Five Steps to Managing Innovation


Innovation Culture

Every organization that I know of says they value innovation culture.

Many describe themselves in their annual reports and promotional materials as having an “innovative culture”. The questions asked by their executives are often, “What motivates innovation?”, “How can we be more innovative?” and “How do we help individuals, teams, and departments to be more innovative?”  To sum it all up, organizations need to get a handle on how to manage innovation. While this may seem simple, the answers could be key to an organization’s success.

Creating Innovation Culture

The process of innovation is very desirable for most individuals. The creative process releases dopamine and endorphins in the brain – neurotransmitters of pleasure and pain, respectively. Flow is the pleasurable feeling often experienced during the creative process. Flow is a strong motivator, and it is the effect that drives many innovators. The organization should provide a culture that allows individuals to become innovators. How does it do that?

The generative artificial intelligence (AI) tools that were introduced in late 2022 started a “tsunami” of change in organizations. Competition is ratcheted up and routine jobs are being augmented and restructured with AI. The organizations that respond to these changes will thrive and their employees will be released from most of the tedium of repetitious work to be more creative.

AI will gradually shift the effort at routine work to jobs in research and development (R&D) and creative work in general. AI will result in greater overall job satisfaction, increased productivity and the elevated exposure to creative opportunities for workers. There will be a freeing of much of the mind-numbing work from the industrial revolution to jobs that raise workers’ potential by using more of their intellect and creativity.  The organizations that thrive in this new revolution will be the ones that create a culture that welcomes and supports innovation.

Measuring Innovation

An organization that wants to increase innovation should have a system in place that measures it in a fair and objective manner. This can be a challenge because the benefits of some ideas are not easily quantified. There should be an initial estimate of the value of an idea and then, once the idea is implemented, a more precise measurement of the innovation may be made. Most organizations don’t have useful measures of their rate of innovation. Some use measures such as patents that are helpful in some ways. However, there should be a measure of innovation that is the summation of the rates for each person, department and the overall organization. That will give management a target by which to gauge continuous improvement in innovation. This should break it down by category and identify the departments and individuals who excel at innovation. Measuring it is a big step toward managing it. Without a reliable measure of innovation, rewards cannot be fairly administered.

Increasing Innovation

There are many ways to increase innovation. The selection of new employees for their creativity is an important start. Brainstorming, benchmarking, training and coaching are processes that have been proven to facilitate innovation. AI is a great tool for generating ideas. Six Sigma, Business Process Reengineering (BPR) and Total Quality Management (TQM) are a few approaches that have been used very effectively to generate improvements. The best way to start is to encourage and reinforce innovation at the individual level. Rewards and recognition are essential to generate ideas.

Rewarding Innovation Culture

Creators of ideas should be protected. A record must be kept of the initiator of an idea and their contribution should be recognized. Then it will be possible to reward the effort for ideation equitably. The organization should reward innovations through compensation, promotions and recognition much as they reward other desirable behaviors and outcomes. Furthermore, innovation should be included in the organization’s evaluation system. Are employees required to be innovative? Do they even want to be? If not, it might be that they don’t trust their innovation will be rewarded.

Too often the root cause of a “stagnant” work climate is that innovation involves change and change will often be resisted. Who would willingly support an innovation that might eliminate their job? They should be given assurance that there will be better situations for them after the introduction of the innovation. Enthusiastic support for an innovation will be positively correlated with the expectation of improved workplace circumstances. Management should assure employees that they will be given new job responsibilities and appropriate training to secure their support of change.

Agile Intrapreneurship

An approach that I’ll refer to as Agile Intrapreneurship involves empowering each employee with the freedom to create their own innovation plan. This allows them to use their own style and strengths to generate ideas and follow them through implementation to innovation. Innovation is not a one size fits all process. Some people work best in teams while others work more effectively on their own. Some excel at creating incremental ideas while others prefer to go for quantum idea home runs. Ideation requires freedom of thinking with an appropriate measure of structure. It is both an art and a science. Everyone creates in their own unique way, and we all need encouragement. Each employee should have at least one innovation project at any given time.

Agile Intrapreneurship will help to create a magical innovative culture. Workers have nothing to lose but tedious and boring aspects of their jobs. They will be freed to spend more time being creative.

Take Your Next Step

Interested in learning more about creating an innovative culture in your organization? The Elmhurst University Innovation and Entrepreneurship program is here to help. The program is designed to help you develop a set of core competencies so that you can deliver projects efficiently and communicate effectively. Take the next step by requesting information about Elmhurst University below.

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About the Author

Bruce Fischer is the Coleman Foundation Distinguished Chair and Professor of Project Management at Elmhurst University. His research interest is innovation and entrepreneurship, and he serves as the director of Elmhurst’s Graduate Certificate in Innovation and Entrepreneurship program.

Posted August 29, 2023

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