Adapting and Innovating

4/8/2021 Adapting and Innovating | Boundless Management
Boundless Management
Organizational Culture and Innovation
Adapting and Innovating
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Bene ts of Innovation
Innovation may be linked to positive changes in e ciency, productivity,

quality, competitiveness, and market share, among other factors.
LEARNING OBJECTIVES
Identify the organizational bene ts derived through enabling

internal innovation
KEY TAKEAWAYS
Key Points
Innovation is the development of customer value

through solutions that meet new needs, unarticulated
needs, or existing market needs in unique ways.
Innovative employees increase productivity by creating

and executing new processes which in turn may in-
crease competitive advantage and provide meaningful

di erentiation.
Managers who promote an innovative environment can

see value through increased employee motivation, cre-
ativity, and autonomy; stronger teams; and strategic rec-
ommendations from the bottom up.
Clarity about and understanding of roles, increased re-

sponsibilities, strategic partnerships, senior manage-
ment support, organizational restructuring, and invest-
ment in human resources can all enrich organizational
culture and innovation.
Key Terms
e ciency: The extent to which a resource, such as

electricity, is used for the intended purpose; the ratio of
useful work to energy expended.
productivity: The rate at which goods or services are

produced by a standard population of workers.
innovation: A change in customs; something new and

contrary to established customs, manners, or rites.
De ning Innovation
Innovation is the development of customer value through solutions that

meet new, unde ned, or existing market needs in unique ways. Solutions
may include new or more e ective products, processes, services, tech-
nologies, or ideas that are more readily available to markets, govern-
ments, and society.
Innovation is easily confused with words like invention or improvement.

They are, however, di erent terms. Innovation refers to coming up with a
better idea or method, or integrating a new approach within a contextual
model, while invention is more statically about creating something new.
Innovation refers to to nding new ways to do things, while improvement
is about doing the same thing more e ectively.
Organizational Bene ts of Innovation
From an organizational perspective, managers encourage innovation be-

cause of the value it can capture. Innovative employees increase pro-
ductivity through by creating and executing new processes, which in turn
may increase competitive advantage and provide meaningful di erentia-
tion. Innovative organizations are inherently more adaptable to the exter-
nal environment; this allows them to react faster and more e ectively to
avoid risk and capture opportunities.
From a managerial perspective, innovative employees tend to be more

motivated and involved in the organization. Empowering employees to
innovate and improve their work processes provides a sense of auton-
omy that boosts job satisfaction. From a broader perspective, empower-
ing employees to engage in broader organization-wide innovation cre-
ates a strong sense of teamwork and community and ensures that em-
ployees are actively aware of and invested in organizational objectives
and strategy. Managers who promote an innovative environment can
see value through increased employee motivation, creativity, and auton-
omy; stronger teams; and strategic recommendations from the bottom
up.
Managers can accomplish this through providing top-down support to

employees, providing clear roles and responsibilities while allowing indi-
viduals the freedom to pursue these as they see t. Supporting the HR
and IT departments so that they can provide training and tools for higher
employee e ciency can contribute substantially to a culture of internal
innovation. This requires open-minded and motivational leaders in man-
agerial positions who are capable of steering employee e orts without
diminishing employee creativity.
Characteristics of Innovative Organizations
According to recent research, companies that make a commitment to in-

novation are exceptional performers in their respective industries.
LEARNING OBJECTIVES
Outline the critical success factors and characteristics of an

adaptable and innovative organizational culture
KEY TAKEAWAYS
Key Points
Being receptive to new business ideas means being re-

ceptive to the idea that mistakes are a necessary part of
the process.
Everyone in the business needs to keep an open mind

and develop the capacity to look at things with fresh
eyes.
It is likely that some successful innovations will result

from chance discoveries.
Managers must understand that employees too mired in

routine work and too criticized for trying new methods
will inherently fail to create innovations that may drive
organizational growth.
Key Terms

Many business experts argue that companies that make a substantial

commitment to innovation and entrench it deeply throughout their cul-
ture will perform exceptionally well. But how can innovation be facilitated
within the organizational framework? The following are some examples
of characteristics that lead to successful innovation.
Accept Mistakes as Part of the Process
A Minnesota Mining & Manufacturing researcher was looking for ways to

improve the adhesives used in 3M tapes that he discovered an adhesive
that formed itself into tiny spheres. At rst, it seemed as though his work
was a failure. However, the new adhesive was later used on Post-it notes
—a great innovation and business success for the company. Being re-
ceptive to new business ideas means being receptive to mistakes as a
necessary, and sometimes even crucial, part of the process.
Keep an Open Mind and Think Laterally
Possibilities for innovation exist everywhere. To realize them, everyone

in the business needs to keep an open mind and develop the capacity to
look at things with fresh eyes.
The classic example of a company that completely transformed itself as

a result of lateral thinking is the Finnish company Nokia, whose original
core business was wood pulp and logging. When the collapse of com-
munism opened the Russian market to the west, Nokia’s core business
was seriously threatened by cheaper imports from Russia’s seemingly
limitless forests. In the deep recession of the early 1990s, Nokia’s man-
agement concluded that the only real competitive advantage they re-
tained was a very e cient communications system developed in the
1970s that helped them keep in touch with their remote logging opera-
tions. That single realization transformed the company into one of the
world’s most successful vendors of communications equipment.
Nokia cell phone: Nokia successfully transformed itself from a logging

company to an electronic-communications company through innovation.
Managerial Implications
As is usually the case, these principles are easier said than done. Man-
agers must carefully consider what type of work environment they
project for their subordinates. Managers must understand that employ-
ees too mired in routine work and who are criticized for trying new meth-
ods will inherently fail to create innovations that may drive organizational
growth. There is therefore a balancing act between enabling employees
to try new things and take risks vs. ensuring that tasks are completed on
time with reasonable success.
Types of Innovation
There are three main modes of innovation: entrepreneurial value-based,

technology-based, and strategic-re exive.
LEARNING OBJECTIVES
Outline a categorical overview of the potential ways in which

innovation can be pursued and identi ed.
KEY TAKEAWAYS
Key Points
The entrepreneurial method of innovation is one in

which change is initiated by an individual’s actions and
drive to create a business venture of adaptation.
Technology-based functional innovation occurs when

the development of new technology drives innovation.
The strategic -re exive mode describes innovation that

springs from individuals’ interactions with their organi-
zation ‘s common values and goals.
Other types of innovation include: incremental, architec-

tural, generational, manufacturing, nancial, and
cumulative.
Key Terms

In business and economics, innovation is the catalyst to growth.

Fuglsang and Sundbo (2005) suggest that there are three modes of in-
novation. The rst is an entrepreneurial value-based method where
change is initiated by an individual’s actions. The second is a technol-
ogy-based functional mode in which the development of new technol-
ogy drives innovation. The third is a strategic-re exive mode in which in-
novation results from individual’s interactions with their organization’s
set of common values and goals. The following graphic provides an ex-
ample of the innovation process.
Entrepreneurial Innovation
The innovation dimension of en-

trepreneurship refers to the pur-
suit of creative or novel solutions
to challenges confronting a rm.
These challenges can include de-
veloping new products and ser-
vices or new administrative tech-
niques and technologies for per-
forming organizational functions Innovation process: Innovation
involves continuous improvement
(e.g., production, marketing, and throughout phases of a
sales and distribution). development program. Phases can
be iterative and recursive (meaning
that they do not proceed linearly
from one to the next; rather, earlier
Technological Innovation phases can be returned to for
further improvement as needed).
Technological innovation takes Such phases include market
analysis and consumer research,
place when companies try to gain which progress to design and
a competitive advantage either prototyping, after which follow
naming and packaging design and
by reducing costs or by introduc- ultimately retail and production
ing a new technology. Technolog- support.
ical innovation has been a hot
topic in recent years, particularly when coupled with the concept of dis-
ruptive innovation. Disruptive innovation is usually a technological ad-
vancement that renders previous products/services (or even entire in-
dustries) irrelevant. For example, the smartphone disrupted landlines,
Net ix made Blockbuster obsolete, and mp3s have marginalized CD
players.
Strategic Innovation
The strategic-re exive mode of innovation is the most e ective mode for
change and innovation. While technological innovation is clear and easy
to de ne, strategic innovation is inherently intangible and organizational
in nature. Strategic innovation pertains to processes: how things are
done as opposed to what the end product is. Strategic changes can be
disruptive but are more often incremental. Incremental innovation is the
idea that small changes, when e ected in large volume, can rapidly
transform the broader organization.
Walmart’s “Hub and Spoke” distribution model is a classic example of

strategic innovation. Walmart succeeded thanks to process e ciency
enabled via innovative operational paradigms and distribution strategies.
By utilizing a maximum e ciency warehousing and distribution model,
re ned over and over again incrementally for improvement, Walmart has
sustained a competitive advantage for decades.
Other Applications of Innovation
Generational innovation involves changes in subsystems linked to-

gether with existing linking mechanisms.
Architectural innovation involves changes in linkages between ex-

isting subsystems.
Incremental innovations improve price/performance advancement

at a rate consistent with the existing technical trajectory. Radical
innovations advance the price/performance frontier by much more
than the existing rate of progress.
Manufacturing process innovation refers to all the activities re-

quired to invent and implement a new manufacturing process.
Cumulative innovation is any instance of something new being cre-

ated from more than one source. Remixing music is a direct exam-
ple of cumulative innovation.
Financial innovation has brought many new nancial instruments

with pay-o s or values depending on the prices of stocks. Exam-
ples include exchange-traded funds (ETFs) and equity swaps.
Speed of Innovation
Companies compete to adapt their products and services to incorporate

new innovations rst.
LEARNING OBJECTIVES
https://courses.lumenlearning.com/boundless-management/chapter/adapting-and-inno… 10/27
Recognize the challenge inherent in adopting new ideas and

the subsequent considerations pertaining to the speed of pur-
suing them.
KEY TAKEAWAYS
Key Points
Speed of innovation can pose a major challenge for or-

ganizations responding to external change.
Pro ts depend on speed of innovation and the ability to

attract customers. Big corporations used to dominate,
but now industry leaders are often small, highly exible
groups that come up with great ideas, build trustworthy
branding for themselves and their products, and market
them e ectively.
A rst-mover in a given innovation captures the obvious

advantage of tapping into a new market before the
competition. This can also allow the rst-mover to cap-
ture the new technology for its own brand.
First-movers encounter high scal risks in integrating a

new product or services into their distribution, and fail-
ure often means sunk costs. Late-comers to the game
can simply observe the success or failure of other com-
petitors and make a more informed (and less risky)
decision.
Key Terms

Cannibalization: The reduction of sales or market share

for one of your own products by introducing another.
The best ideas should implemented as quickly as possible—not just by

the idea generator but also by others who have a di erent viewpoint. It
is imperative that the idea is honed and re ned while it is still fresh. For
example, an idea for a new product might start out as a crude model
built from polystyrene, foam, or cardboard that will evolve quickly into a
more professional prototype.
Product Innovation Approach: Innovation involves continuous improvement

throughout phases of a development program. Phases can be iterative and
recursive (meaning that they do not proceed linearly from one to the next;
rather, earlier phases can be returned to for further improvement as
needed). Such phases include market analysis and consumer research,
which progress to design and prototyping, after which follow naming and
packaging design and ultimately retail and production support.
Robert Reich observes that pro ts in the old economy came from econo-
mies of scale, i.e., long runs of almost identical products. Thus we had
factories, assembly lines, and industries. Today, pro ts come from speed
of innovation and the ability to attract and keep customers. Therefore,
while the big winners in the old economy were big corporations, today’s
big winners are often small, highly exible groups that devise great
ideas, develop trustworthy branding for themselves and their products,
and market these e ectively. The winning competitors are those who are
rst at providing lower prices and higher value through intermediaries of
trustworthy brands. To keep the lead, however, these companies have to
keep innovating lest they fall behind the competition.
The Bene t of Moving First
Speed of innovation poses a major challenge for organizations respond-

ing to external change. A high rate of change can be seen in the short-
ening of product life cycles, increased technological change, increased
speed of innovation, and increased speed of di usion of innovations.
These are key challenges for organizations, as the pro t generation of
new ideas must t into a slimmer chronological window—thus underlin-
ing the great value of being a rst-mover.
A rst-mover in a given innovation captures the obvious advantage of

tapping into a new market before its competitors. This also sometimes
allows the rst-mover to identify its brand with the new technology (i.e.,
saying “Google it” as shorthand for online search or calling any and all
mp3 players an iPod). These branding hurdles must be tackled by any
competitor following in the footsteps of the rst-mover.
However, speed is not everything. First-movers encounter serious disad-

vantages, the most notable of which are freeloaders. First-movers also
encounter high scal risks in integrating a new product or services into
their distribution, and failure often means sunk costs. Latecomers to the
game can simply observe the success or failure of other competitors and
make more informed (and less risky) decisions about entering the market
segment. Similarly, rst movers must carefully consider cannibalization—
where their new innovative products steal sales from their older prod-
ucts still on store shelves. Speedy innovation and moving rst requires
great foresight, planning, and managerial skill to execute e ectively to
minimize risks.
Sustainability Innovation
Sustainability innovation combines sustainability (endurance through re-

newal, maintenance, and sustenance) with innovation.
LEARNING OBJECTIVES
Describe how organizational culture adds value by generating

an innovative approach to sustainability issues
KEY TAKEAWAYS
Key Points
Sustainopreneurship describes using creative organiz-

ing to solve problems related to sustainability to in turn
create social and environmental sustainability as a
strategic objective and purpose.
Solving sustainability-related problems is the be-all and

end-all of sustainability entrepreneurship.
Passively heated houses, solar cells, organic food, fair

trade products, hybrid cars, and car sharing are all ex-
amples of sustainability innovations.
Key Terms
sustainability: Con guring human activity so that soci-

eties are able to meet current needs while preserving
biodiversity and natural ecosystems for future
generations.

Sustainability is the capacity to endure through renewal, maintenance,

and sustenance (or nourishment), which is di erent than durability (the
capacity to endure through resistance to change). Innovation is the cre-
ation of new value through the use of solutions that meet new, previ-
ously unknown, or existing needs in new ways. Innovation should be
pursued with sustainability in mind as a critical strategic objective, as the
integration of new business ideas with the broader community and envi-
ronment is central to long-term success.
Sustainability Entrepreneurship
“Sustainopreneurship” describes using creative business organizing to

solve problems related to sustainability to create social and environmen-
tal sustainability as a strategic objective and purpose, while at the same
time respecting the boundaries set in order to maintain the life support
systems of the process. In other words, it is “business with a cause,”
where the world’s problems are turned into business opportunities for
deploying sustainability innovations. Sustainopreneurship is en-
trepreneurship and innovation for sustainability.
This de nition is highlighted by three distinguishing dimensions. The rst

is oriented towards “why” – a company’s purpose and motive in adopt-
ing sustainable entrepreneurship. The second and third re ect two di-
mensions of “how” the process is carried out.
Entrepreneurship consciously sets out to nd or create innovations

to solve sustainability-related problems.
Entrepreneurship moves solutions to market through creative

organizing.
Entrepreneurship adds sustainability value while respecting life

support systems.
Solving sustainability-related problems from the organizational frame is

the be-all and end-all of sustainability entrepreneurship. This means that
all three dimensions are simultaneously present in the process.
An example to provide context: Interface Global produces modular car-

peting. Sustainability is the core operating mission and vision of the
broader organization. Through greening their supply chain, minimizing
water use, cutting electric costs, reducing fuel costs through better distri-
bution, and a number of other innovative process improvements, Inter-
face Global produces high quality carpets at a lower cost and smaller en-
vironmental footprint. The company created a sustainable business strat-
egy through innovative thinking.
Social Innovation
Social innovation refers to new strategies, concepts, ideas, and organi-

zations that meet societal needs of all kinds.
LEARNING OBJECTIVES
De ne social innovation and the potential positive outcomes of

employing it within an organizational culture
KEY TAKEAWAYS
Key Points
Social innovation can refer to social processes of inno-

vation, such as open source methods and techniques.
Social innovation can also refer to innovations that have

a social purpose, like microcredit or distance learning,
and can be related to social entrepreneurship.
Social innovation can take place within the government

sector, the for-pro t sector, the nonpro t sector (also
known as the third sector), or in the spaces between
them.
Key Terms
social: Of or relating to society.

social capital: The value created by interpersonal rela-

tionships with expected returns in the marketplace.
Social innovation refers to new strategies, concepts, ideas, and organi-

zations that extend and strengthen civil society or meet societal needs
of all kinds—from working conditions and education to community devel-

opment and health.
Organizations, both for for-pro t and nonpro t, bene t enormously from

incorporating social innovation into their operations. Giving back to to
the community and empowering the individuals you work with and sell to
(i.e., stakeholders) improves employee morale, grows wealth for poten-
tial customers, builds a strong brand, and underlines social responsibility
and high ethical standards as central to the organizational character.
Example of a social innovation program: A health camp conducted for

villagers as part of the Social Innovation Program at SOIL, in partnership with
the Max India Foundation.
The term “social innovation” has overlapping meanings. Sometimes it

refers to social processes of innovation like open-source methods and
techniques. Other times it refers to innovations that have a social pur-
pose, like microcredit or distance learning. The concept can also be re-
lated to social entrepreneurship (entrepreneurship is not necessarily in-
novative, but it can be a means of innovation). On occasion, it also over-
laps with innovation in public policy and governance. Social innovation
can take place within the government sector, the for-pro t sector, the
nonpro t sector (also known as the third sector), or in the spaces be-
tween them. Research has focused on the types of platforms needed to
facilitate such cross-sector collaborative social innovation.
The Process of Social Innovation
Social innovation is often an e ort of mental creativity that involves u-

ency and exibility across a wide range of disciplines. The act of social
innovation in a sector encompasses diverse disciplines within society.
The social innovation theory of “connected di erence” emphasizes
three key dimensions of social innovation:
. First, it usually produces new combinations or hybrids of existing

elements, rather than wholly new.
. Second, it cuts across organizational or disciplinary boundaries.
. Last, it creates compelling new relationships between previously

separate individuals and groups. Social innovation is currently
gaining visibility within academia.
Examples of Social Innovation
There are many examples of social innovation making a meaningful dif-

ference across the globe—from huge organizations like the Bill and
Melinda Gates Foundation funding multinational initiatives to small
groups of community leaders collecting money to help buy new high
school textbooks. Some speci c examples include:
The University of Chicago sought to develop social innovations

that would address and ameliorate the immense problems caused
by poverty in a largely immigrant city around the turn of the 20th
century.
Prominent social innovators include Bangladeshi Muhammad

Yunus, the founder of Grameen Bank, who pioneered the concept
of microcredit for supporting innovators in multiple developing
countries in Asia, Africa, and Latin America.
Stephen Goldsmith, former Indianapolis mayor, engaged the pri-

vate sector in providing many city services.
Commercializing Innovative Products
Commercialization is the process or cycle of introducing a new product

or production method into the market.
LEARNING OBJECTIVES
Examine the three key aspects of the commercialization

process and outline the four key questions that must be an-
swered prior to the commercialization of a new and innovative
product
KEY TAKEAWAYS
Key Points
The actual launch of a new product is the nal stage of

new product development. This is when the most
money is spent for advertising, sales promotion, and
other marketing e orts.
It is important to emphasize that the commercialization

strategy and feasibility should have been considered
and approved long before the actual execution of com-
mercialization – as the time, e orts and development
costs have already largely been incurred.
Organizations must consider who they are selling to

and where they are selling when determining the most
e ective process for commercialization.
The primary target consumer group includes innova-

tors, early adopters, heavy users, and opinion leaders.
Their buy-in will ensure adoption by other consumers in
the marketplace during the product growth period.
Key Terms
commercialization: The act of positioning a product to

make a pro t.
early adopter: A person who begins using a product or

service at or around the time it becomes available.
Commercialization is often confused with sales, marketing, or business

development. In the context of innovation, commercialization is the
process of introducing a new product or service to the public market. In-
novations are de ned as new products or services that improve upon
their predecessors, and the process of integrating them into the current
market is a critical component of successfully bringing them to market.
Great innovations are not always brought to market due to a lack of fea-
sibility or poor planning. Long-term planning is crucial in the commercial-
ization process because this is when the most money will be spent—on
advertising, sales promotions, and other marketing e orts after the
launch of a new product.
Product innovation approach: Innovation involves continuous improvement

throughout phases of a development program. Phases can be iterative and
recursive (meaning that they do not proceed linearly from one to the next;
rather, earlier phases can be returned to for further improvement as
needed). Such phases include market analysis and consumer research,
which progress to design and prototyping, after which follow naming and
packaging design and ultimately retail and production support.
The Commercialization Process
The commercialization process has three key aspects:
Carefully select, based upon comprehensive market research,

which products can be sustained nancially in which markets for
long-term success.
Planning for various phases and/or stages in the commercialization

process is key. Consider geographic distribution, di erent demo-
graphics, etc.
Finally, identify and involve key stakeholders early, including

consumers.
Key Strategic Questions
When bringing a product to market, a number of key strategic questions

need to be answered satisfactorily long before substantial costs are in-
curred for commercialization. These questions are simple to ask but
complex to answer, and business analysts and market researchers will
spend a considerable amount of time approaching them via research
models and careful nancial consideration.
When: The company has to time introducing the product perfectly.

If there is a risk of cannibalizing the sales of the company’s other
products, if the product could bene t from further development, or
if the economy is forecasted to improve in the near future, the
product’s launch should be delayed. Similarly, many items are sea-
sonal (e.g., fashion) and so should be timed appropriately to maxi-
mize revenue.
Where: The company has to decide where to launch its products.

This can be in a single location, in one or several larger regions, or
in a national or international market. This decision will be strongly
in uenced by the company’s resources; larger companies can
reach broader geographic audiences. It is important to keep in
mind where the early adopters will be and where competitive gaps
may exist. In the global marketplace, this question is increasingly

complex.
To whom: The primary target consumer group will have been iden-
ti ed earlier through research and test marketing. This primary
consumer group will include innovators, early adopters, heavy
users, and opinion leaders. Their buy-in will ensure adoption by
other consumers in the marketplace during the product growth
period.
How: The company has to decide on an action plan for introducing

the product by implementing these decisions. It has to develop a
viable marketing mix and create a respective marketing budget.
While these questions are key considerations in the commercialization

process, remember that they should have been answered long before
the commercialization stage. After all, if the need is not su ciently wide-
spread or the market not su ciently developed, there is little reason to
have pursued a given innovation in the rst place.
Fostering Innovation
O ering employees challenges, freedom, resources, encouragement,

and support can help them to innovate.
LEARNING OBJECTIVES
Outline how to encourage creativity, participation and innova-

tion through e ective management
KEY TAKEAWAYS
Key Points
People perform best when they are driven by inspira-

tion and are encouraged to push their boundaries and
think outside the box.
Teamwork enhances people’s strengths and lessens

their individual weaknesses.
One of the most powerful tools for promoting employee

creativity and innovation is recognition.
Ultimately, in developing a culture of innovation you

want employees to feel comfortable experimenting and
o ering suggestions without fear of criticism or punish-
ment for mistakes.
Key Terms

creativity: The quality or ability to create or invent

something.
Strategies capable of producing innovation require resources and en-

ergy; it is therefore necessary to discuss in your business plan the orga-
nizational structures and practices you will put in place to encourage and
support innovation. Amabile (1998) points to six general categories of
e ective management practices that create a learning culture within an
organization:
. Providing employees with a challenge
. Providing freedom to innovate
. Providing the resources needed to create new ideas/products
. Providing diversity of perspectives and backgrounds within groups
. Providing supervisor encouragement
. Providing organizational support
Innovation: Cartoon shows the challenge of translating innovation

(designers) to economic success.
Create a Culture of Innovation
You will likely nd that you need to generate hundreds of ideas to nd

ten good ones that will create value for your organization. This is part of
the creative brainstorming process, and it should be encouraged. It
should be the responsibility of every individual in the organization to
come up with ideas, not just the founder or key sta . Here are some sug-
gestions to encourage the ow of ideas.
Encourage Creativity
Encouraging creativity helps keep sta happy. If they think something is

important and has the potential to create a nancial payo for the com-
pany, let them follow their idea. People perform best when they are
driven by inspiration and encouraged to push their boundaries and think
outside the box. But employees cannot do this when they are being mi-
cromanaged. Employees need to feel independent enough to own their
innovative thinking and to pursue the ideas they are passionate about. In
fact, if management e ectively fosters a creative and open environment,
innovation will happen naturally.
Encourage Participation
Teamwork enhances people’s strengths and mitigates their individual

weaknesses. E ective teamwork also promotes the awareness that it is
in everyone’s best interests to keep the business growing and improv-
ing. Creating a participation-based environment means creating smart
teams, encouraging open dialogue, and minimizing authority. Criticism is
productive and should be encouraged, but it must be used
constructively.
Provide Recognition and Rewards
One of the most powerful tools for promoting employee creativity and
innovation is recognition. People want to be recognized and rewarded
for their ideas and initiatives, and it is a practice that can have tremen-
dous payo for the organization. Sometimes the recognition required
may be as simple as mentioning a person’s e ort in a newsletter. If a
sta member comes up with a really creative idea, mention them in the
company newsletter or on the news board even if their idea can’t be im-
plemented immediately. Make it clear that compensation and promotions
are tied to innovative thinking.
Enable Employee Innovation
You may have an innovative culture in your organization, but you also
need to familiarize sta with some of the hallmarks of continuing innova-
tion. For example, you could educate employees at regular training ses-
sions on topics such as creativity, entrepreneurship, and teamwork. Each
session might conclude with the assignment of an exercise to be per-
formed over the next few working weeks that will consolidate lessons
learned. Your aim here is to give employees a taste of innovation so they
will embrace the process.
Other Motivators
Pro t-sharing and bonuses
Days o
Extra vacation time
Encourage employees to take advantage of co ee breaks, lunch breaks,

and taxi rides. Often great ideas that can lead to innovation will happen
outside the places where we expect them to happen. If it’s hard to get
sta together for common informal breaks, consider taking them out for
an informal meal where you can encourage creative discussion about
work. Also be sure to encourage laughter at meetings because laughter
is an e ective measure of how comfortable people feel about express-
ing themselves.
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4/8/2021 Adapting and Innovating | Boundless Management

Organizational Culture and Innovation

Innovation may be linked to positive changes in e ciency, productivity,

Identify the organizational bene ts derived through enabling

Innovation is the development of customer value

Innovative employees increase productivity by creating

crease competitive advantage and provide meaningful

Managers who promote an innovative environment can

Clarity about and understanding of roles, increased re-

e ciency: The extent to which a resource, such as

productivity: The rate at which goods or services are

innovation: A change in customs; something new and

Innovation is the development of customer value through solutions that

Innovation is easily confused with words like invention or improvement.

Organizational Bene ts of Innovation

From an organizational perspective, managers encourage innovation be-

From a managerial perspective, innovative employees tend to be more

Managers can accomplish this through providing top-down support to

Characteristics of Innovative Organizations

According to recent research, companies that make a commitment to in-

Outline the critical success factors and characteristics of an

Being receptive to new business ideas means being re-

Everyone in the business needs to keep an open mind

It is likely that some successful innovations will result

Managers must understand that employees too mired in

innovation: A change in customs; something new and

Many business experts argue that companies that make a substantial

Accept Mistakes as Part of the Process

A Minnesota Mining & Manufacturing researcher was looking for ways to

Keep an Open Mind and Think Laterally

Possibilities for innovation exist everywhere. To realize them, everyone

The classic example of a company that completely transformed itself as

Nokia cell phone: Nokia successfully transformed itself from a logging

There are three main modes of innovation: entrepreneurial value-based,

Outline a categorical overview of the potential ways in which

The entrepreneurial method of innovation is one in

Technology-based functional innovation occurs when

The strategic -re exive mode describes innovation that

Other types of innovation include: incremental, architec-

innovation: A change in customs; something new and

In business and economics, innovation is the catalyst to growth.

The innovation dimension of en-

Walmart’s “Hub and Spoke” distribution model is a classic example of

Other Applications of Innovation

Generational innovation involves changes in subsystems linked to-

Architectural innovation involves changes in linkages between ex-

Incremental innovations improve price/performance advancement

Manufacturing process innovation refers to all the activities re-

Cumulative innovation is any instance of something new being cre-

Financial innovation has brought many new nancial instruments

Companies compete to adapt their products and services to incorporate

Recognize the challenge inherent in adopting new ideas and

Speed of innovation can pose a major challenge for or-

Pro ts depend on speed of innovation and the ability to

A rst-mover in a given innovation captures the obvious

First-movers encounter high scal risks in integrating a

innovation: A change in customs; something new and

Cannibalization: The reduction of sales or market share

The best ideas should implemented as quickly as possible—not just by

Product Innovation Approach: Innovation involves continuous improvement

The Bene t of Moving First