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Home arrow Management arrow Strategic Management in the 21st Century. Corporate Strategy

Communication

Effective organizational communication has been shown to contribute to innovative environments in terms of more effective problem solving, reduced development times, increased flexibility, better cooperation between individuals and groups, heightened initiative and commitment, and increased sensitivity to customers and markets.46 Likewise, communication failures lead to poor performance in terms of cost increases and budget overruns, time delays, and poor quality and morale.47 Having the right information at the right place and time adds value by contributing to time and place utility.

In the book What Happy Companies Know, one chapter focuses on fostering innovation.48 One of the mantras offered is "the team that sits together invents together," and communicates the importance of co-location in fostering communication and the cross-pollination of ideas. Similarly, the Obeya approach or "large room" process utilized by Toyota is based on the notion that "close proximity spurs informality and interaction, which spurs innovation, particularly among people in different fields or areas of expertise."49 Jack Welch, the former CEO of General Electric, is quoted as supporting this approach, "Co-location is the ultimate boundaryless behavior and is as unsophisticated as can be . . . one room, one coffeepot, one team, one shared mission."50 Effective communication has thus been called "superglue #1" in the development and maintenance of effective relationships and innovative environments.51

Leadership

As exemplified by Phil McKinney, the innovation wizard and vice president of Hewlett Packard, innovative environments are generally best served by collaborative leadership styles. Since every factor of an innovation environment hinges on management support, it can be argued that supportive leadership is the most important factor in innovation. In his "Seven Immutable Laws of Innovation," McKinney ranks the law of leadership as law number one in creating an innovative environment. This law states, "Executive level support (Board, CEO and his/her direct reports) is critical for an organization that wants to have innovation at its core. Leadership means talking-the-talk AND walking-the-walk. It means committing (and protecting) resources (time, money, people, equipment) for innovation. How much time does the executive team as a group and individually spend working on innovation? Listening to status reports from others doesn't count."52 It is interesting to note that the second law, the law of culture, also contains an element of leadership, as do laws four (the law of patience), six (the law of big hairy aggressive goals—BHAGs), and seven (the law of execution). The other laws are the laws of resources (3) and process (5).

One example of an innovation culture that reflects the law of BHAG is Honda Corporation's philosophy of "kick the ladder out," or creating innovation environments in which there are high expectations, a culture of "no going back."53 Honda's approach is to assign aggressive/difficult projects to autonomous teams and establish a serious expectation of success. Although failure would not likely lead to termination of employment, there is a cultural stigma associated with these BHAG projects. Those invited to participate in them are honored by the trust placed in them, and those who succeed become heroes within their organizations. Using BHAG in innovation is different from traditional stretch goals in that a BHAG approach creates a serious expectation of success even though the goals are ambitious, whereas stretch goals are typically more of a wish without the serious expectations or consequences of BHAGs.

 
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