Making the Case for Culture: Innovation

By Dr. Stacy Van Gorp, executive director of R.J. McElroy Trust

Many of us wonder how to fuel innovation in our organization. We ask ourselves a cascade of questions. Do we have the right people to make this happen? Do we have the right culture to support innovation? Do we have the right process to bring ideas to fruition?

I spent the last few years researching how organizations can fuel innovation and identifying the predictors of innovative organizations.

Try your hand at predicting what makes an organization ready to innovate. Which of the following factors is the best predictor of an employee who is ready to innovate for your organization? If you’re feeling geeky, try ranking these items:

_____ An employee’s psychological disposition to change.
_____ An employee’s tenure with the organization.
_____ An employee’s level of engagement in the workplace.
_____ An employee’s assessment of the trustworthiness of your organization.
_____ An employee’s perception of how your organization resolves conflict.

I researched the above question with a large nonprofit credit union. I wanted to understand how we, as organizational leaders, can help innovation thrive. Specifically, I studied what is required to help employees feel ready to innovate. I call this innovation readiness.

The results were revealing.

Demographic categories, like organizational tenure and age, were not good predictors of how ready someone was to innovate. Keep this in mind when you hear someone say that you need “fresh blood” to increase innovation.

Employee engagement was also not a good predictor of a person’s readiness to innovate. Think of engagement as the opposite of burnout. Engaged employees may be more committed to your cause, but it doesn’t necessarily help them feel ready to launch new ideas.

Psychological resistance to change was a predictor of innovation readiness. People who had high resistance scores were, not surprisingly, less likely to feel ready to innovate.

While individual disposition was predictive, it was organizational culture issues that mattered most.

The second strongest predictor of innovation readiness was the employee’s perception of the organization’s ability to deal with conflict. Employees who believed that the organization had low conflict or handled conflict effectively were significantly more likely to feel ready to innovate.

The best predictor of innovation readiness was an employee’s perception of an organization’s trustworthiness. In fact, this predictor was five times more powerful than an individual’s disposition to change. Organizational trustworthiness reflects an employee’s opinion of the reliability, benevolence, competence, honesty and openness of the institution. My research focused exclusively on institutional trust, not interpersonal trust.

Perceptions of trustworthiness and conflict are both issues of culture. To accelerate innovation, organizations frequently focus on processes, like how to find new ideas or how to allocate resources to innovative projects. Or, we become focused on innovation amenities like 10% discretionary time, ping-pong tables, and free-flowing-lattes. However, it’s harder to tackle the culture that it takes to unleash the creative potential and risk-taking of our teams. Reducing conflict and building organizational trust are investments in building your organization’s innovation capacity. They are the foundation upon which innovation processes and practices can succeed.