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Creating a Culture of Innovation

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If your organization is ready to truly embrace an innovative culture, consider the adoption of an enterprise-wide system and move towards executing strategy in any economy.


A New Paradigm

Innovation has long been driven by an old paradigm of push from within technical groups — define solutions quickly and conduct rapid development with little consideration of adoption until launch. Today, though, a new paradigm for innovative cultures is stirring:

Innovation System Components

Creating a culture of innovation cannot be achieved through creativity and process training alone. Innovation cultures require enterprise-wide systems and practices that position everyone at every level to operate in a way that moves the entire organization towards realizing its long-term strategy.

The strategic plan of an organization is simply the future vision of the organization. The “what will be” stated by the senior team. Based on this viewpoint, everything in the strategic plan does not exist today and thus is a needed innovation. Historically, organizations tried to apply standard processes lower in the organization to generate creative solutions and implement projects. This methodology definitely provides a return on investment with project teams being more effective and efficient and ideas being creative. However, this method misses the mark on supporting an organization’s ability to execute the strategy.

Consider this statistic: 90% of organizations that have strategic plans fail to execute them. This is not because they don’t have the right people or enough people — the failure is often due to the lack of an enterprise-wide system for strategy execution. This is where the Innovation System comes into play.

An Innovation System is an enterprise-wide system comprised of best practices and methodologies for conducting top-down creation and bottom-up execution of the strategic plan. Illustration #1 shows the components of a standard Innovation System. Each component is described in more detail in the table below:



Horizontally Focused Strategic Planning Everything that is new in the organization is an innovation. Given that organizations are complex matrix organizations, the strategic plan must be created with a focus on optimizing the horizontal dimension of an organization to deliver the organizational mission.


Horizontally-focused strategic planning begins with the mission and identifies long term and short term goals which are decomposed until innovation projects are identified.

Innovation Portfolio Steering Process The portfolio of innovation projects that are identified through the strategic planning process are the ideas for how to deliver the strategy. In order to ensure that the organization can deliver what is set out, a steering process that is focused on selecting, funding and monitoring the status of the portfolio of is needed. This process is horizontally-focused and requires horizontal governance councils to be accountable for the portfolio’s results.
Proactive Accountability If you are truly striving for a culture of innovation, then the accountability system in place must be aligned to foster this culture. Innovation is a team-based effort that requires collaboration across functions. Therefore, the accountability system in place must not only support individual efforts but team-based efforts as well, focus on the lessons learned, and support the calculated risk-taking that is needed to truly be innovative.
Innovation Methodology Everyone trained in the organization’s innovation process. Without a methodology, innovation is hit or miss.
Project Management Method All innovations are projects. The organization needs a simple, team-based method that all teams can follow to manage projects.
Innovation Sponsorship Innovation leaders lead the innovation project through one or more of the stages. They will come from today’s ranks of project leaders. Sponsors are needed to interface between the Innovation Steering Committees and the innovation leader.

System Components Are Not Enough

Having a system is a great start to embedding a new culture. However, cultures are based on paradigms and belief systems, and changing the culture already in play in the organization cannot be accomplished through processes and methodologies alone. In addition to the Innovation System, the following shifts need to be made as well:

Customer Ownership of the Innovation Effort

The failure of innovation is often caused by the lack of ownership by the internal customer or customer representative for the innovation. In order to ensure that the selected solution is adopted and becomes an innovation, the customer must be accountable for the success of the development and its launch since it designed to not only solve their problem but move the organization towards its strategy.

Senior Leader Attitudes

For the organization to be successful at innovating, the tone must be set from the top. Leaders need to be open to new ideas, willing to explore new paradigms and reward learning from mistakes. Leaders need to put an end to the blame game and finger-pointing and require cross-functional collaboration to focus everyone on optimizing the whole organization and not just the parts.

Want to Learn More?

Cathy Cassidy

As the Managing Director of the International Matrix Management Institute, Cathy helps organizations and practitioners adopt the skills and methods they need to succeed in today’s complex, dynamic environment. She is a Matrix Management 2.0™ Master Consultant and the author of several books on matrix management, including her most recent publication, Managing Projects in a Matrix. She is a key contributor to the Matrix Management 2.0™ Body of Knowledge, co-developer of the Matrix Management 2.0™ organizational operating system, and a lead developer for the company.