A recent revealed that most companies look inward for their innovation spark. The Deloitte Innovation Study 2021 surveyed business leaders from the fields of innovation, technology and business functions from a diverse set of industries, sizes and business models. The study reported that many programs kick off their process by looking internally for opportunities to optimise existing business operations. While 40% of looked internally only 15% relied on brainstorming for new ideas as their starting point. Innovation has remained a buzzword for a while now. The big question is whether your organization culture supports innovation. We’ll decode this by defining Organizational Culture.
What is organizational culture
Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.
The World’s most innovative companies
Boston Consulting Group’s annual ranking of the world’s most innovative companies in 2021 saw Apple capture the top spot. Other companies in the top 10 also included Microsoft, Samsung, Sony and Pfizer. The survey reported that effective leaders foster an organizational culture that grants prestige to innovation roles and values openness and thoughtful challenges to the status quo. They assign their very best talent, including true business builders, to the most ambitious innovation challenges. Two themes are common to these five pivotal capabilities: exercising leadership and bringing teams together. A strategy-led, CEO-driven, data-informed innovation culture is central to putting the five pieces in place. A cross- functional, customer-centric organizational approach brings multi-capability innovation teams together to share ideas and develop insights.
Innovation itself is not the goal.
It’s important to understand why you want to innovate and conduct a needs analysis. Innovation itself should never be the goal. It’s a tool or a means to an end that you can use to bring your organization closer towards your goals. For instance your goal could be meeting customer needs by improving your products or creating new ones or success in a new market. In none of these cases do you innovate for the sake of innovation. Instead, you look to innovate in order to be more successful. This is why you need to start from a proper needs analysis. It’s equally important to be clear on what kind of innovation you need.
Thinking “all innovation is innovation” is an easy miss-step
Chasing the wrong kind of innovation is not only ineffective but can even be counter-productive. If your goal is to improve your existing products, you would most likely do this via incremental innovation. This means gradually improving your existing products. With this kind of innovation, you are, usually, largely following the same processes you already have in place. When your goal is disruptive innovation, to create something that doesn’t exist yet, incremental innovation would be counter-productive. With disruptive innovation, you might create a product that doesn’t exist at all, or even a completely new market. That product, however, might require further development, or might be fairly expensive to produce. You wouldn’t get here by strictly following existing processes but by trying new things and accepting – even welcoming – mistakes.
It all comes down to understanding your Organizational Culture.
position. At this stage, you should have already done your competitor analysis but understanding your position goes deeper than that. It requires you to have an honest and analytical – even critical – look into your own working practices. This all comes down to truly understanding your Organizational Culture. The best and the easiest way to understand your current reality is to compile data through an objective tool like our Organizational Culture Scan. It gives you a snapshot of your Organizational Culture as a whole, and also allows you to divide and measure it in sub-cultures. This means that in addition to the overall culture, you can measure the cultures of different teams, departments, regional or country offices or other functions that you deem necessary. Sub-cultures allow you to get an honest starting point for your transformation project and also enable you to fine-tune where necessary. This is absolutely crucial for larger organizations.
Reach out to us to find out about how our programs and solutions can help you build the optimal Organizational Culture to meet your innovation goals.