Creating a Culture That Fosters Innovation

Creating a Culture That Fosters Innovation

by / June 19, 2002
Entrepreneurial government has been increasingly talked about in recent years. A new book by Stephen M. Shapiro, 24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Change (McGraw-Hill, 2002, ISBN: 0-07-137626-7, $29.95) offers a fresh look at how to develop a culture of innovation within any organization or company.

Stephen Shapiro was previously an Associate Partner with Accenture. After a dozen years in the New York office, he moved to London to lead the firm's European Process Excellence practice. He has consulted with global corporate leaders such as BMW, Williams, ABB, UPS, Lucent and Xerox.

According to Shapiro, changes must be made in virtually all parts of an organization, from management style to measurement systems. While such transformations don't happen overnight, it is possible to gradually bring about modified employee behavior, leading from the top.

Specifically, he offers several key strategies that have successful been used in the private sector to create innovative cultures:

*Make Everyone Accountable. Because a few individuals at the top cannot possibly plan all of a company's activities, give employees a set of rights, responsibilities and rewards that make them accountable for their own actions. Koch Industries, an oil and gas company based in Wichita, Kansas, wanted to achieve world-class safety. Rather than have a few safety engineers scour the company, Koch gave this responsibility to all employees, with rewards both for uncovering unsafe conditions and for discovering new ways to conduct business more safely. This initiative resulted in as much as a 50 percent improvement each year in the number and severity of accidents across Koch Industries. Within one year the company had moved from the middle of the pack to having one of the best safety records in its industries.

*Encourage employee innovations, and reward them accordingly. Companies are often fast to turn to outside help, when in fact they already have the capabilities within their organization to do the job. Koch's pipeline business in Minneapolis had budgeted $30 million to expand its pipeline with external support. A team of company employees decided that they could do the job themselves better and cheaper, and within a couple of months they had increased the pipeline's capacity by 15 percent while spending only a little over $1 million. Koch immediately gave them all a check averaging 15 percent of their annual salary.

*Replace rigid processes with clear business objectives. Too often innovation is stifled because companies define business processes in great detail, then hand those designs to the line that is expected to execute them from memory. M
Blake Harris Editor
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