04 Feb The Balance For Success In Innovative Organisations
What would be your ideal organisation to work for? Somewhere innovative, nonhierarchical, a place where you can voice your ideas, where you can experiment? Somewhere “fun”? Most people would choose an organisation with those traits – with an innovative culture like Apple or Google. But how do these companies maintain their innovative cultures without descending into chaos?
In the latest edition of the Harvard Business Review, Gary P. Pisano, Professor of Business Administration at Harvard, reports in The Harsh Truth About Innovative Cultures on his findings of research on the necessary behaviours habits for a company to have a successful innovative culture.
He found that the ideal positive behaviours: tolerance for failure, willingness to experiment, psychological safety, highly collaborative, and nonhierarchical structure all contribute to higher innovative performance. However, these positive traits require counter balance by tougher and grounding behaviours to ensure the sustained success shown by Apple, Google and Amazon.
“Innovative cultures are paradoxical. Unless the tensions created by this paradox are carefully managed, attempts to create an innovative culture will fail.”
A summary of the conclusions made by Pisano in his HBR article:
A tolerance for failure requires no tolerance for incompetence: Some of the most innovative companies have had highly publicised failures which is inevitable when experimenting. However, a tolerance for failure requires having extremely competent people. Taking risks in a company and putting its reputation on the line requires the highest level performers, effective management, and leading with an expectation of excellence by all employees.
A willingness to experiment requires rigorous discipline: A company which follows a policy to experiment needs planning select experiments carefully on the basis of their potential learning value, and they design SMART goals relative to the costs. All individuals involved need the disciplined mindset to be willing to experiment but also be able to move forward with, adapt, or abandon the idea.
Psychological safety requires comfort with brutal candour: Pisano says, “Psychological safety is an organisational climate in which individuals feel they can speak truthfully and openly about problems without fear of reprisal.” This has positive implications for an organisation as it can avoid catastrophic errors through lack of communication and also support learning and development for everyone. However, this idea is only effective if every individual is willing to both give as well as listen to and act on criticism from any other person in the company. This culture requires mutual respect and civility.
Collaboration must be balanced with individual accountability: An effective innovative organisation needs collaboration through input, communication and integration by all individuals to ensure success. The organisation which supports collective responsibility means people buy into the values and purpose, and are willing to go beyond the expectations and formality of a job description. This leads directly to taking individual responsibility. For successful collaboration, every individual must own their decisions and behaviours whatever the consequences.
Flatness requires strong leadership: Pisano uses the term “Cultural flatness” to explain how people within an organisation behave and interact with each other irrespective of their position. In a less hierarchical culture, employees are more likely to make effective faster decisions, voice opinions and take action on issues. When employees all accept collective responsibility owning their decisions and actions, they need a strong leadership to sustain the non-hierarchy overall by providing clear strategic goals and purpose.
Working for a company with a successful innovative culture can bring out the best in its employees providing the opportunities for freedom to experiment, fail, collaborate, speak up, and make decisions, but these freedoms come with some tough responsibilities. An organisation needs to strike a careful balance to sustain a successful and evolving innovative culture, starting from the leader and right through a whole company.
A company with an innovative culture can bring out the best in its employees but the strategies which give freedom and opportunity need the balance of the tougher traits and ultimately, this balance requires strong leadership at the top: a leader who can be the role model to demonstrate these behaviours, and be able to maintain that difficult balance within the individuals in the organisation.
As Gary Pisano says: “If you want your organization to strike the delicate balance required, then you as a leader must demonstrate the ability to strike that balance yourself.”