Month: June 2020

Innovation is about creating new value people are willing to use and pay for, whereas strategy is the plan for harnessing for example marketing, operations, finance and R&D to support achieving the competitive goal.

To clarify, innovation strategy isn’t about innovation tactics, such as setting up an idea challenge, but more about mapping organization’s mission, vision and value proposition for defined customer markets. It sets boundaries to your innovation performance expectations by simplifying and structuring your innovation work to achieve the best possible outcome.

Before moving forward, it’s important to mention that your innovation goals shouldn’t be separated from your overall business objectives as having a unified vision and common goals for innovation will help fight the silo effect and increase your operational efficiency.

If you think about marketing, for example, you wouldn’t want to separate your marketing strategy from your overall business objectives but rather make sure your marketing strategy and initiatives help contributing to your overall business plan and vision.

The same goes for innovation. There’s no point of innovating just for the sake of it, as it has to contribute to your bigger plan. So, before starting to develop an innovation strategy, make sure you’re aware of how innovation helps you to achieve your goals.

5 Steps for Developing Your Innovation Strategy

1. Determine objectives and strategic approach to innovation

The first step in the strategy choice cascade is to define your winning aspiration. In other words, your innovation objectives and the why behind your innovation strategy.

As any other strategy, the planning process of your innovation strategy starts with defining your objectives: What do you want to achieve with innovation?

If we take a step back, think about your long-term business goals and the things that are most likely to drive your business forward even after some time. As already mentioned, your innovation strategy should help supporting your business objectives and vice versa.

An example of a good strategic approach introduced in Playing to Win is Olay. Olay’s winning aspiration is to become a leading skincare brand that wins convincingly in their chosen markets and channels. Along with hair care, it will help establish a key pillar in the Procter & Gamble beauty-care business.

It’s likely that your approach to innovation will be something different. Typically, there are two different approaches to innovation strategy: business model innovation and leveraging existing business model.

2. Know Your Market: Customers and Competitors

The second step in the strategy choice cascade is defining the right playing field, as in, the market you’re operating in and the customer segment you’re offering value for.

To be able to innovate and to respond to your customers’ needs, you should listen and understand what your customers really want and remove the rest. To be able to do that, knowing what happens in the market is essential.

However, because competitive needs are individual and often very specific, a strategy that worked for another player in your field shouldn’t be copied but learned from. Although defining your playing field is important, your unique value proposition is what will make or break your innovation strategy.

3. Define Your Value Proposition

Next, and probably the most important step is to define that unique value proposition. How will you win? What type of innovations allow the company to capture that value and achieve competitive advantage?

Because the purpose of innovation is to create competitive advantage, you should focus on creating value that either saves your customers money and time or makes them willing to pay more for your offering, provides larger societal benefit, makes your product perform better or more convenient to use, or becomes more durable and affordable compared to the previous product and the ones in the market.

To be able to create a unique value proposition, the ability to identify and exploit new uncontested markets is recommended. This can be done through value innovation.

4. Assess and Develop Your Core Capabilities

The first three steps in the strategy choice cascade really come down to one thing; your fundamental capabilities required for winning.

When assessing your set of capabilities that need to be in place, consider the following:

• Culture
• R&D
• Behaviors
• Values
• Knowledge
• Skills

For example, if you want to win at delivering breakthrough technology, you must have internal skills and knowledge to be able to build that. The ability to connect and develop these capabilities is key to innovation.

5. Establish Your Innovation Techniques and Systems

Last but not least, to be able to execute your innovation strategy in a scalable and integrated manner, you should find out what systems need to be in place.

Define: which innovation techniques and systems do we need in to be able to link our innovation infrastructure elements together? What are the most important systems that support and help measuring the results of our innovation strategy?

According to a recent study, Christopher Freeman defines the system of innovation as ‘the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies’.

This includes the following elements:

• The role of company R&D, especially in relation to technology
• The role of education and training related to innovations
• The conglomerate structure of industry
• The production, marketing and finance systems

1. Review your market research

When you start to develop your innovation strategy it’s a good idea to review your market research to help you identify:

• Key gaps in the market which are opportunities for you to be innovative
• How other organisations are being innovative

You may also like to:

• Ask your customers for feedback to gain insights to improve your processes, products or services
• Ask your employees for ideas based on their experience with customers

2. Understand your opportunities

Opportunities for innovation occur in 2 ways:

• Internal business opportunities through changes to processes.
• External business opportunities through collaborations and product or service offerings.

3. Decide on open or closed innovation

Once you understand your opportunities for innovation, you must decide if you will use an open or closed innovation model.

Open innovation means that you:

• Actively seek collaboration with external partners
• Recognise that no business has all the expertise nor owns all the best ideas
• Understand that solutions may already exist in other industries

Closed innovation allows you to:

• Control all intellectual property and profit within your organization
• Maintain strong boundaries of a project

4. Find support and guidance

You may like to connect with a business adviser or find a grant or assistance program to help drive innovation in your business.

5. Update your business plan

An innovation strategy is just one part of your business plan. Make sure you update your business plan to reflect your innovative ideas and processes.

Market share speaks of the extent each unit has its share in the total sales turnover in a given industry. It is the total demand for the goods and services in a given industry shared by firms. This share is expressed in value, in turn expressed in terms of percentage of the proportion.

In a way, the market share of a company is based on its competitive ability as against the competitive advantage it has. It is because many firms have competitive advantage but fail to take full advantage of it that is why, ‘market share’ and competitive ability are closely linked.

Customer Value Analysis

Managers are keen on conducting customer value analysis to reveal the company’s strengths and weaknesses relatives to various competitors.

The major steps involved in such analysis are:

1. Identifying the Major Attributes of Customer Value

The customers are asked to specify as to what attributes and performance levels they are looking for in choosing a product and the sellers.

2. Assessing the Quantitative Importance of the Different Attributes

Here, the customers are asked to rate the importance of the different attributes. If the customers diverge too much in their ratings, they should be clustered into different customer segments.

3. Assessing the Company’s and the Competitors Performances

This assessing shall be on the different customer values against their rated importance. Customers describe where they see the company’s and competitor’s performances on each attribute.

4. Attribute buys Attribute Examination

Examine how the customers in a specific segment rate the company’s performance against a specific major competitor on an attribute by attribute basis. In case the company’s offer exceeds the competitor’s offer on all important attributes, the company can charge higher price or it can charge the same price and gain more market share instead of higher profits in first case.

5. Monitoring Customer Values over the Time

The company must periodically redo its studies of customer. Values and competitors’ standings as the economy, technology and features change.

Focus of Attack

Once the company has conducted its customer value analysis, it can focus its attack on the competitors who are classed as “strong versus weak”, “close versus distant” and “good versus bad”.

Most of the companies aim their shots at weak competitors because this warrants fewer resources per share point gained. In attacking weak competitor the firm achieves in the way of improved capabilities.

The firm cannot brush aside strong competitors because they gain much. What is more important to note is that even the strong competitors have some weaknesses on which it can capitalize.

Majority of the companies compete with their competitors who resemble them most. The distant competition can be handled easily without underestimating, after all he or the firm is a competitor. At the same time, the company should avoid trying to destroy the closest competitor, for there is danger of benefits going to others.

In every industry, one comes across ‘good’ and ‘bad’ competitors. A wise company in one which supports its good competitors and attack its bad competitors. It is so because, ‘good’ competitors play by the industry’s rules; they make realistic assumption about industry’s growth potential, they set prices which are in consonance with costs: they favour healthy industry; they limit themselves to a position or a segment of the industry; they motivate others to lower costs or improve differentiation.

As opposed to these, bad competitors they invest than earning; they take huge risks; they invest in over-capacity and upset the industrial balance or equilibrium.

It is worth noting that the market leader has to be alert because challengers are there to topple their leadership; again followers try to move up one step to be the challengers. Even nichers might improve their position. That is nothing is certain and a unit which soars high has to come down sooner or later as per Newtons Law.

However, point lies in maintaining the existing position and if opportunities strike improve-upon the existing position. This takes as to the study of strategies of each player as leader, challenger, follower and nicher.

Market Leader Strategies:

Each industry has a company or firm which is accepted as industry leader. It goes without saying that such a market leader has largest market share in the relevant product market. Because of its superior position it dominates others or leads other firms in price changes, new-product introductions, distribution coverage and promotional intensity.

Take world leaders, Kodak in photography, Microsoft in computer software, Xerox is copying, P and G in consumer packaged goods, Caterpillar in earth-moving equipments, Coca-Cola in soft drinks, Mc Donald’s in fast food items, Gillette in razor blades, Casio in calculators and watches, Sony in sound Gadgets and so on. What is true, is also true in national market of which we already taken practical market shares.

The Strategies Open to Market Leader

A company which wants to maintain TOP POSITION as a LEADER has three options or fronts.

These are:

1. Expanding the Total Market

Any dominant firm normally gains the most when the total market expands. The Colgate Company gains by expanding its market as already it has 53 percent share in dental cream market.

In case the Colgate Company convenes the Indians more and Indians will buy and Colgate Company stands to gain. As a part of expanding the total market, the company should look for new users, new users and more usage of its products.

Tap New Users

Every product class has the potential of attracting buyers who are unaware of the product or those who resist it because of price or lack of certain features.

A company can search for new users among three groups:

• Those who might use it but do not by using market penetration strategy.
• Those who have never used it by market segment strategy.
• Those who live elsewhere by geographical expansion strategy.

Find New Uses

Markets can be extended by discovering and promoting new uses of the product. Take the case of dental cream. It not only makes gleam the teeth, stops ba4 breath, solidifies gums, but can be a best silver ware cleaver.

The poultry eggs can be put to variety of uses and it can be a product that can change total food habits. Many a times, the customers only discover new uses may be by trial and error. Take the case of petroleum jelly was introduced first as a lubricant, later it was accepted as ointment, healing agent, as a hair gel.

In case of baking soda was used in bakeries, but later it became a very powerful fridge deodorant and used as a grease fires in Kitchen fighter or quelled.

Make Them Use More

The consumers can be convened to use more of a product per use. Gillette razor blades were with single blade with adjustability, later twin blades as to how it saves time and changing blades or cartridges. Now it has three blades popularly known as 3 “Mach 3” which gives so with shave within no time instead of wasting valuable time.

Tea companies speak of more cups of tea a day those who are brain workers. Even in case of shampoo users, they are concerned to use daily instead of attentive days or by giving “instructions for better results” “as lather, revise and repeat”.

2. Defending the Market Share

The dominant firm or the leader must continuously defend its current status of business performance against rivals while trying to expand the total market size. Leader is like a mighty elephant being attacked by swarm of bees. Thus in soft-drinks, Coca-Cola must guard against Pepsi-Coca; in shaving razor system Gillete against BIC; in Jeans Herty against Avis; in fast food, McDonald’s against their challengers namely Burger King; in case of Cars General Motors against Ford, in case of cameras and films Kodak against Fuji.

In case India, Colgate against HLL, in case of detergents HLL against Procter and Gamble, in case of masala Everest against MDH and Badshaha Masala, Dettol makers against Salon and so on. What then the market leader do to maintain the position NUMBER ONE. In this regard the most constructive response is continuous innovation.

The leader leads the industry by developing new product and customer services, distribution, effectiveness and Cost Cutting. Leader keeps on increasing his competitive strength and value to customers. True leader applies the military principle of the offensive. That is the commander exercises initiative, sets the pace and exploits enemy weaknesses. The best possible defence is a good offence.

The market leader must consider, carefully which territory or territories are important to defend even at loss which can be surrendered. The aim of defence or defensive strategy is to reduce the probability of attack, divert attacks to less threatening areas and lessen their intensity.

One thing is sure that any attack is likely to hurt the profits. However, the defender’s speed of response and effectiveness can make a significant difference in the profit impact.

According to Gartner, innovation management is a structured process of generating, capturing, discussing and improving, organizing, evaluating and prioritizing valuable insight or alternative thinking that would otherwise not have emerged through normal processes.

Capturing innovative ideas from employees at various levels, building an active and collaborative workforce, recognizing employees effort and communicating effectively with all stakeholders are the vital building blocks of innovation management.

According to the recent study by Accenture, over 90% of executives think innovation is key to their business success.

Organizations are often driven by committee-vet ideas developed from a holistic perspective. This gives only a one-dimensional lookout for a specific business challenge. However, crowdsourcing innovation from employees can harness your organization’s creative ability besides your business growth.

Four functions of innovation management

The four functions agreed by most scholars and innovation experts can be summarised roughly as:

1. Searching and scanning

Searching and scanning for new ideas and technologies, both within and beyond the organization. This includes looking at technologies that could affect the clients of the organization, and technologies that could disrupt markets and industries.

2. Comparing, selecting and imagining

Comparing, selecting and imagining how different technologies could impact the organization, its markets and its own innovation agenda.

3. Integrating

Next comes integrating or deploying the technology or innovation into the organization. This includes adjusting processes and systems, scaling up implementation, and project managing the whole change process.

4. Exploiting

The last step is often overlooked, but new technology and innovation often make new ideas, innovations and improvements possible. I call this last step exploiting the benefits of a new technology or idea. This could involve leveraging some of the additional benefits or features of a technology, perhaps by creating a new business unit focused on an adjacent market or particular offering.

Ideas for Successful Innovation Management

1. Involve Everyone and Create Conversations

To make your innovation culture efficacious, involving every employee remains crucial. Innovation isn’t effective in isolation. Bringing employees together, in the beginning, may stir a better chance for success. As mentioned above, crowdsourcing can be one of the best techniques to involve employees in innovation and generate a pool of ideas within the organization.

The best way to inspire innovative thinking isn’t to force a brainstorming session, it’s to create an ongoing conversation. The quality of conversation is an important determinant impacting the quality of creativity and innovation.

It provides an interactive platform to bridge the gap between senior management and employees during their ideation sessions.

2. Do Not Push Employees, Pull Them In

Nurturing the internal side of open innovation amplifies participation. Forcing or mandating involvement may lead to frailties in due course of time.

To involve employees in ideation: make them understand how their ideas will contribute to the organization’s success. Explain the significance of innovation, describe the potential they have in improving the organization’s productivity, individual growth, rewards & recognition, overall purpose and values they get.

Employees might get motivated by recognizing these values and participate in innovation.

3. Run Awareness Campaigns

Creating innovative ideas that drive business growth don’t just happen, it requires a strategic orientation to adopt the culture and generate new ideas. It is a proven way to encourage the widest range of participants in innovating.

Creating awareness by running campaigns is a proven way to generate interest to use the ideation space. This has a direct influence on capturing creative ideas stirring enhanced productivity, cut down operational costs and drive improvements from the bottom up in a short time period.

This campaign can be within your organization’s social network via emails, news and events, announcements, posts etc.

4. Introduce a Common Space for Innovation With an Innovation Management Tool

Employees might not have a separate place and time to meet to discuss ideas addressing a common challenge. Introducing an innovation management platform can create a digital workplace environment in which employees can interact, collaborate & contribute ideas, and evaluate, select and provide the best innovative strategies across the organization from anywhere anytime.

Did you know? MarketsandMarkets Research predicts that the Innovation Management market is projected to grow from an estimated USD 421.6 Million in 2017 to USD 1,519.2 Million by 2022, at a Compound Annual Growth Rate (CAGR) of 29.2% during 2017–2022.

Incorporating innovation management software or tools like Wave can play a major role in fostering employee engagement and involvement in innovation using techniques like gamification.

5. Transparency

Transparency boosts the culture of innovation. It is essential that employees should know what the buzz is around the ideas shared, challenges posed by the organization, etc. Often employees are left in the dark having no clue on further steps on the ideas posted. This may create chaos and trust issues in the entire innovation initiative.

In such instances, social collaboration tools can provide a platform to employees where they can collaborate, communicate, engage and share the selection process updates in real time.

According to The Deloitte Millennial Survey 2017, Millennials want to work in places where they feel empowered and accountable – where they feel they can make a difference and have an impact.

6. Rewards and Recognition

Building an effective reward and recognition system is a key aspect of maintaining and encouraging innovation. Appreciation and recognition are essential to an outstanding workplace.

Employees want to be respected and valued by others for their contribution. When employees and their work are valued, they seem happy, loyal, satisfied with the organization.

Therefore developing an effective tool for rewards and recognition can encourage and keep employees continue to post their ideas to get recognized and rewarded their effort.

Elements of gamification in innovation management tools can help in streamlining rewards mechanism. Awarding badges/ points to the highest contributor or bestowing the winning idea can fuel competitive spirits and active participation.

As organizations strive to develop an innovative culture in the organization, it is necessary to consider implementing the right strategies to bring about the transformation from the ground up.  We suggest integrating an effective idea management software or tools into the digital workplace which can collaborate, capture, evaluate and pick innovative ideas that can help in business growth.

Looking to transform your ideas into powerful business outcomes? Check out Wave – A SharePoint based idea management tool.

Examples:

(i) Google: Google was the first company to create a business based on innovation. Google founders Larry Page and Sergey Brin addressed in their 2004 IPO letter that “We support our employees to contribute 20% of their time to work on the innovation that will benefit organization”.

Employees having an idea not related to their work will focus 5-10% of their time on their innovation until they demonstrate the impact of the idea. This helped Google to generate some of the most successful applications and tools including Gmail, GoogleTalk and AdSense.

(ii) General Electric: In the early 1900s, GE developed the renowned industrial research laboratory. Innovation bought GE to the uncontrolled process of scientific discovery and, over the next 50 years, won more patents than any other company in America.

Much of GE competitive prowess was an outcome of innovations in the best way – nurturing a culture of ideation. They provide a healthy environment where employees share their ideas openly and get recognised to their efforts in innovation.

They also seek external voices with unique opinions and ideas on everything from the cloud, robotics and manufacturing to public policy and the global economy.

There are many other organizations like DuPont, Procter & Gamble, Visa, Linux who owe their success to organizational innovation.

Developing a good management team is a critical component of running a successful organization. Managers not only supervise employees but must make important decisions that directly affect the company. Employers desiring to hire managers must understand the qualities that make up good management. Understanding these characteristics allows companies to make good hiring decisions and helps managers understand what is required of them.

Good managers respect and appreciate their employees, provide necessary resources, share knowledge, listen and delegate tasks effectively.

1. Appreciation of Employees

Companies with good management teams understand the importance of respecting and appreciating their employees. Appreciation can come in many forms, such as saying thank you, monetary bonuses, paid-time off and other valuable rewards. When managers appreciate their employees, it results in a boost in employee morale. Satisfied employees value their jobs, are rarely absent from work and perform their duties with enthusiasm. Completing employee evaluations and rewarding employees based on their performances is another way management can show their appreciation.

2. Provide Necessary Resources

Good management provides employees with the resources necessary to accomplish their tasks. Employees can suffer from a lack of motivation when they are asked to complete duties and meet goals without receiving the proper resources. Companies with good management properly train their employees in the latest technology, ethical issues and teamwork. Good organizational management believes in equipping their employees with the necessary skills and knowledge needed to grow and maintain success for the business.

3. Being Generous with Knowledge

Management must possess the necessary knowledge to effectively compete in their industry. Knowledge managers possess comes from the ability to learn relevant information. Therefore, managers must stay current on issues regarding their industry and organization. Managers must also be generous in sharing their knowledge with employees and other managers.

4. Listens and Makes Good Decisions

Managers should take time to listen to their employees. At times, management is willing to listen to the suggestions of valuable employees, but can brush off employee complaints. Effective managers understand the importance of listening to its employees. One reason is that it causes employees to feel as if their opinion is valued. Another reason is that management can consider employee suggestions, concerns and complaints when making decisions. The decisions made within an organization should benefit the company and its employees.

5. Lead Employees and Delegate Tasks

Good management knows how to develop employees by focusing on their strengths. In most cases, employees need to hear what they are doing right instead of constantly hearing what they are doing wrong or their weak areas.

Also, an organization with good managers employs professionals who know how to delegate tasks to subordinates. Successful organizations utilize teams and individual contributions. A manager that delegates duties to employees shows that workers are perceived as responsible and capable of fulfilling duties. Delegation also allows managers to focus on more pressing issues that require a greater expertise than what employees possess.

Five Characteristics of Good Managers

Many of us have worked for a manager who may have lacked the qualities of a confident, capable leader. For some, the desire to escape such an environment and be one’s own boss was a main motivator for starting a small business.

At some point, however, most successful small business owners are likely to find themselves bringing in one or more employees. When that happens, you aren’t just your own boss anymore; you’re also the boss of whomever you’ve hired to help your business grow. In smaller office environments, it’s especially hard to withstand clashes and personality conflicts with your staff, so it’s important to lead effectively.

In order to avoid becoming the boss you always resented, make sure you understand and take every opportunity to adopt these five characteristics that make good managers.

1. A positive attitude and the ability to motivate

Cynicism and negativity are the enemy of business success, especially when projected by someone in a senior position. They’re the easy way out whenever problems or roadblocks appear. Think of them as an infectious virus that saps your staff of their collective energy, excitement and desire.

A good manager rejects these damaging emotions in the face of difficulty and adversity, choosing instead to project a positive attitude and maintain their passion for the job at hand. Such behaviour will also infect your employees in a viral way, but with belief, hope and confidence. By refusing to let stress, failure and frustration get the better of you, you’ll be helping to foster an environment where morale is high and people are happy and productive.

2. Excellent communication skills

No one likes a manager who’s unapproachable or won’t listen. Bosses who wall themselves off behind a communication barrier become distant from their staff, unable to connect. And while a manager who claims to have an ‘open door policy’ has become something of a cliche, those who follow this approach tend to be viewed more favourably. These days, of course, it’s about more than opening the door you’ll need to answer your phone and stay on top of any emails and text messages sent by your employees.

The best managers are active listeners who indicate through their replies and resulting actions that they’ve heard the concerns and comments voiced by their employees and are willing to do something about them.

Of course, listening is only half of the equation. Just as important is the ability to clearly and honestly express yourself in a variety of situations, whether it’s a one-on-one meeting, a group address, a phone call, or an email. Good managers are able to clearly express guidelines, responsibilities and expectations. They won’t sugarcoat bad news, but can be diplomatic and discerning when the situation requires it.

Finally, don’t forget about non-verbal communication. Even if you don’t say something, your staff will pick up on visual cues, whether it’s slumped shoulder or raised eyebrows. Practice your poker face in order to prevent your body language from undercutting the message you’re trying to deliver.

3. A willingness to delegate and the ability to prioritize

A frequent complaint about bad bosses is that they ‘micromanage’ their employees, meddling with work in progress or taking over tasks entirely. Not only is this a poor use of the manager’s vital time, it robs employees of the freedom they need to fulfill their responsibilities and makes them feel undervalued.

Most managers are busy people with lots to juggle. Monitoring the minute-by-minute actions of their staff is neither necessary nor helpful. More often than not, it’s important to let people work through their problems without outside interference they’ll learn from their mistakes, develop skills more quickly, and will eventually be able to handle a broader range of responsibilities.

Of course, a little direction here and there isn’t such a bad thing. That’s where decision-making skills, strategic vision and prioritization come into play. It’s incumbent on good managers to keep the bigger picture in mind, to understand what’s important and what can wait, and to allocate resources as required, all without making decisions under pressure whenever possible. Practice good planning and organization skills to avoid wasting anyone’s valuable time while keeping your business on track.

4. Flexibility and adaptability

While routines can often be helpful in a business setting, no one wants to be bound by them, either. That’s why the best managers are flexible enough to encourage change and accept new ideas. Just as every situation needs to be handled differently, different people also need to handled as individuals, not with a one-size-fits-all approach.

In the same vein, good managers know they need to adapt and remain current to stay successful. Whether that means being aware of technological advances and other industry trends, or just being open to new attitudes and changing cultural perspectives, it’s important to avoid being labelled a ‘dinosaur’ it’s the first step toward business extinction.

5. Empathy and humanity

Your employees are not robots. They all have lives outside the office, some of them full of family problems or other pressures. No matter what’s happening in their personal lives, your employees won’t always be at their best and will inevitably make the odd mistake. Rather than ruling like a tyrant when such things happen, remember to express some empathy. Don’t miss an opportunity to deliver the message that you care more about people than the bottom line. Express understanding and concern if someone has a problem that requires them to miss time or adjust their hours. Be willing, and able, to make light of a situation, as long as nothing serious has gone wrong. Show your human side, be caring and considerate, and your staff will pay you back many times over with their loyalty and productivity.

The challenge of improving organizational effectiveness through innovation has played a central role in organizational research and practice for well over a century. The early improvement efforts, firmly rooted in the industrial revolution and best represented by Frederick Taylor’s (1911) “scientific management,” were based on the top down assumption that organizational effectiveness is a function of individual work behaviors being carefully specified, explicitly linked, and tightly controlled by organizational leaders to improve productivity and efficiency. Although subsequent empirical studies and increasingly complex views of work behavior and performance challenged many of these early assumptions, Lisbeth Schorr (1997) noted almost a century later that the underlying philosophy of these mechanistic models was still evident in the managerial approaches taken in many human service organizations: “We are so eager, as a body politic, to eliminate the possibility that public servants will do anything wrong that we make it virtually impossible for them to do anything right”.

Current empirically based models of organizational innovation and effectiveness transcend the mechanistic models of a century ago and many emphasize that innovation and effectiveness are as much about creating the appropriate organizational social context as about implementing the latest technology. The idea that an organization’s social context is associated with innovation and effectiveness is accepted by many organizational leaders and two distinct dimensions of social context—organizational culture and climate—are mentioned often as the key factors that determine an organization’s performance in a wide range of areas. Researchers, practitioners and the news media have used the terms to explain organizational performance in, for example, science (e.g. NASA), religion (e.g. Catholic Church), information technology (e.g. Google), athletics (e.g. NFL), healthcare (e.g. Veterans Administration), manufacturing (e.g. GM), media (e.g. BBC), finance (e.g. J P Morgan Chase), higher education (e.g. Penn State), and energy production (e.g. BP). Although the terms, culture and climate, are widely used to explain organizational performance in these and many other examples, the terms are often used vaguely and even inappropriately by administrators, researchers, and the media. There is confusion regarding the precise meanings of the terms and their explicit effects on what organizations do. These are important issues for those interested in the performance of human service organizations who believe improving effectiveness depends on a better understanding of organizational culture and climate.

First, the distinct histories of the two constructs underscore different approaches to understanding the nature and influence of an organization’s social context. Organizational climate appeared first by several decades in the 1930s and is associated with Kurt Lewin (1939), who studied how the social climate engendered by a work group’s leader affected the behavior of group members. He used the term, climate, to capture the psychological impact of the work environment on employees’ sense of well-being, motivation, behavior, and performance. Studies of organizational culture, defined as the shared behavioral norms, values, and expectations within an organization, emerged decades later in the 1970. The term, organizational culture, borrowed heavily from sociological and anthropological explanations of social culture in research focused on communities, indigenous groups and other socially defined collectives. Inexplicably, organizational culture and organizational climate began to be used interchangeably by some writers in the 1990’s but a comprehensive thematic analysis of the literature in the latter part of that decade confirmed a distinction between culture and climate that continues among many researchers.

The Differences between Organizational Culture and Climate

My own view after studying culture and climate in human services for three decades is that they differ in a number of ways. First, organizational culture is best represented by the behavioral norms and expectations that characterize a work environment. These norms and expectations direct the way employees in a particular work environment approach their work, specify priorities, and shape the way work is done. Proficient organizational cultures, for examples, expect service providers to be up to date on state-of-the-art practices and to place positive client outcomes as a top priority. New members of an organizational unit are acculturated in these expectations and norms through social processes such as modeling, reinforcement, and sanctions. Many writers emphasize that organizational culture is a layered construct consisting of deeply held assumptions and values which translate into normative expectations and behavior. However, several studies suggest organizational culture is transmitted more through behavioral norms and expectations than through internalized values or assumptions which may or may not be expressed or even known to the organization’s members.

Organizational climate, on the other hand, is created by employees’ shared perceptions of the psychological impact of their work environment on their own personal well-being and functioning. The perceptions that are shared by employees in a given work environment represent an agreement in their personal appraisals of the meaning and significance of their work. The perceived impact of a work environment on each individual worker’s personal well-being has been labeled psychological climate to distinguish it from organizational climate. When individuals in the same work environment agree on their perceptions of the psychological impact of their work environment, their shared perceptions define the organizational climate of that particular work environment. For example, when the individual service providers in a given human service organizational unit agree that they experience their work environment as highly stressful, the organizational climate is described as stressful.

Guided by these definitions, the Organizational Social Context (OSC) measure was developed to assess the organizational cultures and climates of mental health and social service organizations using information provided by frontline direct service providers (Glisson, Green & Williams, 2012; Glisson, Landsverk et al, 2008). The OSC has been used in scores of studies, including both randomized controlled trials (RCTs) and nationwide surveys, and United States national norms are available for child welfare and mental health settings, respectively. The national norms are important because they permit organizational culture and climate profiles for a specific organization to be compared to a representative nationwide sample of organizations that provide similar services.

Dimensions of Organizational Culture

The three dimensions of culture assessed by the OSC are proficiency, rigidity and resistance. Service providers in proficient organizational cultures report that they are expected to be responsive to the unique needs of the clients they serve and have up-to-date knowledge and practice skills. Service providers in rigid organizational cultures report that they are expected to closely follow a host of bureaucratic rules and regulations in completing their work and have minimal discretion in work related decision-making. Service providers in resistant cultures are expected to suppress change or innovation in their work environment through either active or passive strategies that maintain the status quo. Our studies confirm that organizations with the best outcomes for clients, that are most likely to use evidence based practices (EBPs), that have the highest service quality, and that sustain innovative programs are those with high levels of proficiency and low levels of resistance and rigidity.

Dimensions of Organizational Climate

The three dimensions of climate assessed by the OSC are engagement, functionality and stress. In engaged organizational climates, service providers perceive their work related accomplishments as personally meaningful and report that they are personally involved in their work with clients. In functional climates, service providers perceive that they receive the levels of support and cooperation from coworkers and administrators that they need to do their job and have a clear understanding of their roles within the organization and how they contribute to its success. In stressful climates, service providers report high levels of role overload, role conflict, and emotional exhaustion. Our studies confirm that organizations with the best service outcomes, lowest employee turnover, best clinician attitudes toward EBPs, and highest service quality are those with higher levels of engagement and functionality and lower levels of stress.

Organizations today operate in a highly competitive, global environment, making creativity crucial. Creativity is what fuels big ideas, challenges employees’ way of thinking, and opens the door to new business opportunities. “Creativity” and “innovation” are often used interchangeably for that reason, but are two separate concepts.

“There are a lot of competencies that go into realizing an innovation. Creativity is different because creativity is a mechanism to being innovative. You can have great ideas, but not be innovative.”

Creativity in business is a crucial first step that needs to be prioritized by senior leadership. A survey by IBM of more than 1,500 chief executive officers shows consensus: Creativity was ranked as the number one factor for future business success—above management discipline, integrity, and even vision.

One reason for that is: Creative leaders are more comfortable with ambiguity. And as industries continue to evolve, business goals and priorities will need to change. Eight in 10 surveyed CEOs said they expect their industry to become significantly more complex. Only 49 percent, however, are confident their organizations are equipped to deal with the transformation.

Several retailers, like Apple, are trying to rise to the challenge by creating “experiences.” Take Starbucks, for example. Customers visit for more than the seasonal beverages; they go for the ambiance. From the warm, welcoming interior color scheme to the alternative music and, often, neighborhood-inspired furniture or art, there’s more to the brand than what it’s selling behind the counter.

Target is another example. The chain recently announced plans for how it’s reimagining its more than 1,800 stores. One change is that shoppers will be able to “choose their own adventure” by picking from one of two store entrances. The first will lead customers to a grab-and-go food and wine and beer shop, featuring self-checkout lanes and the option to pick up any online orders. The second entrance will bring customers to the store’s other beauty, fashion, home, and electronics displays.

How to Foster Creativity within Your Organization?

There are several smaller steps leaders can take to make a big change on their organization. Here are five ways you can foster creativity within your own team:

1. Reward Creativity

Not every idea will be a success, but big breakthroughs won’t occur if the company plays it safe. Executives need to be comfortable with failure, and give employees the freedom and flexibility to experiment with and explore new opportunities.

Global conglomerate Tata gives out a “Dare to Try” award to employees with the “most novel, daring, and seriously attempted ideas that did not achieve the desired results,” while Google’s innovation lab, X, offers bonuses to each team member who worked on a project the company ultimately decided to kill as soon as evidence suggested it wouldn’t scale.

Companies that reward creativity show they value it, inspiring individuals within the organization to pursue untested theories and concepts.

2. Hire the Right People

The “right” people in this context aren’t solely creatives. Organizations should instead focus on diversity, bringing in a variety of viewpoints, cultural backgrounds, and skill sets. Tom Kelley, partner at global design firm IDEO, established “The Ten Faces of Innovation,” describing how each type of person—such as “The Hurdler,” who tackles problem-solving head-on, or “The Caregiver,” who works to understand and form relationships with each individual customer—adds to the overall creativeness of a project.

“Not everyone is going to be creative, but most people can learn the tools and techniques for being innovative,” Marion says. “It helps to look at things from a different vantage point.”

It is also worth considering building an innovation team within your organization, whose role is to tap into creative energies to develop new products, services, or processes within an organization.

3. Try the “Yes, And…” Approach

One method for spurring creative brainstorming is trying a technique used in improvisational theater: “Yes, and…” The approach encourages colleagues to build off their peers’ thoughts by first agreeing and then adding something to the discussion. Taking “no” off the table ensures all ideas are heard.

Employees could test this approach by simply putting a paperclip in the middle of the table and thinking up as many use cases for it as possible. The activity might sound silly, but it could help inspire creativity.

4. Try Flexible Work Hours

Not everyone is suited for the traditional nine-to-five schedule. Offering flexible arrangements, such as the ability to work from home, is known to make employees healthier, happier, and more productive. As long as employees are clear about expectations, complete their work on time, and coordinate appropriately with their team, it’s an easy strategy to test and enables everyone to work when they’re feeling most creative, as opposed to a set time during the day.

5. Give Employees Time to Recharge

With creativity can also come burnout. Employees need time to step back and hit the refresh button.

“Companies do need to take burnout into consideration,” Marion says, “and maybe take some time between projects or offer sabbaticals to recharge their employees.”

The only thing companies can’t do is ignore creativity altogether, or hope the problem will solve itself. Creativity needs to be prioritized And for good reason, reminds Marion.

“Creativity lends itself to unique solutions to problems,” he says, “and to unique features on products, or unique business models and sources of revenue.”

1. Thoughtful Persons

The first and most important characteristics of a creative organization are that it has persons with the aptitude to think, who have their own ideas and have the capacity to think and understand and who also have a broader understanding about almost all spheres.

2. Adequate Recognition

The creative organization gives adequate recognition to the creative persons and the contributions made by them.

Besides, they are also motivated by rewarding or promoting them for the challenging jobs performed by them, so that they may provide better contributions to the organization in the future also.

3. Impartial and Objective Approach

In the creative organization, the entrepreneur has an impartial and objective approach towards his employees.

The ideas of the employees are evaluated on the basis of their utility and not on the basis of the position of Ideas providers.

4. Open Communication

In such organizations, the provision is for open communication, like two-way communication, the free exchange of ideas, the use of proper communication methods and regular communication.

Besides it, the secrecy in such an organization is very limited.

5. Autonomy at all Levels of Organization

Autonomy in the creative organization may be observed at all levels.

Hence, the members of the organization present modern ideas, in place of old and obsolete ideas and execution is also accordingly.

Besides, the members and the persons have also full freedom to making initiations and selections in their functions, so that decisions may be taken in accordance with the prevailing circumstances.

So, the creative organization structure is very Autonomy.

6. Adopting Additional Dimensions

In the creative organization, additional dimensions and techniques, like suggestions system, brainstorming, problem-solving methods, etc. are also adopted, besides the methods and techniques used till now.

7. To Bear Failures with Ease

The creative organization’s beer failures, if any, with ease.

Besides, such organizations give due respect to the ideas expressed by various persons and relations do not reject them outrightly by treating them as impractical and worthless, so that even more ideas may be presented in the future.

8. Encouragement for Contacts and Relations

Creative organizations provide encouragement to their, employees, managers and officers to develop and establish contacts and relations with the executives of external organizations and competing institutions.

So that useful ideas of outsiders may also be known as suitably executed.

Examples of Creative Organizations

9. Full Acceptance of Changes

The employees of the creative organizations are not only ready to adopt new changes, but also give them full acceptance.

10. Adoption of Heterogeneous Personnel Policy

Creative organizations adopt a heterogeneous personal policy like:

• There is not binding to adopt the existing traditions, past decisions and set working methods.
• Efforts are made to solve solutions to the problem of the organization with non-specific methods.
• This policy particularly encourages fun, enjoyments, and initiatives.

11. Decentralized Organizational Framework

A decentralized organizational Framework is adopted in the creative organization.

For that, the employees do not have the freedom only to plan their activities, but they also have wide and sufficient opportunities for creative behaviour and participation.

12. Basis of Promotion

Normally, there are two bases for selection and promotion of persons in the organizations: seniority and merit or quality.

But, in creative organizations, selections and promotions are based only on merit or qualities.

1. Enable real-time, dynamic collaboration to integrate knowledge

Innovation is about combining different bodies of knowledge. When knowledge is integrated, it creates the conditions that stimulate creative people to make the unusual connections that lead to breakthrough ideas. That’s why you need cross-functional teams: to collaborate on a daily basis and ensure that their knowledge is integrated.  If you have a dispersed team, then you need to ensure that your social networks are enabled by technology.

2. Broaden your range of inspiration

The best business ideas often occur at the intersection of market, customer and technology intelligence. Teams that create the best ideas take the conscious step of carefully selecting the sources of inspiration before they go digging for information. For example, food companies source inspiration from culinary trends, consumer good companies immerse themselves in the consumer experience, and B2B companies spend days in technology scenario planning. Open innovation extends this network of knowledge to the outside world, quickly multiplying the sources of inspiration.

3. Remove the fuzziness from the process

To ensure that everyone can contribute, establish a clear process and clarify how the front end of innovation (FEI) process fits with the broader end-to-end innovation cycle.  A strong FEI process should include the following steps: clarify the brief, dig for inspiration, create ideas, develop the ideas and, finally, make a decision. The secret to success is to require that the process is followed, but to avoid creating hurdles, gates and governance in the earlier stages.

4. Link ideation to corporate strategy

Figure 1Creativity can produce a lot of ideas, but business value increases when creativity is channeled to priority areas. A lot of patents are traded or sold every year because they represent relevant customer solutions that could not be supported by the company’s business model.  Establish your strategic arenas and innovation requirements early.

5. Transform business requirements into innovation requirements

After clarifying the strategic arenas, translate them into requirements specific to innovation. This leads to innovation domains, which reside at the intersection between mega-trends and unmet consumer needs relevant to the strategic arena. Adding your technical competencies and complementary assets leads to the development of innovation platforms.

6. Fully develop ideas

The best product launches are the ones that deliver against several of the domain benefits and across all of the touch-points of the customer experience. Conversely, rapidly scaled, “half cooked” ideas generally fail, no matter how brilliant they are.  Make sure your organization takes the time to develop and combine complementary ideas.

7. Support the process with great leadership

The innovation leader’s role is pivotal. Generate enthusiasm and creative people will feel respected and valued. Rewarding desired behaviors, like collaboration, teamwork and building on other’s ideas, ensures that change is sustainable. At the same time, your words alone are not enough. To support a successful FEI process, companies must create a leadership team that monitors progress and removes organizational barriers and independent teams responsible for breakthrough innovation.

Companies with a strong number of creative people and the ability to connect them via open innovation are certainly off to a strong start. But good ideas are not created in a vacuum, and mastering the front end of innovation requires more than just creativity. As the philosopher Norman Podhoretz wrote: “Innovation represents a miraculous coming together of the uninhibited energy of the child with its apparent opposite, the sense of order imposed on the disciplined adult intelligence.” Mastering the front end of innovation requires a combination of creativity and discipline.