Magazine Summer 2017 Issue Research Feature

How to Catalyze Innovation in Your Organization

Executives can fuel the emergence of new ideas by understanding and tapping the power of employee networks.

Michael Arena, Rob Cross, Jonathan Sims, and Mary Uhl-Bien Reading Time: 24 min 

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Economists have estimated that approximately 50% of U.S. annual GDP growth can be attributed to product and service innovation,1 and more than 90% of executives claim that long-term organizational success depends on developing and implementing new ideas.2 Research shows that growth fueled through organic innovation is more profitable than growth driven by acquisition,3 in part because the organizational capability required is vastly different.4 Yet organic, or emergent, innovation typically does not occur without heroic effort in many large organizations. While technology giants such as Alphabet, Apple, and Facebook are lionized for their innovative cultures, other industries struggle with hierarchal organizations that make consistent organic innovation very difficult.

Companies try to address this by formalizing innovation processes. However, such programs, when they succeed, often produce only a portion of the growth that most large organizations require.5 Many innovation programs fail to meet expectations, in part because they separate the innovation process from the informal networks needed to adapt and support an innovation.6 For example, “skunk works” programs have some lauded successes but also many failures because their innovations have been developed outside the social ecosystem of the organization. Similarly, acquisition strategies that attempt to bring in new expertise and creative ideas make logical sense but far too often underperform due to integration challenges.7 Of course, these stories of failure often don’t make it to press, so those less effective approaches persist.

Leaders need to better support emergent innovation to supplement planned new product or service development activities. Our research suggests that, rather than leaving emergent innovation to serendipity, executives should create collaborative contexts where innovation is likely to emerge from unpredictable pockets of creativity. Importantly, managers need to stimulate these kinds of environments in a thoughtful way that does not simply overload employees with new collaborative demands from formal matrix structures, multiple “part-time” team assignments, or collaborative technologies that overtax people and that too often kill creativity and innovation.8

Emergent innovation occurs when entrepreneurial individuals within an organization incubate and advance new ideas for addressing customer needs and dynamically changing market conditions.

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About the Authors

Michael Arena is chief talent officer at General Motors Co. Rob Cross is the Edward A. Madden Professor of Global Business at Babson College in Babson Park, Massachusetts. Jonathan Sims is an assistant professor of management at Babson College. Mary Uhl-Bien is the BNSF Railway Endowed Professor of Leadership at the Neeley School of Business at Texas Christian University in Fort Worth, Texas.

References (26)

1. U.S. Chamber of Commerce Foundation, “Enterprising States 2015: States Innovate” (Washington, DC: 2015).

2. D. Smith and C. Mindrum, “How to Capture the Essence of Innovation,” Accenture Outlook Journal 1 (January 2008): 1-10.

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Comments (2)
Scott Ruschak
I have witnessed these organizational dynamics work successfully in the non-profit world also -- even for small to medium sized NPOs.   The central connectors from different groups -- i.e. "program" , "fundraising/development", and "admin"- were isolated from each other and stayed within distinct groups.  Each group can only make incremental changes by themselves.   Some of the groups were also remote, and this created challenges to promoting adaptive space.   We found 2 components were necessary: (1) a broker(s) who needed to draw them out and bridge the gap, and (2) adaptive spaces like multi-day cross-team workshops.   I would add also that the brokers were not always the leaders of departments (though some were), but often lower-level staff who were wired to serve as bridges (and usually had broad training in multiple departments or disciplines).  One caveat, though - executive leaders who are not enlightened to the power of informal organizational networks can completely disrupt innovation (in a negative way) - by interfering with the creation of adaptive spaces, failing to recognize key brokers and central connectors, and promoting others who are similarly unenlightened.
M L Bhatia
MY  NAME IS CORRECTLY MENTIONED. iT IS ONLY AFTER READING THE ARTICLE THAT i CAI CAN OFFER MY COMMENTS. THANKS.