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The missing ingredient

The missing ingredient

Wanted: An ‘innovation’ culture

Establishing an innovation "culture" within organisations is an important driver of innovation, according to the second annual survey of Australian and New Zealand companies commissioned by technology services group Fujitsu. Respondents continue to be exercised by a lack of financial and human resources, but short-termism and resistance to change have become bigger barriers to innovation.

The proportion of companies bemoaning a lack of support for innovation from the top was unchanged from last year, but managers appear to have made progress in reshaping their organisations to support fresh thinking, as well as in adopting formal innovation strategies.

The survey report's author and the principal of consulting at Fujitsu Australia and New Zealand, Tom Dissing, says: "Last year, it was more about getting executives behind it. But now we've got that, it's actually about processes, about people, and embedding innovation across the organisation."

Dissing says the performance of teams and individuals should be assessed, in part, according to how innovative they are. At the same time, staff need backing to voice and pursue new ideas. "Managers need to make sure there are processes for open communication and a governance framework around that; so that ideas are evaluated on a regular basis and people are seen to be rewarded for their efforts."

A management professor at the Macquarie Graduate School of Management, Richard Badham, says: "Many organisations adopt a kind of "McDonald's" approach: so long as we put structures A, B, C and D in place, innovation will come out the other end. It doesn't work like that."

He says managers should approach innovation as they would stage a "cocktail party", a metaphor first coined by Massachusetts Institute of Technology academics Richard Lester and Michael Piore in their book Innovation - The Missing Dimension. "You provide the venue, choose the guests, try to keep the conversation going, and refresh it every now and then with fresh ideas."

Badham admits this is easier said than done within organisations that, by definition, are geared to repeat the same processes over and over, hopefully more efficiently over time. He goes as far as to say that a manager at a big company will, if acting rationally, ignore a radically new process or product. "Existing organisations want to know the payback. But with something that radically challenges an existing industry, you can't predict what that payback will be," Badham says.

He suggests organisations become "ambidextrous", allowing pockets of innovation to exist alongside existing activities. Dissing is more optimistic about the prospects of creating a single, innovative culture, believing it begins with finding the right people. But Dissing concurs with Badham that deeper surgery on the traditional organisation may also be required. He claims Australia's relatively poor record of radical innovation reflects the shyness of local companies about collaborating with external partners.

As Badham puts it: "A lot of innovation is the result of conversations across boundaries."

Australian Financial Review

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