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Creating an innovative (entrepreneurial) organisation - Coggle Diagram
Creating an innovative (entrepreneurial) organisation
Organisations vary considerably in their ability to innovate
Managers and leaders must consider how they can build and develop innovative and entrpeneurial organisations if they are to harness the benefits of creativity
The drivers for innvoation include technological advances, the changing business environment, increased competition and changing customer needs
Organisations innovate to gain advantage through cost reductions, product differentiation and enhanced responsiveness
Innvoating organisations are designed to size opportunity, to take risks, to do things for the first time and embrace uncertainty
Such organisations must be adept at creating new ideas (invention) and then exploiting them (implementation)
The task of innovating organisations is fundamentally different from the operating organisations as well as being more uncertain and riskier
The innovative organisations must regularly make innovative decisions which address novel problems, those are often strategic decisions and innovation strategy emphasises the introduction of major new products and services
While leadership is responsible for setting direction and the funamental purpose and goals of the organisation, managers will focus on innovation management - that is the discipline of managing innovation processes so that novel ideas within an organisation can be implemented successfully
Innovation processes refer to the sequence of activities that generate an idea resulting in an innovation outcome being output that is new or different
Culture, structures and ways of working that support innovation
Corporate culture, its style and shared values can have a positive influence on innovation
In an attempt to create an innovative organisational culture, managers seek to influence its key aspects
The way organisations work varies and the characteristics of an organisation will have a very powerful influence on innovation
For some organisations especially those in dynamic environments or where technology is pre-eminent, innovation is a strong part of the clutrue
These organisations build an ethic that allows their workforce the autonomy to act on their initiative and within reason to take risks
Leadership plays a key role in developing the innovative organisation both in orchestrating structural design and developing the culture
Leaders are responsible for developing a creative environment based on trust, openness, good communications and a blame free culture
The innovative organisation will typically engage employees and through an open communications climate will encourage participation and involvement
Operating on trust will also enable greater degrees of autonomy and freedom necessary to generate new ideas and experiment
Conflict and debate challenging the status quo are also likely to be encouraged in some parts of the organisation
There is likely to be a tolerance of ambiguity and uncertainty coupled with a resulted orientated rather than process focus, that is a concern with what gets done rather than how it is done, though naturally within an ethical and responsible framework
A key feature of innovative organisations is typically less bureaucracy and the absence of a blame culturue
Innovative, creative and entrpernurail behaviours are motivated by the rognaisation's leaders and managers
The reward system must attract and retain ideas people to the organisation, reward innovative behaviour and the generation of ideas that bring improvements to products or the way that work is undertaken
Organisations can develop structures deliberately that promote innovation through a market orientiation allowing autonomy in teams, appointing innovation champions and through organisational alignment
Organisaations also need to assess their view of risk and failure
As innovation involves the risk of failure, managers need to assess their reaction to failure
Managers can only expect their employees to take risks if the organisation can culturally accept the possibility of fialure
Organisations seeking to encourage innovative behaviours will typically create flatter designs to support autonomous working and empowerment, focus less on high degrees of specialisation and engage employees
Organic structures
Channels of communication
open and free information flow throughout the organiation
Operating styles
allowed to vary freely
Authority for decisions
based on the expertise of the indviudal
Free adaption
By the organisation to changing circumstances
Emphasis on getting things done
Unconstrained by formally laid out producedures
Loose, informal control
with emphasis on norm of cooperation
Flexible on-job behaviour
permitted to be shaped by the requirements of the situation and personality of the individual doing the job
Participation and group consensus used frequently
Mechanistic structures
Channels of communication
highly structured, restricted information flow
Authority for decision
based on formal line management position
Operating styles
must be uniform and restricted
Reluctant adaptation
insistence on holding fast to tried and tested management principals despite changes in business conditions
Emphasis on formally laid down procedures
reliance on tried and true management principles
Tight control
through sophisticated control systems
Constrained on-job behaviour
required to conform to job description
Superiors make decisions with minimum of consultation and involvement of subordinates
Characteristics that aid the innovation process
There are a number of factors that can help an organisation to succeed in innvoation
Innovative organisations continually scan the environment, keeping a vigilant eye for any emerging threats and opportunities
They commit resources to the innovation process and acknowledge they cannot do everything themselves, often outsourcing non essential acitivites
They are aware of and receptive to external developments and identify and accept outside technology
The innvoation process is dynamic and organisations need to be adaptable and accept both change and risk
Innovation requires a diverse set of skills and innovative organisations co-operate and work across functional boundaries
Innovative teams can be created with a mixture of specialist and diverse knowledge and skills
Not only does the structures et of values, leadership and management style impact upon innovative and entrepreneurial behaviour within the organisation but space and time also have roles to play
Work space is often used for thinking, communicating and orking
Work space can be designed to optimise innovtion
Creativity requires the allocation of time and innovative organisations attempt to manage the time pressures on their workforce