Teaching

Resources
and
Instructors’
Guidelines
Chapter 5: Building the innovative organization

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 • By the end of this chapter you will understand:
• how leadership and organization of innovation is
much more than a set of processes, tools and
techniques,
Learning • how different leadership and creative styles
influence the ability to identify, assess and
objectives develop new ideas and concepts.
• how teams, groups and processes each contribute
to successful innovation behaviours and
outcomes.
• how different environmental factors can support
or hinder innovation and entrepreneurship.

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 The innovative organization
• Innovation requires energy, enthusiasm and creative light to invent and carry
forward new concepts
• Research shows these factors are associated with good performance
• Innovation requires teamwork

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The innovative organization (continued)

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 Innovative Leadership
• Innovation is about learning and change and is often
disruptive, risky and costly
• Innovation requires energy and determination to change the
order of things
• “Top management commitment” is a common prescription
associated with successful innovation

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 Innovation leadership
• Reviews of research on leadership and performance suggest leadership
directly influences:

• Around 15% of the differences found in performance of businesses;

• Contributes around an additional 35% through the choice of business

strategy;

• So directly and indirectly leadership can account for half of the variance in
performance observed across organizations.

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 Characteristic traits of good leaders
• bright, alert and intelligent;
• seek responsibility and take charge;
• skillful in their task domain;
• administratively and socially competent;
• energetic, active and resilient;
• good communicators.

BUT

There is no brief and universal list of enduring traits that

all good leaders must possess under all conditions.
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 Creative leadership
• Focus on feedback and evaluation instead of simply generate
ideas

• Leader-member exchange (LMX) is vital for success. LMX could

be positive or negative

• Stratified system theory (SST) focus on cognitive aspects of

leadership. Strategic decision making requires to integrate
complex information and think abstractly in order to assess the
environment

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 Creative leadership
• Transformational leadership includes articulating a vision and
inspirational communication

• Vision: the expression of an idealized picture of the future

based around organizational values

• Inspirational communication: the expression of positive and

encouraging messages about the organization, and statements
that build motivation and confidence

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 Creative leadership
• Expression of vision has a negative effect on followers’
confidence, unless accompanied with inspirational
communication
• Transformational leadership
• Transactional leadership
• Mediating variables
• Moderating variables

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 Key factors for leaders to focus on
A review of twenty-seven empirical studies of the relationships between
leadership and innovation investigated when and how leadership influences
innovation, identified six factors leaders should focus on:

1. Upper management should establish an innovation policy that is promoted

throughout the organization
2. When forming teams, some heterogeneity is necessary to promote
innovation

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 Key factors for leaders to focus on
(continued)
3. Leaders should promote a team climate of emotional safety,
respect, and joy through emotional support and shared
decision-making.

4. Individuals and teams have autonomy and space for idea

generation and creative problem solving.

5. Time limits for idea creation and problem solutions should be

set, particularly in the implementation phases

6. Finally, team leaders, who have the expertise, should engage

closely in the evaluation of innovative activities.

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 Creative style
Kirton’s ‘adaptors and innovators’ spectrum:
• Adaptors characteristically produce a sufficiency of ideas
based closely on existing agreed definitions of a problem and
its likely solutions, but stretching the solutions
• Innovators are more likely to reconstruct the problem,
challenge the assumptions and to emerge with a much less
expected solution which very probably is also at first less
acceptable

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 Mintzberg’s Structural Archetypes
• Simple structure: centralized organic type
• Pros: Speed of response
• Cons: individual misjudgement or prejudice; long term
stability
• Machine bureaucracy: centralized mechanistic organization
• Pros: Can handle complex integrated processes
• Cons: Focus on individual specialists and limits the
innovation arising from non-specialists
• Divisionalized form: Decentralized organic form
• Pros: focus on developing competency
• Cons: Internal conflicts; pull towards local efforts
• Professional bureaucracy: Decentralized mechanistic form
• Pros: high level of professional skills
• Cons: difficult to manage individuals with high autonomy
and knowledge power
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 Mintzberg’s Structural Archetypes
• Adhocracy: deals with instability and complexity
• Pros: able to cope with high levels of uncertainty and its
creativity
• Cons: inability to work together effectively
• Mission oriented: Emergent model with shared common
values
• Pros: high commitment; ability of individuals to take
initiatives
• Cons: lack of control and formal sanctions; over-
dependence on key visionaries to provide clear purpose
and lack of “buy-in” to the corporate mission

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 Factors for success
• Critical technical knowledge
• Organizational sponsor: need not have detailed technical
knowledge of the innovation but must believe in its potential
• Heavyweight Vs lightweight project managers. Lightweight
managers’ involvement is more distant
• Technological gatekeeper: collects information from various
sources and passes to relevant people who will be able or
most interested to use it

• Ask workers for input: “any change by which work is rendered

either superior in quality or more economical in cost”

• CI innovators: firms that are operating in the development of

well-developed high-involvement systems for an average of
nearly seven years
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 Factors for success
• Roles: expert, power, process or relationship promoter as well
as champion
• Expert promoter: motivator; comes with alternative
innovation concepts; needs high autonomy in his daily
work
• Power promoter: high autonomy; supports innovation
with resources and protection against opponents
• Process promoter: acts as intermediary; helps others
• Relationship promoter: needs autonomy to foster his
relationships; feels more committed to the persons than
the organization
• Champion: high need for autonomy; needs high
independence; more of an intrapreneur and a role model

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 Employee-led Innovation
• Four key factors that enable employee-led innovation:
• Time-Out
• Expansive Roles
• Competitions
• Open Forums

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 Stages in Evolution of HII Capability
HII (High-
Involvement
Innovation)

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 Effective Team Working
• Teams provide more generation of ideas and flexibility of
solutions, than individuals
• Group
• Team
• Team can also have: unresolved conflicts, personality clashes,
lack of effective group processes, and other factors that can
diminish their effectiveness
• Cross-functional teams

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 Key factors in high performance teams
Key elements in effective high-performance team
working include:
• clearly defined tasks and objectives;
• effective team leadership;
• good balance of team roles and match to individual
behavioural style;
• effective conflict resolution mechanisms within the
group;
• continuing liaison with external organization.

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 Tuckman’s model of team development

• Teams typically go through four stages of

development: forming, storming, norming,
performing.
• Four type of roles for people:
• Plant: someone who is a source of new ideas
• Resource investigator
• Shaper
• Completer/finisher

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 Team Roles
• Nine key team roles. People might be comfortable only in two or
three different roles
• Coordinator
• Team worker
• Resource investigator
• Plant
• Specialist
• Shaper
• Implementer
• Monitor evaluator
• Completer finisher

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Advantages and disadvantages of groups

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 Advantages and disadvantages of groups

Source: S. Isaksen and J. Tidd (2006) Meeting the Innovation Challenge, John Wiley &
Sons, Ltd, Chichester 25
 High performing teams
Based on Tidd and Isaksen research, high performing
characteristics are:
• a clear, common and elevating goal;
• results-driven structure;
• competent team members (recognize diverse strengths and
talents);
• unified commitment;
• collaborative climate;
• standards of excellence (self-esteem, motivation, etc);
• external support and recognition;
• principled leadership;
• Appropriate use of the team;
• participation in decision making;
• team spirit;
• embracing appropriate change. 26
‘Tripwires’ undermining team effectiveness
• group versus team;
• ends versus means;
• structured freedom;
• support structures and systems;
• assumed competence: Members need coaching on skills
needed to work well in a team. Technical skills, domain-
relevant expertise, and experience and abilities are needed
but not enough for inclusion in a group.

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 Creative Climate
• Chance favours the prepared mind – Louis Pasteur
• Two important features of creativity:
• recognize that creativity is an attribute that everyone
possess but express differently;
• after this significant creative leap, the rest will be hundreds
of small problem-finding and problem-solving exercises

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 Context and climate
• Climate is defined as the recurring patterns of behaviour,
attitudes and feelings that characterize life in the organization.
• Objectively shared perceptions that characterize life within a
defined work unit or in the larger organization.
• Climate is distinct from culture in that it is more observable at a
surface level within the organization and more amenable to
change and improvement efforts.
• Culture refers to the deeper and more enduring values, norms
and beliefs within the organization.

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 Context and climate
• Dual ladder: enables technologically innovative staff to progress
within the organization without the necessity to move across
management posts
• Innovation energy is managed through attitude, behaviours, and
structures (organizational support for innovation)
• What survives? Strongest or most intelligent or most responsive
to change
• Convert from “so what” to “so that’s why we are doing this”
• We need to suspend judgement and replace it with what we call
greenhousing
• Replace heavy powerpoint charts with real consumer
experiences

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 Context and climate
• The most useful innovation behaviours are freshness,
greenhousing, realness, bravery and signalling
• Signalling: Someone says “Guys, let us step back a bit, we are
drilling so deep into the economics of the idea that we are
killing it”
• As a technology company, the projects that are most likely to
fail are the most difficult projects, so if you only reward
successful projects no one will ever want to take on the difficult
ones.

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 Innovative Leaders
• Very honest about their strengths and limitations and they are
unafraid to make any gaps in their strengths public.
• Enthusiasts
• Taskmasters

• Teams run solely by enthusiasts might be an inspiring place to

work but chances are it won’t be commercially successful.
• Teams run solely by taskmasters might deliver results but will
ultimately be an exhausting place to work.

• Balance between these two types of leadership.

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 Climate Versus Culture
Criteria Culture Climate
Different levels of Broad and inclusive Failing under the general
analysis concept of culture
Different disciplines anthropology Social psychology
are involved
Normative versus Relatively Not just different but
descriptive descriptive. No better for certain things
notion of best
society.
More easily Observable at surface
observable and level; can change
influenced
Research Qualitative Quantitative

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 Climate Versus Culture
• Trust and openness: refers to emotional safety
• With trust, everyone in the organization dares to put forward ideas and
opinions
• Too much (bind and blind) trust might end up spending more time on
personal issues
• Trust is result of individuals’ own personality and experience; influenced
by organizational climate
• Role autonomy can help build trust
• Challenge and involvement
• How much people are involved in daily operations, long term goals and
visions
• Too high challenge and involvement causes “burn out”
• Provide intellectual stimulation
• Situation may be improved if people are involved in interpreting the
vision, mission, purpose and goals of the organization for themselves
and their work-teams

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 Climate Versus Culture
• Support and Space for ideas
• Time pressure makes thinking outside the instructions and
planned routines impossible
• Under time pressure, individuals are less likely to be creative
• Too much time and space for new ideas cause boredom;
decisions will be slow due to too many ideas to evaluate
• Management avoids new ideas as they extend completion of
current projects
• Organizational slack and performance are inverted “U”
shape or curvilinear
• Organisational slack is a reference to the
resources available to the firm above the
resources necessary to achieve immediate
business and operational requirements
• Low-performing organizations observe any slack
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available
 Climate Versus Culture
• Conflict and debate
• Presence of personal, interpersonal or emotional tensions
• Conflict is a negative dimension
• All organizations have some level of personal tension
• Conflicts can occur over tasks, processes or relationships
• Task conflicts: “What?” needs to be done & “Why?”
• Process conflicts: around “How?” to achieve a task, means
and methods
• Relational or affective conflicts: more emotional and
characterized by hostility and anger
• Openness and collaborative communication causes task and
process conflicts to have a positive effect on performance
• Maintain constructive conflict consistent with the need for
diversity and a range of different preferences and styles of
creative problem solving
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 Climate Versus Culture
• Conflict and debate
• Homogeneous groups are less effective than mixed preference and
styles
• Without debates, authoritarian patterns without questioning are
used
• Without debate dimension, constant moaning and complaining
happens
• Too much debate causes more talk than implementation
• Risk-taking
• With high-risk taking, bold new initiatives with unknown outcome
can be taken
• With risk-avoiding, situation is cautious and hesitant mentality; few
ideas are offered; people play ‘safe side’
• Too much risk-taking causes confusion
• Don’t encourage individualism or competition, encourage
teamwork and cooperation
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 Climate Versus Culture
• Freedom
• Independence in behaviour exerted by the people in the
organization
• With freedom, people are given autonomy to define their
own work
• With little freedom, people work with strict guidelines and
roles
• Without enough freedom, people spend time and energy
obtaining permission and gaining support (internally and
externally) or perform all their work ‘by the book’ and focus
too much on the exact requirements of what they are told
to do
• Too much freedom causes people to go off in their own
independent directions
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 Climate factors influencing innovation

Source: Derived for Scott Isaksen and Joe Tidd (2006) Meeting the Innovation
Challenge (Wiley).

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 Boundary-Spanning
• Needs feedback or mutual adjustment
• Build relationships that enable clear and regular communication
• Cooperative work or collective efficiency
• Toyota’s success due to high-performance knowledge-sharing
network
• Open innovation and virtual organizations:
• No need to have all technical expertise in a single roof
• Whole is greater than sum of parts but friction, conflicts that
make the performance of the group suboptimal to that of sum
of parts

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 Boundary-Spanning
• Key individuals: provide energy into the formation and
operation
• Facilitation: support the process of networking but not
necessarily acting as members of the network
• Key organizational roles

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 Summary
• Leadership and organization of innovation is much
more than a set of processes, tools and techniques,
and the successful practice of innovation demands the
interaction and integration of three different levels of
management, individual, collective and climate.
• At the personal or individual level, the key is to match
the leadership styles with the task requirement and
type of teams. General leadership requirements for
innovative projects include expertise and experience
relevant to the project, articulating a vision and
inspirational communication, intellectual stimulation,
and quality of leader-member exchange (LMX).
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 Summary
• At the collective or social level, there is no universal
best-practice but successful teams require clear,
common and elevating goals, unified commitment,
cross-functional expertise, collaborative climate,
external support and recognition and participation in
decision making.
• At the context or climate level, there is no “best
innovation culture”, but innovation is promoted or
hindered by a number of factors, including trust and
openness, challenge and involvement, support and
space for ideas, conflict and debate, risk-taking and
freedom.
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