees on a regular basis. This includes good news and bad news.
Southwest Airlines’ policy of sharing information allowed the company to weather the sudden increase in fuel costs during the 1990-91 Gulf War. The company kept everyone informed as fuel prices soared. Southwest CEO Herb Kelleher sent a memo to the pilots asking for their help. Through inventive thinking, the pilots found ways to quickly reduce fuel consumption without compromising safety or service.
Leaders of organizations that support innovation offer multiple communication opportunities.
While not all companies can offer an open door policy for their top executives, or even the opportunity for regular face-to-face contact, all organizations can institute programs that allow front-line workers to feel heard. From CEO lunches with employee cross-sections, to monthly divisional meetings between employees and the CEO, to open intranet forums for sharing ideas and feedback, leaders can communicate their openness to hearing innovative ideas from those closest to them. client.
While larger organizations are often seen as less entrepreneurial and inventive than their smaller counterparts, it is not the size of your company that inhibits innovation, it is systems. Bureaucracy slows down action and is a serious impediment to innovation.
Smaller organizations can often move faster in implementing innovative ideas because they have less bureaucracy. When Jack Welch was redesigning General Electric, he said, “My goal is to bring small business soul and small business speed into our big business.”
Faster implementation encourages more inventive thinking. Think for a minute. If you had an idea for an innovation and it took 6 weeks to clear the channels and another 3 weeks to get funding, would you have lost momentum to keep contributing?
Instill a sense of ownership
An ownership mindset creates a powerful incentive for inventive thinking. When a person is clearly aware of how their interests align with those of the company, they have a strong reason to “go the extra mile” to promote the mission.
Stock ownership is a significant, if not essential, incentive for employees. However, on its own, profit sharing does not guarantee that your employees think like owners.
When employees don’t see how their individual efforts affect the profitability of the company, they tend to be passive and reactive. To encourage greater participation, make sure each employee knows how their work affects the performance of the company.
Southwest gave the pilots the freedom to design and implement a plan to reduce fuel consumption because they were in the best position to determine what would be effective. The pilots enthusiastically collaborated because they understood the impact their actions had on the bottom line and ultimately their own future.
Make sure recognition and rewards are consistent
While financial rewards are often tied to innovations, rewarding only the individual or team responsible for the “big idea” or its implementation creates a subtle competitive atmosphere that discourages smaller, less dramatic improvements.
Even team-based compensation can backfire if teams are set up to compete with each other for rewards. These incentives discourage cross-functional collaboration so critical to peak performance.
Companies that successfully foster a culture of innovation design rewards that reinforce the culture they want to establish. If your organization values integrated solutions, you can’t compensate team leaders based on unit performance. If your company values developing new leaders, you can’t base rewards on short-term performance.
Tolerance for risk and failure
Tolerating a certain degree of failure as a necessary part of growth is an important part of fostering innovation. Innovation is a risk. Employees will not take risks unless they clearly understand the objectives, have a clear but flexible framework in which to operate, and understand that failures are recognized as simple steps in the learning process.
Toyota’s production system transfers authority in managing quality and innovation to front-line workers at the plant. Workers can make adjustments to their work if they see an opportunity for improvement. If innovation works, it is incorporated into operations, if not, it is attributed to experience.
An important psychological benefit of the Toyota method is the development of confidence. Employees who trust their bosses are more likely to take smart risks that have potential benefit for the company.
Eliminate projects and processes that do not work
As your organization innovates, you must practice what Peter Drucker calls “creative abandonment.” Projects and processes that are no longer contributing should be abandoned to make room for new progressive activities.
While no organization wants to waste financial resources on unprofitable activities, it is actually the irreplaceable resource of employee time and energy that is wasted if a company sticks to the old way of doing things.
Innovation requires optimism. It is an attitude of continually seeking higher performance. You can’t expect employees to maintain an optimistic attitude if they feel compelled to continue in activities that are going nowhere.
© 2007 Dr. Robert Karlsberg and Dr. Jane Adler