The Keys to Creating an Innovative Organization

The Keys to Creating an Innovative Organization

Innovation. It’s an important characteristic of our NorthCoast 99 winning workplaces, helping them create a leading edge in their workplaces and products or services.  These winning workplaces have mastered creating cultures that facilitate employee creativity and idea generation.  Numerous studies suggest that innovation not only increases employee engagement and intrinsic job satisfaction, but is a strong predictor of organizational success. But what organizational factors truly contribute most to innovation? What does it take to create a truly innovative organization? 

Research seems to suggest that there are two “entry-ways” towards innovation. Both opportunity and necessity/limited resources stimulate creativity.  In fact, in addition to new opportunities that present themselves (such as new technology), pressing problems, necessities and distress with the status quo can cause organizations to become more innovative.  Perhaps even in the face of a difficult recession, organizations, more than ever before, have a reason to innovate and think differently about how they are conducting business (Bledow, Frese, Anderson, Eres, & Farr, 2009).


A newly published study (Bledow, Frese, Anderson, Eres, & Farr, 2009) analyzing over 150 research studies on innovation suggests that several factors can contribute to the degree of innovation in organizations.  Their insights include:

  • Ask employees for new ideas regarding an area of the organization in which development is needed.  Focus on creative idea generation, as this is the root of all innovation.
  • Empower all employees to engage in some exploration activities.  By exploration, we mean search, variation, risk-taking, experimentation, flexibility, and discovery. Offer the right balance of exploration (free-thinking, unstructured activation) with exploitation (structured activity focused on refinement, efficiency, productivity, implementation, and execution). Allow time for individual projects unregulated by managers.
  • Encourage incremental innovation, rather than radical innovation – start with small improvements to everyday processes, procedures, products, and services. By using a well-defined customer base as the main source of innovation, focus on solving problems for that particular customer pool. Organizations with a strong customer focus have shown to be more innovative and successful.
  • Individual characteristics and styles matter. Hire individuals that are conscientious, open to new experiences, curious, and intuitive. They will need to be able to tolerate and embrace ambiguity and adapt accordingly – particularly those in leadership and management roles.
  • Acknowledge the creative process. The creative process makes setting deadlines and providing performance feedback more difficult. It’s important to acknowledge that performance management will need to be more flexible as a result.
  • Make creativity and innovation an organizational value and performance objective.  Set goals for creativity and innovation for each employee.  Make it part of other performance criteria on which the employees are assessed.
  • Support innovation in all facets of the organization and not just one department, such as research and development. Provide resources for innovation to all departments.
  • Eliminate barriers to creativity and innovation.  These could be strict and restrictive rules, guidelines, policies, or norms that contradict the goals of creativity.  It could also include unsupportive managers and supervisors. The organizations that innovate best have managers and leaders who provide unconditional support for creativity.
  • Provide moderate levels of employee autonomy, which allow for optimal creativity.   Large levels of autonomy do not necessarily lead to optimal creativity as most employees need some form of structure to implement ideas. Too little autonomy and micromanagement, however, stifle creativity and lead to other adverse effects.
  • Reward new and successful ideas. Rewards do not have to be large, or even monetary, but they should be meaningful. Do not provide rewards that impede creativity as this communicates a contradictory message.
  • Stick to a vision. Ensure that all creative efforts and ideas are focused on a shared, common vision. Efforts and ideas should not stray away from the core mission and purpose of the organization.
  • Use diversity. Create diverse teams in terms of education, knowledge, and demographics. Diversity of thought leads to greater innovation.
  • There may be positions within organizations that do not require innovation.  Regardless, organizations can employ the use of a simple method called proactive creativity – a method in which a worker identifies a work-related problem and identifies ways and strategies to solve it. This has been shown to be a successful practice among production workers at manufacturers and nurses in healthcare.  All employees can be engaged in solving work-related problems creatively and with the customer’s interest in mind, even if their jobs do not require a creative mindset.

Perhaps your organization’s unique demands and problems could actually be the “entry-way” to a transformation in how your organization conducts its business. Try some creativity yourself, exploring how employee innovation and ideas can change the way your organization operates and meets customer needs. The results could not only impact your bottom line, but may improve your employees’ engagement and morale as well.

For some innovative workplace ideas, check out this year’s NorthCoast 99 Innovation Award Winner, Intuit Real Estate Solutions.

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Bledow, R., Frese, M., Anderson, N., Miriam, E., and Farr, J. (2009). A dialectic perspective on innovation: Conflicting demands, multiple pathways, and ambidexterity. Industrial and Organizational Psychology: Perspectives on Science and Practice. 2:3. Wiley & Sons.

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3 Responses to The Keys to Creating an Innovative Organization

  1. Pingback: Posts about diversity in the workplace (best posts combined for review) as of September 15, 2009 | Discrimination Law News

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  3. DennisVega says:

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