According to Kelley a culture of innovation may be the ultimate fuel for long-term growth and brand development (2001). In today’s business world companies are valued less for their current offerings and more for their ability to change, adapt and envision something new. The frequency with which companies have to innovate and replenish their stock is rapidly increasing. Schein has defined culture as:
“/…/ the result of a complex group learning process that is only partially influenced by leader behavior. But if the group’s survival is threatened because elements of its culture have become maladapted, it is ultimately the function of leadership at all levels of the organization to recognize and do something about this situation. It is in this sense that leadership and culture are conceptually intertwined.”
Organisational cultures can be integrated, differentiated or fragmented. An organisational culture that is differentiated or fragmented often, according to Schein, has an array of subcultures that have their own set of shared assumptions (2004). He believes that large organisations experience a higher degree of differentiation between its sub organisations (i.e. subgroups). As such, even the strongest formal corporate culture will experience volatile blossoms of subcultures and tensions that arise from the frictions between subcultures can make influence the overall corporate culture or even kill it. Much of what can be known about culture is implicit by nature and cultural knowledge can only be absorbed by experiencing the culture (Hatch & Schultz, 2006). In Schein’s level of cultures, the most tangible and explicit manifestation of culture are artifacts (Schein, 2004). The deepest two layers represent the implicit layers of values, beliefs, and assumptions that govern a culture and also represent the behaviours that are pursued to be changed or controlled (see figure 2).
Figure 2. Levels of culture (Schein, 2004).
Because artifacts appear at a very shallow level they are easily observable, but at the cost of being difficult to decipher. Schein explains that it becomes easier to decipher cultural artifacts if one experiences the culture long enough (2004). Furthermore, symbols are ambiguous without their context and as such, one must experience the deeper levels of the symbols culture to gain insights into their meaning (Schein, 2004). Schein describes climate as an artifact of these basic underlying assumptions and as an organisational process that enforces certain behaviours. Hatch has noted that cultural artifacts convey meaning and an organisational culture develops from how its members utilise them to communicate and sensemake (Hatch & Schultz, 2004). It is in this sensemaking activity that artifacts are linked back the deeper layers of culture and in such a way artifacts become symbols of a shared common ground and the possibility to execute change by shifting the interpretation of the artifacts’ meaning, or introduce new artifacts (Schein, 2004). However, according to Hatch, artifacts carrying new meaning must integrated into the larger organisational culture by its members (i.e. sensemaking). When new artifacts are introduced to a culture their new values will induce a sensemaking activity. Introducing a few artifacts won’t change the overall patterns of a culture and its core meanings, but overtime, however, continuous change within an organisation will do this (Hatch & Schultz, 2006). When new values carried by artifacts demonstrate relevance to the members of the culture, change is realised travels down to the underlying regions of values and assumptions. This constitutes a cultural change, as expressed by Hatch, when new meaning is embedded in the value layer of culture (Hatch & Schultz, 2006). Primary embedding mechanisms try to, in a direct way, shape employees sense-making activity (i.e. top-down approach), while secondary embedding mechanisms are more indirect (i.e. bottom-up approach). The latter approach tries to influence employees through organisational structures and cultural artifacts, separate from the leader (Schein, 2004). Top-down is less subtitle and more difficult for employees to resist the associated power. In this sense, leadership provides a force that can be imperative and very influential in cultural change practices (Hatch & Schultz, 2006). The bottom-up approach gives insights into what might be possible at a much lower cost than a top-down solution (Mulgan, 2006).
According to Towers Perrin, organisations that focus on innovation highlight cultural attributes that foster and nurture the right competitive priorities and engaged organisational cultures (Closing the Engagement Gap, 2008). In their study, they show that focusing on innovation leads to employees believing that their companies are successful. Innovation can therefore be perceived as a key priority. Organisational culture can enable the creativity and innovation that are needed to be competitive and successful. Paradoxically it can also be a barrier to creative and innovative behaviour (Martins et al., 2002). Martins has created a model to describe organisational culture and it highlights the importance of leadership in creating an ideal organisational culture that influences organisational behaviour. In their study they found seven factors that can promote creativity and innovation. Out of the seven factors, three are most noteworthy:
customer focused marketing orientation, integration of core values, reaction on change and knowledge of management with a future perspective)
- Innovation behaviour
idea generation, risk taking and decision-making)
integration of goals and objectives, conflict handling, cooperative teams, participation, control of own work and developing better work methods)
In connection with behaviour that encourage innovation, Martins has highlighted the need for leaders to create values that support risk-taking and demonstrate, through their actions, that risk-taking and tinkering are acceptable behaviours (Martins, 2002). Whilst risk-taking is promoted, it should, however, be smart and balanced to allow employees freedom but a culture that allows for moderate risk-taking. Creative employees are more motivated by the possibility of success rather than the result of success, and this is an important distinction by Martins. Participation in decision-making can lead to quicker decisions and more ideas being transformed into innovation. Innovative cultures let senior management implement innovation strategies and plans more easily, because cultural values and assumptions can allow the organisation to foster aligned behavioural patterns (Flynn et al., 2003). A confrontational and hostile culture, on the other hand, reacts negative to change, with a lack of interest, participation commitment. In this type of culture, creativity will not prevail and neither will the change to an innovative culture. According to Flynn et al., adaptability is the key to success (i.e., the ability to interpret and accept change) in transforming the organisation’s cultural strengths into a competitive operational strategy.
Flynn et al. have highlighted three requirements for creative cultures: (1) the appropriate leadership, (2) structures, (3) and tasks. In organisations, these components interact and influence the quantity and quality of achievable creative work. The right leadership can unleash the creative power of all employees within the organisation and creativity is one of the most effective ways to mobilize and empower individuals’ innovative power. Leadership combined with empowerment, support and commitment gives employees the autonomy to own responsibility for innovation (Flynn et al., 2003). The second criterion for a creative culture, according to Flynn et al., is an organic structure which is flexible, encourages collaboration, communication, and working in local or cross-functional teams. To achieve this, an open and facilitating culture needs to be established that sends out positive attitudes towards creativity at every level and function area. Flynn et al. warn against labelling some employees creative and others not creates barriers that kill many ideas with high potential are because they originate from “uncreative” sources. Illustrious strategist Mark Federman has emphasised the need to create environments in which giving credit is valued instead of taking credit (2006). He recommends rewarding all contributions to ideas and all those who enable the flow and cascade of knowledge that support the creation of the right conditions for innovative cultures. Since people, ultimately will produce the innovations, organisations need to foster and nurture the creative talent of all the employees, by means of openness and sharing, teamwork, motivating and engaging individuals, and embedding knowledge management actions on an everyday basis.