Establishing Innovation Culture
Establishing Innovative Culture in big organization.
30th International Conference on Entrepreneurship and Innovation Maribor PODIM SELLING INNOVATIVE IDEAS April 14th – 15th 2010, Maribor, Slovenia Establishing innovative Culture Tomislav Buljubašić Siemens d.d. Siemens IT Solutions and Services, Županijska 21 Osijek Croatia firstname.lastname@example.org Abstract Innovation Culture is essential factor for good Innovation Results in every Organization. Building and maintaining the high level of Innovation Climate is the main subject of this paper. Keywords: innovation, innovation culture, improvements, award program 1 Introduction Innovation Culture or Innovation Climate is essential factor for good Innovation Results in every Organization. The building of innovation process, including process of idea generation and innovation metrics, is nothing without strong and active start of measures to set innovation culture or in different words, innovation climate in the organization. 2 Innovation culture The biggest obstacle to innovation within a company is the climate or culture that does not support new ideas. Innovative climate, innovative spirit or innovative culture – how ever you called it - is impossible without the support of the leadership in the company, which has to stand behind claims of innovation strategy, which should be implemented. The task of creating innovative climate and culture in the organization, which will encourage staff creativity and bring new innovations that will help the company, surely belongs to management. It is necessary to define the goals of innovation, both short-term, and long-term, and then determine drivers for these goals (setting innovation manager, innovation metrics) and an annual budget that will be available for the innovation program. Budget should be available to reward ideas and to implement tools that will help with registration and processing of ideas. The new innovation strategy, should be well advertised within the company, which is best achieved by pointing out examples of successful ideas when they occur. The scheme of incentives should be built in parallel. Everyone should know about the incentives after the application of idea and the eventual success of the idea. In the past were the times, when idea proposals were collected through the box for suggestions, etc. Today, proposals of ideas are easily submitted via a web-site (intranet) or software tools that will support it. One of the most important factors is confidence in the organization, because if employees do not believe to their company, they will not try to innovate. The positive aspect that can affect the innovative climate, may be a natural environment, i.e. the arrangement of the workplace. Colour, light and space into office space certainly have an impact on creativity. Creativity is the ability and vision, to do things in new or different ways, and the ability to create new ideas. The idea as a result of creativity, must however have an economic value that it would be considered an innovation. Creativity at its exit has ideas, which may, but need not to be innovations. The first phase of raising the innovation climate, therefore, is raising the climate that will allow creativity, and then define the innovation process that will support idea from idea-generation phase to realisation. We can say that innovations depend on creativity, but creativity is only the beginning of the road that innovation must pass in order to become a product. You can either have or do not have creativity in your business, but innovation will only appear on the other hand, if you have a defined innovation process. Employees who are the most creative will ask lots of questions about the idea during the innovation process, such questions can shape and direct future of innovation to the right path. When we understand that people are by nature innovative, but companies often are not, and hinder or stifle their creativity, we come to the challenge of enabling innovation, which can be possible only with defining the obstacles that prevented it, and creating conditions in which creativity can come alive. Individuals who have a proven ability to be innovative will find it difficult or impossible to be innovative if they are put in the organization that does not foster creativity. Innovation starts from the top of each company, which is expressed with the overall attitude of management towards innovation â€“ it requires open support for innovation! The key is to create models that will describe the innovation process. They should have their own measures for innovation that should generate the expected results and with that, talk about the current state of innovation in the company. In case of failure, there shouldnâ€™t be any kind of penalties, because it will kill the innovation spirit, which often causes the projects that do not succeed. The biggest risk associated with innovation is not to innovate. If the company does not have innovation, it allows competition to shape the future, and with that also shapes the market that is no longer interested in old products. Because of this, we can say that sometimes the challenges of innovation are big, but the risk of non-innovating is much bigger. It is easy to perceive that companies are always proud of their latest innovations and they love to praise with them, to the competition. But the same should be done within the organization. After evaluation and use of ideas, they can be used in other departments within the company, so they should be published in the company's magazine, newsletter, etc. It is good to organize forums â€“ meetings on which ideas could be exchanged among departments. Innovative climate, or perhaps better to say - the innovative culture can be achieved only if innovation is highly valued in the company. Innovation also must be a way of life and spirit of innovation must be in all corners of the company. People should have the freedom for innovation and task of creating innovation climate is precisely to create the climate of freedom. It can not only create a new process and tell people: Be innovative! Innovation does not occur with a single click, but need inspiration, just like the artwork. It is difficult to know who among the innovators is just a dreamer, but who is really focused on your market and on what your company needs - innovations for the end customer. Directors therefore have difficulties to recognize true innovators who need supports in the realization of their ideas. Big ideas do not always come as a bomb, but mostly as a series of small improvements and ideas that eventually grows to innovative product, as a result of long-term work. This is only possible if manager support ideas that rely on one another with a common goal. Innovation is then drawn into the daily tasks of each employee. Here are some answers to the question "How to establish a climate of innovationâ€?(Figure 1): Figure 1: How to establish a climate of innovation Fear must be removed from the organization that wants to have a climate of innovation Errors are possible Raise brainstorming workshops on the higher level Establish an innovation process, if possible, supported by corresponding software tools New employees can be a source of innovation and should be included in the process Set up innovation as a responsibility to all employees, instead of frequent views on innovation as a business for only a few people Select the specific goals that you want to achieve with innovations Inside the organization must be an individual or team of people who are active in promoting, supporting and driving innovations. Primary role of local "heroes" or as someone called “idea champions” in the organization: 1. must be well known within the organization as an innovative person and open to all questions and suggestions 2. managing and improving the innovation system 3. ensuring that everyone knows the process of creating ideas (how to apply the idea?) 4. care for the ideas that stay long in the innovation system without estimation 5. knowledge about each submission of the idea 6. managing innovation metrics: the number of reported ideas, the number of realized ideas and creating of new innovation metrics if necessary Other roles such as connecting entrepreneurs inside and outside the organization with the Idea Creator can, but must not neccesserally be, the part of the innovation system and can be driven by another person. 2.1 Innovation program Before starting of new innovation program in Siemens IT Solutions and Services (Siemens d.d. Croatia), the state of Innovation Climate was not satisfying. The number of submitted ideas per year, and the number of successful ideas were not in acceptable value. The first task was to build up new innovation portal which has all information about submitting of ideas and about innovation process. Award program was started and promoted with intranet news, posters and articles on innovation portal. The idea was to award 10 best idea submitters with most successful ideas in one year. The award budget is approved at the start of the fiscal year and awards are published on innovation portal. Current position of every innovator in Award Program Table can be seen on Award Program intranet site. Figure 2: BonusZaIdeju poster 2.1.1 Types of ideas 3 main pillars of innovation power in Siemens are: Improvements, Innovations and Patents. Improvements are incremental ideas that generate savings in existing products or processes. Innovations are new business ideas which can make new profit. After submission, innovations are sent to experts from corresponding sector that make analysis about possible realization based on customer situation and state of the market. Inventions are handled centrally in the company and they are sent to Siemens Patent Office. 2.1.2 Results Already after first year of Award program, strong success was registered. Number of filled and the number of successful ideas has grown 7 times(Figure 3). Workshops on all locations and strongly informing about innovation activities together with publishing of success stories, made quick results. On chart is visible that number of submitted ideas has grown in the years 2006 and 2007 (first 2 years of new innovation program), but it is more significantly to see the growth of the number of successful ideas (Figure 4). Figure 3: Number of submitted ideas On this chart(Figure 4) is easy to see the rapid growth in the year when BonusZaIdeju was introduced (2006). This growth was build with active promoting of improvements, innovations and patents. Improvement proposals was handled by superiors of submitters, and superiors was noticed already when proposals had to be written at all. Innovations were promoted in a way that business ideas should have strong relation with current business or with current customer. The closer submitter was to customer, the bigger was the opportunity to have successful innovation. Figure 4: Number of successful ideas The best innovators have become recognizable inside the Company and they were awarded on BonusZaIdeju Award Ceremony, where they also shortly presented their ideas in front of managers and other innovators. Abstracts of ideas were published on intranet and inside Award program brochures. This way of informing about successful ideas and continually publishing of innovation news has made high influence on establishing of innovation climate. Other crucial factors are workshops held on all locations, where the Innovation Process and Award Program was introduced, following with brainstorming (idea-generation) sessions. Commitment from executives is the main driver in innovation program. We have always strong commitment from head of Siemens IT Solutions & Services, SDE (System Development and Engineering) to innovation program BonusZaIdeju(Figure 1) and this was shown through the Award Ceremonies which was hosted by head of SDE. These measures inspired known innovators inside the company, but also the new ones, to submit their ideas to innovation program. Award program is going-on for 5th consecutive year and the results shown that innovation climate established in first years, is now on strong level which guarantees high number of ideas in future. This is shown on Figure 5 â€“ the number of submitted ideas concerning location of the submitter. The number of ideas has grown on all three locations after introducing innovation program, but after that, the quantity of ideas remains on the same level. Figure 5: Number of submitted ideas according to location Now, the innovation culture has reached desired level, but there are new challenges ahead, like make the innovation process faster and to bring technology trends closer to submitters. 3 Conclusion The Innovative organization does not have only different processes, innovation measures, or leadership; itâ€™s the innovation culture that makes the difference. Establishing and maintaining the high level of innovation culture should be the goal of each organization that wants to call itself innovative. References Davila, Epstein, Shelton (2006): Making Innovations Work, Wharton School Publishing, New Jersey Sloane, P. (2007): The Innovative Leader, Kogan Page, London Morris, L. (2007): Creating the Innovation Culture, An InnovationLabs White Paper