Joe Tidd
and
John Bessant
ISBN: 9781118360637
© 2013 John Wiley & Sons Ltd.
1
www.innovation-portal.info
Chapter 3
Building the innovation
organization
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Innovative Organization
Leadership, shared vision & climate:
• innovation leadership, not senior
management
• broad vision, not detailed strategy
• organizational climate - ‘the way we do
things around here’
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Innovative Organization
THE THREE CAPABILITIES
Inclusive Leadership
% of the
Survey Sample
Top 5%
Top 20%
Bottom 20%
Deliberate Creative
Process Climate
Adapted from: Davis, T., Arnett, A., Gibbons, P., Milton, F. Innovation Survey . London, UK: PricewaterhouseCoopers.
Source: Adapted from Isaksen & Tidd (2006) Meeting the Innovation Challenge (Wiley)
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Innovative Leadership
Orientation to Change
Explorer Developer
Manner of Processing
External Internal
Ways of Deciding
People Task
Source: Adapted from Isaksen & Tidd (2006) Meeting the Innovation Challenge (Wiley)
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Innovative Leadership
Context
Where it works best
Process
Leadership Style Cognitive & Behavioural
Preferences
Goals
Objectives & Outcomes
most valued
Source: Adapted from Isaksen & Tidd (2006) Meeting the Innovation Challenge (Wiley)
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Innovative Leadership
Contingency approach to leadership:
• effectiveness of different styles of leadership
will depend on the context
• task behaviour (guidance & direction)
• relationship behaviour (support & teams)
• maturity of followers - ability & willingness of
people to define & take responsibility for own
task behaviour
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Innovation Leadership
Leadership styles & effects:
style influence effect .
visionary top-down identification
Transactional reciprocal compliance
participative bottom-up internalization
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Behavioural Perspectives
Some propositions from organizational psychology
(Angle, 2000):
• innovation is a joint function of personal
attributes & organizational context
• innovation occurs in a context that contains
both enabling (can do) & motivating conditions
(will do)
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Organizational Slack
• Organizational slack is the difference between
resources available & those currently needed
(Cyert & March, 1963)
• result of past success, failure or lag in response to
environmental changes, imperfections in internal
‘markets’
• represents a static in-efficiency, but can act as a
dynamic shock absorber
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Organizational Slack
Organizational slack, innovation &
performance:
• when successful, an organization generates more
slack, which provides greater resource (people, time,
money) for longer-term, significant innovation
• when less successful, organization searches for
problems & their solution, tends to reduce slack
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Innovative Culture
SURFACE MANIFESTATIONS
e.g. artefacts, ceremonies
SHARED VALUES
BASIC ASSUMPTIONS
e.g. relationship with environment,
nature of reality Source: Schein (1985)
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Innovative Organization
Climate versus culture:
• Different levels of analysis
• Different disciplines involved
• Normative versus descriptive
• More easily observable & influenced
Source: Isaksen & Tidd, 2006
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Innovative Organization
Characteristics of an innovative climate:
• Challenge & involvement
• Freedom & autonomy
• Trust & openness
• Idea time & support
• Playfulness & humour
• Conflict & debate
• Risk-taking
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Innovative Organization
Key individuals, strong teamwork:
• inventors, champions, entrepreneurs,
gatekeepers
• job rotation, cross-functional teams
• strong project management
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Innovative Teams
Teams can be innovative, but beware of:
• ‘group think’ - restricts interpretation &
response, homogeneity limits innovation
• ‘siege mentality’ - group vs. organizational
goals, commitment to sub unit vs. organization
• means vs. ends - attachment to social system,
not course of action
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Innovative Organization
Appropriate structure:
• No ‘one best way’ e.g. flat structure
• Depends on task & environment i.e.
contingencies e.g. uncertainty & complexity
• Ideal configurations for different contexts
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Configuration & Performance
Example: Environment-innovation-structure relationship
(Damanpour):
Stable Uncertain
structure small, simple large, complex
product - +
process n.s. N.s.
technological - +
organizational+ -
radical - +
incremental n.s. N.s.
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Job Design & Innovative
• Thompson (2004) surveyed 6 R&D based high tech
firms - 429 returns (57%)
• Focus on engineers and scientists
• Identified 24 dimensions of the employment contract
important to these types of knowledge workers
• Captured individual and organisational characteristics
as well as performance outcomes
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Job Design & Innovative Performance
Intuitive Style Innovative
R2 = .30
Performance
Doctorate
Org. Justice
Org. Climate Organisational
Good R2 = .21
Job Design Citizenship
Behaviours
Salary
Symbolic
Recognition
Job Involvement
Affective R2 = .42
Commitment
Length of Service
Source: Thompson (2004)
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Rewarding Innovation
100
90 me a s ure s cle a rly de fine d
80 include d in s ta ff re vie ws
70
linke d to compe ns a tion
60
50
40
30
20
10
0
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Innovative Organization
Supportive processes, tools & resources:
• bureaucracy is not bad, but bad
bureaucracy is
• broad & two-way communication
• encourage challenge, debate & risk-taking
• training in & widespread use of tools e.g.
QFD, creativity
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Innovative Processes & Tools
(S)POT framework for assessing innovation:
• Assesses innovation (Strategy), Processes,
Organisation & Technology (37 measures)
• An audit & improvement framework for change
supported by published research
• Proven effectiveness - developed & tested with
108 firms
• Significant association with performance (R2 40%+)
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SPOT
P- Innovation Processes:
• Performance measurement.
• Structured process mapping & analysis.
• Quality management & continuous
improvement.
• Process Benchmarking.
• Systematic project reviews.
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SPOT
O - Organization for innovation:
• Re-organisation to reduce interfaces and
hand-overs.
• Cross-functional teams, or cross-training
specialists.
• Rewarding team performance.
• Strengthening the role of project managers.
• Involvement of suppliers and customers.
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SPOT
T - Tools & Technologies to support innovation:
• Tools e.g. QFD, Taguchi, lead-users
• Technologies e.g.
– Groupware to encourage communication & knowledge
sharing.
– Common software for project management.
– Electronic databases for knowledge storage & distribution.
– Electronic data interchange (EDI) with suppliers and
customers.
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Process Scores (example)
Processes
Legend symbol “P1” refers
5 to “Processes,” question #1,
Market Design
Design etc.
4.5 Assessment Reviews
Cross- Stds.
Requirements functionality Documentation
4
Management Development Illustrative Interpretation:
Continuous
3.5 Planning
Improvement ⁃ Significant
3
opportunities in market
2.5 assessment processes
2 ⁃ High usage of design
standards
1.5
⁃ Uneven use of design
1
reviews
PMARKET P1 P2 P3 P4 P8
P9 PREQUIRE P5 P6 P7 P18
P20 P31 PCROSSF P10 P11 P12
P19 P21 PDEVPLAN P13 P14 P15
P16 P17 PSTAND P23 T20 PDOC
P22 P24 P25 PREVIEW P26 P27
P28 P29 P30 PIMPROVE P32 P33
P34 P35
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Opportunity Gaps
Customer Focus
Agility 5.00 Strategy Formulation
Integration Planned Opportunism
Voice of Supplier
4.50
Clear Strategic Objectives •This chart provides a
Design Controls
4.00
Core Business Competencies comprehensive view of
3.50 product development
Voice of Customer Core Technology
3.00 Competencies
improvement opportunities.
Flexible
Manufacturing
2.50 Design Reviews •For example, Company
2.00 Alpha is doing relatively
Information Design Standards
Systems
1.50 well in use of design
Electronic Data 1.00 documentation, cross-
Interchange Market Assessment
functionality, and
Analytical Methods Requirements development planning, but
Management
is significantly below BIC
Process Control Documentation in most other areas.
Market Analysis Cross-functionality
Organic Structure Development Planning Strengths
Ambidexterity Co-Location
Project Orientation Life Cycle Responsibility
External Partnering Team Boundaries Best-in-Class
Alpha
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Innovative Organization
External focus:
• customer focus, not customer driven
• sensitive to & actively scan for external
opportunities
• use formal tools e.g forecasting, QFD
• design & participate in diverse networks
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