Organisational context

Focus on the internal business environment

It is important to look inside your company and ask yourself: What do we do? How does my company contribute to system innovation? How can I contribute in the future? What do I need, what do I need to change within my company to play the innovation game? 

At a strategic level, the importance of analysing a company's internal resources has been developing in recent times, since the 1990s, with the theory resource-based view of the firm. Therefore, a much more resource-oriented focus (financial, technological, physical, reputation, human capital) was adopted. 

This shift in focus was motivated by the high and increasing instability of the competitive scenario. Companies must increasingly focus on what they can do in relation to their own internal resources and expertise. Starting from their own resources, they must then define attainable and challenging objectives, in line with the opportunities and developments in the context.

Organisational characteristics

There are four internal ingredients for creating innovative and entrepreneurial capacity (potential to generate innovation), according to Sorensen and Fassiotto's (2010) 'Organisations and fonts of Entrepreneurhsip'.

  1. Knowledge
    My company must have knowledge/experience/know-how that can be used to innovate. 
  • Specialised and vertical know-how (useful mainly in the conception phase).
  • Transversal/horizontal skills (mainly useful in the commercialisation phase at the market).

Both are important for successful innovation. It would be useful to have both in the right balance.

2. Culture of change 
What is culture? Culture is the values/thoughts that a company carries forward. The term 'corporate culture' is usually attributed to Edgar Schein, Professor at the Sloan School of Management at M.I.T. (Massachusetts Institute of Technology). He describes culture as: "A structure of basic assumptions - invented, discovered, or developed - by a given group as it learns to deal with its problems of external adaptation and internal integration“. 
So culture is values and behaviour. What are the key words of a culture of innovation? 

Some keywords of the culture of innovation: 

  • tolerance for failure;
  • aptitude for experimentation; 
  • transparency in communications;
  • openness to collaboration (internal and external);
  • non-hierarchical organisational structure. 

A balance, a equilibrium, must be found on these five dimensions: tolerance for failure (but not for incompetence), aptitude for experimentation (but with discipline), transparency in communications (but openness and acceptance of criticism), cooperative attitude (but identification of responsibilities), non-hierarchical organisational structure (but strong leadership). 

There is no one-size-fits-all recipe, but it is important that each one finds its ingredients among them and, above all, the right balance/balance between opposing forces. 

Last consideration: is culture only about one person? No, one person alone doesn't go anywhere. We talk about corporate culture, culture of change because it must be internally socialised and shared by everyone who works in the company. If it is only one person's it is not a culture of change, we need to move together to make innovation, those who lead the change must take the whole company with them. 

3. Incentives 
To direct behaviour towards change, I have to create incentives to change. Creating incentives for change is about creating a culture of change. Employee incentives, rewards for those who generate diversity, for those who innovate. Rewards and recognition (not just financial) for employee behaviour that goes in the direction of innovative goals. 

4. Reports 
Stay connected, don't be isolated. Innovation is not done by standing alone, relationships are needed to activate resources, access resources, identify opportunities and create partnerships. Relationships within the company, but above all also relationships with the outside world (suppliers, customers and also competitors). 

Promoting not only established, structured and frequent relationships (strong ties), but also spot relationships, one-offs, oriented towards getting to know diversity, creating variety, because it is only from what I do not know that I can get new stimuli to innovate (weak ties). 

The history of successful innovations shows that the most revolutionary ideas have arisen from infrequent relationships (weak ties) because they are less conventional, more open, with more input in terms of diversity and change. 

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Italy - Gorizia

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