Innovation: what has to change in your organisation
Researching the topic of innovation the works of I. Nonaka stand out throughout the span of the past few decades. In this brief article I will present a few of his ideas from his writings in “The Knowledge Creating Company”.
Innovation is proving to become increasingly important as corporations need to adapt to an increasingly changing environment. By innovation, we refer to the “capability of a company as a whole to create new knowledge, disseminate it throughout the organisation, and embody it in products, services and systems” (Nonaka and Takeuchi, 1995). In a way, innovation is all about setting the right organisational conditions that will connect and amplify relevant knowledge within the organisation and foster the creation of new solutions. But, how is it done? What do we have to change? What are the trade offs?
Nonaka sees organisations as something organic and alive. As such, he points out the importance of tapping on tacit knowledge for innovation. As opposed to explicit knowledge, tacit knowledge cannot be easily communicated through manuals or processes. It’s built on experience and is often intuitive or even unconscious (think of yourself explaining how to ride a bike or how to be a good leader). However, the tacit knowledge of experts and entrepreneurs at all levels of organisations hold the key to the breakthrough creative ideas. Innovation takes place when we are able to capture and learn from the tacit knowledge, then put it in explicit knowledge to share it with the rest of the organisation, and finally turn this into tacit knowledge for the rest of the employees.
Nonaka also emphasizes the importance of having a shared vision and a motivated work force. “New knowledge is born in chaos” he suggests, and the role of management is to orient this chaos in one direction, following the companies vision.
On the other hand, today most large organisations are controlled by top management. As they become larger, they focus more efforts on controlling the increasing complexity, when studies have shown that more control leads to less innovation. We have to turn the system around:
- The knowledge and decision making has to stop coming predominantly from top management, but from experts and entrepreneurs at all levels.
- To do so, organisations can’t rely on hierarchy; they will need liberated informal networks that will be self-organised and organic but guided by a common vision.
- Ambiguity shouldn’t be feared and chaos should be embraced.
- The usual cost and frustration of high dependency on top management and long lead-times to take decision will disappear. However, this will be replaced by some ambiguity, difficulties in coordinating all efforts, and higher levels of redundancy, which in any case, is essential for innovation.