Innovation. Perspectives for the 21St Century

Innovative Culture: values, Principles and Practices of Senior Executives in Highly Innovative Companies Joaquim Vilá 1. InTRoDUCTIon with my second point, innovation demands IESE Business School One of the reasons why many companies and relies on new developments: a new and institutions are so cautious about contribution to basic knowledge, a new increasing their innovative capacity is that process or a change of direction, some kind innovation represents a seemingly complex of internal development that complements problem for the senior executives who must the original new idea. Innovating today makes initiate and direct the changes that robust it easier to innovate tomorrow. innovation requires. Innovating entails The attention of many top executives transforming new ideas into tangible results. is largely focused on the urgent matters There are three important aspects to be of everyday management. Innovation is considered in this approach to innovation. often put on the back burner for, although First of all, merely coming up with new it is considered an important issue, it does ideas is not innovation; if the ideas are not not have the same priority as other more implemented, the desired effect cannot pressing concerns. If company directors were be achieved. Churning out new ideas for aware of the fact that postponing innovation the sake of it does not make us more today would undermine their ability to innovative. Secondly, when a new idea can innovate tomorrow, innovation would (or be applied without changing a company’s should) be given higher priority and create a day-to-day reality, it falls under the heading predisposition among senior executives to lay of continuous improvement rather than the foundations that will make it possible. innovation. Continuous improvement and When a senior management team innovation both make a contribution, a becomes aware of the transformations that market impact or an internal improvement, innovation requires, it identifies a series but the difference between innovation and of challenges that must be faced. These improvement is that the implementation of reflections usually address issues such as: an innovative idea requires a change of tack, • The need to protect innovation from a significant modification of the company’s potential threats that would prevent former routine. Thirdly, and in connection the company from taking off in a new JoaqUIM vILá 255 direction: management systems (like have great internal logic and are also within budget planning), chains of command reach of any management team that is willing opposed to change, organisational inertia to change, even if it means starting with and other determining factors carried over themselves. from the previous system. There are two key aspects to any • In order to be credible, innovation must organisational solution which aims to achieve produce consistent results. It cannot robust innovation in a conventional company. be a fortuitous, one-time contribution. First of all, innovation is a challenge that Innovation must become a permanent and has much more to do with human resources deeply embedded fixture of organisational management than with technical or design culture. problems. Developing the capacity to innovate • Coming up with new ideas requires a requires a paradigm shift in managerial certain attitude (thinking big, challenging strategy and in how people act. Secondly, things, seeing more possibilities than and more importantly, innovation targets problems, etc.) which in many cases is the the pinnacle of the management pyramid; exact opposite of how people have been it is a matter of transforming leadership taught to think in the corporate context. that brooks no delegation. Moving towards How can we make innovation both credible a completely innovative corporate culture and appealing to the people we work with? calls for new managerial skills and • Creativity will only flourish if there is a practices which, up until now, have not change in management style; executives been considered vital qualifications for top have to realise that the rules which govern corporate management positions. However, everyday management activities—such an examination of the working methods of as exercising bureaucratic control, senior executives at innovative companies communicating via the established chain reveals their awareness of one important of command, equating the value of a fact: that the singularity of their companies person’s idea with his/her status in the begins with a change in themselves. corporate hierarchy, and other similar rules that allowed operations to grow 2. InnovaTIvE CULTURE steadily and predictably in the past— When a company first launches an cannot be applied when innovation is on innovation process, it is usually focused on the agenda. the key performance areas within its business Faced with such a scenario, most strategy, such as product, service aspects executives tend to pull back, look away and or other business development issues. hope that the profit margin can be increased In every case, innovation is successfully by discovering a new way to cut costs. The brought to market by combining efforts rest, those executives who are willing to face in several different areas. The key is to the challenges involved in developing new spread the responsibility for innovation as capacities in the company, take comfort in much as possible rather than limiting it to the knowledge that innovation has prospered a small group of individuals or specialised in traditional companies in almost every departments. sector. The solution to the puzzle is based on As they acquire more experience with principles which, while not purely intuitive, do innovation, company directors begin to 256 see that any area of the business can be and share, the task can seem dauntingly revitalised by applying new ideas, and that complex. Values and beliefs are a part of innovation can be used to work towards a people; they have become a part of each number of goals, not just competitiveness. person, ingrained in his/her mind, and At this point, innovation ceases to be a are therefore hard to change if a direct specific responsibility assigned to one team approach is taken. Yet senior executives, in or department. The vision of immersion their daily routine and by their example—in in innovation becomes a project to make other words, the way they shoulder their innovation a broad core value for the entire responsibilities and interact, formally company. The approach becomes one of or informally, with the people around wide-scale innovation, which yields regular them—continually show what they value results. This represents a major change of in, and expect from, their co-workers. The perspective. The pursuit of management values and beliefs that comprise corporate innovation goes far beyond the initial culture are largely the result of accumulated intention of managing innovation within a experiences over time deriving from a limited area. The management soon sees the specific management style.1 This suggests advantages of creating an environment where the existence of a much easier way to everyone in the company can contribute, bring about change. The management can and creating an innovative corporate culture promote a culture favourable to innovation by becomes one of the top priorities on the changing the way they lead and interact with agendas of the senior executives and the their employees. This basically means that board of directors. organisational progress (the way leadership The most widespread notion of responsibilities are defined, different organisational culture is that it is the sum management systems, and the manner of of values and beliefs which people have integrating and coordinating management acquired over time and which dictate the practices, etc.) is achieved by recognising appropriate standards of behaviour within people’s contribution to creativity and a company. Edgar Schein, an MIT professor innovation. Clayton Christensen (1999), a famed for his valuable contributions in this professor at Harvard Business School and field, defined culture as a “pattern of basic a leading expert on innovation, reached assumptions that a given group has invented, a similar conclusion when he stated that discovered or developed in learning to cope “culture is comprised of processes, or ways with its problems of external adaptation and of working together, and of shared criteria internal integration and that have worked for decision-making [...] which have been 1 The idea of culture as a well enough to be considered valid and, employed so successfully so often, that they result of the sedimentation of management practices over therefore, to be taught to new members as come to be adopted by assumption”. time was proposed by Esteban Masifern, lecturer at the IESE the correct way to perceive, think and feel in This highlights one of the most serious Business School, in the late relation to those problems”. shortcomings of many companies—the 1980s. The conversations with Carlos Cavallé, also an How can management implement and ability to introduce organisational changes IESE lecturer, in 2007 were maintain an innovative culture? If the that facilitate the attainment of concrete instrumental in determining the importance of the behavioural directors think that culture can only be objectives while also opening up new attributes of senior executives changed by directly altering the values possibilities. Implementing management beyond

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