Building an innovation organisation

Being innovative in terms of both products and organisational processes is non-negotiable – it can't be done spasmodically, it must be hard wired into your business.

We all tend to believe that we are innovative, however there is a distinction between being ‘innovative’ and being an ‘innovative organisation’. Doing ad hoc innovative things is different from embedding innovation into everything that we do.

Adding an apple to a junk food diet is not the same as embedding healthy eating into every snack and meal.

I was reading an excellent piece by Michael McQueen, "5 Lessons Every Business Can Learn from Kodak’s demise", in which he shows that, despite misreading the digital photography market in the 1990s, Eastman Kodak was doing innovative things right up until bankruptcy in January this year. So why didn’t all this innovation make it successful?

I thought this warranted more research and went searching for answers. Essentially, Kodak took too long to accept the fact that its business no longer revolved around a quasi-monopoly in traditional film stock.

George Fisher took over as CEO of Kodak in 1993 and he was able to drive cultural change at the top; however according to research by Gavetti, Henderson and Giorgi (Harvard Business Review, 2005), he wasn’t able to change the "huge mass of middle managers, and they just don’t understand this [digital] world”.

Once it fell behind the game, its internal culture dragged it down and never fully recovered. This sounds very much like an organisation that was doing some innovative things – but was not able to become an innovative organisation.

Innovation has two main applications: Firstly, with respect to products; and secondly, with respect to organisational processes – and I’d argue that both are required, with the latter being more important.

Organisations, by their nature, are designed to meet our needs more efficiently and effectively than the efforts of individuals alone. It follows that the process of ‘organising’ the way things are done should be the higher order concern.

In some areas of government for example, I have noticed that the innovation discussion tends to be product-centric, geared towards scientific and technological breakthroughs, and less concerned with organisational process improvement.

There are means and methods of embedding innovation into everything that we do. It starts by recognising that employees have great ideas and putting in place systems that harvest them effectively.

If it is done well, organisations can develop an ingrained culture of idea formation, validation and implementation. Do executives and managers drive it? No, it is an employee-centric model and it works in for- and non-profit environments. It also increases employee engagement and productivity.

There is a well-known manufacturing brand that has maintained double-digit earnings growth in a challenging market environment. Being an innovative organisation has played a big part in it.

So let me pose the question again: Do you have what it takes to be innovative?

Phil Preston is an independent practitioner who helps organisations find innovative solutions to performance issues. He can be contacted on



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