The challenge for leadership is to empower ideas from the bottom layers of the organisation; encouraging staff to get creative, excited and provide permission for the ideas to bubble up. This requires a high level of commitment from the top-level of leadership to support staff in innovation processes, encourage support and mitigate middle layers of management permafrost. (Dodgson, 2019c, 2019d) Innovation across many small to medium sized organisation’s may be largely organic by nature and this can be due to decentralised and fluid structures. Many organisations will find they may have a structure that is largely decentralised with regional or geographically assigned teams and specialised business units each having the ability to devise local approaches within the more generalised protocols of the firm. In many start-ups, social and ‘for-purpose’ organisations I have worked with there often exists very few managerial levels between the strategic apex and operating core, and subsequently a relatively flat structure. Regarding innovation this may serve such organisations well as organisational structure should not be overemphasized and instead the organisational design should promote collaboration and development of new ideas and insights from all levels of the organisation; particularly lower levels. (De Jong et al., 2013) The organisation should seek to minimise and mitigate the “innovation antibodies” (e.g. over-emphasis of risk aversion, compliance requirements, rigid protocols) and “organisational permafrost” (e.g. middle management and gate-keeping, resistance to change and the status-quo) which restrain innovation in organisations. (Dodgson, 2019d, 2019c)
Additionally a focus on the workforce in the development of a considered and systematic approach to the creation of a supportive culture and reward system that supports innovation is essential. An organisation may wish to review and implement on recognition and rewards programs for employees which take account how it will motivate, encourage, reward and visibly recognise employees for innovation efforts. Leaders across the organisation should be supportive and committed to the innovation strategy and key performance indicators and targets should assist in driving the right behaviour among decision makers at each management level. (De Jong et al., 2013) Organisation’s must be able to foster a culture conducive to learning and people must be able to share ideas and knowledge freely. Talent management programs should ensure that leaders pay attention to identification and development of ‘boundary spanners’ and ensuring the right people are on the bus and are sitting in the right seats. Finally it is absolutely essential that key innovation projects have a top-management sponsor who remains invested in its success and is able to effectively encourage, motivate, reward and point an innovator in the direction of strategy. (De Jong et al., 2013)
The benefits for improving innovation across the company are clear and innovation can be shown to deliver (Dodgson, 2019d):
Higher profits over long run (even during recessions) and greater short-term profitability;
Better company survival rates;
Higher market value;
More attractive and exciting places to work; and,
Options for the future and capacity to adapt when faced with volatility, uncertainty, chaos, and ambiguity (VUCA).
However, innovation remains difficult and it is a challenge for many firms and the difficulties faced include (Dodgson, 2019d):
The returns are highly skewed:
Innovation often does not deliver on expectations;
It diverts attention from the immediate concerns;
A balanced risk portfolio approach is needed; and,
There are always ongoing failures as well as successes.
References
De Jong, M., Marston, N., & Roth, E. (2013). The eight essentials of innovation. McKinsey Quarterly, Strategy(2), 36–47. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-eight-essentials-of-innovation
Dodgson, M. (2019c). Introduction and overview (Lecture 1). TIMS7811 Innovation Leadership, Lecture 1, University of Queensland [UQ].
Dodgson, M. (2019d). Organizing for Innovation (Lecture 11). TIMS7811 Innovation Leadership Lecture 11, University of Queensland [UQ].
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