Category: Organizational Management

Melissa Brenes, VT visiting undergraduate student from Costa Rica Tech. Contact Melissa at melibrebas23@hotmail.com

Creativity and innovation are linked as concepts but also they show differences. Marsick (2009) defines creativity as “the production of novel, appropriate ideas in any realm of human activity”. This definition features creativity more like an individual capability. Innovation, as Marsick (2009) suggests “involves group and organizational capabilities needed to produce, market, and sell the fruits of creativity”. Despite the differences in their core definitions, both individual creativity and organizational innovations are influenced by corporate culture.

According to Burke & Litwin (1992), creativity and innovation in corporate culture is affected by two kinds of variables that influence organizational change:

• Transformational: variables that are affected when a company interacts with the external environment (trigger change in mission, strategy, leadership and culture)
• Transactional: variables at the work climate level (management, practices, structure, systems, skills, motivation, needs

Continue reading “RESEARCH BRIEF: Building Innovative Corporate Cultures Using Action Learning Creativity, Innovation, and Corporate Culture”

by Johanna Madrigal, PhD Candidate at Virginia Tech, jmadriga@vt.edu

Innovation is a key success factor in companies with complex and volatile environments, and many researchers have been interested in demonstrate how the organization process and leadership conduct companies to be successful at innovating (Chandler, Keller, and Lyon, 2000). There is also an increasing attention to understand if individual skills are affecting the innovation process inside the companies which has led to the definition of what is known as innovation styles (Ko, 2008).

An innovation style is defined as how an individual promotes innovation, and are categorized in 4 styles, and two dimensions. The first dimension responds to what stimulates and inspires innovation, which could be facts (details and analysis) or intuition (insights and images). The second dimension responds to the approaching style of the innovation process, which can be focused (well planned and outcome oriented) or broad (perceptive and learning oriented) (Innovation Styles, 2007).Figure 1 shows how innovation styles are related to each dimension.

 

Each innovation style stimulates innovative thinking in a unique manner. The innovation styles are listed in Table 1.

Table 1. Innovation styles (Adapted from Miller, 2007)

Benefits

By raising awareness of the innovation styles of individual, innovation environment can become more open and flexible; also, organizations will be able to select a mix of innovative people based on each solution as required. This focus on selecting the right member of the working team can reduce the amount of time to reach a solution, and increase the productivity of the innovation based teams.

References

• Chandler, Gaylen N., Keller, Chalon and Lyon, Douglas W.( 2000), “Unravelling the Determinants and Consequences of an Innovation-Supportive Organizational Culture”,  Entrepreneurship Theory and Practice, Vol 25 No.1, pp 59-76
• Innovation Styles (2007), “Innovation Styles”, available at  http://innovationstyles.com/isinc/styles/overview.aspx (accessed on Aug 31st, 2011).
• Ko, Stephen (2008), “Do thinking styles of entrepreneur matter in innovation?” Journal of Global Business and Technology, Vol 4 No2, pp. 24-33.
• Miller, Debra (2007), “Overview of the four innovation styles”, available at

by Johanna Madrigal, PhD Candidate

Virginia Tech

 

Innovation is acute for day to day performance and long-lasting survival of companies. This importance places innovation at the core of any company, and subsequently creates a need to develop systemic innovation, where a climate of learning helps to understand how and where to focus on your innovation efforts (Thomas, 2006). Figure 1 shows how innovation is the result of the interception of the organization with its strategies and its desire for becoming a learning entity.

Mitra (2000) suggests that these innovation efforts are triggered by needs such as cost reduction, value added, and new market opportunities which have made organizations more aware not only of creativity but also of the need of a systemic innovation learning process.

 Kuhn and Marsick (2005) remark that the learning process oriented to innovation posses three characteristics: (1) has to be part of the strategy development process, (2) has to be capable of transforming, and (3) reaches not only individuals but masses to create groups of learning leaders that support innovation as a fundamental company value and help other to engage in the innovation culture.

These leaders have to learn how to work in environments where diversity is a characteristic, also have to feel comfortable about making mistakes and learning from those mistakes without being punished and finally, to truly create a systemic innovation learning process, they have to be able to reproduce their experiences to lead and manage others (Kuhn and Marsick, 2005).

This increasing awareness about the need of innovation oriented learning process has contributed to the proliferation of teaching to support innovation. Figure 2 shows Innovation and learning has become a perspective in the balance score card for companies who are becoming aware that innovation is a fundamental for success.

Jorgensen and Busk (2007) and Hesselbein et al (2002) had pointed out that today, more than ever, students need to learn, practice and experience tools and methods to develop innovative capabilities that will help them to face the challenges of innovation into their own working environments; however literature shows that although innovation teaching is a need, the education on the innovation field is small. Most of the efforts in academia have been focused in entrepreneurship teaching rather than innovation teaching. By 2008 this entrepreneurship education in US offered around 2200 courses in more the 1600 education institutions. (Harkema and Schout 2008, Fayolle and Gailly 2008 and Kuratko 2005).

In response to the initial question, yes, innovation teaching is important. This teaching will give individuals the skills to think out of the box in day to day situations where creativity must become innovation to help our organizations to remain successful.

References

• Fayolle, A. and Benoit, G. (2008), “From craft to science. Teaching models and learning processes in entrepreneurship education”, Journal of European Industrial Training, Vol.32 No.7, pp: 569-593.

• Harkema, S. and Schout, H. (2008), “Incorportaing Student-Centered learning in innovation and entrepreneurship education”, European Journal of Education, Vol.43 No.4, pp: 513-526.

• Hesselbein, F., Goldsmith, M. and Somerville,I. (2002), Leading Results Innovation and Organizing for results, Jossey-Bass, California.

• Jorgensen, F. and Busk, L. (2007), “Integrating the development of continuous improvement and innovation capabilities into engineering education”, European Journal of Engineering Education, Vol.32 No.2, pp: 181-191.

• Kuhn, J. and Marsick, V. (2005), “Action learning for strategic innovation in mature organizations: key cognitive, design and contextual considerations”, Active Learning: Research and Practice, Vol.2 No.1, pp: 27-48.

• Kuratko, D. (2005), “The emergence of entrepreneurship education: applying the theory of planned behavior”, Entrepreneurship Theory and Practice, Vol.29 No.5, pp: 577-597.

• Mitra, F. (2000), “Making connections: Innovation and collective learning in small business”, Education and training, vol.42 No.4&5, pp: 228-236.

• Robinson, M. (2010) retrieved from http://blog.pfmresults.com/wordpress/?p=82 on November 16th, 2010.

• Thomas, A. (2006). Disciplined Innovation. Excellence is a habit. Leadership Excellente. 23(7): 6.

By Johanna Madrigal, Phd Candidate

Virginia Tech

Email: jmadriga@vt.edu

 

Measuring innovation is a very complex process (Secretary of Commerce, 2007) for the private and public sectors. The Oslo Manual (OECD 2002 and 2005) suggests a methodology to measure innovation based on two sets of guidelines to define what activities belong to innovation processes and how to measure them. The first set of guidelines proposes that innovation activities should be previously segregated in three large groups in order to be measured:

• Research and Development (R&D) activities,
• process and product innovation activities; these activities include, but not limited to acquisition of external knowledge, machinery, equipment and other capital goods, and other preparation activities, and
• preparation for marketing and organizational innovation, covering all activities related to organization innovation other than R&D, such as, training, activities related to development and planning of new marketing methods and marketing instruments and the design of form and appearance of products (OECD, 2005).

The second set of guidelines is known as the Frascatti Manual (OECD, 2002) gives guidance on how to collect relevant data related to R&D activities, which are complemented by economic indicators developed by countries.

Now days, the United States government measures innovation activities based on data collected from two main reports developed by the Organization for Economic Cooperation and Development (OECD). These reports are:

• the Science and Engineering Report which records the national volume of science and technology. Main indicators obtained from this set of data are the current status of R&D as a share of GDP and the R&D expenses per type or research; and
• (2) the Business R&D and innovation survey that collects the data relevant to Research and Development in the industry, where the main indicator reflects the expenditure in R&D made by different business sectors and the ratio of R&D to sector sales.

These two reports have helped to develop economic indicators such as R&D expenditure as a share of the GDP, R&D expenditure per type of expenditure and the amount of patent and scientific and research article generated among others.

At the industry level, literature research about innovation measurement suggest that there is no standardize method to define innovation metrics, however, there is a clear agreement about the importance to measure innovation to show firms’s growth (Anthony et all 2007, Kuczmarski 2001, Muller et all, 2005). Managers around the world recognize that measuring innovation will help to make informed decisions based on real data and, also, will help on the strategies and action plans alignment for successful results (Muller et all, 2005).

There are numerous authors who recommended several innovation metrics inside companies, such as Anthony et all (2007) who suggested a mix of metrics divided in three phases:

• In-put related measures
• process and oversight metrics; and
• output related metrics.

Also, McKinsey Global Surveys (2008) found out that business organizations are interested in using metrics across the whole innovation process, such as the number or people dedicated to innovation, the amount of new ideas from outside the company, the accomplishment of time schedule, financial returns from innovation, and customer service. In addition to the previous proposed innovation measurements for business organizations, the Boston Consulting Group (BCG 2008) also performed a study that found out metrics for four main factors. (1) start-up costs, (2) speed, (3) scale and (4) support costs

In summary, data available for further analysis about innovation at the industry level is quite limited (Secretary of Commerce, 2007), and mainly relies in the data collected by the U.S. government through the economic indicators as previously cited, and data collected by private organizations, such as McKinsey Global Surveys (2008), BCG (2008) and BCG (2009). Some of the metrics identify by these organizations are shown in Table 1.

Table 1. Innovation metrics (Adapted from BCG 2009)

Innovation phases
Metrics	Inputs	Processes	Outputs
	Number of new ideas Business-unit investment by type of innovation R&D ratio to company sales Full time innovation technical staff	Idea generation time Decision to launch time Projects by type and launch date Projects NPV	Patents granted Launches by business area Percentages of sales and growth from innovation projects Innovation ROI

With this quick review, the author aims to summarize findings from the literature to give a general overview about innovation measures at the public and private sectors. However the innovation process is rather dynamic as new metrics and measuring tools are continuously being developed.

References

Anthony, S., Fransblow, S., and Wunker, S. (2007). Measuring the black box. CEO Magazine. December (2007), 48-51.

BCG (2008). Measuring Innovation 2008. Squandered Opportunities. Massachusetts: US. Boston Consulting Group, Inc.

BCG (2009). Measuring Innovation 2009. The need for action. Massachusetts: US. Boston Consulting Group, Inc.

Kuczmarski, T. (2000). Measuring your return on innovation. Marketing Management. 9 (1), 24-32

McKinsey Global Surveys. (2008). Assessing innovation metrics. New York: US. McKinsey and Company.

Muller,A., Välikangas, L. and Merlin, P. (2005). Metrics for innovation. Guidelines for developing a customized suite of innovation metrics. Strategy and leadership. 33 (1)

OECD. (2002). Fascati Manual. Proposed standard practice for surveys on research and experimental development. Paris:France. OECD Publication Service.

OECD. (2005). Oslo Manual, the measurement of scientific and technological innovations. Paris:France. OECD Publication Service.

Secretary of Commerce. (2007). Innovation measurement: tracking the state of innovation in the American Economy. Washington, DC: US. US Department of Commerce.