Innovation in an Organization Is Easier Said Than Done
Creativity and innovation are considered the sources of the competitive advantages for a company, as Higgins (1996, p. 374) predicted that managing innovation would become the most important organizational task of the future. Therefore, presently, the management attention has focused primarily on how organizations generate creative ideas and carry out innovation projects successfully.
However, majority of managers are finding that creativity and innovation in an organization is easier than said. They are finding that in practice the creative ideas and new development activities fail to achieve their anticipated level of success and some of these projects actually end into failure (Belbin, 1981, p. 31). Therefore, the question arises what are the main factors that contribute to the failure of creativity and innovation in the companies.
The paper looks at some of these issues, including management roles, team management, and internal and external organizational factors.
Creativity and innovation require the needs to establish an association between customers' needs and the company's strategy in developing products that satisfy those needs. This linkage must be not only better and stronger, but also sustainable over time. Establishing and maintaining such linkage in order to best satisfy customers' needs through offerings is what defines creativity and innovation (Couger, 1995, p. 84). Implementing an innovation strategy involves pursuing two basic goals: improving product/service quality with respect to customers and competitors, and improving the company's technological level (Gates, 1995, p. 53).
The general inclination for many firms is that they can create ideas, but at the practical level managers in these companies never try to reason and see the viability of these ideas (Morgan, 1997, pp. 3-5). Furthermore, innovation that reflects turning ideas into products, services and processes is never realized in these companies. In other words, despite the importance of creativity and innovation, companies find it mostly difficult to maintain a steady state of creativity and innovation. The main reasons for this failure are described as below:
Creativity and innovation require top management support and participation. This means that senior leaders take an interest in encouraging creativity and innovation and help the project-team secure needed funding and other resources, but they do not micromanage the project. However, in many companies, management is reluctant in taking personal responsibilities and does not usually take a leadership role in developing creativity and sponsoring innovation. Without leadership, failure is almost inevitable (Belbin, 1981, pp. 56-58).
Many firms are generally unprepared to tackle complex problems, for which the decision-making process requires, more than technical skills, experience or sound business sense, it is rather the ability to conduct far-reaching, systematic analysis of data and events for the most part that leads to creativity and innovation (Hall, 1996, p. 118). Traditionally, the major difficulties facing many companies with regard to strategic management of creativity and innovation involve their lack of managerial skills, as management in general has paid less attention to technologies as a strategic variable and the effect of qualified competitors in creativity and innovation (Hammer and Champy, 1996, pp. 45-49).
Often, the difficulty in obtaining the information necessary to assessing one's own competitive situation and conducting scenario analyses is invoked as the main factor keeping many firms from performing strategic planning of innovation. The lack of planning is a real constraint on management in generating and testing creative ideas and taking some of these ideas to the innovation. Another related difficulty that is also more apparent than real involves the fact that management in companies do not collect information systematically, thereby rendering an incomplete understanding of market evolution.
A concrete limiting factor in creativity and innovation involves the highly complex nature of the phenomena to be managed. Moreover, there is the related problem of defining clear, unequivocal objectives, and therefore evaluating the impact of the possible strategic alternatives on enterprise performance. So, even the best-prepared manager, when faced with the multifarious complexity of innovation phenomena, may lose sight of the true goals of the decision-making process. Moreover, manager in many companies do not systematically follow the complex task of information processing, which opens up a myriad new alternatives, corresponding to as many as possible scenarios, and thereby further amplifies the already exacting number of interrelations and their consequent effects on overall objectives.
Employing a strong project team is critical for success in creativity and innovation. Using cross-functional teams is important because creativity and innovation spans many functional disciplines including engineering, marketing, manufacturing, legal, and finance. It is unreasonable to assume that one or two people possess the requisite skills to cover all these diverse areas. An effective innovation team must not only have adequate representation from different functional areas, but also the team members should possess sufficient knowledge, skills, and abilities to get the job done. However, many companies do not take adequate care in the building of such teams (Gates, 1999, p. xxii). Several companies often believe that one or two experts in the middle management can generate new ideas that will eventually lead into innovations. In reality, this kind of reasoning is faulty because creativity requires the accumulation of diverse ideas and turning those ideas into the innovation.
To carry out creativity and innovation, a project team needs to match its strategic approach to the situation at hand. It would be foolish to believe in "one size fits all innovation." Different strategies are needed for different kinds of innovation types, including market-based, technology-based, process-based, speed-based, and learning-based strategies.
One of the problems in creativity and innovation also stems from the bureaucracy. The hierarchical top-down and rule-based administration created competitive advantage in the past, but these strategies have been slow in encouraging creativity and continuous innovation that are the keys today. That is the reason that the teamwork and empowerment are seen almost everywhere as the road to success. Flexible organizations require that people participate beyond their jobs. Everyone needs to understand and contribute creatively to the overall purpose of the organization. That kind of participation partly threatens traditional relationships; therefore, in many companies top management only provides lip services to the creativity and innovation.
Bureaucracy operates by dividing work into small pieces and building walls between them. But the empowerment breaks the bureaucratic mold. Instead of increasing autonomy, it increases the ability to work together effectively across walls. The organizations that are starting to move beyond bureaucracy can pull together quickly people with different skills and knowledge, from different parts of the system, into effective temporary teams working on a task (Larson and Christensen, 1993, pp. 13-15).
In the new environment, employees can no longer rely on informal networks as a basis for trust. They are required to pay attention to their own needs rather than counting on the company to take care of them (Cleland, 1996, pp. 45-51). The way to get employees to work together in this new environment is to focus on the organization's purpose. The purpose is a complex statement of the organization's challenges and objectives over a three to five-year period. The limited time frame keeps the purpose concrete, but is long enough to provide a challenge worth caring about. People who understand the organization's purpose can talk knowledgeably about competitive positioning, comparative advantages and strategic objectives (Hammer and Champy, 1996, pp. 83)
Dynamic companies tell their managers the full picture of competitive problems and make clear that promises of job security are no longer possible. The world therefore makes sense to them, even if it is not entirely pleasant (Langfield-Smith, 1992, p. 351). High levels of participation are achieved, not through participative programs, but because an environment has been created in which understanding and criticizing the business direction are important to people's daily jobs. A flexible organization requires that people participate beyond their jobs. Everyone needs to understand and contribute creatively to the overall purpose of the organization. That kind of participation threatens managers in several companies, so in these companies carrying creativity and innovation often leads to failures (Hall, 1996, p. 116)
Internal and External Factors
Internal factors can also lead to the success or the failure of an innovation effort. The correct internal infrastructure includes having an appropriate organizational design using the right team structure, employing the correct team composition (the right personnel), capturing and using organizational knowledge, and implementing operational and managerial policies and procedures that stimulate innovation that include ways to secure the needed capital resources (Cleland, 1996, pp. 21). Also, the external factors such that economic, regulatory, social, political, and ecological variables that are beyond the control of a company directly affect the success and failure of creativity and innovation in a company. Industry variables are the forces that act upon the company over which it has limited control such as the competition and the supply chain also impact the success and failure of the creativity and innovation.
Concerning a company's ability to compete on the basis of creativity and innovation is the consideration that the more a product's performance features…