developing+an+innovation+culture

8/6/2019 Developing+an+Innovation+Culture

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Discussion paper for Department of Trade and Industry Innovation Review March 2003

DEVELOPING AN INNOVATION CULTURE:

IMPLICATIONS FROM RESEARCH

INSTITUTE OF WORK PSYCHOLOGY/ ESRC CENTRE FOR ORGANISATION AND

INNOVATION, UNIVERSITY OF SHEFFIELD

Modern times have seen an iincreasing emphasis placed on innovation as a key

contributor to organizational success. Innovation not only concernsvers the creation of ideas

that are novel and useful to the workplace, but also includes the implementation of those

ideasem to produce develop new products or, services (i.e., product innovation) or and new

ways of working (e.gi.e., process innovation, for example though. changes in HRM practice

or work design).

The Institute of Work Psychology (IWP) has been conducting research in this area, for a

number of years and it has become apparent that a holistic approach is needed to initiate and

sustain innovation in organisations.

What would an innovative organisational culture look like? It would be one in which

employees are motivated and confident enough to continually try new things out. To this end,

employees They would also be equipped with the right types of knowledge, skills and abilities

to both effectively generate and implement new ideas. However, innovation will only

flourish if the work environment is supportive of these efforts. This means employees must

be given opportunities to explore, investigate and experiment, and management should

provide support through active encouragement of these types of behaviours. At a broader

level, the organisation itself should have structures and processes in place which that allow

for smooth transitions from appearance of new ideas to actualised innovationstheir

implementation.

How can such a culture be developed? Research conducted by IWP and others have

highlighted some of the overlapping means by which this culture can be grown:

o Selecting innovative employees

o Training for creativity and innovation

o Developing a general learning culture

o E Enabling empoweringment of employees

o Setting up idea capture schemes

o Developing managers to support the innovation of others

o Having Making creativity as a requirement of the job

o Improving employee participation in decision-making

o Having appropriate reward systems for innovation

o Allowing risk-taking as an acceptable mode of practice

o Encouraging investment in research and development functions

o Benchmarking on a regular basis

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Each of these approaches will beis elaborated upon evaluated in the following discussion.

SELECTING INNOVATIVE EMPLOYEES

Studies over the years haveResearch has uncovered a wide range of potential attributes of

creative individuals. Some of these characteristics refer toare fairly stable personality traits

but other aspects are more malleable knowledge, skill and motivational dimensions.

Recently, psychometric measures have been developed by IWP staff for tapping into the

general traits which identify consistently innovative individuals ( i.e. those good at both

generating and implementing ideas). The Ff our key traits include are: an openness to frequent

change;, active championing of change; , having unstructured approaches to work ; and a

preference to try doing things differently. This instrument provides a practical way forward

for helping to select innovators into the organisation, measure and is now being used by a

number of organisations for recruitment purposes.

Such instruments will help identify strongly innovative individuals, but a mixture of

personality types are needed in organisations. So there remains a and there is still a question

of what would be the optimal balance. FurthermoreMoreover,, given that most organisations

are not starting from scratch, they may have to settle for working with options to develop the

capabilities of the existing workforce. Although relatively few people are able to innovate in

a radical manner, everyone has the potential to be creative at some level or another. It is

better therefore to use these selection instruments for key, identified positions where

innovation is a major component of the job. Also, even if highly innovative individuals have

been selected, they will be unlikely to innovate if the work environment is unsupportive (e.g.

one with a lack of resources and time for creativity).

Policy implications:

o Select for innovation in key roles

o Encouraging diversity in organisational populations?

TRAINING FOR CREATIVITY AND INNOVATION

Another popular approach is to directly develop employees’ learning about innovationIt is

widely assumed that, the underlying belief being that creativity is a skill that can be learned

by anyone. For this reason many organisations send their employees This is typically done by

sending individuals on creativity training courses, that which cover techniques such

brainstorming, lateral thinking or problem-solving. Until recently, little evidence existedabout the effectiveness of such initiatives.

However, there has been very little formal published evaluation as to the effectiveness of

these types of courses. A A study done completed in IWP on three different types of creativity

course s found that they all improved the generation of ideas, but that idea implementation

was much more strongly determined by organizational factors (e.g. management support).

These findings combined with others provide some practical implications.

In order for individuals to fully learn about the innovation process, creativity courses should

cover opportunity finding, problem definition, idea generation, idea evaluation and idea

implementation. The skills needed for each of these aspects can differ and it appears that the

implementation side of things can often be ignored.

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Training interventions can be used to enhance motivation and confidence to innovate, as well

as to develop creative thinking skills. Research has shown that motivation is a core

contributor to creative outputs. Within courses, these emotional aspects can be enhanced

through clarifying personal and organisational benefits of creativity, goal-setting and

providing sufficient feedback with practice.

As well as formal training, organisations can consider other routes to stimulate learning about

creativity. These include providing access to books, articles and web resources, setting up

innovation discussion groups and encouraging coaching by line managers.

Although these learning activities can be used to develop employees’ knowledge,

skills and attitudes concerning innovation, there will be little long-term impact if the work

environment they return to does not give them the support and freedom to express, develop

and apply their ideas.


o Build in creativity and innovation training into MBAs or other courses (as the other

innovation review panel also recommend)Encourage development and assessment of innovation traininginnovation training within organisations.

o Develop innovation training to emcompass encompass implementation as well as idea

generation.

o Include innovation training within MBA and other professional development

programmes.

DEVELOPING A GENERAL LEARNING CULTURE

Evidence is gathering linking the extent to which organisations actively encourage continuous

learning and development in their employees with company innovativeness. By providing a

wide variety of opportunities for learning, organisations are exposing their workforce to a

greater variety of stimuli, developing the motivation of individuals to learn new things and

developing their knowledge and skills to work with new innovations. These are all conducive

to stimulating creativity


o Support a culture of training and learning lifelong learning initiatives in organisations.

o Education of children and students to encourage more creative and autonomous thinking

and learning.

ENABLING EMPOWER INGMENT OF EMPLOYEES

Empowerment involves devolving responsibility for organising and managing work to

individuals or teams. For example, this can take the form of delegation, job enrichment

initiatives or setting up of autonomousself-managing work groups.

Research has shown that those with greater levels of control in their jobwho are empowered

tend to develop better understanding of their work and arebe more innovative and open to

new ideas. . In fact, there are indications that autonomy is a particularly strong influence on

the implementation of ideas as opposed to the generation of ideas. Empowerment influencesfacilitates innovation by not only giving employees the motivation, knowledge and

confidence to generate new ideas, but has especial value with respect to implementation, by

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providing the opportunity to put their ideas into practice. but it can also enhance their

motivation, confidence and learning.

When instigating empowerment initiatives, it is vital to involve employees in the design of

new work practices from the start, and to have visible and active management support.

Policy implications:o Encourage empowerment with in organisations (especially those facing most change) .

o Involve employees in the development of empowerment practices.

?

SETTING UP IDEA CAPTURE SCHEMES

There are probably already many untapped ideas in the workforce, and idea capture

schemes (ICSs) are ways of harnessing the suggestions of all employees. Thesey are most

commonly thought of in terms of suggestion schemes, but can also refer to quality circles and

production development groups. In essence, they provide an opportunity for employees to

share their ideas so that their relevance and feasibility can be assessed. Savings from these

schemes can be huge substantial, but there is very low participation in UK organisations

compared to those abroad.

A study ofurvey of 160 organisations idea capture schemes was conducted by IWP.

on the design of ICSs and the success of employee suggestion making. More effective

schemes: involved end-users in the development of the scheme and its rewards, recognition

and feedback systems; gave timely, detailed and encouraging feedback to employees on their

ideas; had rewards (not just monetary ones) that were perceived as being fairly distributed and

valued by employees; engaged in sufficient marketing and continuous publicity to maintain

the momentum of the scheme; were given visible support by senior management; and

encouraged use of the schemes as part of daily work.


o Dissemination of best practice in ICS schemes.

o I Government initiatives to support and rewardthe use of ICS schemes.

DEVELOPING MANAGERS TO SUPPORT THE INNOVATION OF OTHERS

Many studies have demonstrated that greater line management support is linked to greater

creativity of employees, especially with respect to the implementation of ideas. Further

workWithin IWP research has within IWP has set out to ascertain exactly what managers

supportive of innovation do. It has been found that managers they: help employees learnhow to innovate by sharing their knowledge, skills and experience and role-modelling the

desired behaviours; and; and they. They enhance employee motivation and confidence by

giving supportive encouragement and feedback.

The other key aspect is the extent to which the manager provides opportunities for innovation

by giving freedom and resources to employees and being open to challenge and willing to

change.

Again these types of managers can be selected into post according to the above criteria

or, more usefully, undergo training and development to develop the requisite capabilities. As

mentioned by the Innovation Review Panel, management skills in the UK need to be

enhanced and the management of innovation is a crucial aspect that should be addressed.

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o Ensuring that management of innovation is covered on MBAs and other types of

educational courses.

o Management of innovation as an NVQ element

MAKHAVING ING CREATIVITYINNOVATION AS A REQUIREMENT OF THE

JOB

Studies within IWP have indicated that, in many jobs, creativity is not seen as a requirement.

At the same time, the extent to which creativity is a formal requirement of the jobthe job is

strongly associated with the degree of innovation shown. Other research has shown that if

innovation is not overtly attended to currently, there is a danger that it can ly required by the

job influences an employee’s level of innovation. be seen as less and less important over

time.


o Ensuring that innovation is a job requirement.

o Include innovation in career development and performance appraisals.

Practically, making innovation an explicit part of the job description should motivate and

focus creative efforts.

IMPROVING EMPLOYEE PARTICIPATION IN DECISION-MAKING

The fact that employee participation is a key ingredient to innovation success is apparent

across the issues discussed above. A survey by IWP of 500 UK organisations showed that

those that conducted extensive internal and external discussion and negotiation prior to ideaimplementation, were more likely to produce successful innovations. By broadening

participation in decision-making, the organisation is encouraging a wider range of viewpoints

and ideas from which to choose., which is beneficial to creativity. It should alsoThis also

helps motivate recipients of innovationemployees by giving them a sense of ownership over

changes at work, as opposed to them resisting imposed changesalterations. Other benefits of

an increased sense of control have been outlined previously. Furthermore, research has

shown that employees’ participation in innovation is influenced by the degree to which they

trust the organisation will take their ideas seriously, indicating the importance of a climate of

openness and honesty.

Participation can extend beyond employees to other stakeholders such as customers. Findings

from research show thatsuggest that seeking the views of customers, or providing an

opportunity for them to comment, can supply an organisation with invaluable

feedback/information on, for instance, the quality, usefulness, or price of products or services.

Feedback from customers intuitively represents a major source of knowledge from which

ideas to improve existing products or services, or to develop new products and services, can

spring. Importantly, ideas and innovations originating from such feedback help to ensure that

customer demands are met, thereby contributing to organisational competitiveness and

growth.


o Encour age aging organisational usage of systematic employee participation

initiativesve.s

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o Involve customers or client in the participation process.

HAVING APPROPRIATE REWARD SYSTEMS FOR INNOVATION

The idea ofP providing employees with rewards for their innovation activities is an importantissue. At some level employees need to be acknowledged for their efforts and rewards can

take many forms apart from the financial. For example, informal recognition by from

immediate managers, public recognition in company newsletters or certificates of

achievement can also be valued by employees. Furthermore, it is felt by

researchersEspecially significant is the finding that employees that people will perform more

creatively if motivated by the work itself, rather than by rewards or punishments. This type

of intrinsic motivation can be developed by encouraging employees to explore ideas they find

personally exciting, reinforcing feelings of personal competence and creating an environment

where people can freely exchange ideas and explore areas of mutual interest.


o Encourage recognition for innovation within organisations (not necessarily financially).

o Tax breaks for innovation?

ALLOWING RISK-TAKING AS AN ACCEPTABLE MODE OF PRACTICE

It is an established fact that a number of ideas must be produced in order to produce one

successful one, and that implementation is generally not right first time. An innovation

culture should reflect this by showing a tolerance for errors and and rewarding effort as well

outcomes. However, Tthere also needs to be an element of learning from any mistakes that

are made, by instigating regular reviews and reflective practices. It is apparent that the UK culture is currently more risk-averse than others abroad.


o Promote reflection and learning from practice.

Policy-wise:

Risk assessment as a tool to be learned in courses

o Reflection and learning from practice, again a key component of management learningUse

risk assessment techniques alongside idea generation and implementation.

ENCOURAGING INVESTMENT IN RESEARCH AND DEVELOPMENT

IWP studies have confirmed that gGreater levels of investment in R&D are associated with

greater reported levels of innovation in organisations (though not more so than the kinds of

‘softer’ initiatives decribeddescribed above). Traditionally, R&D has been regarded as a

discrete function of the organisation devoted to the design of new products or services, but the

creation or adoption of new work processes can also come under this aegis. Activities in this

area can range from fundamental ‘blue sky’ research, where the intention is primarily to

develop scientific knowledge without having a predefined practical application, to tailoring of

specific products or processes to meet a particular need. R&D therefore represents a

conscious and planned effort by the organisation to innovate but it does need to be

strategically integrated with other functions such as production and marketing to be optimally

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effective. Collaboration between organisations and the research community can enhance

such R&D, by bringing a broader perspective (see also benchmarking, below).


o Encourage R&D into process as well as product innovation. Tax breaks for Researchand Development (already done?).

o Encouraging research into process as well as product innovation.Promote research

community and user collaboration in R&D.

BENCHMARKING

Many organisations actively undertake systematic approaches to locate and assess good

practice elsewhere in attempts to improve their own performance. Again, research has shown

that organisations that benchmark their operations more frequently tend to be classed as more

innovative. Benchmarking comparisons can be made both externally, with direct competitors

or those in other industries, and internally, examining similar operations within different partsof the organisation. Typical methods of gathering this type of knowledge include

observational visits, using surveys, attending conferences and workshops, conducting

literature reviews and analysing performance or operational data. Since these benchmarking

techniques are a means of introducing or generating ideas which that are new to an

organisation, this can greatly help an organisation to become more innovative.

In particular, organisations should benchmark themselves in terms of their innovation

processes and outcomes in order to highlight areas for improvement. IWP research within

Small and Medium Enterprises has led to the development of an innovation audit tool which

can be used for this purpose.


o Support for benchmarking groups or initiatives

o National databases and studies to highlight the most effective organisational practices

o Support usage of innovation audit tools

Notes compiled by:

Kamal Birdi and Toby WallInstitute of Work Psychology (IWP) and

ESRC Centre for Organisation and Innovation (COI)

University of Sheffield

3rd March 2003

SELECTED REFERENCES FROM IWP RESEARCH

Axtell, C., Holman, D., Unsworth, K., Wall, T., Waterson, P., & Harrington, E. (2000).

Shopfloor innovation: Facilitating the suggestion and implementation of ideas. Journal of Occupational and Organizational Psychology, 73: 265-285.

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Birdi, K. (2003). Evaluating the effects of creativity training on employee innovation. Paper

presented at the Academy of Management Conference, August, Seattle, USA.

Clegg, C., Unsworth, K., Epitropaki, O. & Parker This document has outlined some of the

issues to be considered when developing an innovation culture. The list is not exhaustive butdoes provide evidence-based recommendations that should go a long way to enhancing and

sustaining innovation in UK organisations

, G. (2002). Implicating trust in the innovation process. Journal of Occupational and

Organizational Psychology, 75, 409-422.

Clegg et al., (2002). An international study of the use and effectiveness of modern

manufacturing practices. Human Factors and Ergonomics in Manufacturing, 12, 171-191.

Leach, D., Totterdell, P., Birdi, K., Clegg, C., Wood, S. & Wall, T. (2001). Innovation atwork: Findings form a survey of innovation in UK organisations. Sheffield: University of

Sheffield.

Leach, D.J., Unsworth, K.L. & Wall, T.D. (2002). What is an idea capture scheme? ‘What

is..?’ series on IWP website at www.shef.ac.uk/~iwp.

Leach, D.J., Jackson, P.R. & Wall, T.D. (2001). Realising the potential of empowerment:

The impact of a feedback intervention on the performance of a complex system. E rgonomics ,

44, 870-886.

Patterson, F. (2000). The Innovation Potential Indicator: Test Manual and Users Guide.Oxford: Oxford Psychologists Press.

Patterson, M.G., West, M.A., Lawthom, R. & Nickell, S. (1997). Impact of People

Management Practices on Business Performance. London: Institute of Personnel and

Development.

Port, R., Patterson, F., Warr, P. & Hegarty, P. (2002). The management of innovation. Paper

presented at the BPS Occupational Psychology Conference, January, Blackpool.

Unsworth, K. & Wall, T.D. (2002). Creative requirement: A neglected construct in the study

of employee creativity. Paper presented at the Academy of Management Conference , August,

Denver, USA.

Wall, T.D. (2001). A digest of evidence from studies of innovation and performance.

Contribution to – ‘The UK Productivity Challenge: CBI and TUC submission to the

Productivity Initiative’. Report submitted by the CBI and TUC to the Chancellor of the

Exchequer, October 2001. See pp 52-58 and body of text.

Wall, T.D. & Parker, S.K. (2001). Job design. In N.J. Smelser and P.B. Baltes (Eds)

International Encyclopaedia of Social and Behavioural Sciences (vol 12) , Oxford: Elsevier

Sciences.

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