Organisations that make creativity and innovation central to their existence survive and succeed in the long run.
In the 1800s, when New York’s streets were crammed with horse-drawn carriages, the city was threatened with an overwhelming horse manure problem. The city almost didn’t survive the ecological disaster, but out of the mire there was a positive result. The crisis led to the need to reset the clock through a massive new technological innovation — through the mass production of the new machine known as the ‘automobile’. The innovation was introduced just in the nick of time, but as a result anyone involved in the horse-and-buggy industry would have lost their income, if they hadn’t kept abreast of these changes.
The pace of change, not only in cities but also in organisations, is now so fast that it is essential to innovate to stay ahead. Theoretical physicist Dr Geoffrey West, who has studied the growth of cities and compared them to the growth of organisations, believes that innovation is critical for the survival of our civilisation. West believes that if you are going to have open cycles of growth (as in our current capitalist system), you must have innovation to support them. But he cautions that “There is a clock that’s getting faster and faster. And so you have to innovate faster and faster in order to avoid the collapse,” warns Dr West.
By examining the life and death cycles of organisations, Dr West has noted that there often needs to be a point where critical intervention is necessary if an organisation wants to keep on innovating and, in the long run, survive. For large corporations, the growth typically stops at the same value — about half a trillion dollars — or 40 years or three generations. Up to this point, the sigmoidal curve indicates that although sales might have been steadily increasing, the ratio of profit to sales has been steadily decreasing.
It is usually only at the point that an organisation first sees the writing on the wall that they cut back on spending on innovation, for example limiting research and development budgets, and yet this is exactly the time when it is most needed. The lack of foresight organisations usually demonstrate at this critical stage in their life cycle is what ultimately kills them. When companies allow themselves to be dominated by bureaucracy and administration rather than creativity and innovation, as West says is inevitable, they are suffocated by the essentials.
Because innovation emerges out of the structural tension between the way things are and the way we imagine things could be, the gap between what people can do today and what they want to be able to do is driving change beyond anyone’s expectations.
Continued innovation, therefore, needs to be an essential part of the DNA of your organisation.
Innovation in the DNA
In the past, companies valued tight top-down controls. Now, though, it is most important to mobilise resources for innovation and entrepreneurship. Organisations need to empower people right through to their lower levels because the freshest ideas often come from the brightest young minds—people who are just starting out in their careers.
As Christopher A. Bartlett explains, “There is a shift to a much more empowered organization in which you have to shift the power away down to people who have access and who understand technology, to those closest to the customer and able to develop the ideas.” Mr Barlett is the Thomas D. Casserly Jr. Professor of Business Administration at Harvard Business School.
Traditional hierarchy is well suited for improving efficiency, but not for innovating or adapting to change. And the problem is there are multiple industries facing radical change. See article “More companies are adopting a flat working structure.”
Steve Ballmer, the former CEO of Microsoft’s 2007 comment about his company's strategy to “systematize innovation” did not end up proving too successful, as they now struggle to regain market share.
This approach to innovation was challenged by Alan Noble, the Engineering Director at Google Australia and New Zealand. “What Ballmer presented was pretty much a top-down driven response, almost reactive in that he said. We need to figure out how to innovate better,” observes Mr Noble.
If innovation is “so central to your culture, there's nothing to systematize,” he adds. “It's there, it's like the air you breathe — you innovate to survive… it's just what you do.” See full article “Microsoft needs to let staff innovate: Google.”
Whilst this might sound like a flippant comment, Google has made a science out of creating innovate environments, including the coffee shop where they even look at the food people eat and places they sit. The cafeterias are designed to make food social rather than fast. This all fosters innovation allowing the staff at the bottom of the food chain bring fresh ideas to the table. Literally! See more about how Google redesigned their coffee shop (article)
The critical question is - how can we make innovation central to our culture as pervasive as the air that we breathe?
Author: Gaia Grant is the Executive Managing Director of Tirian and author of “Who Killed Creativity And How Can We Get It Back?” Gaia is currently completing a Post Grad Masters of Science in Creative Thinking at the University at Buffalo, The State University of New York.