The 4 Building Blocks of Innovation

Just about every day another article or story pops up in the news on how important innovation is for organizational survival, growth, and success. Or a new book is published offering new techniques and strategies to make an organization more innovative. And just about every company, whether large or small, touts innovation as one of its key values.

While it is clear that innovation is not a management “fad du jour” and is vital for success, building and maintaining a sustainably innovative organization remain an elusive, although critical management challenge. Why is building an innovative organization so difficult? I believe there are two root causes: One is that too few recommendations focus on the complete picture so advice can often be confusing. Is innovation about product development? Disruptive technology? Building external alliances? Customer centricity? Ambidextrous organizations? The second root cause is that leading for innovation is both a science and an art and requires diagnostics, tools, as well as all of the attributes of effective leadership.

Sorting through the literature and advice is not an easy task. Based on my research and experience, I have identified four building blocks that in combination lead to sustainable innovation, defined as an organization’s ability to leverage the talents of its employees to create and successfully produce new and different results. Such results range from breakthroughs to incremental changes and improvements in products, services, business models, and operational and managerial processes.

The building blocks include: 1) a leadership style throughout the organization that encourages innovation; 2) a culture that supports innovation; 3) flexible processes that promote creative collaboration, problem-solving, decision-making, and product development; and 4) internal and external metrics that drive accountability and ensure progress and efficient use of resources. Focusing on all four areas will avoid compartmentalizing innovation and instead allow it to be embedded into the fabric of the organization, an absolutely essential step toward achieving sustainable innovation.

This month, I will focus on the first two and cover the last two in more depth in a subsequent article.

Building Block #1: Leadership Style

The roots of an innovative organization start at the top. Senior leaders must be able to balance the many complexities, tensions and trade-offs inherent in leading for innovation. Managing these dilemmas enables the organization to both tap into the imaginations and capacities of all stakeholders and continue to achieve organizational goals. To deal with these challenges leaders must be versatile and agile. They must be able to create the conditions for others in the organization to contribute, feel supported, and be engaged and at the same time exercise power and authority to push for performance. They must also position the organization to be competitive in the future and drive the organization in the near term to achieve results. They must have both strategic and operational acumen. Such leaders are curious, open to being challenged, patient, and adopt a learning approach to experimentation and risk. They must indeed be humble and admit that they don’t have, and don’t need to have, all the answers, but instead need to know the right questions to ask to encourage new ideas and solutions.

This type of leadership style, however, is not easy for leaders to adopt, especially if they have to fight, in one academic's words, "the very human tendency to cling to [different] formulas that worked well in the past." Thus leaders, now more than ever, need to know their limitations and their strengths, as well as when their strengths might become obstacles to success and organizational prosperity. Such knowledge requires self-examination, reflection, and constant feedback from customers, colleagues, superiors, subordinates and objective third parties.

Building Block #2 – A Supportive Culture

Leadership style is a major contributor to the organization’s innovation levels. However, there is more to building an innovative organization than just leadership style. The vision, mission, long-term objectives, and strategies need to be focused on innovation and creativity. Organizational norms and values must encourage teamwork and collaboration, maximum information flows, customer and market focus, talent development, and a comfort level with constant change and new ideas – the hallmarks of an innovative culture. Norms must also encourage constructive conflict, appreciation of differences, decentralized decision-making, and learning through mistakes and even failure. They must actively discourage the hidden agendas and political shenanigans that inhibit innovation. To ensure alignment, performance management systems must reward behaviors that demonstrate these norms.

Conclusion

Encouraging leadership styles and a supportive culture are critical components, but of course are not the whole story to building an organization where innovation thrives and is part of the organizational DNA. Processes and metrics that allow for the proper balance of creativity and control also matter, as we will learn in the next issue.

Lynne Levesque, Ed.D., is a member of WJM Associates’ Executive Coaching faculty. Based in Boston, Lynne is committed to accelerating the strategic and creative performance of leaders and their organizations. She has co-authored several articles on critical management processes as part of her research at Harvard Business School, in particular “Meeting the Challenge of Corporate Entrepreneurship” (Harvard Business Review, October 2006). Lynne was formerly Vice President of Information Technology Administration at Shawmut Bank (now Bank of America). She also teaches Strategic Leadership at Northeastern University.