Friday, March 23, 2018

Changing corporate culture to encourage more innovation

I've written and spoken about the importance of corporate culture and its impact on innovation over the last 15 years or so.  Heck, one of the underlying issues I address in my book Relentless Innovation (shameless plug) is the overwhelming challenge that corporate culture presents to an innovation team.  I've argued that corporate culture, more than any other issue, is the biggest barrier to sustained innovation.

I've just found a great article on the subject of corporate culture, published recently in the Harvard Business Review.  This is one of the best articles I've read recently about corporate culture, and while the article barely touches on innovation, the points it makes about corporate culture and employee motivation are important.

Links between culture and motivation

At the heart of the article is the question of what impact corporate culture has on employee motivation.  I've always used a simple definition of corporate culture  - it's how things get done in a company, regardless of the org structure or process maps.  It's the formal and informal decision making, corporate history and perspective, formal and informal rewards, recognition systems and what the entity encourages or discourages.

The authors of the paper draw a direct link between what people do, and what motivates them, and corporate culture.  They go so far as to suggest six reasons why people work:  play, purpose, potential, emotional pressure, economic pressure, and inertia.  The first three are positive forces that encourage people to do what they enjoy.  The last three are negative forces that merely sustain day to day activity.

Where does innovation fit in?

If you think about how these factors influence innovation, it becomes obvious how much the positive aspects of why people work influence innovation.  The first and most important aspect is "play".  Michael Schrage wrote a book about innovation called Serious Play.  Innovation is a playful, explorative, experimentative activity at its best.  If people feel called to innovate, and view it as a fun, exciting activity, they are far more likely to be fully engaged.  In fact, if it is play, they are likely to enter what Csikszentmihalyi called 'flow'.  Flow is the experience of doing something so challenging and engaging that you lose track of time.

The second factor the authors describe is purpose.  Doing something that aligns to a key purpose is also very attractive and engaging.  People who are interested in taking risks, creating new things, exploring new opportunities find their purpose in this work.  People who don't have this purpose or goal reject much of the work, which is why so much innovation feels so much like a repeat of existing processes or products.  Helping people align to their internal goals or purpose might also sound like intrinsic motivation, and we know the best innovators are often intrinsically motivated.

Contrast intrinsic motivation with extrinsic motivation, which could align to economic pressure (a negative characteristic).  Too much overt payment for innovation can lead to the wrong incentives.

Innovation Effectiveness is based on your culture

If your business is focused on efficiency and effectiveness, consistency and a lack of risk taking and variability, then that's what your culture reinforces.  Imagine, then, trying to introduce a project or activity that has all of these aspects - variability, risk, uncertainty and so on.  Is it any wonder that the culture reacts by first ignoring, then resisting, these activities?

How do we make our cultures more receptive to innovation?  By accepting that innovation should be like "play", that it should align to an individual's purpose, and that it builds people's potential.  When innovation is risky or uncertain, or people are motivated purely by financial incentives, or worse simply can't be bothered (the authors' characteristic of inertia), then the culture wins.
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posted by Jeffrey Phillips at 4:59 AM


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