Organizational innovation refers to new ways work can be organized, and accomplished within an organization to encourage and promote competitive advantage. It encompasses how organizations, and individuals specifically, manage work processes in such areas as customer relationships, employee performance and retention, and knowledge management.
At the core of organizational innovation is the need to improve or change a product, process or service. All innovation revolves around change – but not all change is innovative. Organizational innovation encourages individuals to think independently and creatively in applying personal knowledge to organizational challenges. Therefore, organizational innovation requires a culture of innovation that supports new ideas, processes and generally new ways of “doing business”.
The Benefit of an Innovative Organization
In promoting a culture of innovation organizations should foster:
– Cross functional team building while discouraging silo building
– Independent, creative thinking to see things from a new perspective and putting oneself outside of the parameters of a job function
– Risk taking by employees while lessening the status quo
The value and importance of knowledge and learning within organizational innovation is crucial. If innovation is about change, new ideas, and looking outside of oneself to understand ones environment, then continuous learning is a requirement of organizational innovation success.
The value of learning and knowledge can only be realized once put into practice. If new organizational knowledge doesn’t result in change, either in processes, business outcomes, or increased customers or revenues, then its value hasn’t been translated into success.
The road to organizational innovation lies in the ability to impart new knowledge to company employees and in the application of that knowledge. Knowledge should be used for new ways of thinking, and as a stepping stone to creativity and toward change and innovation.
Steps to Innovation
To determine how supportive your current environment is in fostering innovation read the frequently asked questions and answers below, about how to build an organizational culture that encourages innovation.
1) Is a climate of innovation supported by senior management?
a. That means, that such activities as risk taking and small ad hoc work groups that brainstorm and talk through ideas need to be promoted, supported and encouraged in the organization.
2) Do managers routinely identify and bring together those individuals more oriented toward innovation those willing to think new ideas and act on them?
a. Identifying new thinkers and individuals oriented toward change helps to ensure an outlet for innovation by supporting these individuals and giving them and like-minded colleagues the time and opportunity to think creatively. This is tantamount to becoming an innovative organization.
3) Is there a process in place monitoring innovation teams and identifying what has and hasn’t worked as a result of them?
a. Maintaining and monitoring innovation is important. This requires checks and balances that identifies how innovation is developed and managed and processes that capture what did or didn’t work. In order to be able to continue to innovate in a changing environment, continually monitoring the internal and external environment to determine what supports or hinders innovation is key.
4) How can an organization be strategic and focused on it goals yet build and develop an innovative culture?
a. The value of a strategic focus remains important to a company’s success. In fact, clear direction and understanding of a company’s mission can help fuel innovation – by knowing where in the organization innovation and creativity would provide the most value. An innovative organizational culture creates a balance between strategic focus, and the value of new ideas and processes in reaching them.
5) Is there a single most important variable or ingredient that fuels an organization toward an innovative culture?
a. Similar to other successes of an organization, what drives innovation are the people of the organization. First, management must set the expectation of innovation and creativity and then “doing business” is about how to improve processes, products and customer relationships on a day-to-day basis. This mindset itself will create an ongoing culture of innovation.