Monday, March 05, 2012

Is your culture kryptonite for innovators?

I've made the argument previously that corporate culture is one of the most significant barriers to innovation.  Yet corporate culture is ephemeral, hard to grasp and change.  Like Potter Stewart's definition of pornography, you can't define it, but you know it when you see it.  Why is it that culture is so powerful yet so hard to define and manage?  If culture lacks definition and isn't transparent, why is it such a major obstacle to innovation?  Finally, if culture is powerful, what does your culture do to your innovators?

First, we ought to debate whether or not "corporate culture" exists.  Certainly we can't see it, can't "cage" it.  Corporate culture is really the belief system a company has about itself and how it operates.  It can't be seen, and in most cases can't be documented or defined.  While many executives would like to believe that they influence and control the culture, they are usually wrong.  Culture is far more powerful than an executive who will take on a role for just a few years.  The culture, like a rubber band, will simply snap back into place once the executive who attempts to promote some change moves on to another position.

Really, arguing about culture is like debating why an airplane can fly.  We know there are scientific principles and aerodynamic reasons for flight, but most of us can't describe them yet we willing strap ourselves in and read comfortably during the flight.  Culture is similar to that - most executives can't define and can't control corporate culture, but willingly partake of the impact and benefits.

Why is corporate culture powerful?

Corporate culture is powerful for at least three significant reasons.  First, it defines what people should focus on and what they should avoid.  Yes, this should come from managers or executives, but there aren't enough managers or executives to go around telling people what to focus on.  Culture, formal and informal, defines what is valuable, what is important and what will be rewarded.  Second, culture is cohesive.  It helps a broadly distributed organization work to common purposes, without constantly consulting a documented process map or decision tree.  Culture helps people in very disparate organizations make similar decisions given the same data.  Third, culture acts as both an on-boarding mechanism and as a guidepost to bring people into line, or cause people who aren't aligned to the culture to leave.  Culture reinforces itself - attracting more people who think similarly to the culture and forcing those with different perspectives to change their thinking or encouraging them to leave.  These powers are vast and important - they shape the way work gets done and how people think.

Why is culture important for innovators?

That last sentence says it all - culture shapes the way work gets done and how people think.  Culture reinforces specific goals, work styles and perspectives and rejects others.  When new ideas arise in a company, the culture quickly surrounds the ideas like antibodies, evaluating the idea to determine if 1) it is a threat to the culture and 2) if it is within acceptable bounds of the existing frameworks.  If either of these concepts isn't true, the culture will try to reject, stymie or change the idea until it is killed or changed to fit within the cultural framework.

What does existing culture do to innovators?

Unless your existing culture sponsors and encourages innovation (a very small minority of companies) culture has a corrosive effect on most people who want to explore and promote innovation.  Most cultures exist to protect and defend "business as usual", and innovation in inevitably a threat to existing business process.  Therefore, culture blocks innovation and innovators, telling them "we've never done that before" or "that failed the last time we tried it".  Culture ensures that safe, incremental ideas are funded and new, risky ideas don't receive resources or funding.  Innovators are constantly scrambling to find money, time and resources to pursue even simple ideas.  Further, the culture presents a skeptical face to new ideas.  Innovators are asked - do you really think that will fly?  Their ideas are belittled.  The tools they use, especially tools to discover future needs or understand how the future will unfold, seem strange and unfamiliar.  The work seems frivolous next to the "hard" and valuable work of achieving the next quarter.  In short, existing cultures isolate, frustrate, belittle and starve good innovators.  Which is why far more entrepreneurial firms create interesting new products than large corporations.

Can you create a culture of innovation in an existing business as usual company?

I think the answer is "yes", but the time, focus and commitment necessary is significant - starting from the most senior executives and working through to the most important keepers of the culture - middle managers.  Creating a culture of innovation starts by reframing the importance of innovation, carefully defining what innovation is and then constantly reinforcing the importance of innovation by setting specific goals, measuring innovation progress and changing compensation and reward programs to reinforce innovation.  And "innovation" isn't a "this year" thing, by the way.  I hear far too frequently that someone's CEO has decided that innovation is going to be the focus for the year.  As if your corporate culture is intimidated by a yearly focus, or can be whipped into shape within that timeframe - or will remain in its new state once the focus changes.

There is no free lunch, especially where corporate culture is concerned.  Too many firms, too many executives have become comfortable with cultures that return enough to keep shareholders happy but those same cultures resist innovation.  Your innovators are frustrated, isolated and angry, and are voting with their feet.  As more and more innovators leave, the short-term, efficient, business as usual culture is only reinforced, creating a vicious cycle of ever more efficiency and increasingly, no capability or appetite for innovation.

Your culture may seem innocuous, but many cultures are kryptonite to innovators.  And, unlike in the Superman comic strip, there more to be done than simply removing the kryptonite in order to get more innovation.  You'll need innovators who have skills and understand how to get things done.  The absence of innovation barriers by itself will not ensure innovation success.
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posted by Jeffrey Phillips at 5:54 AM

3 Comments:

Blogger Graham said...

jeffrey,

i agree with everything you have written and have seen plenty of evidence of it in my own activities.

however, having tussled with the problem for a few years now, i'm no longer sure that transforming efficiency cultures into innovation cultures is the right way to go.

any largish corporation will have different types of activities going on with respect to their need for innovation. the division that is pumping out a cash cow product needs to focus on efficiency, cost-control and quality. they should hire people who are good at that and not distract them with innovation.

at the same time, there will be other divisions which need to be highly innovative, for example because of the market they are in or because they are working on products at early stages of development. clearly, you don't want bureaucrats running the show there.

so i think the problem is that companies are unable or unwilling to foster different cultures in different departments or divisions, but instead try to instill a monolithic culture on all their employees. inevitably, when they do, the one they choose is the business-as-usual culture.

however, putting this approach into practice has its own difficulties: managers and employees would have to recognise that the skillset needed for running or working in innovative environments is a different one to the business-as-usual case. this ultimately implies distinct career paths within a corporation.

a venture capital corporation would not install a traditional corporate manager as CEO of a startup, nor would a traditional CEO consider hiring a successful entrepreneur to run a factory.

in other words, i suspect that corporations need to create and nurture two distinct cultures, each appropriate to its task, that can exist side-by-side. i'm not sure that - having discovered that imposing one culture on everyone didn't work - the solution is to repeat the mistake with the other one.

12:10 PM  
Blogger Franklin Peña said...

Hi Jeffrey!
Good for the motivation you've had to write this post, you treat the subject when it comes to culture is a very complex subject so much that when we refer to the organizational culture we are referring to all those intangibles and operational on the day to day business, to generalize a bit would you say is the way of thinking and acting of the company at least is how one acts and reacts against specific business issues and policies.

Is all this cruzigrama of characteristics that makes a way to define the culture of an organization is a titanic task, as is trying to change once the organization acts and moves under the same criteria specific criteria that constitute the organizational bureaucracy in addition to determining the degree of control and process efficiency but mostly serves regular key or bottleneck for innovation so that the same organizational culture is what determines the flexibility of the imaginative processes therefore determine the degree and gives them ideas creative.

Thanks Jeff
Franklin Pena Beras
HMM 2.0

2:15 PM  
Blogger Franklin Peña said...

This comment has been removed by the author.

2:16 PM  

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