Innovation and Organizational Culture

Posted on by Brandon Klein

    People are reluctant to believe in something they can’t yet imagine or for which they don’t (yet) have a reference. The more successful an organization, the more likely it will continue to do what has made it successful in the past and resist breakthrough innovations. Leaders can, and often do, try to make corporate cultures more receptive to innovation. However, providing innovators with the influencing tools needed to gain support for their ideas within the prevailing corporate culture, whatever that culture may be, will sometimes have a greater impact.
    The more people get specialized in or become acquainted with something, the more they resist novel ideas that interfere with their field or domain. Research found that new ideas – those that remixed information in surprising ways – got worse scores from everyone, but they were particularly punished by experts. Everyone dislikes novelty, but experts tend to be over-critical of proposals and new ideas  in their own domain. As executing and developing a business requires increasing specialization (e.g. in terms of underlying products, technologies or processes), companies become more innovation- and creativity-adverse with higher maturity.
    People tend to value short over long term and answers over questions. Dan Ariely explains: (…) experiments require short-term losses for long-term gains. Companies (and people) are notoriously bad at making those trade-offs. Second, there’s the false sense of security that heeding experts provides. When we pay consultants, we get an answer from them and not a list of experiments to conduct. We tend to value answers over questions because answers allow us to take action, while questions mean that we need to keep thinking. Never mind that asking good questions and gathering evidence usually guides us to better answers.
    Most people are uncertainty- and variance-averse, rather than risk-averse. In business environments, people  like and often need predictable outcomes. The difference between risk und uncertainty is well explained by Andrew Hargadon: The big difference between risk and uncertainty lies in their effect on our behavior. We can deal with risk proper. We can’t deal with uncertainty. We calculate the risks that can be calculated, make sure we can afford the losses (or offset them by hedging) and then proceed. In the face of uncertainty, however, we more often choose inaction.