What is organizational innovation?

Define innovation

Organizational innovation refers to new ways of organizing and performing work within an organization to encourage and promote competitive advantages. It covers how organizations, and individuals specifically, handle work processes in areas such as customer relationships, employee performance and retention, and knowledge management.

At the heart of organizational innovation is the need to improve or change a product, process or service. All innovation revolves around change – but not all change is innovative. Organizational innovation encourages individuals to think independently and creatively in applying personal knowledge to organizational challenges. Therefore, organizational innovation requires an innovation culture that supports new ideas, processes and generally new ways of “doing business”.

The advantage of an innovative organization

By promoting an innovation culture, organizations should promote:

– Cross functional team building while counteracting silo construction

– Independent, creative thinking to see things from a new perspective and put yourself outside the framework of a work function

– Risk-taking of employees at the same time as the status quo decreases

The value and importance of knowledge and learning in organizational innovation is crucial. If innovation is about change, new ideas and looking outside oneself to understand one’s environment, then continuous learning is a requirement for success with organizational innovation.

The value of learning and knowledge can only be realized once it is put into practice. If new organizational knowledge does not lead to change, whether in processes, business results or increased customers or revenues, its value has not been translated into success.

The path to organizational innovation lies in the ability to impart new knowledge to the company’s employees and in the application of that knowledge. Knowledge should be used for new ways of thinking, and as a springboard to creativity and towards change and innovation.

Steps to innovation

To determine how supportive your current environment is in promoting innovation, read the most common questions and answers below, on how to build an organizational culture that encourages innovation.

1) Is an innovation climate supported by top management?

a. This means that activities such as risk-taking and small ad hoc working groups that brainstorm and talk through ideas need to be promoted, supported and encouraged in the organization.

2) Do managers routinely identify and bring together those individuals who are more oriented towards innovation and who are willing to think new ideas and act on them?

a. Identifying new thinkers and individuals who are oriented towards change helps to ensure an outlet for innovation by supporting these individuals and giving them and like-minded colleagues time and opportunity to think creatively. This is tantamount to becoming an innovative organization.

3) Is there a process that monitors innovation teams and identifies what has worked and what has not worked as a result of them?

a. Maintaining and monitoring innovation is important. This requires controls and trade-offs that identify how innovation is developed and managed and processes that capture what worked or did not work. In order to continue to innovate in a changing environment, it is important to continuously monitor the internal and external environment to determine what supports or hinders innovation.

4) How can an organization be strategic and focused on its goals while building and developing an innovative culture?

a. The value of a strategic focus is still important for a company’s success. In fact, a clear direction and understanding of a company’s mission can contribute to innovation – by knowing where in the organization innovation and creativity would provide the most value. An innovative organizational culture creates a balance between strategic focus and the value of new ideas and processes to achieve them.

5) Is there a single most important variable or ingredient that drives an organization towards an innovative culture?

a. Like other successes for an organization, what drives innovation is the people of the organization. First, management must set expectations for innovation and creativity and then “doing business” is about how to improve processes, products and customer relationships on a daily basis. This way of thinking in itself will create an ongoing culture of innovation.

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