The role of culture in driving innovation


Recently I heard a veteran consultant, muse loudly that many of the large organizations and groups are struggling to innovate, despite significant efforts at developing a high performance / excellence culture.


As I look around, I see plenty of Indian business groups and companies that are running some excellent business. Many of them have invested in capabilities to make their business efficient and excellence programs run very deep in these organizations. The big business groups have at least a few companies that have won excellence awards like the Deming prize, JIPM award, etc.


Many of these groups have set ambitious growth agenda and engaged top consultants to develop growth strategies. The need for innovation is being keenly felt in every board room. Sadly, true innovation output from Indian companies is still limited to incremental and sustaining improvements, even if the organization has a record and culture of excellence.


To understand this conundrum, one has to understand that successful organizations can have very different cultures. In a HBR paper in 2018, Groysberg, Lee, Price and Cheng identified 8 different characteristics of culture. Groysberg et al examined culture along two dimensions, how people interact and how they respond to change. They identified 8 distinct cultural styles, Caring, Purpose, Learning, Enjoyment, Results, Authority, Safety and Order. A description of these styles is in the illustration below


Source: The Leaders Guide to Corporate Culture” published in HBR January 2018

It is quite possible to find that you have an organization that succeeds to excel in its business through a focus on results only, another takes an approach of creating a caring environment. Yet another may have purpose-oriented culture and another a sharp focus on authority.


In short you can succeed in your existing business with a culture that is specifically useful for the organization and one that works.


However, do all cultures work equally well for delivering innovation?


Authority and safety focused cultures will not have innovation flourish. The over emphasis on standardization and risk minimization in the safety culture is deterrent to any type of innovation. On the other hand, the hierarchical nature of authoritative organizations and the dominant personality culture present excludes all but innovation initiatives of the dominant leaders. Such authoritative organizations may still manage breakthrough innovation from acquisitions triggered by the leaders.


Organizations that are result oriented and focused on maintaining order, usually succeed with incremental innovation. Result oriented cultures do have positives such as fast decision making and goal orientation, but they also tend to have employees that are more comfortable with “certainty of achievement” and an aversion to high-risk innovation projects. The orderly culture on the other hand focusses on efficiency, civic mindedness and an over emphasis on rules, all of which are likely to stifle creativity and openness. Both these cultures may limit the organization to execute initiatives that are in the comfort zone, sustaining and efficiency innovations and stop them creating disruptive changes.


Caring culture enables an environment of collaboration and trust, are great enablers of both incremental innovation as well as exploring new opportunities for growth in horizon 2. Organization that have a culture of enjoyment similarly are well positioned to drive innovation as the environment of spontaneity, fun and openness encourage experimentation, challenging status quo etc.


Organizations that are disruptive innovators have a culture that is focused on achieving a larger purpose or on learning environment. Their emphasis on the long term and exploration are the ideal drivers of breakthrough thinking and disruptive innovations.


Interestingly, an organization can have more than one cultural style present, even if one of them is clearly dominant. This arises from the fact that you can have multiple leadership styles and a wide range of people personas. Magnus Penker and his team analysed vast amount of data in the InnoSurvey® database and found that how people interact can be correlated to personas and the response to change can be correlated to leadership style.


Groysberg et al, found that it is common to find organizations to have cultures that are adjacent to each other (refer the illustration above), but rarely do cultures that are apart in the map co exists.


For example, it would be common to find that a culture of authority and results coexist, but rarely would you find a culture of authority and purpose in the same organizations.


You would find that innovative organizations are have multiple cultures coexisting, result oriented culture, enjoyment, learning, purpose driven and even caring culture. On the other hand many start-ups that depend on just one culture, purpose driven or exploratory culture, may lack the result focus or orderly cultures that are necessary for executing business consistently.


As an organization, if you have sustained success in your existing business line, but are struggling to innovate (despite stated ambition of the board) the challenge probably lies in too narrow a culture. This is reflective of the personas you have in the organization and lack of diversity in leadership behavior.


We have observed that many organizations miss a few key personas; anthropologists, cross pollinators and experience architects. We also observe that leadership models create similar leadership personas. The result is a narrow cultural profile in the organization.


We find culture an extremely important lever to understand and explore the impact on innovation. You may have an excellent culture of excellence that delivers your existing business, but that might the biggest reason why your innovation efforts are not succeeding.


Do reach out to me for understanding the innovation culture of your organization.


Krishnan Naganathan

Krishnan is a leading innovation consultant and focuses on helping people and organizations innovate and build capabilities for innovation. He brings over 25 years of experience in the industry and consulting.

You can reach him by phone / WhatsApp: +919791033967 or

email: krishnan@thinkhorizonconsulting.com


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