I wrote this for a client recently, and was promoted to post it here after reading Dave's post about innovation.

Infectious Innovation

A brief discussion about creating a culture of innovation inside organizations.

Any talk about innovation has to first create an understanding of what the term means and how it fits into the organisational context.

Innovation is concerned about tomorrow's revenue. However, organisations are generally designed around today's revenue, and with that, the associated pressures and initiatives to reduce variance and increase efficiency.

So that is why it is extremely difficult for new ideas and creative thinking to take root and find a nurturing environment; the day-to-day operational focus creates a thinking style that is reactive and judgmental. If one had to think of a metaphor to describe this, the Emergency Room environment is a useful one.

So it's clear that for new ideas to emerge and flourish, an appropriate environment needs to be present, much like a Greenhouse.

A Greenhouse is preferably a physical space that stimulates participants into a headspace of fresh thinking, but more importantly, it's also a headspace where certain behaviours are encouraged, whilst others (typical in the operational/ER space) that are detrimental to the creative process are discouraged.

Innovation & Creativity

At this point a distinction between innovation and creativity needs to be made. Our take is that creativity is the raw material for the innovation process, the posing of questions, probing new lines of thinking, the generation of ideas, the discovery of new connections.

 It is a behaviour and thinking style that is needed to support the innovation process.

Innovation can be thought of as "ideas in action". For the ideas to have any relevance, they need to add value to the organisation with a range of options, from reinventing processes to creating new industries. Innovation needs the right mix of supporting structural elements and senior leadership worldviews. Hence the lens that innovation is about tomorrow's revenue.

It's also about action, and prototyping and experimenting, invention, with roughly formed concepts is a key part of the process - the mindset of getting something 100% right before engaging the customer or board derails the innovation process in many organisations.

Continuous improvement I would argue is less about innovation and more about applied learning, as the mindset is all about getting better answers to the same old questions. True innovation is coming up with new questions.

Creating A Culture Of Innovation

The interplay between the innovation and creativity can best be illustrated by viewing the organisation through a systems thinking lens. There are four cascading levels in which to see the organisation system:

 Worldview or Weltanschauung:  

This is the how the system architects see the world, what mental models they have employed in creating and unfolding their vision. Think of the different worldviews that Henry Ford and Steve Jobs had, the framework of ideas and beliefs through which they interpreted the world around them.

 Vision:
The above mental models inform the development of a vision of what the system architects want to achieve. Ford's vision centered on mass production, Job's was about building an "insanely great" design-led organisation.

 Structure:
Both the worldview and vision in turn inform the design of the organisation's systemic structure, and that includes the cultural, procedural, policy, and infrastructural elements.

- Behaviour:
Patterns of behaviour, in turn, are influenced by the structural elements, the interplay between the cultural hiring filters, prevailing expectations of desired behaviour, and reward systems (intrinsic and extrinsic).

The figure adjacent illustrates how these systemic levels relate to each other. Of course with any system, the interplay is not linear and the depiction below is a highly simplified version to help frame why innovation and creative thinking initiatives sometimes fail.

Organisational Change

To train and coach teams in creative thinking, grounded in challenges and problems they face in the organisation, without a parallel shift in the worldviews and structural design of the organisation may result in teams not realising the full potential of these new thinking behaviours.

Since behaviours are bounded by the limits of the structural design 'container', and that in turn is limited by the organisation's leadership worldview, the new creative actions by individuals run out of steam, killed by these well-used phrases: "We tried that last year", "Management won't buy that."

An example helps to illustrate this interplay.

Top leadership buys into the idea (ie. their worldview shifts) that for innovation to really change the game for their business, customers need to be actively recruited and integrated into the research and insight process from the beginning, and at all points of contact. (Traditional market research by contrast is generally used to answer preconceived questions that the firm has, and are mostly answered in artificial environments like the focus group.)

Teams are then coached in creative thinking, with a resultant shift in behaviour. However, the part in the middle, structural design, doesn't change as quickly. For example, structural elements may relate to a very restrictive warranty policy, where any adaptation of a product by a customer voids the warranty. Coupled with this is a performance management system that says sales reps may not spend more than 30 minutes on each client visit.

These two elements conspire against the new intentions and worldviews of senior leadership: a customer is not willing to show the rep clever and useful adaptations they have made to the product, and the rep is under time pressure not to stray from the sales-focused visit. The adaptation may be just the thing that more customers are calling for, but the organisation is too inwardly focused on it's own R&D and marketing idea pipeline as the source of innovation.

Infecting Innovation

One way out of this dilemma is to create teams that prototype the interplay between vision, structure and behaviour, without implementing wholesale realignment. With the prevailing worldview in place, certain multidisciplinary teams are formed and coached in creative behaviours, and these teams are applied to specific challenges, eg. specific customers, service issues, or product development challenges.

Over time, more and more of these teams are introduced into the organisation, and slowly 'infect' the rest of the organisation with their approach and results. While this is happening, structural impediments are identified and a new design is prototyped.

PS This thinking has been influenced by a host of articles and players in this space, not at hand at the moment...will post references soon.