CollaborativEye

We've seen the lists of the "Most Admired Companies", and can name companies generally thought of as "Visionary". But are these companies truly innovative in their core, or are they admired because of their visionary leadership? Is their spark from within, or is it the result of charismatic leadership, and a strong corporate culture? These are questions raised in an interesting paper titled "Managing Innovation: When Less is More", written in 1997 by Charlan Jeanne Nemeth, Professor of Psychology at UC Berkeley. (Incidentally, I like written material that is at least 10 years old. If it still resonates after a decade, there must be some solid truth in it!)

According to Nemeth, most of these admired companies have very strong cultures, with loyalty, passion, and well understood norms, almost in a cult-like atmosphere. "Through this path, they may achieve productivity and high morale, but at the same time can thwart creativity, innovation, and an ability 'to respond readily to change.'"  Certainly strong values and a strong sense of corporate identity and purpose are good things??? Yes, but there are dangers as well.

Nemeth points to evidence that "the atmosphere most likely to induce creativity is one diametrically opposed to the 'cult-like' corporate culture.'" In such atmospheres, there is strong incentive to reinforce the corporation's values and vision. This "power of the majority", however, can easily cause groups to not see original solutions to problems and create individuals who are afraid to voice dissent. Why? Simply, people are afraid of rejection. This fear of rejection is particularly powerful within strong corporate cultures.

An additional danger is for companies to rely on creativity and innovation from the top. Examples include Enron, Mirage, Honda. These companies had good ideas and strong vision, but these were driven from the top. Why is this bad? It is not sustainable because it relies on the performance of one or two individuals - a risky proposition no matter how talented and inspired the leader may be.

So what should be done? "For companies that attempt to foster innovation from within the ranks, a number recognize the importance of dissent or of being a maverick. They often try to limit the fear of failure and promote risk taking."  Management must not only tolerate, but welcome dissent, and also explicitly try to limit the control of upper management. This can be achieved through the organic formation of cross-functional teams, allowing a level of randomness and "emergence" to occur. Such collaboration between individuals will be most fruitful when controls are limited to high-level strategic objectives, leaving idea generation and problem solving to occur within collaborative networks of employees, suppliers, and customers.

I believe there is more thinking that needs to occur here. How can companies balance a strong sense of mission and identity, but still leave room from considerable movement and freedom? Can corporate cultures have the best of both worlds?