Commentary
10/30/2013
10:49 AM
Chris Potts
Chris Potts
Commentary

Innovation Stalled? Bad Culture Defeats Good Strategy

Your project managers' focus on meeting budgets and deadlines may be the root of your innovation stagnation. Here's how to change that culture.



Why do some organizations succeed at innovation more than others? It's because the winners at innovation focus their strategies on the culture it takes to succeed, more than the structure itself.

Innovation leaders know, for example, that copying someone else's organization and process has little real impact if their culture doesn't know how to invest in innovations -- or doesn't want to. Winners know how to diagnose their investment culture, fix those aspects that are broken and resolve cultural paradoxes -- contradictory patterns of behaviour that damage the probability of success.

"Culture eats strategy for breakfast" is a quote attributed to Peter Drucker. Yes, it does. Culture is not the soft stuff. Culture can easily defeat strategies that are unable to turn this principle to their advantage. Culture is often both the toughest part of strategy and the reason a strategy works.

Sustained innovation is rooted in an organization's culture for investing in change and for exploiting the changes they invest in. This is the sweet spot of an innovation strategy. Get this aspect of corporate culture working -- paradox-free -- and your strategy has a fighting chance of success.

[ For more on building a value-driven IT culture, see How To Budget Your Way To Irrelevance. ]

Here's an example of a common cultural paradox, based on working with organizations around the world. People focus on business benefits, costs and return on investment (ROI) when proposing and selecting innovations for investment. Yet, once approved, the innovation is assigned to a project manager who is motivated and rewarded based on a successful implementation, not a successful investment. Delivering the implementation on time, to scope and on budget becomes the primary consideration. Delivering business benefits -- the ROI -- on time and within budget becomes secondary, an afterthought or even forgotten.

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To resolve this particular paradox, organizations need project managers who are focused on, measured by and rewarded for delivering a return on investment. If they aren't, those project managers could forget about ROI in the upfront investment decision -- an approach definitely not recommended. These investment project managers have different motivations and skills from implementation project managers. The two complement each other and represent a constructive conflict of interests. Ultimately, however, for innovations to succeed it's the investment project manager who must prevail.

Introducing investment project managers into a culture that is not used to having them is itself an innovation, and risks them being eaten for breakfast. They need to be backed by a robust board-level strategy. The example above is not the only potential paradox in an organization's culture. There can often be others, requiring different solutions. The organization's ability to deliver value through innovation depends on diagnosing cultural gaps and paradoxes, and fixing them in ways that changes the culture for the better.

Chris Potts is a keynote speaker at the TechTomorrow conference Nov. 14 in Columbus, Ohio.

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