Factor 2: Management’s view of innovation

This Factor measures the extent to which management explicitly looks for innovation.

Factor extremes as measured in survey:

Management explicitly looks for innovation


Management does not explicitly look for innovation

Overview to restructuring initiatives

Senior management has not made it clear to all employees and to other stakeholders, either by their action or inaction or by not communicating effectively, just how important innovation is to the corporation., Solutions may lie in demonstrating the importance of innovation by making new appointments, improving communications and making use of other fully transparent means of recognizing the importance of innovation. Actions speak louder than words. Modify the signals and actions taken by senior management to clearly demonstrate the importance of innovation

Examples of good policy and management practices

Factor #2 is one of the 8 most important building blocs to support corporate innovation.

3M makes explicit the importance of innovation to the company’s success. There are no doubts as to the importance placed on innovation.

An example of the commitment to innovation by the organization is set out in 3M’s publication, ‘A Century of Innovation’. When asked to describe his company in one sentence, Coyne, who was senior Vice President of Research and Development, was succinct. In a book titled “Innovation: Breakthrough Thinking at 3M, DuPont, GE, Pfizer and Rubbermaid,” Coyne said, “At 3M, we live by our wits. Innovation may be an important element of other corporate strategies, but for us, innovation is our strategy.” For decades, Coyne said, 3M has been balancing on “the innovation high wire” and funding research. When I joined 3M in 1962 as an organic chemist, Leon Royer, retired senior director, Commercial Office Supply Division of EM, says, some of us called 3M ‘the big red sandbox.’ Product innovation is our magic and our soul. Today, 3M is the best and biggest sandbox to play in. All statements are explicit evidence of a commitment to innovation.

Google, which ranks very high in anyone’s list of innovative companies, places a very high emphasis on all aspects of innovation. The Boston Consulting Group report, Innovation 2007, reports that respondents to their survey were particularly impressed with Google’s culture. Perks, massages, flexible schedules, were all mentioned as ways by which Google creates an environment which allows employees to focus on innovation.

Possible Initiatives to Modify and Improve the Culture for Innovation

Improve corporate governance at the Board level

Form an outside advisory group as a source of ideas on new technologies or markets and make its formation well known throughout the organization. Alternatively, appoint an advisory group to provide advice on current corporate seen-to-be innovative projects. Restructure the Board by creating an ‘Innovation Committee’ and assign to the Board a clear role in the stimulation and oversight of innovation. Further modifications at the Board level could include changing the selection criteria for Board members to include prospective Board members’ ability to contribute to some aspect of innovation

Modify/change top management positions

Reinforce the emphasis on innovation by appointing a senior person to be primarily concerned with innovation such as a chief technology officer, an innovation director, a corporate development director or technology czar. Replace, were necessary, an existing CEO or division head to accelerate the pace of change and/or innovation performance.

Reorient corporate values by improving communications about innovation

Increase overall awareness about innovation by encouraging senior executives to talk about the importance of innovation to the company’s economic performance. Create a widely-shared vision of the company’s future that reinforces a dependency on innovation. Reinforce the stated corporate attention to innovation by offering rewards, recognition, and career advancement to innovators or groups that have been successful in implementing new initiatives.

Divest low performing non-innovative business

The corporate message on the importance of innovation can be reinforced where, in the case of a slow-growth non-innovative business, a decision is taken to divest the business and focus on other opportunities. Equally clear is a message that the Board expects that upwards of 25% of product sales over the next 5 years will come from products introduced within the next 5 years, although this refers to only one aspect of innovation and may therefore place unintended priority on only the product aspect of innovation.

Make use of all manner and means of communication to get a message out

Make sure the company’s web site as well as other newsletters which have wide distribution contain a section dealing with innovation in the company. In addition, as many innovative companies do, provide an ‘Innovation Time Line’ on the corporate web site as illustrative of the innovative tradition of the company.