Organize for Innovation: Tweak the Internals

In today’s economy, it is important that businesses take great strides to survive and be profitable. The way that a business can do that is to be innovative in products and processes (Krell, 2009), and one way companies can be innovative is to setup their organizations to be innovative (Tushman & Nadler, 1986). Using Google and Proctor and Gamble as templates, a person can examine some internal and external organizational attributes that can make companies innovative. Today’s post will just cover Google and internal attributes of innovation.


Google is a company that has infused innovation into its organizational DNA. One of the ways they have done this is to give their employees freedom to work on whatever they want to 1/5 of their time at work. Called, 20% time, this allows Google’s engineers and managers to spend time on new ideas and businesses that aren’t directly recognized by the company (Iyer & Davenport, 2008, p. 64). This HR directive gives Google’s employees the flexibility to find unplanned innovations that will directly (through new products) or indirectly (through knowledge creation) benefit the company. Google also allows its employees to take on risky endeavors and numerous projects recognizing that some will probably fail (Iyer & Davenport, 2008, p. 66). Ultimately, Google lets its customers (mostly Internet users, with some businesses) choose what products will succeed or fail, essentially allowing its innovations be customer directed (Iyer & Davenport, 2008, p. 66). These organizational strategies setup by the founders of Google have propelled Google to beat the Dow and NASDAQ stock indexes as well as make Google the most used search engine on the Internet.

There are attributes that Google has implemented organizationally that makes it more innovative. Such organizational changes may require changes to a company’s Human Relations (HR) policies or just a shift in leadership. I believe that implementing these facets of innovation can modify an organization’s overall performance.

Unplanned

Augsdorfer says that the early stages of innovation needs some freedom for unorganized research (2008, p. 42). He says that innovation at a company needs some rigor, but there are limits to organizing for innovation (2008, p. 43). Researchers who enjoy subversive research will do it anyhow, whether a company allows it or not (Augsdorfer, 2008, p. 42).

Flexible

Innovative people need the flexibility to be creative. First management needs to let creative people have the time to investigate and think about new innovations (Mumford, 2000, p. 318). Creative people need work space that is buffered from unneeded distractions in order to focus (Mumford, 2000, p. 319). Innovative people need a few resources, such as money and tools, in order to accomplish their work (Augsdorfer, 2008, p. 44). This requires an organization to be a little flexible, but not fiscally extravagant, in its budgeting process.

Risk Tolerant

Risk in innovation is related to the success or failure of a project (Newman, 2009, p. 24). Researchers should be allowed to investigate risky projects in order to find something that will have a large payoff for a business. However, projects that are going to fail need to do so quickly in order to lessen the impact on a company (Newman, 2009, p. 25). Allowing a potentially doomed project to fail shows the ability of an organization to properly tolerate risk versus avoiding it (Newman, 2009, p. 25).

Tomorrow’s post will examine Proctor & Gamble,and external attributes and interactions of an innovative company.

References

Augsdorfer, P. (2008). Managing the unmanageable. Research Technology Management, 51(4), 41-47. Retrieved October, 31, 2009, from EBSCO Business Source Elite.

Google. (2009, November 14). Google Inc. Retrieved November 14, 2009, from Google Finance: http://www.google.com/finance?q=google

Google Inc. (1  November). Hoover’s Company Records, 59101.  Retrieved November 15, 2009, from Hoover’s Company Records. (Document ID: 995427241).

Iyer, B., & Davenport, T. (2008). Reverse engineering Google’s innovation machine. (cover story). Harvard Business Review, 86(4), 58-68. Retrieved November 14, 2009, from EBSCO Business Source Elite.

Krell, E. (2009). Business innovation beyond boundaries. Baylor Business Review, 28(1), 4-13. Retrieved November, 4, 2009, from EBSCO Business Source Elite.

Mumford, M. (2000). Managing creative people: Strategies and tactics for innovation. Human Resource Management Review, 10(3), 313. Retrieved October, 31, 2009, from EBSCO Business Source Elite.

Newman, J. (2009). Building a creative high-performance R&D culture. Research Technology Management, 52(5), 21-31. Retrieved November 10, 2009 from EBSCO Business Source Elite.

Tushman, M., & Nadler, D. (1986). Organizing for innovation. California Management Review, 28(3), 74-92. Retrieved October, 27, 2009 from EBSCO Business Source Elite.

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About jpthomp137
Techie/student/husband/father interested in new technology, social media, and innovation.

One Response to Organize for Innovation: Tweak the Internals

  1. Pingback: Organize for Innovation: Setup the Externals « disRupTions

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