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How Company Culture Makes Innovation Ability of Every Organisation

Updated: Nov 12, 2018

Companies benefit when employees speak up. When employees feel comfortable voicing their opinions, suggestions, or concerns, organizations become better at handling threats and opportunities.

Not only. Evidences show that the more radical the collaboration the better it is. Data are clear: in order for Innovation to flourish you need to protect Dissenters. But in order to protect dissenters you first need to have them.

Executives can create the right context towards innovation by applying some processes and best practices in decision making. Six of them that have proved most effective in a business context. A company that applies all six practices will significantly increase the chance of Creating successful innovation.

  1. Set Decision Rules

  2. Pay Attention to Voting Rules

  3. Protect Dissenters

  4. Expressly Consider Alternatives

  5. Separate Advocacy and Decision Making

  6. Reinforce the Anticipation of Regret

All these rules are aiming at one main target: removing confirmation biases and groupthink in favour of diversity and radical collaboration.

All these rules requires for employees to speak their mind.

But often employees remain silent with their opinions, concerns or ideas.

There are generally two viewpoints on why: One is the personality perspective, which suggests that these employees lack the disposition to stand up and speak out about critical issues, because they might be too introverted or shy to effectively articulate their views to the team. This perspective gives rise to solutions focusing on external capabilities (innovation capacity) such as hiring employees who have proactive dispositions and are more inclined to speak truth to power.

By contrast, the Contextual perspective argues that employees fail to speak up because they feel their work environment is not encouraging it. They might fear suffering significant social costs by challenging their bosses: retaliation and punishment. This perspective leads to solutions focused on how managers can create the right social and internal conditions that encourage employees to voice concerns without fear of sanctions.

To paraphrase Joseph Schumpeter “Innovation is an act of creative disruption” that requires to let go existing paradigms to evaluate and embrace new ones. Advocating for new systems often requires demolishing the old way of doing things, and typically this means “rocking the boat” and possible retaliation.

This has obvious consequences. Researches show that among nearly a thousand scientists at the Food and Drug Administration, more than 40% were afraid that they would face retaliation if they spoke up publicly about safety concerns.

Of more than forty thousand employees at a technology company, 50% felt it was not safe to voice dissenting opinions at work.

When employees in consulting, financial services, media, pharmaceuticals, and advertising companies were interviewed, 85% admitted to keeping quiet about an important concern rather than voicing it to their bosses.

Companies that are tied up in these dynamics lose their capacity to innovate and fail dramatically usually by doubling down on a once successful strategy that is now anachronistic and failing.

These two perspectives aren’t mutually exclusive, but we wanted to test which one matters more: If personality is the primary predictor of speaking up, situational factors shouldn’t matter as much. This means that employees who are inherently disposed to speak up will be the ones who more frequently do so. By contrast, if the situation or environment is the primary driver of speaking up, then employee personality should be less important – employees would speak up, irrespective of their underlying dispositions, when the work environment encourages speaking up, and they would stay silent when the environment doesn’t.

A research by Harvard Business Review on 291 employees from a manufacturing plant in Malaysia in 2014 and their supervisors (from 35 teams overall) confirms these results are globally applicable.

Data shown that both personality and environment had a significant effect on employee’s tendency to speak up with ideas or concerns. Employees with a high approach orientation, who tend to seek opportunities and take more risks, spoke up more often with ideas than those with a lower approach orientation. And employees who believed they were expected to suggest ideas spoke up more than those who didn’t feel it was part of their job.

But evidences show that a strong environmental norms could override the influence of personality on employees’ willingness to speak up at work. Even if someone had a low approach orientation, they spoke up when they thought it was strongly expected of them at work. And if someone had a high approach orientation, they’d be less likely to speak up with concerns when they thought it was discouraged or punished.

Data supports the Contextual Perspective better than the Personality Perspective.

This finding suggests that if you want employees to speak up, the work environment and the team’s social norms matter. Also, the environment could influence how employees spoke up. Employees voiced their opinions in two different ways—by identifying areas for improvement at work, and by diagnosing potential threats to the organization and calling out undesirable behaviors that might compromise safety or operations.

When norms at work encouraged detection of potential threats or problems, employees spoke out more on issues such as safety violations or breaches of established work practices. But when such norms encouraged improvements and innovation, employees more often spoke up with novel ideas for redesigning work processes that promoted innovation on the shop floor.

This suggests that work norms can not only encourage all employees to speak up but also focus their voice on specific issues confronting the organization.

It is fundamental for executive and managers working in contexts where innovation is important (which today is pretty much every context), to create an environment that really encourages employees to come up with ideas that can offer new opportunities for success. On the other hand, managers working in contexts where reliability is critical would do well to specifically create an environment where employees are focused on forecasting and speaking up about potential threats that can hinder or disrupt work operations.

A shift in cultural paradigm

Creating a transparent, innovative, engaging culture within companies is even more crucial when we consider about the impact of millennials in today's economy and on the work environment. Data show that millennials are focused to work for organizations that support innovation and on feeling involved. In fact, 78 percent of Millennials are influenced by how innovative a company is when deciding if they want to work there, but most say their current employer does not greatly encourage them to think creatively.  They believe the biggest barriers to innovation are management attitude (63 percent), operational structures and procedures (61 percent), and employee skills, attitudes, and (lack of) diversity (39 percent).

In an increasingly competitive and Innovation based Market, attracting and retaining talent is going to be crucial for companies. But when we asked "How long do you expect to stay with an employer?" the finding were generationally astonishing. 90% of millennials plan to leave within 5 years Over a third within 24 months.

When asked what matters to them when choosing an employer the results were clear: 3) Career opportunities 2) Organisational Culture 1) Work-life balance.

it's implicit that these are 3 links of the same chain and one (missing) link would help them collide in harmony: Purpose.

When we talk about attracting, retaining and nurturing talent and future leadership, purpose, is critical. The power of ‘why we are here; what it means to work here’ has never been more important to employees.  If the transactional nature of work, the lower levels of Maslow’s hierarchy, are losing sway, then the higher order of meaning surely needs to be owned by team leaders and within the everyday dialogue of the team. 

It's clear than that companies need to deeply rethink their culture to be able not only to listen to be relevant in external "market conversations" but also to engage, retain and grow internal leadership through a continuously Innovation and engaging cultural framework.

The great news for companies is that technology could help. If Fitbit watches can be so popular supervising a person's daily movement activities, and GPS systems can get people from place to place without them having to do a lot of thinking, so too can apps help us build open organizations. We just need to move from principles to actions.

All it takes is a platform able to identify and track specific behaviors, attributes, and actions, that express the characteristics of open organization (transparency, inclusivity, adaptability, collaboration, and community) and that is able to generate a collaborative rewarding and meritocratic system based on an algorithmic measurements for each behavior.

Too good to be true? Stay tuned.

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Erin Fields
Erin Fields
07 Οκτ 2021

Very thhoughtful blog

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