Innovation culture - People and innovation in the conflict of corporate culture (Pt. 1/2: People)

Intro: Innovation today

Innovation is the dogma of our time. It is the monstrance of the hour of a success-suggesting corporate strategy. If you want to remain relevant in the long term, you have to be innovative. The ability to innovate is the central competitive advantage of companies today and no longer, as in the last century, labor, land or capital.

?We must innovate to stay competitive.“ (Every company. Worldwide.)

A lot has changed in recent years. And the same is true for innovation. There are many more innovation managers, tools, webinars, blogs, books, and consultants. Overall, there is much more talk about it, and more research and reporting. Trade fairs, trade journals, blogs, social media, even politicians are elevating innovation as the most promising element in combating the climate crisis. "Innovation must be encouraged. Bans must never be allowed to hamper the spirit of innovation," is what is said in political debates. Innovation seems to be the ultimate goal and is the new yardstick for entrepreneurial action. New and different - that's always good.

And yet, old habits and ways of thinking still exist despite these advances. Because today, an astonishing number of executives and CEOs still believe you can make people in a company more innovative and creative through appeals or financial incentives alone. We push a button, the idea lamp turns on automatically and then let the employees fiddle with ideas for 2 days in boot camps, hoping to find the one idea that promises a rosy future with maximum returns. It could hardly be naiver.

Moreover, innovation is often equated with technology. Innovations are apps, devises, social media. But innovation can also mean simply doing things differently. My favorite example in this context is the bicycle manufacturer VanMoof from the Netherlands, which only changed its packaging because of a high rate of damage to its bicycles during transport to the USA [1]:

Equating innovation with technology thus leaves out major fields of innovation.

However, I will not scientifically examine these different fields of innovation, the delimitation in horizons or the different types of innovation. Likewise, the procedure of managing ideas and guiding them through the process is not part of this essay.

This is about the foundation, the soul of innovation. What is the secret behind it, the secret ingredient, so to speak? What is the backbone needed to permanently implement innovation in an entrepreneurial environment that is consistently focused on efficiency? And what interactions and relationships exist with one's own self-image, that of the company and that of the individual? Accordingly, we will now dive into people and the corporate or innovation culture as such. Both are inseparably united and at the same time contradictory in parts, resulting in a tension that is not easy to withstand and resolve.

For years, the following question has haunted me: Does a company need a different culture in or-der to successfully drive innovation? Or does the company need innovation in order to create a different culture? Whew! Sounds like chicken-and-egg all over again. But first things first...

The probability of an idea as a business success

To state it right at the beginning: The idea of innovation usually does not come true. The likelihood of having that one idea that contributes extraordinarily to a company's success is like looking for the Amber Room, at least if you look at the prominent and often cited examples of innovation. Airbnb, Netflix, Spotify, the iPhone, the list of them seems long, but in the historical context and classified in the overall, global economic world, it is extremely short. The good old "rags to riches" narrative, in other words. It is by no means a lie to tell these inspiring stories. However, the probability of achieving anything similar to the above examples is far less than one percent.

In seeking and trying, failure is far more common than success. The search for this "Holy Grail" is the naive idea of a successful innovation. In order to bring a successful new product to the market, up to 3000 ideas are needed, depending on the degree of novelty, as several studies show. [2] In order to achieve disruption in business fields, one needs a multiplicity of "sub-ideas", which can hardly be measured statistically.

Well, before I get too defeatist here, it should be noted that innovation does not necessarily have to be synonymous with ultimate disruption and radicality. Incremental innovation as a type of innovation is also an essential part of an innovation strategy. An incremental improvement that grows out of an idea within the framework of innovation contributes to the success of a company. And there are many smaller ones of these.

This "probability" is reinforced by some of the stories behind the greatest innovations of our time. They are often on the verge of ridiculous ideas. Take the example of Post-Its (yes, also all over the place, but so be it). The failed idea to produce a super glue was taken up a few years later in order to mark passages in the hymn book in church without destroying the individual pages - the Post-Its were born. [19] And Teflon, for example, was developed when people were actually looking for a moisture-retardant coolant. [20]

So, innovation is also chaos. You can't always force it to happen, and ideas don't come when you need them, and especially not when you're searching for them in your head. They appear all of a sudden when one has let go. Whether a truly enlightened person whispers the decisive, inspirational hint, the dice fall by pure chance in such a way that they provoke an insight, or an error generates a flash of inspiration, innovation is a complex process that can rarely be planned out.

This is called serendipity in the technical literature. This refers to the phenomenon of arriving at an insight or finding something that one has not explicitly searched for or researched. [3] If a company accepts this, then it may very well create conditions that increase the likelihood of innovation, both radical and disruptive, but especially incremental innovation.

The human being

When it comes to innovation, the human being is and remains the all-important factor. On the one hand, as an individual with his or her skills and abilities, his or her creativity, for example, or his or her willingness to accept and adopt other perspectives. And on the other hand, as a component of the social system of a group. And hovering over this is the corporate culture, which torpedoes or supports the dynamics from the social connections of a group and the individual. And this cultural dimension sometimes has something very paradoxical about it. Managing corporate activities in tension between day-to-day business, including short-term and long-term crises, and visionary, sometimes disruptive, shaping of the future is a balancing act that is not easy to maintain. But this does not have to be a contradiction, as the teaching of organizational ambidexterity shows us.

The questions that arise in connection with people in the innovation field, and which I want to explore, are:

• What drives people to think about a problem? What promotes this thinking behavior? Or what restricts it?
• How important are the social connections?
• What are the problems people face in today's digital information age?
• And how must all of this ultimately be integrated into the work environment so that an idea can flourish?

Knowledge spillover in the innovation environment

Knowledge spillover is the exchange of ideas between individuals. There is an internal and an external knowledge spillover. An internal one occurs when the exchange of knowledge between individuals within an organization that produces goods and / or services has a positive impact. An external one, on the other hand, occurs when the positive effects of knowledge between persons are outside a production organization, e.g., in the context of a cooperation. [4]

Scholars have agreed for years that these knowledge spillovers occur in regions (geographically) or between individuals in organizations. Often cited as the first empirical evidence of this, is the astonishing research on spatial knowledge spillovers published by Adam Jaffe, Manuel Trajtenberg, and Rebecca Henderson in the Quarterly Journal of Economics in 1993. They studied the geographic distribution of patents and citation patterns in the U.S. [5]

These patent records contain a wealth of information, including the identity, location, and employer of the inventor, as well as the technological area of the invention. Patents also contain citation references to earlier patents that allow links between inventions to be traced. These links are like the DNA of an idea that served as data for just such research purposes. Indeed, Jaffe and co-authors found nearly 30 years ago that new patents were disproportionately likely to cite earlier local patents. In other words, patent citations were highly geographically concentrated. It was estimated that citations were three to four times more likely to come from the same state as the original patent. [5]?

In Silicon Valley, for example, when a person moves from one company to another, he or she brings knowledge and experience from previous work environments and can use it to enrich and refine an existing idea at the new employer. The particularly high geographical concentration of patents and, above all, the success of such valleys are based precisely on this effect.

Since we now live in a globalized and fully networked world, the spatial aspect can be neglected nowadays. The permanent virtual connection with colleagues, but especially the social networks, have decoded this geographical correlation to a large extent. In a bubble of like-minded people, it is easier to share content, which can have both positive and negative consequences.

The interesting thing about Jaffe and Co's research, however, is that it still serves as proof today that social connections, whether geographically connected or not, are absolutely essential for innovation.

People and knowledge in the context of social connections

The na?ve idea of having a Thomas Edison or Nikola Tesla clone in 2021 working on ideas in his basement like an innovation guru to generate the business of tomorrow still exists but is no longer as widespread as it was at the turn of the millennium. The best ideas originate in more than just one head. They are sharpened, changed, buried, revisited, honed, refined, and ultimately brought to life through dialogue with other people.

New ideas develop through people who are close in some way interacting with each other. Be it friends, work colleagues or even an ethnic affiliation. People who feel connected share their ideas or give feedback more readily.

"A study conducted by Daniel Tzabbar and his team found that high levels of collaboration foster innovation because it encourages the free flow of ideas among people who need or want to work together to find new solutions to problems." [6] Economic theory today also states that social connections positively affect productivity, and thus economic growth.

Knowledge can be used by many people simultaneously and permanently. In this way, knowledge differs from many physical goods. Thus, the diffusion of knowledge creates productivity gains that transcend society. [5]

?He who receives an idea from me, receives instruction himself without lessening mine; as he who lites his taper at mine, receives light without darkening me.“ (Thomas Jefferson)

Therefore, it is imperative to promote exchange and communication among employees. The basic idea here is that social connections make it easier for knowledge to travel further and faster. Social networks have a high value in today's society in this regard. They facilitate the spread of ideas, even beyond the boundaries of one's own company. In a world that is spinning even faster and also becoming more complex, where partnerships and collaborations will have an increasing importance, this will play an even more central and important role.

Companies that have already understood this today will have a competitive advantage in the long term.

The human being in the context of the working environment

In the work environment, there are two extremely relevant pillars that not only apply to innovation but are also very general factors that are relevant to society: "Failure" tolerance and self-determination.

Failure tolerance means the unrestricted acceptance of failures. Innovation always involves exploring uncertain and unknown territory. In this respect, it is hardly surprising that failure tolerance is a particularly prominent characteristic of innovative cultures. [7] The success stories of the most lauded innovations have also had a learning curve of failed experiments and false assumptions, most of which go unreported. Even companies known as innovative have had failures. Remember Apple's MobileMe, Google Glass and the Amazon Fire Phone?

But: Failure should only be celebrated if it leads to real learning. And in this context, companies should always celebrate learning rather than failure. That's why innovation also needs some form of discipline, because without it, anything can be justified as an experiment. This means that experiments should be carefully selected for potential learning value and also consistently designed to provide as much information as possible relative to cost. [7] Failure tolerance should not mix with incompetence.

?Those who avoid failures miss out on the associated experience and knowledge, lose the associated initiative, cement the present at the expense of the future.“ (Anja F?rster / Peter Kreuz)

Many things are covered by the term self-determination, but I will focus on the one decisive thing: time. This is the time that is trustingly given to a person, so that he/she can, for example, think about his/her ideas without having to account for them. Because sometimes the chaos of an idea is ordered when it is structured. It is not for nothing that there are Business Model Canvas with Value Propositions and Revenue Streams in the context of innovation development.

You are probably familiar with situations in which you are working on a complex topic, on interwoven contexts, and on interacting ideas. As a rule, you organize these balls of yarn on paper, on the whiteboard, or in the digital world (mind map, Miro, etc.). Slowly but surely, the pieces of the puzzle come together to form a complete picture. And not infrequently, you achieve enlightenment and insight, or at least a certain amount of it.

Not everyone in the working world enjoys the privilege of being able to put things in order, especially when it is not the task corresponding to the role. But it is not as if companies do not want to allow this of their own accord. Quite the opposite. Most companies emphasize the importance of this and give employees precisely this freedom. But what is the reality? This space is absolutely at odds with day-to-day business.

Day-to-day business basically fills the entire week. That may sound strange, because work is paid and we usually have 40-hour work contracts and should fill them with work as much as possible. But in recent decades, the average employee has been given more and more tasks and more responsibilities, so that the free time available has basically been vaporized. Don't you know someone in your work environment who has two roles? And how many of you have an inbox with 0 unread emails? Ever experienced an 8-hour marathon meeting day?

Of course, it's partly up to the individual not to let himself be controlled by others. But in my view, it is too big a task to place this responsibility solely on the employee. Once the tsunami of overload has arrived, and it can suddenly flare up through no fault of one's own, it becomes very difficult to cascade it back to a controllable level. The supposed productivity gain in relation to the employee leads to an unhealthy overload of work - for the person and the company alike.

And this leads to the following effect: everything that is important to shape the future is blocked with the current overload. Which means that within the organization, almost everyone is only concerned with the urgent instead of the really important. [8]

However, when there is a concession of contributing to an idea in the context of innovation management, this means that every hour for collaboration is fought for. "20% of the working time in the week," is said everywhere. Negotiated as on the market. "I can offer 10%". “We need at least 15% ". "Fine, 13% then". "Deal!". In reality, this is usually expressed in such a way that the tension be-tween day-to-day business and shaping the future is fought out exclusively on the backs of the employees. The negotiated hours simply add up to the 40 hours. Cynically, this is also a form of self-determination. I decide to overwork myself. For the good cause.

This gives the impression that day-to-day business and creative space/time are invariably in competition. No doubt this is a conflict. But who has ever finished an essay, a homework assignment, a contribution to an innovation white paper, a Power Point presentation or the thesis at the last minute? And how "productive" (I'll get to that term) do you find this last mile? Discipline and even (positive) pressure can sometimes be beneficial. A jointly felt pressure can weld people even closer together, which ultimately results in a focus. Nevertheless: this circumstance does not compensate for the preliminary work of thinking.

The human being in the information age

Added to the time available in the work context is the changing and ever faster pace of information provision and processing in today's world. This is a societal issue but must be factored into the overall context of the work environment.

Again, I'm sure you're familiar with this. You are sitting in the office looking out the window, no matter what you are thinking about at that very moment. A team member enters the office and smugly comments on your lost thoughts by saying, "What's wrong? Don't you have anything to do? Experienced a thousand times. In many companies it is considered a sign of an irreparable behavioral disorder to simply look out of the window for 10 minutes and think. How is it that we equate the greatest and at the same time most valuable human quality with being unproductive?

Our basic understanding of productivity is the number of frenetic movements at the workplace, for example measured by the key figure "keyboard strokes per minute". If you don't produce anything tangible and recognizable, you don't make anything. From the moment when one hammers madly on the keys, productivity seems to start. The preliminary work that always starts in the head is left out because it is also admittedly difficult to measure and, above all, to compare. In other words, structuring, processing, assembling, simply thinking about a topic, a problem and, if necessary, a solution to it.

We live in a world where actionism is confused with productivity. We no longer give our brain enough time to process, structure and order. We can't just absorb information at the push of a but-ton and generate something new from it. Or generate an opinion spontaneously, which we should avoid as much as possible. First of all, we need to get to the bottom of things, look at them from several perspectives, debate with people - in other words, take a 360-degree view - and that's something we should do. Of course, not always, but more often than we are currently doing.

Kester Schlenz, among others, has vividly described this phenomenon of our time in an article entitled "Ich komm nicht nicht mehr mit" (I can't keep up), which was published in the German magazine Stern (Nov 21). "The world's knowledge is now available virtually instantly to everyone everywhere in many parts of the world. And it continues to grow in real time. But this tremendous accumulation of knowledge is juxtaposed with our very individual scarcity of attention, as sociologist Andreas Reckwitz calls it. We cannot absorb all that we could know. And yet many are expected to be on top of things." [9] To truly learn, humans need time.

"If our brain is not bombarded with new things incessantly but has time to itself and digests information in peace, so to speak, then a lot happens in our heads," Schlenz continues. "Because that's how we process information, link it together, and organize."

End of Pt. 1/2

Sources:

[1]?????????“Genius Dutch Company Creates Fake TV Packaging For Their $3,000 Bikes, Reduces Shipping Damage By 80%” on boredpanda.com (2019)

Link: https://www.boredpanda.com/bikes-company-tv-box-print-reduces-shipping-damage-vanmoof/?utm_source=google&utm_medium=organic&utm_campaign=organic

[2]?????????G. A. Stevens, J. Burley: “3,000 Raw Ideas = 1 Commercial Success!” (2016)

[3]?????????Dr. G. Angermeier: Serendipit?t (2004)

Link: https://www.projektmagazin.de/glossarterm/serendipit%C3%A4t

[4]?????????Link: https://en.wikipedia.org/wiki/Knowledge_spillover

[5]?????????E. Ortiz-Ospina: “The importance of social networks for innovation and productivity” (2019)

Link: https://ourworldindata.org/social-networks-innovation-and-productivity

[6]?????????UKEssays: ?“Importance of innovation and change within an organization” (2018)

[7]?????????G.P. Pisano: “The hard truth about innovative cultures” in Harvard Business Review (2019)

[8]?????????S. Sinek: “Das unendliche Spiel” Buch (2019)

[9]?????????K. Schlenz: ?Ich komm nicht mehr mit“ in Stern Nr. 46 (11.11.2021)

[10]???????D. Vahs, H. Trautwein: ?Innovationskultur als Erfolgsfaktor des Innovationsmanagements“ Buch (2000)

[11]???????Dr. A. Blaeser-Benfer: ?Erfolgsfaktor 4: Die Innovationskultur“ (2014)

Link: https://www.rkw-kompetenzzentrum.de/publikationen/faktenblatt/erfolgsfaktor-4-die-innovationskultur/

[12]???????Oh Gott. Das kann ich nicht ?ffentlich machen.

[13]???????Alan Smith (Strategyzer): “Discussion: Top 10 mistakes every business makes” (2016)

[14]???????D. Sivers: “How to start a movement” (TedTalk 2010)

[15]???????C.M. Christensen: ?The Innovators Dilemma - Warum etablierte Unternehmen den Wettbewerb um bahnbrechende Innovationen verlieren“ Buch (2011)

[16]???????S. Bendiek: “Innovation macht widerstandsf?hig” in Handelsblatt (2020)

[17]???????R. K. Sprenger: ?Schwerpunkt Innovation: Lass gut sein“ in McK Wissen Ausgabe 15 (2005)

[18]???????F. Vermeulen, P. Puranam, R. Gulatihttps: “Change for change’s sake” in Harvard Business Review (2010) (//hbr.org/2010/06/change-for-changes-sake)

[19]???????Link: https://edition.cnn.com/2013/04/04/tech/post-it-note-history/index.html

[20]???????Link: https://www.teflon.de/news-events/history