Change refers to making things different. Innovation is a more specialized kind of change. Innovation is a new idea applied to initiating or improving a product, process, or service. So all innovations involve change, but not all changes necessarily involve new ideas or lead to significant improvements. Innovations in organizations can range from small incremental improvements, such as Nabisco’s extension of the Oreo product line to include double stuffs and chocolate covered Oreos, up to radical breakthroughs, such as Jeff Bezos’ idea in 1994 to create an online bookstore. Keep in mind that while our examples are mostly of product innovations, the concept of innovation also encompasses new production process technologies, new structures or administrative systems, and new plans or programs pertaining to organizational members.
How can an organization become innovative? An excellent model is W.L. Gore, the $ 1.4 billion a year company best known as the maker of Gore-Tex fabric. Gore has developed a reputation as one of America’s most innovative companies by developing a stream of diverse products including guitar strings, dental floss, medical devices, and fuel cells.
What’s the secret of Gore’s success? What can other organizations do to duplicate its track record for innovation? Although there is no guaranteed formula, certain characteristics surface again and again when researchers study innovative organizations. We’ve grouped them into structural, cultural, and human resource categories. Our message to change agents is that they should consider introducing these characteristics into their organization if they want to create an innovative climate. Before we look at these characteristics, however, let’s clarify what we mean by innovation.
Sources of Innovation:
Structural variables have been the most studied potential source of innovation. A comprehensive review of the structure innovation relationship leads to the following conclusions. First, organic structures positively influence innovation. Because they’re lower in vertical differentiation, formalization, and centralization, organic organizations facilitate the flexibility, adaptation, and cross-fertilization that make the adaptation of innovations easier. Second, long tenure in management is associated with innovation. Managerial tenure apparently provides legitimacy and knowledge of how to accomplish tasks and obtain desired outcomes. Third, innovation is nurtured when there are slack resources. Having an abundance of resources allows an organization to afford to purchase innovations, bear the cost of instituting innovations, and absorb failures. Finally, inter-unit communication is high in innovative organizations. These organizations are high users of committees, task forces, cross-functional teams, and other mechanisms that facilitate interaction across departmental lines.
Innovative organizations tend to have similar cultures. They encourage experimentation. They reward both successes and failures. They celebrate mistakes. Unfortunately, in too many organizations, people are rewarded for the absence of failures rather than for the presence of successes. Such cultures extinguish risk taking and innovation. People will suggest and try new ideas only when they feel such behaviors exact no penalties. Managers in innovative organizations recognize that failures are a natural byproduct of venturing into the unknown.
Within the human resources category, we find that innovative organizations actively promote the training and development of their members so that they keep current, offer high job security so employee don’t fear getting fired for making mistakes, and encourage individuals to become champions of change. Once a new idea is developed, idea champions actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the innovation is implemented. The evidence indicates that champions have common personality characteristics extremely high self-confidence, persistence, energy, and a tendency to take risks. Idea champions also display characteristics associated with transformational leadership. They inspire and energize others with their vision of the potential of an innovation and through their strong personal conviction in their mission. They are also good at gaining the commitment of others to support their mission. In addition, idea champions have jobs that provide considerable decision-making discretion. This autonomy helps them introduce and implement innovations in organizations.