In large & fragmented orgs how can you embed an innovation culture?

Recently the question went out: In large organisations (i.e., with more than 10,000 employees working in a wide range of departments and functions) how can you truly embed an innovation culture?

The best answer I read was by Richard Campbell (Business Innovation Consultant at Jekkub Design Management, London, United Kingdom). (My responses to his ideas are in brown.) He said, “There are as many authorities on innovation as there are ways to foster such cultures. Which of these that will work for your company depends on the existing culture…” This is absolutely true. Because innovation must be useful to the company, it must be ‘customized’ (for lack of a better word) to that culture. To miss out on this important concept means the solution will probably not stick.  Then he said, “who is the innovation champion, how engaged are your staff currently (have they seen lots of pointless change recently)…” This I partially agree with. People are willing to engage if they feel their opinions are heard and if the new idea fits with their understanding of the situation. The reason pointless change is pointless is because it fights the existing culture.  (All of what Richard said is powerful, but I’m just going to focus on this starting idea.) When you understand your company’s culture, you will understand why the company is stagnating in certain areas, which will be the areas that need innovation and will give the best ROI.

Here’s an example. Inertia is the tendency of a resting object to remain at rest and the tendency of a moving object to remain moving in a constant direction. Objects with large mass, such as train, require a lot of energy to start moving – that’s inertia. However, once a train is moving, it’s hard for it to stop. That is also inertia. Well, companies have inertia, too.

Cisco Systems, for example, has a company culture that is based on being first-to-market. The M&A teams are highly compensated and appreciated because they help the company grow fast – that’s inertia. Now, the problem that Cisco faces is that all that acquisition is hard to absorb. The company moves so fast, it has NOT developed the kinds of internal structure and processes that a process-centric company would have. This hurts Cisco’s competitiveness, but the only strategy they have is to “run faster”. Eventually their puny and fractured structure will not be able to hold up the company and the problems will become too big to ignore and will cost too much to continue.

At this point, most companies look for a solution outside themselves. “Hey, look,” they say; “That company doesn’t have our kinds of problems. Let’s do what they are doing.” And that is very problematic. Because companies with that kind of culture have trouble with staying nimble and cutting-edge, which are hallmark aspects of Cisco. You can’t just take what another culture does and impose it on your culture without damaging it (Can we say HP from 1999-2005+). But that’s what people know how to do instead of innovating. A bunch of ‘fads’ are imposed (in this case it would be things like Six Sigma, Lean, etc.) The problem is, trying to force this top-down structural change on the culture is nearly impossible to sustain. Everyone, from management down would have to significantly change their habits, beliefs, and understanding of their job.

What innovation allows for is the company can get MORE of what they want and LESS of what they don’t want. A proper innovation would allow Cisco to continue to grow fast by absorbing companies AND SIMULTANIOUSLY grow the systems, processes, beliefs, mindsets, etc. that will develop a structure that is robust and strategically aligned with the company’s goals and vision. Innovation works with the culture to make it more of what it is. Innovation happens naturally and does not have to be imposed from above (although that always helps to have management support). Change management happens easily and customers support it where it interfaces with them. Innovation harnesses the good parts of inertia and exploits that part of the company’s inertia that is still useful and it exposes the stagnation aspects of the inertia. In that way, the inertia can be strategically realigned.

So, the first step is to look at what currently exists from different points of view. Get unstuck from the tradition, beliefs, ‘facts’, observations, and social momentum. Understand who your company is, why it does the things it does, and what still supports that. Then find out the hidden traps and entrenched thinking that hurts.

He also said, “Is it necessary to innovate across the whole company at once or can you focus on critical business units/departments?  This is an extremely good question. It interupts the psychological inertia that the whole company must change or that the only solution is an absolute one.  Plus, there are stategies to deployment.
Finally, Richard Campbell said, “Probably most important is that the CEO provides a clear vision for the company. Ask random staff members, can they tell what it is and their role in it? Clarity from the top and autonomy for those below, though you need to make sure you can track ideas and test them quickly and cheaply.This a great, but it is not a necessary step. If you have it; use it. If innovation needs to happen, it can begin and spread from the least of us. That has been proven out historically from the beginnings of recorded history. Use innovation and strategy to roll out the plan, no matter who initiates it and/or supports it.