Innovation – everybody is talking about it, but nobody is doing it!

A while ago, I had an interesting discussion with a senior IT professional regarding the topic of innovation. Business had forced IT to be more “innovative” to support business digital ambitions. They had tried to boost innovation by creating an idea mailbox - but with limited success.

To be honest, hardly anyone had contributed with ideas of how to improve IT way of working and Business/IT services. When discussing the topic further, it turned out that most employees are measured on productivity metrics in a quite controlled environment. To contribute with ideas and creativity was simply not prioritized or part of the culture. The question was how to boost innovation – in practice. Why does some companies succeed with innovation while others fail?

Innovation vs. productivity and control

The Hofstedt Center has done research to understand the relationship between innovation and culture – and there is a clear correlation between the two. The Hofstedt Center has defined a cultural parameter called Innovativeness that indicates the level of innovation capacity in an organization. The parameter is dependent on two out of Hofstedt’s eight cultural dimensions – organizational effectiveness and work control. It is clear from the research that strict routines, strong control, risk avoiding employees where every day is pretty much the same hinders innovation. “Command and control” culture kills inspiration and motivation among staff, making only a limited effort in their job. On the other hand, a goal oriented and easy-going culture where failure and risk are accepted with looser internal structures, higher unpredictability and reduced control and discipline unleashes innovation and customer value.

What I see in many IT organizations is a culture and leadership based on productivity and “command and control”. When discussing the success criteria for the IT organization and its employees, cost reduction and risk avoidance (productivity) are on the top of the list. That is the role IT is often given in the organization. In other words, most IT organizations are not designed to be innovative but are rather seen as a productivity engine of IT services. To change the role and culture of IT is therefore key for becoming an innovative IT organization. But moving from productive IT to innovative IT is a complex transformation. It requires different culture & leadership, performance metrics, capabilities, business interaction - and foremost trust. In the end, it is about redefining the purpose and role of the IT organization.

When studying companies like Google and Spotify (well-known for its innovative and creative culture) it is possible to see how they cleverly designed their culture and governance to support the need for innovation. Innovation is the overall purpose of the organization’s governance, leadership and other capabilities follow that particular purpose – not the other way around. To build a new Google or Spotify is hardly the ambition of traditional companies but it still shows that innovation is often hindered by the wrong governance and culture. This is where many companies fail in implementing innovation or idea management.

Creating a culture of innovation

A company I worked for tried to implement Innovation Management in the early 2010’s without success. There was high demand from business and top management to boost the IT innovation capabilities, and work was initiated to define and design the new innovation management function. In the end, the new innovation function challenged traditional IT governance, culture and leadership – and the innovation initiative was cancelled. Implementing innovation management will challenge leadership about what is important. Doing things as they always have been done (comfortable) – or challenging traditional to reach new levels of value creation (challenge). In most cases, traditional win the fight.

My recommendations:

• Awareness! What signifies your IT organization’s culture and governance (five words)? And how does it support creativity and innovation?
• Roadmap! Define a strategic roadmap (next 6 months) for IT to transform its role to be more innovative. It is important to address primarily purpose, culture/people, processes and tools. A quick and dirty implementation of an idea management tool will not do the trick.
• Stakeholder management! The new role of IT need to be anchored in the organization. Remember that the IT transformation requires change management activities for stakeholders outside IT.

Innovation is the top of management agenda to address the new challenges of digitalization. Everybody is talking about innovation but very few are doing it (correctly). Innovation is not primarily a tool or process but a mindset and culture. It takes time to implement and cannot not be rushed. But every long journey starts with a single step.