Framework to assess a firm’s cultural readiness for Innovation

Introduction:

Example project.  Client will migrate all front and back office systems to a public cloud network, close 2 data centres and begin application rewriting and rebuilding.  Client also has a small weak union which does not have the power to obstruct these changes.  The following addresses cultural readiness for innovation, in the context of Client’s IT transformation.

Section 1:  Cultural framework readiness overview

This section will clarify what is meant by culture and then introduce a common framework which can be used to calibrate Client’s cultural readiness in relation to innovation.

1.1 Definition of culture:

A common perception of ‘culture’ is centred around a firm’s processes, beliefs, and the general way people within the firm perform tasks (Martins & Terblanche, 2003).  Schien summarized culture as a 5-step process:

“..(a) pattern of basic assumptions, (b) invented, discovered, or developed by given group, (c) as it learns to cope with its problems of external adaption and internal integration, (d) that has worked well enough to be considered valid and, therefore (e) is to be taught to new members as the correct way to perceive, think and feel in relation to those problems.” (Schien, 1990: 111)

By the above definition an organization’s culture is about the way the firm accomplishes its business objectives, responds to external stimuli and challenges; its mores and ethics; its belief systems; and how these unique characteristics give its employees an identity and energy to support the company’s mission. Creativity and innovation can therefore be regarded as closely related steps within the creative process; namely generating innovative ideas and then implementation.

1.2 Definition of Innovation:

Literature investigations imply that innovation is the implementation of a novel, and problem-solving idea.  The process of creating a product or service to resolve a problem, or to offer a new approach to resolve an issue, is accepted by practitioners and users and adopted as part of a change improvement (Schien, 1990). Many researchers believe that culture informs the process of innovation (Martins, 2000).

1.3 Framework readiness for innovation

There are many characteristics of ‘innovative’ firms.  Ulrich (1998), argues that agility, learning, skills development, knowledge and speed of responding to market demands and Client expectations, is vital.

“Constant change means organizations must create a healthy discomfort with the status quo, an ability to detect emerging trends quicker than the competition, an ability to make rapid decisions, and the agility to seek new ways of doing business. To thrive, in other words, companies will need to be in a never-ending state of transformation, perpetually creating fundamental, enduring change.” (Ulrich, 1998: 127)

Innovative culture can be viewed as a never-ending system of both incremental, and at times, radical innovation (Harvard, 2003).  A framework which supports Ulrich’s vision is one developed by Martins and Terblanche (2003).  This framework is similar to Kotter’s famous 8 step change management programs and his innovation-acceleration model (Kotter, 2014).  Table 1 summarizes Martins and Terblanche use the following metrics in their framework.

Table 1:  Martins and Terblanche’s cultural readiness framework

Mission and Vision Employees comprehension of the firm’s vision, mission, and values and how these can be used to support individual and company goals.
External Environment External stimuli including competition, Clients, regulators or other actors, also includes employees understanding of how to deal with these stimuli.
Means to achieve objectives Outlines how the organization and its workers use support mechanisms or processes to contribute to the success of the firm.
Image of the organisation Mainly concerned with how the firm is viewed externally and internally as a place to work.
Management processes How the processes of management including goal-making, innovation processes, control and communication are built.
Employee needs and objectives The need to integrate the desires of employees with the goals of the firm.
Interpersonal relationships Reducing conflict and enabling idea sharing and process improvement.
Leadership Nexus between employees and the management team of the firm, and how they interact, communicate and how they collaborate to support the goals of the firm.

 

Section 2:  Cultural and innovation readiness through a cultural analysis of strengths, weaknesses

We can apply Martins & Terblanche’s framework to Client to see how ‘ready’ the firm is to both create, and adapt, innovative technologies. Table 2 summarizes this analysis using a score between 0 (never will be ready) and 10 (already implementing innovative creativity or understanding the metric completely).

Table 2:  Client Readiness

Readiness Ranking:

-0 (never ready)

-10 (already doing it or comprehend it)

1.       Mission and Vision Employees comprehension of the firm’s vision, mission, values 8-Client has spent 2 years communicating its new mission and dedication to innovative technology.
2.       External Environment External stimuli 8-Well understood and documented extensively.
3.       Means to achieve objectives Mechanisms or processes to contribute to the success of the firm. 5-Work in Progress.  Legacy systems and attitudes are in place (there is a partial union).
4.       Image of the organisation Viewed externally and internally as a place to work. 6–Varies by staff and department area.  Externally Client has a good reputation and is a winner of many innovation awards.
5.       Management processes Goal-making, innovation processes, control and communication are built. 5–Work in progress.  Partially unionized which makes change difficult.
6.       Employee needs and objectives Integrate the desires of employees with the goals of the firm. 8–Mature firm with well-developed HR and management processes to stimulate employee loyalty and training.
7.       Interpersonal relationships Reducing conflict and enabling idea sharing and process improvement. 8–Comprehensive management processes to achieve this.
8.       Leadership Nexus between employees and the management team of the firm. 9-Strong, visionary leadership, recognized as key note speakers in many fora on innovation and change.

 

If we did a simple calculation and took the average of the above 8 areas Client has a score of 57 / 8 or 7+ out of 10.  In general, Client has a reasonably good level of cultural and management processes to support innovation.

 

Section 3: Change management approach to help adopt innovative technologies

To help Client change its organization we can use the amended Kotter framework (1996, 2014), which identifies 8 steps to effect change management to produce a culture which is keen on innovation and using new ideas to achieve business objectives.  Table 3 summarizes this change framework.

Table 3:  Change Management process for Client

Steps What has been done Critique for Client
1. Urgent change advocated Market changes, competitive factors identified

Use external resources to prove change is valid

 

Changing everything at once is risky

 

2. Change agent builds a team Engage key personnel to help with the changes

Entire organisation is represented

CEO, CIO, CTO initiative

Still needs employee support

3. Team and agent create the vision Establish a vision to direct the changes

Strategies are built to achieve the vision

Top down vision, needs feedback loops

 

4. Communication with stakeholders to get buy-in Multi-channel, story-telling approach

Simple, emotional messaging

‘Team’ leads by example

Processes still being set up
5. Empowerment to generate action Remodel or change structures or systems which impede the vision HR and other reward systems being changed.
6. Manufacture short term wins Market improvements from the change plan to the firm

Use concrete examples

Part of vision, needs to be demonstrated.
7. Reinforce the change plan Establish clear performance improvements metrics

Reward anyone involved in the change process

Reinforce the positive cultural changes

Still in process.
8. Consolidate the changes Make the linkages between the changes and corporate success obvious To be determined.

(Mindtools, 2012, Change Management Blog, 2009, amended from Kotter 1996)

Client has done a very good job at getting the organization ready for change.  Some key areas to focus on would be: clarity to the workers of the vision; why it benefits them; how they can participate; feedback loops established; and ‘quick wins’ identified as they change the entire IT system to a new platform within a short 18-month period.

Conclusion:

To enable a culture of creativity and innovation, research seems to indicate that a good approach is to develop an ‘open systems’ culture, where ideas and innovation are discussed and rewarded (Martins & Terblanche, 2003). The open-systems theory is a holistic approach which supports the framework used in this paper.  The framework discussed analyses the interaction, inter-relationship, and inter-dependence of systems, culture, management and employees.  Client has a strong base to create a continuous and innovative culture which will allow the firm to achieve its business objectives.

 

follow site References:

Burnes, B. (2011). Why does change fail and what can we do about it? Journal of Change Management. Vol 11: Issue 4: 445-450, Routledge.

Change Management Blog, (2009) Change Model 3: John Kotter’s 8 Steps of Leading Change, Available at: http://www.change-management-blog.com/2009/07/change-model-3-john-kotters-8-steps-of.html, (accessed 08/03/17)

Kotter, J.P. (2014). Accelerate: Building Strategic Agility for a Faster-Moving World. HBR Press, 224 pages, Boston, USA.

Lauchlan, A. K. Dr. (2007). Book Review: John Kotter on Change Management. Available at: http://www.think-differently.org/2007/06/book-review-john-kotter-on-change/ (accessed; 08/03/17)

Martins, E.C. (2000), “”Die invloed van organisasiekultuur op kreatiwiteit en innovasie in “n universiteitbiblioteek,” University of South Africa, Pretoria

Martins, E. C., & F. Terblanche, (2003) ‘Building Organisational Culture that Stimulates Creativity and Innovation’, European Journal of Innovation Management purchase Lyrica from canada , 6 (1) pp.64-74

Mindtools (2012).  Kotter’s 8 step Change Model. Available at: https://www.mindtools.com/pages/article/newPPM_82.htm (accessed: 20-08-17)

Schein, E. H., (1990) ‘Organisational Culture’, American Psychologist. 45 (2) pp.109-119

Ulrich, D., (1998) ‘A New Mandate for Human Resources’, Harvard Business Review. 76 (1) pp.124-134

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