What is Organizational Innovation?

innovation definition

Organizational innovation refers to new ways in which work can be organized and accomplished within an organization to encourage and promote competitive advantage. It covers how organizations, and specifically individuals, manage work processes in areas such as customer relations, employee performance and retention, and knowledge management.

At the center of organizational innovation is the need to improve or change a product, process or service. All innovation revolves around change, but not all change is innovative. Organizational innovation encourages people to think independently and creatively by applying personal knowledge to organizational challenges. Therefore, organizational innovation requires a culture of innovation that supports new ideas, processes and, in general, new ways of “doing business”.

The benefit of an innovative organization

When promoting a culture of innovation, organizations should encourage:

– Building cross-functional teams while discouraging the building of silos.

– Independent and creative thinking to see things from a new perspective and to be outside the parameters of a job role.

– Employee risk taking while reducing the status quo

The value and importance of knowledge and learning within organizational innovation is crucial. If innovation is about change, new ideas, and looking outside yourself to understand the environment, then continuous learning is a requirement for successful organizational innovation.

The value of learning and knowledge can only be realized once it is put into practice. If the new organizational knowledge does not generate change, whether in processes, business results, or increased customers or revenue, then its value has not translated into success.

The path to organizational innovation lies in the ability to impart new knowledge to company employees and in the application of that knowledge. Knowledge should be used for new ways of thinking and as a springboard to creativity and to change and innovation.

Steps towards innovation

To determine how conducive your current environment is for fostering innovation, read the FAQs and answers below on how to build an organizational culture that fosters innovation.

1) Is there a climate of innovation supported by senior management?

A. That means activities such as risk-taking and small ad hoc working groups that brainstorm and discuss ideas need to be promoted, supported, and encouraged within the organization.

2) Do managers routinely identify and assemble those most innovation-oriented individuals, those willing to think of new ideas and act accordingly?

A. Identifying new thinkers and change-oriented individuals helps ensure an outlet for innovation by supporting these individuals and giving them and their like-minded colleagues time and opportunity to think creatively. This is equivalent to becoming an innovative organization.

3) Is there a process for monitoring innovation teams and identifying what has worked and what has not worked as a result of them?

A. It is important to maintain and monitor innovation. This requires checks and balances that identify how innovation is developed and managed, and processes that capture what worked and didn’t work. In order to continue to innovate in a changing environment, it is key to continually monitor the internal and external environment to determine what supports or hinders innovation.

4) How can an organization be strategic and focused on its objectives and at the same time build and develop an innovative culture?

A. The value of a strategic approach continues to be important to the success of a company. In fact, clear direction and an understanding of a company’s mission can help drive innovation by knowing where in the organization innovation and creativity would deliver the most value. An innovative organizational culture creates a balance between strategic focus and the value of new ideas and processes to achieve them.

5) Is there a single most important variable or ingredient that drives an organization towards an innovative culture?

A. Like other organizational successes, innovation is driven by the people in the organization. First, management must set the expectation for innovation and creativity and then “doing business” is about how to improve processes, products and customer relationships on a day-to-day basis. This mindset itself will create a continuous culture of innovation.