Oct 21, 2008

Innovation and Creative Organizations

Organizations can be creative in two ways...! maybe three! 

One, consider the case of a traditional Indian licence rajconglomerate that seeks to be 'creative/innovative' in the new age...It's better off trying to replicate the 'skunkworks' analogy and isolate the creative group (with high business outcomes) from theexisting culture and help them flourish ...! Lots of organizations have tried this approach and succeeded like Indian automobile manufactures .
This is the structural solution...easy to do...but the cons come inthe integration part...the 'skunkworks' will never truly be 'a part of the bigger organization'...always be considered the 'geeks' amongst the 'suits'.

And eventually most of them will leave and the business would have lost the lessons they had learnt...unless the business tries to take on the culture.

That's when we go to approach two .

Approach two is to embed creative thinking into the organization, have dedicated champions who understand benefits...strive and keep at it ...and nine times out of ten this won't succeed...and the companies will have obits written about them..But for the one in ten who succeeds, well you can be sure that HBR will write a case study !And approach three ?Well you can begin a creative company to start with ! Jokes apart, when I read Edgar Schein's views on Organizational Innovation, it made me a little sad :-( From the Businessworld site:

MIT's Edgar Schein has very strong views on organisational culture. He believes business theory has got it all wrong - it is impossibleto transform an innovative company into a business-driven one."Aculture of innovation doesn't scale up. As a company grows, it must either find a way to break away small units which continue to innovate, or abandon innovation as a strategic priority. Also,different organisations with different cultures are needed at different stages in the evolution of a market. Current business theories are too locked in making a mature corporation in a maturemarket not only economically effective, but innovative as well. That may be just as difficult as making an innovative company economically effective. In a developing market based on new technologies, you may need more organisations like Digital, many of which will not survive,but will create an industry. Thus, playing their role as innovators.I am not sure that companies can avoid getting into such a culturetrap. Business books always have a solution for everything. I am trying to be a bit more pragmatic. Some problems don't have an easy resolution. Companies do die. Wang could not make this transition. Neither could Polaroid. It is not something which you can necessarily fix unless the entrepreneur is able to see it and chooses to abandon some of his original values. But you cannot say he should see it -some do, some don't. It is very easy for us to say what theentrepreneur should or shouldn't do. But it is very difficult to predict if they, in fact, will do it."

Originally posted October 2004