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How Culture and Leadership in Organizations Influence Innovation

by Lena Tarakjian, with a conclusion by Bertrand Viala

Diversity Management is key to innovation

In any organization, people bring with them their own ideas, experiences, dreams and imagination which can be used as the seeds of innovation giving the company competitive advantage over competitors. Therefore, to sustain innovative environment businesses need to operate as a cohesive unit to function creatively and flexibly to be able to move forward on solid grounds. Doubtlessly, innovation remains vital for the success of organizations and one of the most powerful resources for company’s growth.

This culture of fostering innovation needs innovative, visionary and effective leaders putting the right processes in place to manage creativity and transform them into actual innovations. Moreover, to tolerate a trial and error practice to give their employees the freedom of expressing their ideas without any boundaries. Such a culture fuels creativity and boost performance.

Ability To Trigger Effective Teamwork in a Diverse Environment is Key

In light of this belief, teamwork is another key element for the innovation process as it brings together from all walks of life a variety of personalities and nationalities with their imagination and creativity pooling ideas and putting a piece of their mind to generate newness together with their market understanding and their commercial plan to build profitable products (Ulijn, 2001).

In this sense, it is important to note that the presence of different nationalities in an organization defines the way people think, feel, react, function, and perform. For instance, French and Italians are knowns for their creativity and their design, Germans and Japanese are reliable when it comes to production and precision, and Americans have been pioneers in marketing and understanding market dynamics etc. (Elenkov, 2009). As such, hiring is critical for organizational innovation since newcomers bring their experience, knowledge, skills, and fresh ideas which enhances the innovation culture in organizations (Wang, 2019).

This in turn enables the organization to be more flexible in its engagement with an incredibly varying set of diverse customers locally and globally. So if you want to go global and target new markets, measure your innovation capacity in how open your organization is to new types of profiles and how you can put them to work together effectively.

Check Your KPIS and Recruitment Policies

Innovation needs discipline and diversity, not conformism

At Battle Tested Consultant, we recommend you start using the following KPIs:

  • What is the proportion of your staff have similar academic training and professional background?

  • What is the proportion of staff in your in-house or extended team (contractors, consultants) that have a significant working and business experience (more than 5 years) in your target markets and international environnments.

  • In your daily/weekly management processes, how many times do teams and staff from various backgrounds interact to generate new ideas and assess current projects?

First things first, for this to work, you have to make sure that your recruitment and HR officers have a strong understanding of diversity management. If your HR director is risk adverse and does not value people that can bring an out-of-the-box value, changing the rest of your organization and projects will likely have a very limited impact.

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