Wednesday, 11 February 2015

Embedding innovation into organizational culture

Human capital has a greater importance to employers for several reasons; first and foremost in that it is essentially thanks to the contribution of its employees that organizations attain their objectives and pursue their strategy. The expression human capital, nonetheless, should not be considered as exclusively referring to the business talents and high-flyers, but rather to the overall organization employee population. In order for employers to totally benefit of the contribution which can be potentially made by their usually varied and diversified workforce, these should encourage and stimulate the participation of all of their employees. This will in turn show these that their employer genuinely values them and their support, regardless of their role and rank in the organizational hierarchy.

The world is nowadays subject to a constant process of change whose pace is progressively accelerating. Yet, organizations have become increasingly sensitive to a higher number of exogenous factors of different nature, which may either provide these great opportunities or pose serious threats. It is therefore evident that the capability to adapt and change strategies accordingly, more often than not at very short notice, has to be considered by employers as a prerequisite for survival at worst and success at best.

An organization ability to anticipate and introduce new trends, products, services, approaches and procedures would unquestionably enable this to gain competitive advantage. Notwithstanding, this has not and cannot be intended as an effort or a process limited to a specifically identified period of time. In contrast, by reason of the harsh competition existing between organizations of the same industry and sometimes between organizations of different industries, this has to be indeed meant as a never ending process.

To be successful and constantly come up with brilliant, brand new ideas, which can be subsequently developed and transformed into new valuable products or services or into more productive and efficient processes, the support, involvement and active participation of all of the employees have to be sought and pursued in a stable unwavering way insofar as being perceived by all of the employees as an activity included into their job description; hence, as something they have to regularly devote time and thoughts.

This unquestionably is a difficult feat to perform for every employer in that individuals might perceive this activity as an additional task vis-à-vis those typically, directly required by their job. The sole effectual way to instil innovation into individuals and induce these to truly dedicate themselves to the activity of identifying and developing new ideas is to embed innovation into a pervasive organizational component, that is to say corporate culture.

Organizational culture is traditionally concerned with the business shared values and beliefs, from which the behaviour, which is thus considered as the business norm, stems. So powerful is nowadays deemed to be the impact of business culture on employee behaviour that it is recently very often associated with the distinctive way individuals behave, perform their activities and approach decision-making in the workplace, that is to say the “way we do things around here.”

The pervasiveness and penetration of culture through an organization and the strong influence it exerts over individuals leave no doubt about the circumstance that whether employers want to constantly achieve an objective, especially whether this is sorely associated with employee behaviour, aptitude and the way individuals approach decision-making and problems, the means they identify to attain this end has to be supported by and embedded into organizational culture.

Firmly and stably including innovation into corporate culture can be also considered as a mandatory step to avert that innovation may be hampered by culture. Organizational culture can in fact make or break any change initiative an employer may wish to introduce and implement within a business. Ensuring that innovation is well understood, that it is genuinely accepted and that it actually inspires every individual action and behaviour acquires hence a particularly remarkable importance.

In order to consistently, effectually introduce and embed innovation into organizational culture, notwithstanding, employers should have crystal clear ideas from the outset about what they intend as innovation and why they consider crucially important their business culture being underpinned by this value.
What innovation is

The idea of innovation at large is habitually associated with the making and development of new products and services: different from the existing ones, capable to meet an increased number of users’ needs, performing better and easier to use, store and carry. The constant technological advances have and are indeed favouring this process so that in many cases the application of the latest technology to the existing products and the provision of services making use of new technologies have enabled employers to introduce in their relevant market innovative products and services. Most importantly, technology can clearly help employers to develop and design unparalleled, completely new products.
Innovation, nonetheless, is not exclusively concerned with products and services, but also with processes and procedures, which can be designed and developed to the benefit of a person, unit, business or community at large (Farr, 1990). As stressed by Martins (2000), the concept of innovation is also strictly contextual-related; more specifically, a new idea can be actually considered as genuinely innovative whether regarded as such within the specific settings and, it could be added, by the individuals to whom it is directed.
Identified the different degrees of innovation and stressed the fact that innovation depends on the circumstances, it is also crucially important to ensure that innovation serves the business cause. New ideas have hence to represent for employers valuable opportunities enabling these to effectually pursue their intended strategy (Gaynor, 2002). Once again, the context and the specific circumstances came to play; what is considered innovative today might become obsolete or unsuitable tomorrow as a consequence of a strategy or environment change, never mind technological advances. To ensure that employers’ expectations in terms of innovation are constantly met these need hence to be relentlessly monitored and the consequent possibly required initiatives and actions adapted and adopted accordingly.

The circumstance innovation strongly supports an employer strategy and essentially enables this to gain competitive edge has accounted for innovation also being essentially perceived and seen as an, it could be argued innovative, approach to problem solving.
Innovation does not derive from the development and introduction of new technologies only; new ideas can in fact also be identified by creatively adapting, improving and enhancing current and even past technologies.

Why it is necessary to embed innovation into organizational culture

There are indeed plenty of reasons for employers having to introduce innovation as a strong component of corporate culture. As suggested by Voelpel et al (2005), an innovation-based organizational culture should first and foremost enable employers to successfully compete in their market in a sustainable way. Albeit innovation is crucially important for all the employers, irrespective of the industry they operate in, in some industries, as for instance it is the case of high-tech and information technology, innovation plays an even more significant role insofar as employers need imperatively to innovate, seriously risking otherwise to disappear (Angel, 2006).
Encouraging continuous innovation is essentially important to support the business over time and enable the organization to gain and maintain competitive edge. This unremitting process clearly entails remarkable efforts which would be pointless to think could be ever made by a limited number of employees who, by reason of their formal role, may be considered as the only ones suitable to take the challenge up. Including innovation as a founding pillar of culture enables employers to ensure that every individual takes up the challenge and does his/her utmost to contribute to a constant, unrelenting innovation process (Kenny and Reedy, 2007).
As discussed earlier, embedding innovation into culture can also help individuals to come up with new, innovative ways to analyse problems and identify solutions (Lock and Kirkpatrick, 1995). Employers are in fact increasingly considering embedding innovation into organizational culture to promote and encourage problem solving within their business. One of the main reasons for managers usually complaining about their direct reports relates to their readiness to represent the issues and difficulties associated with their tasks and duties, and their lack of ability and eagerness to come up with and suggest appropriate solutions to overcome these. Despite this is not obviously the sole reason for employers deciding to include innovation amongst their organizational values, developing and rooting within a firm’s culture a strong employee aptitude to problem solving clearly represents a massive advantage and asset on its own. Managers at all levels could thus focus on other issues and employees would find their job and daily activities definitely much more significant and compelling, increasing their self-esteem and deriving from their job a higher value in terms of intrinsic reward.

The development of innovation as a means to foster problem solving within a business can indeed prove to be particularly advantageous. Whether employers are keen and long to come up with new ideas, products, services, processes and procedures this is indeed invariably associated with their need to solve current problems and anticipate or avoid likely future ones to arise. Regularly introducing in the relevant market new products and services would enable organizations to stay ahead of the competition, whereas developing more efficient and effective processes and procedures can enable these to control variable and fixed costs and to resist and insist thus in the market.
Employers, those who strive for innovation included, unfortunately also constantly wait in ambush in order to be ready to copy and replicate the innovative ideas developed by their direct and indirect competitors as quickly as possible. This actually is one of the main reasons, arguably the main reason, for innovation being all too often short-lived. This is indeed also the motive for innovation being typically regarded as an everything but straightforward process and should be as far as possible invariably coupled with the concept of “difficult to replicate” (it can hardly be used the term “impossible”). All of that should not deter employers from struggling for innovation. Copying and replicating also require time and efforts and sometimes it can also be the cause for dismal failure. Yet, introducing in the market innovative and original products and services definitely contributes to the employer brand image, in addition to the consumer brand image. Findings of an investigation carried out in the health sector (Tuan and Venkatesh, 2010), for instance, revealed that technological innovation is considered by many hospitals’ directors as an effective means to increase both “hospitals reputation and brand image” and improve the institutions marketing efforts credibility.

Innovation and change

Whereas change does not necessarily imply innovation, things in fact changes but not necessarily in an innovative and creative fashion; innovation clearly entails change. Before fostering innovation, organizational culture should hence first and foremost support and ensure individual readiness to change. This aspect has indeed a pivotal importance and it is underpinned by the same reasons for innovation, in order to become part of everyday employee behaviour, needing to be embedded into culture. Whether in fact an employer should attempt to embed innovation into the corporate culture of an organization where change is habitually resisted by employees, innovation would never ever be embraced in practice by individuals. Culture, rather than make would in this case break the change initiative. Employees are instinctively wary about change and use to oppose and resist it in that perceived as threatening their current status quo and pushing them beyond their comfort zone. Innovation can potentially be perceived as a dimension of change in the extreme so that whether individuals are not acquainted with change these may be likely to a fortiori resist innovation.
Employers and HR professionals need to pay extra care to this aspect and, before making plans to firmly introduce innovation amongst the founding pillars of the business culture, should previously ensure that employees are supportive of and open to change.

The innovation continuum

Embedding innovation into organizational culture means openly recognize and communicate that this value has a central and special meaning for the employer. In order to foster innovation the support and encouragement of managers is clearly paramount, but the most important features of an organizational culture inspired by innovation are focus and constancy, which have to never ever fade or weaken.
Since innovation requires a continuous investment in terms of efforts and resources, employers should decide from the very beginning how they want to support the process, safe in the knowledge that promoting innovation by means of organizational culture entails the involvement of the overall employee population and not, for example, the empowerment of the research and development unit only.
The first decision employers need to make concerns hence the pace they want to keep in terms of investments over time. Employers may for instance decide to devote a constant level of resources (Table 1), slowly increase (Table 2) or decrease this over time, or to have recourse to a combination of all of these approaches. This decision should be indeed influenced by the return the organization is expected its investment to yield. It is hardly imaginable that the higher the investment, necessarily the higher the return. It clearly also depends on the circumstances; whether no substantial changes have been implemented within the business in terms of products, services, processes and procedures during the last few years, which may account for the employer believing that there are many areas which could benefit in the short to mid term of the overall employee population involvement in the quest for innovation, the investment could be initially higher and subsequently decrease and stay constant over time. This may also depend on the level of the employee response and on how this varies over time. Employers may also decide to occasionally increase their investment to reinvigorate and boast employee participation whether and whenever this should weaken.

Organizations should preferably identify from the outset the approach to the investment they want to adopt to sustain innovation, but this does not clearly mean that plans cannot be changed accordingly depending on the results yielded and the return on the investment generated in practice. In theory, it is likely that more significant results are produced initially, whereas subsequently the frequency results are yielded might occur every so often. This is clearly an area which would deserve a specific empirical investigation. Nevertheless, irrespective of the frequency successes are attained, employers should be well aware that these feats can only be performed by means of a constant, unrelenting process and thanks to the constant efforts and dedication of all of the employees. What matters the most is therefore keep staff constantly focused on innovation and create excitement about the topic. Needless to say, accomplishments and successes have to be properly celebrated and contributors rewarded.

Longo, R., (2015), Embedding innovation into organizational culture; Milan: HR Professionals.