Traditional management is focused on improving the efficiency of a known process - and as such it has an affinity for procedures and processes that remain largely fixed. Innovation, however, is about replacing these procedures and processes or rendering them obsolete. To foster innovation, a firm needs to abandon traditional management and its corresponding system of restrictions and controls for a more open relationship with innovators.
It is no accident that innovation largely takes place in smaller firms, outside of the structure of the organization. Nor is it accidental that to make any substantial change often requires the engagement of an external consultant who can reconsider the structure and function of the organization without favoring the maintenance of existing structures and relationships. This is not to say that it must be so for all companies, but when a firm embraces the traditional restrict-and-control culture, it necessarily discourages and prevents innovation from occurring.
What is found in innovative firms are the assets (people and processes) to innovate - but more importantly, it is their relationship to the firm. Innovative ideas are not squelched, but are considered and tried (and "tried" is significant here - swinging to the opposite extreme and implementing any novel idea, regardless of whether it has merit, is not at all a good practice). The firms that are leaders in design have empowered innovative employees, and have had a history of doing so.
A first step is for firms to genuinely value their innovators. A firm that constantly ignores or punishes innovative ideas will find that its people lose the will to innovate. A firm that only superficially and temporarily values new ideas will find that its people lose the will to innovate and are very cautious when the opportunity to innovate is presented. Only a firm that demonstrates in action that it values innovation will encourage and empower innovators.
External innovators are likewise discouraged or encouraged to interact with a firm. Where exernal experts, scholars, designers, journalists, and the media are treated in a hostile and defensive manner, or where they are occasionally engaged with it is in the interest of the firm to use it for its own benefit (positive PR), then the innovative community shows disinterest in having an ongoing relationship with the firm.
A second step for a firm that means to be more innovative is to establish new relationships. Even when existing relationships can be repaired and rejuvenated, there is a limit to what a firm can accomplish by interacting with the same minds. To spark innovation and fuel it requires a constant inflow of new ideas, which largely come from outside the firm. To innovate constantly, a firm must constantly expand its network of relationships.
These relationships do not occur automatically: a firm must invest in proactively searching for innovators and take steps to foster and maintain relationships with them. A common belief among firms is that hiring innovative people give the firm immediate access to their personal network - but this is not necessarily so. It is similar to social interaction - making friends with one person doesn't automatically make you the friend of all of their friends, you must be introduced. And to be introduced, you must be the kind of person that the other party doesn't mind introducing to their friends. So when an innovation-hostile firm hires an innovative person, that person is reluctant to make those introductions.
However, this problem is addressed by the same solution: when a firm empowers and values its internal innovators, they develop a positive relationship with their employer and have no qualms about introducing the firm to other people they know to be innovative. None of this is a revolutionary idea: it's long been known that a firm that treats its employees well finds that its employees connect the firm to others who are similar to themselves. But what is different is the way in which a positive relationship is established with the innovative employee as opposed to the traditional employee.
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