6.5: Stimulating Innovations
The key to great success is innovation. Innovation is done to get a secured upcoming future. These two thoughts were said by Ajay Banga and Sophie Vandebroek, the CEO of Master Card & chief executive officer of Xerox Innovation Group. These above thoughts tell us that how much innovations are important for getting success in an organization. Today success demands innovation. In this global competitive market there is the presence of tough competition and to stand in this competition new products are demanded, that is innovations are necessary to stand up in the competitive market. Every new technology is needed to be embraced by the organizations to become successful.
Which companies do first comes in mind when we think about successful innovators? Most of the technology related companies comes in mind first such companies like Apple, ipad, iPhone etc and other computers company. One of the greatest admirers of innovation is Google. It innovates and moves on with trend. Google runs about fifty to two hundred online search experiment with users in any time. Once the company asked some of its selected users about how many search results do they desire on one single screen. Obviously user’s demands are too many.
So hat Google planned to do that it took only 1/3 rd of seconds to appear the search results. This was such a small period delay that users were satisfied with this fast search and thus Google used the latest technologies to enable this fast searching. Google tried this new innovation but they realized that this was not what they want to pursue.
The global personal products and household giant, Protector and Gamble has started doing many of their concepts testing online that created substantial savings in time and money. This was said by their market knowledge officers & global consumer. In Exhibit 6-9 a huge variety of companies are mentioned who are at the top list of the most innovative companies of the world. Now you must be wondering what secret lies behind their innovations and success? What other managers can do to bring success to their organizations through innovations? The following pages describe the chief factors behind such innovations.
Creativity Vs Innovations
We can define creativity as the ability to combine ideas through the unique way and make unusual association in between ideas. An innovative creative organization tries to find out unique ways and novel solutions for working and solving out problems respectively. But only creativity is just not enough. The outcome from those creative processes should become successful products or services that will lead to the success of a company, this is the innovation. So an innovative organization is one which has the ability to changes its creativity into useful products and outcomes. So when managers think about to bring change within the organization, they basically intend to bring and nurture innovations within the production and working process.
Stimulating & Nurturing Innovations
Systems models can describe how organizations can become more innovative. To get innovative outcomes and products this needs transferring the inputs. Such inputs are creative people & groups inside the organization. Creative employees are the ones who take the initiatives to bring change. But only creative employees will not be enough. A right environment is required to transfer those creative inputs into the innovative outcomes and useful products. The right environment is an environment which stimulates innovation. This environment includes 3 variables: organization structure, organization culture & human resources practices. Exhibit 6-10 will describe the above three variables.
Carol Bartz, the CEO of Yahoo, noticed after joining the company that the company’s structure was getting into the innovations of the company. Employees within the organizations wanted to try something creative and new but they were confused about the decision making process, whether they should take the decision or somebody else should, and also about the consequences of their new initiative. What Bartz said that every employee should have the freedom to think something new and then execute it in his own ways. This freedom is required to make the organizational environment creative. On the basis of this the structure of Yahoo! Is changed and it gives the freedom to work openly and provides clear views of employee’s responsibility towards the organization.
The structure of an organization has great impact on the innovativeness. The effects of the structural variables on the innovation have 5 things. 1st is an organic type structure has positive influences on innovations. This is because, the structure low in centralization, formalization & work specialization. This type of structure facilitates the flexibility & sharing of idea which are needed for any innovation process. 2ndly availability of numerous resources provides the building of innovations. It is quite obvious that resources are very much required for making innovations. With huge amount of resources, managers can start using innovative production process, the cost of using new technology becomes affordable and the risk of failures becomes less.
At Smart Balance uses efficient resources by focusing on production development & outsourcing everything else such manufacturing, sales and product distribution. Even in economic down towns this initiative helps the CEO to become an aggressive innovator that will lead to the success of the company. Thirdly a good communication system is very much important within the organization ads it helps to break down those barriers that come in the way of innovations. Task forces, cross functional team, & other organizational designs helps communications and interactions between different departments thereby creating a clear line communications. These are mostly used in the innovative companies. Pitney Bowes which is a mail & document company, conducts an electronic meeting named as IdeaNet, through which more than 35000 employees can communicate and collaborate with each other.
In this meeting they can find out new ideas that will increase revenue, make the firm profitable, increase customers and have innovations and share with each other. This is not just an electronic box for suggestion but it was made to give new innovative challenges to the employees. In a recent meeting it was focused on how the mail service can be expanded in new segments. In this meeting various employees suggested new ideas from different departments and finally 8 promising ideas got generated. The final is that an innovative organization tries minimizing extreme time pressure on the creative activities in spite of the demand of white water rapid environment.
Though we know that time pressure pressurizes employees to work for more hours and more hard but its effects are actually opposite. Studies tell that this makes them less creative. Organizations like Google, Hewlett-Packard and 3M actually urges staff researches for spending chunk of their worksheets on self-started project, even though such projects are outside individual’s work areas of expertise. It is to be noted that an organizational structure has great influence on the creativity of the firm. An employee can only act creatively if the organizational structure has that creative environment. Beneficial supports include things like open communication, encouragement, useful feedback and ready to listen attitude.
At the toy organization Mattel there is a lingo used known as throw the bunny. This is a juggling lesson given to the employees to learning juggling with 2 balls & a stuffed bunny. What is noticed is that most of the people can juggle 2 balls but cannot juggle with the stuffed bunny.
The innovative firms mostly have similar cultures. Most of them encourage experimentation; they reward success & failure & celebrate mistakes. Following are the characteristics that most of the innovative organizations posses.
- Accept ambiguity: there is too much emphasis on objective & specific constraints creativity.
- Keep external control minimal: The rules, controls, regulations, company policies & other organization control tools are very minimal.
- Tolerance of the impractical: the most impractical ideas and solutions are also considered as important ideas. This is because may be the most impractical ideas lead to something great in future.
- Tolerate risk: the employees in an innovative culture and encouraged to take decisions and try something new as most of them have the fear of getting ridiculed if their idea did not work. The fear of getting rejected is reduced in such an ambience so that employees can come up with new ideas without any fear of doing mistakes. Here mistakes are opportunities of employees to work better.
- Focus on end than on means: the goals of the organization are fixed and clear. This helps the employees to work efficiently and come up with different solutions to one problem. So here the focus in mainly on the output that is the end and not on the means through which the work is being done.
- Tolerance on conflict: in an innovative organization there will be obviously different ideas from different employees. These diverse ideas are all encouraged and managed in harmony. Agreement & harmony between units or individuals are not thought about to be the evidence of high quality performance.
- Use of open system focus: the managers observe the ambience & responds changes when they occur.
- Providing positive feedback: The managers in such an ambience have to provide feedback to their employees. This will encourage the employees to come up with more new ideas and perform their activities with a back support. The creative ideas are encouraged and are corrected by the managers if there is something wrong with the idea. This helps the firm to get success in the long run. The president & CEO of Research in Motion promotes innovation to a great extend and encourages when easily communication of the engineers with him. He finds transparent communication among employees and managers a way to become an innovative firm.
- Being a leader of the organization with great confidence and decision taking power helps the employees to relay on him. A leader should be such that he provides opportunities to all the employees to take decisions along with him and also guide them in doing the right things. Show how confident you are about their high performance quality. This will increase the confidence within them and they will be able to work more efficiently. This type of leadership will always have positive impact on the company’s employees and will also have positive influences on the creativity of the employees.
Human Resource Variables
Innovative organizations in this category actively promote development and training of its employees so that their knowledge can remain current. They offer their employees job security so that the fear of getting fired gets reduced; encourage employees so that they become idea champion. This supports new ideas, overcoming resistance, & ensures that innovations get implemented. This all helps the employees in some way to act confidently and find out new innovative ideas for the companies. Researches tell that idea champions have more self confidence, energy, persistence & tendency towards risk taking. It also displays characteristics with dynamic leaderships. These people inspire & energizes others with their strong potential of innovation & through strong personal conviction. These idea champions are very good at supporting other employees and gain full commitment from others. They lead the company’s innovative process and try to take advantage of every new opportunity. Their job is of taking instant main decisions of the company. This decision making capability of them make them heroes of the organization. This autonomy basically helps them to start & implement innovations in firms.
Links of Previous Main Topic:-
- management and organizations a managers dilemma
- Understanding managements context constraints and challenges
- Managing in a global environment
- Managing diversity
- What is social responsibility
- Managing change and innovation
- The change process
Links of Next Fundamentals of Management Topics:-
- Case application 1 too big to change
- Case application 2 stress kills
- The summary of the chapter by learning outcomes
- Preparing for my career managing change and innovation
- Managers as decision makers
- Foundations of planning
- Strategic management
- Basic organizational design
- Adaptive organizational design