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Take Action to Change Innovation Culture - Management System

Thu, 02/20/2014 - 11:18 -- KevinMcFarthing

Here’s a proposition – a company will never succeed with innovation unless the culture is supportive. It’s best encapsulated in the phrase “culture eats strategy for breakfast”, attributed to Peter Drucker, the noted management guru. 

This is the third of four articles focused on creating a culture of innovation.  You can find a link to the first two articles here and here.  I propose that action is what changes culture, and there is a specific sequence to be followed.

1.  Decide what you want – what’s the output?

2.  How to do it - design the management system.

3.  Fill the pipeline - stimulate the input.

This article looks at how to design the management system.

Far too often the phrase “innovation process” means a multiple stage/gate system.  There is so much more to it than that.  Stage/gate is important, but in my view is a potential barrier to a successful innovation culture if it is implemented in a bureaucratic and controlling way.  The overall objective of such systems is to stimulate and facilitate innovation, improving both effectiveness (the right things) and efficiency (the right way).  If implemented wrongly, both can go backwards.  I know of one company that uses a seven stage/six gate process to manage any change from simple packaging to breakthrough options.  They appear to be drowning under the weight of writing and approving gate papers.

Such an approach to process is driven by a need for control. Too much control inhibits initiative; makes people focus on rules, not content; and eats away at creativity.  Options default to top down, and people decide that putting their head above the parapet just isn’t worth it.  Instead, I would advocate a process with far fewer gates (in some companies as few as two), complemented by other important features.  A simple stage/gate system needs:

-  Clear and transparent boundaries of responsibility.

-  Multi-functional teams.

-  Responsible and experienced team members.

-  Good reward and recognition practice.

Some decisions will inevitably need to be made in the middle of a stage.  There is no need to build in artificial gates to supplement what are often pre-existing approval systems, for example in the case of capital expenditure. It encourages more face-to-face discussion and avoids building extra time into tight project plans.

The existing corporate culture will inevitably have a major influence. If it is highly structured with impenetrable silos, it will be much harder to integrate across departments and institute a multifunctional team based approach. If the culture is already strongly collaborative, there is a much greater chance of building a true innovation based culture. It is essential to understand the enabling and inhibitory elements of the existing culture before embarking on the  culture change program.

One outcome from opening up the corporation and reducing top down control is that more opportunities for disruption of existing business will arise.  This will be accompanied by more challenge and disagreement from people further down. This creative tension is a good thing; the culture will be changing from one of passive obedience to one of active passion.

As I’ve written before, the portfolio is the pivotal tool in innovation management.  How this is used has a massive influence on developing an innovation-oriented culture.  Perhaps the key factor is to minimise bureaucracy, that infamous strangler of initiative.  The more time spent by capable people on filling in forms and complying with unnecessary rules, the less they spend advancing innovation initiatives.  Operational portfolio management provides the right framework.

A key factor in an ambitious innovation culture is a tolerance for failure.  Aiming to fail fast, i.e. quickly get answers to what will work and what won’t, is essential. This is extremely difficult in some cultures, where failure is generally not accepted.  It must be worked through, otherwise innovation will be limited to those initiatives with a high degree of certainty and, consequently, relatively little advantage or differentiation.

Leaders and managers set the tone and the agenda in a company through what they do much more than through what they say.  Following on from the vision of culture I mentioned in previous posts, leaders must “walk the talk”.   For example, if the team fails with a new approach, they should not be castigated or punished, otherwise the change in culture will go backwards.  Instead they should be congratulated for trying something new and learning from it.

Finally, the right people should be put in the right positions.  Those with the entrepreneurial spirit, passion and appetite for risk will need support from top management to blaze a trail for the new culture. It will be tough and will need a lot of courage.  In short, if anybody is feeling comfortable with progress, then they’re not trying hard enough.

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