Factor 22: Innovative Tradition or Not
This factor deals with the extent to which the company has an innovative tradition.
Factor extremes as measured in survey:
Organization does not have an innovative tradition
Organization has an innovative tradition
Overview to restructuring initiatives
Organizations that have an innovative tradition are seen as attractive places to work and thus attracting quality staff is a smaller problem than those that do not exhibit such a tradition. Retaining innovators is also enhanced. It is not inconceivable that the price to earnings ratio of the stock for innovative companies is improved if the market has a view that a company has an innovative tradition since the P/E ratio also correlates with growth and profit. Just think about having the opposite reputation.
Examples of communicating a tradition; to emphasize a tradition
Deere & Company; Chairman and Chief Executive Officer, Robert W. Lane, from an address he gave on May 7, 2007, addresses how Deere is ‘Driving Growth through Innovation’. Mr. Lane makes reference to the beginning of innovation at Deere and that the founder ‘infused in us an appreciation that continuing innovation, often breakthrough innovation is necessary to sustain long-term growth… and that this tradition is as old as the company’, namely 170 years.
Toray Group, a world leader in advanced materials, true to its corporate philosophy of “contributing to society through the creation of new value by innovative ideas, technologies and products,” set up a Toray Science Foundation in Japan in 1960. The Foundation, unusual at the time since it was a private sector initiative, is a way of awarding outstanding potential through its awarding of a Science and Technology Prize, grants to young researchers engaged in basic research, and a prize presented to junior and senior high school teachers who have given creative and innovative lessons in science with good results. The Foundation also hosts science lecture meetings. Toray continues to place heavy emphasis on its commitment to innovation through the recent establishment of a long-term corporate vision, “AP-New TORAY 21,” a roadmap for the transformation of the company into a New Toray for the 21st Century. An innovative tradition for over 40 years!
Possible Initiatives to Modify and Improve the Culture for Innovation
Develop a sustained corporate attitude about innovation
You can’t make a silk purse out of sow’s ear. A tradition of innovation is something which is built up over many years. The reputation is gained through years of hard work and a bit of luck. Making innovation a part of the philosophy of the company and working to sustain innovation in the face of both successes and inevitable failures is important.
Pay attention to the small details of developing an innovative culture
While big picture initiatives are important, it is also important to remember that small steps towards having or not having an innovative culture are also key. Even the simple suggestion box, if not handled properly can be a disincentive to employees at large if the suggestions provided by staff are not handled with care. If the suggestion is ignored or there is not proper feedback as to the reasons for rejection—handling the successful ideas is more obvious—employees become quickly discouraged and will not participate. The accumulation of small steps, both positive and negative, contribute to a sense of having an innovative tradition.
A tradition of change versus stability: the dynamic
In innovative companies there is a feeling of momentum, i.e. that change is always underway, and is expected, whereas in other companies change is often greeted with resistance and concern. While too much change can become a management challenge, innovative companies thrive on change and, when change slows down, or even may stop or pause, there is a feeling of unease that brings concern about the future. There is a natural pulse rate for most organizations and management needs to be sensitive to it’s pace.
Innovation is closely related to being competitive
Most innovative companies share an attitude about innovating that relates closely to a sense of being competitive. Being competitive and having an innovative tradition are both ways of attracting people who wish to innovate and move ahead. The business game, believe it or not, is to compete and win, and one does this through being innovative. New products and new ideas often result in the highest profit margins, at least for a short time, and the drive to make profits is a motivating factor in taking the risks associated with innovation. Staying ahead of the pack, i.e. being competitive is important to innovative companies.
- Factor 1: Management's Profit Emphasis
- Factor 2: Management’s view of innovation
- Factor 3: Tolerance for Mavericks
- Factor 4: Planning Emphasis
- Factor 5: Tolerance for failure
- Factor 6: Management of People
- Factor 7: Use of Career Ladders
- Factor 8: Tolerance from the Corporate Norm
- Factor 9: Tolerance for Risk
- Factor 10: Degree of formal communication
- Factor 11: Use of Independent Work Groups
- Factor 12: Input into Management Decisions
- Factor 13: Formality of the Decision Process
- Factor 14: Rewards for Innovators
- Factor 15: Planning vs. Action
- Factor 16: Attitudes Towards Mergers, Ventures, Etc.
- Factor 17: Loyalty
- Factor 18: Corporate Hierarchy
- Factor 19: Resources for New Ventures
- Factor 20: Staff vs. Line Involvement
- Factor 21: Retension of Innovators
- Factor 22: Innovative Tradition or Not
- Factor 23: R&D Budget Levels
- Factor 24: Perception of Innovation Changes
- Factor 25: Role of Employee Organizations