Wednesday, July 09, 2008

Building an Innovative organization

If you are a leader of an organization, then the responsibility for building an innovation oriented organization is on you and the share holders. As a leader, the main responsibility for idea generation is on you. So what should one do to build an innovative organization?
This question is not a simple one to answer. The role of leadership in building an innovative organization is a complex one, and is deeply involved in all phases of innovation. To begin with, lets discuss the high level responsibility of the leader.

A leadership is responsible for:
  1. Working with shareholders to develop strategies for profitability/growth through innovation.
  2. Hiring creative individuals
  3. Encouraging creativity & innovation in the organization.
  4. Create opportunities & platform for employees to submit & promote their ideas.
  5. Create a manangement structure that nourishes/incubates innovative ideas.
  6. Implement process that convert accepted innovative ideas into product innovation.

Get shareholders approval

The organization exists only to create wealth for share holders. Innovation by nature is an investment - with uncertain returns, therefore the first step is to get share holders approval for an innovation strategy. Investors or the board of directors must approve the investments & the risks associated with innovation. For example, companies like HP, IBM, Pfizer, Genetech, GE, Apple, Intel, Google, P&G, Nokia and others allocate resources for innovation - through clearly marked R&D expenses or for experimental projects. The budget & the plan must be approved by the sharesholders before it gets to implementation.

Hiring Creative Individuals

Innovation & creativity starts with individuals. The company leaders are responsible for hiring creative individuals for the key roles. For example,Masaru Ibuka hired Akio Moritaand that partnership led to creation of SONY. Intel hired Vinodh Dham - who was responsible for creating "pentium" microprocessors.

It is the leaders responsibility to hire creative individuals & give them enough authority & responsibility to pursue innovation. Without the right set of people, the company’s innovation efforts will fail.

Encourage Creativity & innovation

Creative individuals will need a suitable work atmosphere for innovation. The leaders must set an example at work in creating a culture of innovation, by encouraging people around them to be innovative, soliciting creative ideas and implementing truly innovative ideas. The leaders should create an image of being open minded and innovative - within the organization. For example, Robert Noyce, Gordon Moore & Craig Barret - all ex-CEOs of Intel were accomplished R&D professionals, thus setting the right tone for the entire organization.For more details on creating a culture of Innovation see:

Closing Thoughts

Company leadership - both the CEO (CXOs) and the shareholders are primarly responsible for building an innovative organization. If a company fails to be innovative, then the leaders are solely responsible for it. But if the company succeeds in innovation, then the top leadership should step aside and ensure that the creative individuals who worked on the project take all the accolades.

1 comment:

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