Innovation and creativity 06 innovative organizations

Chapter 06: Innovative organizations
BY KAMAL M. AL MASRI
Israa University Gaza
Faculty of Managerial and Financial Sciences
Departmentof Management
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Course code: ::::..BEAD4312..::::

Innovation and Creativity By Kamal AL MASRI
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Two videos
GOOGLE'S FLEXIBLE WORKSPACE
Exclusive Look Inside Facebook’s Engineering
Office In London
Reportage TF1 Le JT : Les ambitions
démesurées du géant Huawei

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Internal factors (drivers) of innovation and
change …
Skills, attitudes, …PeopleP -
Lines of communication, and
reporting/reward systems, …
Administrative
structures
A -
Change would require a
fundamental transformation.
Core businessC -
Minor equipment/software
to complete redesign.
TechnologyT -
Recall

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Introduction
 Innovation needs a real nurturing and encouraging environment.
 Necessary to recognize market opportunities, and respond innovatively to market
“problems”.
 Organizations must provide an environment in which creativity and innovation can
flourish.
 Many elements count:
 Vision and strategy for innovation,
 Culture,
 Processes, practices and systems,
 Leadership/Top management commitment,
 Empowered employees driving innovation,
 …
Innovative organizations
have a specific
“personality”.

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Most
Innovative
Companies
BCG
ranking,
2019

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What makes organizations innovative?
 We are going to focus on five hallmarks of
innovative organizations (Adair, 2004):
1) Top level commitment.
2) Flexible in the structure of the organization.
3) Tolerance of failure.
4) Encouraging teamwork.
5) Good at open and constructive communication.

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1- Top level commitment.
 This must be visible and audible by:
Ensuring that blocks are removed (bureaucracy, tough
individuals).
Valuing new ideas and innovation.
Participating actively to ensure that all know of their
commitment to positive and useful change.
Avoid focusing on short-term profits (this can dull the edge
of creativity and innovation).

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Top management is concerned …
Managing innovation’ is a ‘challenge to
management... especially top management
and a touchstone of its competence’
Peter Drucker

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2- Flexible in organizational structure
 The antithesis of the innovative organization is the bureaucratic
one.
 Remember, bureaucratic organizations are characterized by:
• authority is impersonal and formal,
• strong emphasis on functional specialization,
• a rule for every eventuality,
• clearly laid down procedures (red tape),
• proliferation of paperwork,
• security of employment and advancement by seniority.

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At the opposite, in flexible organizations:
 ability to respond to changing situations,
 barriers between staff in different areas are minimized,
 flat rather than pyramid organizational structure,
 decision making is pushed downwards to where the organization meets its
customers/suppliers,
 entrepreneurial flair present at all levels,
 developing and testing more than one solution to problems encountered,
 efficient rather than stifling monitoring systems,
 balances freedom and order.

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3- Tolerant of failure
 Innovation and risk go hand in hand.
 Management which goes into critical overdrive when mistakes
occur smothers creativity and innovation.
 Risks can yield failure, but no risk ≈ no profits and no growth.
 Unless failure results from negligence, recklessness or complete
incompetence, managers should not seek out scapegoats or exact
revenge.
Profits are the reward for taking risks and innovative
organizations learn to live with risk.

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Failure parties
Yes, we can celebrate mistakes …
This serves to:
 Analyze mistakes to learn from the failures.
 Encourage people to talk together.
 Earn and discover new ways of doing things.
 Promoting trust.
 …

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Google: “reward failure”
Google’s Head of People: “it’s also important to
reward failure” so as to encourage risk-taking.
He gives the example of Google Wave, an online
platform launched in 2010 and closed a year later.
“They took a massive, calculated risk. And failed. So we
rewarded them.”
 Read:
 8 companies that celebrate mistakes
 Gaming Empire Supercell: We Pop Champagne Every Time We Fail
Just an
example …

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4- Encouraging teamwork and
innovation
 In innovation it can be said that none of us is as good as
all of us.
 Teamwork and innovation are better in organizations
where:
• the climate is open,
• participation is encouraged,
• facts and information are readily available,
• change is managed positively,
• resources are provided for training and development, …

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Encouraging teamwork and innovation
(cont.)
• rules are at a minimum (with policies and guidelines instead)
• internal communications are good and more by mouth than
memo
• respect is given to all colleagues (but not on demand by
management – it has to be earned)
• managers are themselves highly motivated
• teamwork often transcends departmental boundaries.

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5- Good at open and constructive
communication
 Communication should be good laterally and vertically
(and flatter organizations should – in theory, at least –
encourage good lateral communication).
 Managers should ensure a good flow of information –
ideas can emerge as a result.
 Cross-fertilisation can create more (and better) ideas,
particularly where departmental, divisional boundaries are
crossed.

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Innovation needs flat organizations ...
 One key to successful business evolution in today's
rapidly changing economy is to let go of centralized
control.
 People close to customers know better the market needs
and can respond faster to rapidly changing customer
requirements.
 In flat organizations, decisions are made faster,
entrepreneurial creativity of employees is released, and
ideas are managed better.

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Let others do!
"Don't tell people
how to do things,
tell them what to
do and let them
surprise you with
their
results." George S.
Patton

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These factors can be measured …
Scoring: Yes/No – More than 9 No scores – not
good!
Lets complete,
just to test ….

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Technology
Technology can be seen as both an internal
and external driver for innovation.
As an internal driver, it helps in:
 Organizing people and communicating,
 Redesigning processes,
 Prototyping,
 …

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Many managerial issues…
 Many managerial issues can be discussed when talking about
Innovative organizations:
 Leadership styles: participative, transformational, directed, non-
controlling leadership, ....
 Resources and skills: team building, creative thinking, …
 Effective communication systems: lateral, electronic, …
 Work climate: incentives, participation, freedom of expression,
freedom to experiment, trust and respect for the individual, …
 …

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Places and practices of innovation…
Innovative organizations create specific
environments for innovation:
• R&D teams,
• Corporate Innovation Labs,
• Corporate Garages,
• Corporate Investment
Programmes,
• Corporate Hackathon,
• Corporate Startup Funding,
• Corporate Startup Awards,
• Incubators, and Accelerators,
• Open Innovation,
• etc.

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Benefits
To create new solutions, new products, and
new processes through:
Welcoming external visitors,
Partnering with early-stage companies,
Involving their own employees,
…

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Examples of innovative organizations:
• ABN AMRO
Hackathons by ABN AMRO
• Accor Innovation by Accor
Hotels
• Adobe Innovation by Adobe
• Samara by Airbnb
• Lab126 by Amazon
• Innovation Centers by Apple
• AT&T Labs by AT&T
• AutoDesk Innovation Lab by AutoDesk
• InsightStudio by Deloitte
• Blue Lab by EDF Energy
• ERICSSON Garage
Challenge by ERICSSON
• Innovation by Gartner
• HP The Garage and HP Labs by HP
• McKinsey Digital Labs by McKinsey
See (link here).

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Deloitte InsightStudio
“Delivering outcomes by design”
Deloitte’s InsightStudio is a rapid incubator that can
help you turn ideas into results.
“It’s a powerful, fast way to see the tangible value that
analytics and cognitive capabilities can deliver.”
 Industry Focus: Professional Services
 Link here

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Blue Lab by EDF Energy
Working with start-ups, colleagues, students
and innovators, to accelerate the process of
conversion to a more sustainable offer.
Industry Focus: Energy
Link here

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McKinsey Digital Labs by McKinsey
Providing new disruptive services for
organizations that want to get the most out of
the digital experience
Industry Focus: Management Consulting
Link here

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Hackathons
A hackathon (also known as a hack
day, hackfest or codefest) is a design sprint-like
event in which programmers and others involved
in a project, and others (domain experts),
collaborate intensively on software projects.

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Hackathons (cont.)
 The goal is to solve a problem or to meet a challenge by
the end of the event.
 Hackathons tend to have a specific focus but teams may
includes contributors with different backgrounds (marketing,
HR).
 Hackathons can be internal or external events.
 Regardless, hosts often incorporate ideas produced during
the event in their own products or services.

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In Gaza?
Yes, Hakathons exist in Gaza!
Just do a little search on Google!
“Empowering First Responders in Gaza: Students in Baltimore
and Gaza Design Solutions for Humanitarian Health”
 JULY 28, 2018, See the article (here).

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Some giant companies that failed to
innovate … (read the article)
 Polaroid
 Nokia
 Kodak
 Palm
 Motorola
 Netscape
 …
Each one has its proper story, …
But they have in common the fact
that they couldn’t adapt to change
…
https://www.youtube.com/watch?v=T0Z73Zbtlyg

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Ignorant Polaroid?
In 2001, due to the boom of
digital photography, the
company filed for bankruptcy.
The leaders of the company
continued to believe paper print
was what customers wanted!
They were great people who failed.

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Hard Motorola?
 Motorola demonstrated the first handheld
phone in 1973.
 Motorola kept producing various versions of
its cellphone, but they failed to see that
customers wanted innovation in software
rather than hardware.
 Clearly lacking market knowledge,
Motorola’s new products in the early 2000s
weren’t enough to grow the business.

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Scared Sony?
 Sony didn’t adapt to technological innovations such as
digitalization, the shift towards software, and the growth
of illegally downloadable music online.
 Sony actually had the technology to launch a product
even better than the iPod, but it never happened.
 The company was too afraid to test out something
new, thinking it would threaten their compatibilities on
the market.
 See the article “Why Sony did not invent the iPod.”

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References
 Essentials of the Management of Creativity and Innovation in Education, Business, and
Engineering, Christian H. Werner and Min Tang, 2017. in Handbook of the management of
creativity and innovation: Theory and practice, World Scientific Press, 2017.
 Managing Change, Creativity & Innovation, 3rd Edition, Patrick Dawson, Constantine
Andriopoulos, SAGE, 2017, Los Angelos.
 Part 3: Creative Industries, Innovative cities and Changing Worlds
 10. Creative Industries, Innovative Cities and Changing Worlds 377
 11. The Individual: Promoting Critical Thinking 426
 12. The Group: Nurturing Teamwork 458
 13. The Leader: Promoting New Ideas at Work 503
 14. The Internal Environment: Orchestrating Structure, Systems and Resources 538
 15. Culture: Enabling and Constraining Creative Processes at Work 577


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