Tuesday, August 22, 2006

Innovation Culture and Conflict

I've been thinking a lot lately about the organization and culture of many businesses, and the importance of a culture that supports and enables innovation. To create a simple example, let's group all firms into one of two types of cultures: sustaining and enabling. These are my definitions so let's get them out on the table.

A sustaining culture is one in which few new ideas are created, and the culture is all about sustaining existing products. My example in this regard is Texas Instruments. When I worked for Texas Instruments many years ago, the management team prided itself on driving down the cost of the products they created. Now, this is not to say that TI didn't create new products, just that the culture and the focus of the business was on driving out cost and scaling up production, rather than a significant focus on new product development. In fact TI spent money on new products, including a significant amount of money on microprocessors to compete with Intel and AMD. TI at that time just wasn't able to bring the innovation, creativity and culture to bear to win in markets where its sustaining culture wasn't helpful. TI became a more innovative firm when the Houston office, which was removed from headquarters, created a new product (the digital signal processor) and the management team that created the DSP took over. Even after that takeover, the predominant culture at TI is one of driving out cost and quickly reaching scale production, but TI has become more innovative.

By contrast, an enabling culture is one which identifies innovation as a critical function for differentiation and puts in place the systems, processes and culture to enable innovation on a consistent basis. Innovation and new product development are recognized as important to the organization and there is a corporate wide focus on these capabilities. To stay within the semiconductor industry, Intel was probably the most visible of the larger semiconductor firms as an enabler of technology. When your senior folks write books with titles like "Only the Paranoid Survive", there's a belief that the competitors are constantly gaining on you, and only through constant innovation and new product development can you differentiate. Other good examples of firms with enabling cultures are the pharmaceutical industry and the Consumer Packaged Goods industry.

However, over time it has proven difficult to maintain an enabling culture across the business. If we look closely at Intel, or pharmaceutical firms or CPG firms, what we'll see in most cases is a combination of the two cultures: an enabling culture in R&D and a sustaining culture in the rest of the business. After all, those firms still have to make next quarter's numbers. What falls apart somewhat in these firms is that "innovation" increasingly becomes "R&D", while the rest of the business focuses on its day to day operational issues. Clearly there are ideas and concepts to improve other parts of the business, but the sustaining culture creeps in.

What's interesting is how the cultures are bending back on themselves. Some new idea management systems in firms we've worked with are spawned by sustaining cultures trying to improve their efficiency through Lean or Six Sigma. By considering how they can become more efficient, these teams and processes are generating a lot of ideas which need to be considered and implemented, so a sustaining culture needs to become an enabling culture, at least for a while.

Where's your organization's culture on the sustaining - enabling spectrum? Outside of R&D, most firms are very focused on a sustaining culture, which is necessary but misses many opportunities. Also, as two cultures emerge in a business, there will be conflict at the intersections unless the "sustaining" folks and the "enabling" folks are working together cohesively.

Over the long term it may not be possible to maintain a truly enabling culture. As the firm grows, it may simply need to spawn small enabling organizations or teams and graft them to a sustaining manufacturing and fulfillment team. Size plays a critical role, as does the focus on the next quarter and the risk of failure. Quite possibly the hybrid culture is the best approach for a larger firm.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 4:36 AM


Anonymous Anonymous said...

This comment has been removed by a blog administrator.

7:09 AM  
Anonymous Anonymous said...

How innovation should be embedded in an organization most probably will depend on the specific setting and culture of the company as well as the phase the company is going through in terms of becoming more innovative.

Culture is of huge importance to become innovative. In the early phases we often see the need for a mindset change. Discontinued ideas are e.g. often refered to as 'killing ideas'.

While you successfully embedded innovation in the organization, one also may be interested in the cultural impact on consumer adoption of your innovations!

3:58 AM  
Anonymous Anonymous said...

Interesting article!
We've done some work on innovation culture stereotypes together with Cranfield School of Management and one of the dimensions we've identified is "ambition" reaching from "incremental" to "radical". This seems very much what you call "sustaining" and "enabling". We pulled our 5 dimensions into a free online tool. So, if you go to this website you can learn how we defined the dimensions and measure them based on a 5 - 10 minutes online questionnaire. The "ambition" dimension may be of particular interest to you and I'd liek to learn whether it looks like your "sustaining" - "enabling" dimenion in your view.
Tool: www.iproconhcm.co.uk/innotool

kind regards
Sven Ringling

6:17 AM  
Anonymous Invertir en oro said...

I think that this post is one of the best that i have read in my life, congrats you did a great job,.

8:20 AM  
Anonymous christinetjan said...

be careful to the culture & conflict when we want to do innovation

1:31 AM  
Anonymous cure hemorrhoids naturally said...

Life is very joyful, but it lacks form. It's the aim of art to give it some.

3:03 AM  
Anonymous konsultan perusahaan said...

I think people fear idea management and innovation because there's a significant number of ideas that simply won't plan out.......Nice statement.....keep posting

4:10 AM  
Anonymous belajar internet marketing said...

this day I've been searching for information on various issues, this I found very good and I would like to congratulate you for your work.

4:10 AM  
Anonymous parcel lebaran said...

I think that this post is one of the best that i have read in my life, congrats you did a great job,.

4:10 AM  
Anonymous delayed orgasm said...

the difference between the content spammers and most corporate innovators is that the smaller

4:11 AM  
Anonymous how to avoid premature ejaculation said...

I'm writing to you because I just came across a business that I think has great potential. It lets you save money on almost everything. Make money from almost everything,

4:11 AM  
Anonymous konsultan seo said...

If growth is important to a firm, and if growth is dependent on offering existing products and services to new customers

4:11 AM  
Anonymous tabungan pendidikan said...

innovation is very natural and happens in the "real world" as new plants and animals colonize new ecological niches.

4:12 AM  
Anonymous mengecilkan perut said...

I wonder how you got so good. This is really a fascinating blog, lots of stuff that I can get into. One thing I just want to say is that your Blog is so perfect

4:12 AM  
Anonymous how to teach dogs tricks said...

We generally think most specifically about the risk associated with a new product introduction

4:12 AM  
Anonymous easy way to get pregnant said...

I would be aware that as somebody who really doesn’t comment to blogs a lot (in actual fact, this may be my first put up), I don’t think the time period “lurker” is very flattering to a non-posting reader.

4:12 AM  

Post a Comment

<< Home