BusinessWeek recently interviewed Rajesh Chandy, Professor of Marketing at the U of M. Chandy identified five common traits of innovative companies in his recent paper, ”Radical Innovation Across Nations: The Pre-eminence of Corporate Culture.” Perhaps somewhat surprising, he found that corporate culture was the driving influence on wether your company was innovative or not.
Those five traits are:
- Future Market Orientation – how much your managers and execs talk about what will be vs what is. Think about “the extent to which a firm emphasizes, in its market research activities, customers and competitors who are not currently in the markets it serves.”
- Willingness to Cannibalize – how willing you are to destroy something you fought for (or created) in order to create something new. In paper format, this “is an attitude that puts up for review and sacrifice current profit-generating assets, including current profitable and successful innovations, so that the firm can get ahead with the next generation of innovations”
- Tolerance for Risk – The more you are willing to take calculated risk, the more innovative you will be.
- Incentives for Enterprise – Innovative companies reward employee’s success in a significant way, and failure comes with only a mild reprimand. “By this practice, the firm refrains from rewarding only or primarily seniority or management of current products. Rather, it ensures that adequate if not large incentives are reserved for employees who venture to explore or build new enterprises for the firm.”
- Empowering Product Champions – “By this practice, a firm empowers an individual with resources to explore, research, and build on promising but uncertain, future technologies. In effect, it embeds within the firm the enterprising spirit that enabled it to initiate the original innovation that brought it success.”
These rung rather true for me.
Chandy ended the interview with Tolstoy’s Anna Karenina line: Just like “Happy families are all alike; every unhappy family is unhappy in its own way,” innovative companies are all alike and un-innovative companies lack innovative in their own special way.
Tags: business culture, education, innovation, leadership
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