What are the Key Conditions for Successful Organizational Innovation?
As the world changes, people and organizations must change too. Recent surveys suggest there is growing confidence in the global economy among executives. A PwC pulse survey of over 5000 CEOs revealed that more than 60% are expecting innovation and M&A deals to fuel their organizational growth over the next 12 months. Growth is a critical driver of organizational performance. However, not all change is innovation and not all innovation flourishes. Successful innovation produces a significant positive change for customers. Like the atmospheric conditions required for the formation of a tornado do not always produce a tornado. The same can be said for organizational innovation. Innovation is unpredictable and often comes from a combination of hard work, curiosity, the pursuit of wealth, and necessity. There are countless prerequisites to any innovation, and analysis reveals both the astonishing and absurd. While this reality may leave you feeling a bit confused about what to do, here are some conditions that will increase your odds of successful innovation.
"Successful entrepreneurs do not wait until the muse kisses them and gives them a bright idea: they go to work." Peter Drucker
Conditions for Innovation
As organizations gain competence and confidence, the likelihood of innovation decreases. Adopting the following approaches and mindsets can reduce organizational threats to innovation:
Awareness: The decisions we make reflect who we are. The better organizations understand their culture and their employees; the better decisions can be made at each phase of innovation development.
Reward failure: In the pursuit of innovation, failure happens. Organizations lacking positive reinforcement for innovation will not bring out the best in the people attempting to innovate. Too often, organizations are designed to keep people from taking risks.
Work hard and reconsider assumptions: As organizations invest time pursuing innovation, it is easy to become increasingly less willing to question an idea. It is essential to step back every so often and challenge the innovation assumptions. Organizations that dare to question assumptions will keep the focus on the best ideas.
Growth: Many innovations begin with a simple question. Can it be done better? Organizations that value the pursuit of incremental improvement will not miss the value of the mundane ideas that lead to the next significant invention.
Luck and mistakes: It’s essential to recognize that organizations may do everything right and fail as well as do nothing right and succeed. Organizations that acknowledge that luck, chance, and the work of others play a role in their innovation process set themselves up for success.
“A person who never made a mistake never tried anything new.” Albert Einstein
The Psychology and Sociology Behind Successful Innovation
As stated earlier, not all innovations are successful. No one wants to spend a bunch of time working hard to produce an invention that is considered ahead of its time. An innovation ahead of its time is not a compliment. Adding to the complexity of successful innovation is the reality that the technical merits are essential but not sufficient. Beyond the technical merits are the influences of psychology and sociology. Both are vital determinants for an organization’s innovation success. The following are five factors that moderate organizational innovation success:
Perceived value – How much better is the new from the old? Perceptions are realities for customers. Successful organizational innovation considers its perceived value based on cost, status, convenience, pleasure, and style.
Effort – What is required to transition to the innovation? Is the cost of the innovation greater than its advantage? If it takes more effort to utilize the invention, most people won’t do it.
Learning – How much learning is required to use the new? The smaller the perceived gap, the more likely people will try something new.
Ease – How easy is it to try the innovation? If something is risk-free, it is more likely to be used. Likewise, as time, energy, and cost required increases, the likelihood of the innovation being used decreases.
Visibility – How visible are the innovation’s results? Consider a fashion fad. It may have limited value, but the results are obvious. The more visible the results, the more likely the innovation will be used.
Successful organizational innovation accounts for both the positive and negative psychological and sociological consequences associated with the utilization of the innovation. For each factor, you should evaluate if the consequence is:
positive or negative from the users perspective
experienced immediately or in the future
certain or uncertain
Not all consequences have the same degree of impact on innovation success. Consequences that are either positive immediate certain, or negative immediate certain will have the most significant impact on if the likelihood of the organizational innovation being successful.
Successful organizational innovation produces a significant positive change for customers.
Key conditions of innovation include: increasing awareness of organizational culture and people, rewarding interesting failures, working hard and reconsidering assumptions, valuing incremental improvements, and recognizing the role of luck and mistakes.
The technical merits of innovation are essential but not sufficient for innovation to flourish.
Successful innovation accounts for the psychological and sociological consequences associated with innovation.
PwC 24th Annual Global CEO Survey